13 August 2010 18:39 [Source: ICIS news]
Ontario accounted for around Canadian dollar (C$) 19bn ($18bn), or 45% of Canada’s C$42bn chemical sector, the Ottawa-based Chemistry Industry Association of Canada (CIAC) said in a paper on chemical industry competitiveness in Canada’s largest province.
However, the proportion of basic chemicals and resins made in
The recession had further weakened the already ailing sector as the decline in demand from key chemical industry customers in housing and automotive had been “dramatic,” the group said.
Critical chemical industry competitiveness concerns in
Said CIAC: “We are not seeing replacement investments to maintain the overall integrity of the
However, one key positive development on the feedstock side were efforts to tap ethane in shale gas from the US Marcellus basin for chemical production at Sarnia, CIAC said.
New supplies from the Marcellus were the first opportunity for new growth in
An equally important concern were electricty supplies and prices, CIAC said.
Ontario-based chemical producers have been hampered by high rates that would likely increase even further as a result of Ontario's new Green Energy Act, which threatened to “crowd out” industrial users, the group said.
“Industrial consumers are concerned that [
While the pursuit of clean renewable power was a “good goal,” electricity prices mattered, it said, adding that prices should not be allowed to go beyond what chemical and others in the manufacturing industry could afford.
On the positive side, CIAC lauded a major tax reform in Ontario - namely, the introduction of the new "harmonised sales tax" or HST, effective 1 July.
The HST combines an 8% provincial sales tax (PST) with a 5% federal goods and services tax (GST) into one 13% tax, and thus establishes a value-added tax system in Ontario that is comparable with those in the EU and most industrialised countries.
Importantly, under the HST, manufacturers can claim full tax credits of 13%, whereas previously they were not allowed to deduct PST on the cost of materials and other products they buy.
Economists estimated that
Major chemical firms with production in
($1 = C$1.04)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|