For Immediate Release
December 10, 2015
Timmins and District Hospital faces financial pressures as a result of Hydro rate and other increases
Timmins, ON - Last week, Ontario’s Auditor General Bonnie Lysyk tabled her 2015 report in the Legislature Sections 3.05, 3.06 and 4.05 of the Auditor’s report dealt with the management of our electricity resources in Ontario and outlined the reasons why electricity costs have escalated by over 70% since 2006. During the past few years, TADH’s annual costs for electricity have been in the neighborhood of 1.1 million dollars.
As Chair of the Board of Directors for the Timmins and District Hospital, I feel compelled to inform the residents we serve of the impact those increases have had on our Hospital and the implications it could have on the future delivery of health care services in our communities. I want to preface my remarks by saying that since 2010, the base global funding to our Hospital which now represents 40% of our provincial funding has been frozen. In other words, there has been 0% increase to that funding over the past 5 years. During that same 5 year period, our annual electrical energy costs have risen from an average of $0.092 per kilowatt hour in 2010 to $0.137 per kilowatt hour today, an increase of 48.9% per kilowatt hour. This represents an increase of approximately $383,000 in the hospital’s annual operating costs compared to 2010.
These increased costs for electricity have been partially offset by the Hospital investing some 6.6 million dollars on energy conservation projects since 2009. These projects included replacing existing heating and air conditioning systems with new more energy efficient systems and existing fluorescent lighting with new LED lighting. Since the implementation of these capital investments on energy conservation, the Hospital has realized a saving of some $603,000 in the cost of electricity. Since these investments have had to be financed over a 10 to 15 year period, we will only start to realize a positive cash flow return on those investments in two to three years. In other words, over the past 5 years, your Hospital has had to reduce its expenditures by $986,000 to finance the energy conservation initiatives and compensate for the increase in electricity costs, while at the same time dealing with a 0% increase in its base global funding.
In addition to the increase in the cost of electricity, the Hospital has also been forced to absorb the impact of increases in other uncontrollable costs such as wages, employee benefits, inflation and other costs related to legislated requirements from the Ministry of Health and Long Term Care. For the fiscal year starting April 1, 2016, we estimate these uncontrollable costs will add approximately $1,800,000 to our expenditures. Unless the provincial government starts increasing Hospital funding immediately to at least compensate for cost increases that are outside its control, our Board will be left with no other option but to review the range of services presently offered to the residents of our communities.
The Timmins and District Hospital (TADH) is a level C, fully accredited community, referral and teaching hospital serving the residents of the City of Timmins and Cochrane District as well as the adjoining areas of the Temiskaming, Sudbury and Algoma districts. The hospital offers a full range of medical, surgical, critical care, maternity, newborn, pediatric, long-term care, mental health and diagnostic imaging services.
Board Chair, Timmins and District Hospital Board of Directors
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Timmins and District Hospital