By Barbara Simpson, from www.theobserver.ca The Observer
The Ontario government needs to roll out the welcome mat to the chemical industry, says one of Sarnia’s top economic officials.
George Mallay, of the Sarnia-Lambton Economic Partnership, is calling on the provincial government to create a strategy to attract new business in the oil, shale gas and bio-based industries to Ontario.
“I think the government needs to have a strategy and indicate that Ontario is open to business in terms of the chemistry industry – and I think it is – but I think we need a strategy and action plan and resources tied together to make stuff happen,” Mallay said.
Ontario is expected to see 600 person-years of employment thanks to the Canadian oil sands, according to the Conference Board of Canada.
Local officials are still working on developing a heavy haul route to allow local fabricating plants to build and easily ship industrial modules for Alberta’s oil companies.
Along with a province-wide strategy, SLEP officials are also recommending increasing funding for pilot-scale production facilities as part of the province’s upcoming budget.
At one time, the Ontario Demonstration Fund provided 50% of funding up to $4 million to create pilot plants, Mallay noted. Both Woodland Biofuels and KmX Corporation benefited from funding through the program.
However, the provincial fund is no longer accepting applications, he noted.
“Generally it’s been difficult to raise funding in Canada for technology projects,” he said.
With capital costs ranging from $200 to $300 million for a commercial plant, Mallay said the province should provide low interest loans and loan guarantees.
BioAmber has received a $15-million low interest loan for its biosuccinic acid plant through the province.
Mallay also pointed to the government’s current industrial electricity incentive program as another area for the province to address in its upcoming budget.
At current rates, large industrial users are paying in the range of 10 to 11 cents per kilowatt hour, Mallay noted. In the U.S. Gulf Coast, the cost is 3.5 cents per kilowatt hour.
Nova Chemicals is considering both Sarnia-Lambton and the Gulf Coast to be home to a new polyethylene plant.
“The province needs to have a program that can enable industrial users to have electricity pricing that is competitive with other global locations,” Mallay said. “In Ontario, electrical prices were historically one of the key economic advantages.”