Manitoba’s plan to charge cryptocurrency operations higher electricity rates and curtail power at peak times will drive businesses under, officials with two companies told a legislature committee.
“If this goes through, our business goes bankrupt and a lot of families will be impacted,” Guildo Theriault, co-founder and chief executive officer of Gator Mining, told a committee hearing Wednesday night.
The government has introduced two bills in the legislature that are aimed at controlling the growing demand on Crown-owned Manitoba Hydro’s electrical grid.
One bill would charge cryptocurrency operations and data centres up to 100 per cent higher rates for electricity. The other would allow Manitoba Hydro to temporarily reduce power to cryptocurrency operators at peak times in order to ensure stability of the grid.
Finance Minister Adrien Sala has said the changes are needed as Manitoba is a few years away from approaching its current capacity at peak times.
Sala has called cryptocurrency operations “low-value” economic drivers. They require a lot of computer power to register transactions in digital currency — a process called cryptocurrency mining. They also provide very few jobs in relation to their power usage, he said.
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“We need to address the pressures that are being placed on the grid,” Sala told the committee.
“One of the challenges we are responding to is the growth of activities that require very large amounts of electricity on a continuous basis, such as cryptocurrency mining, often during periods when our system is under the greatest strain.”
Other provinces have taken similar steps. Hydro-Québec has applied to its provincial regulator to charge data centres and cryptocurrency operations roughly double the price it charges other large consumers.
British Columbia has banned new hydro connections to the electricity grid for cryptocurrency mining, saying unchecked growth in the sector was making it harder and more expensive to provide electricity to homes and other businesses.
Theriault and Gator Mining co-founder Alicia Rocke told the Manitoba legislature committee hearing their company operates in several locations around the province. They suggested changes to the bill including a grandfathering clause, which would protect businesses such as theirs that set up shop under the existing rules.
Brett Kristjanson, who is part of a numbered company that runs a crypto operation near Arborg, Man., said his business would likely go bankrupt as well, if the bills become law without changes.
“It’s going to just … be a wash of devastation of lost jobs and creditors chasing people,” he said.
Kristjanson said his company has a general manager, two technicians and a part-time bookkeeper. It has paid out more than $600,000 in wages over the last three years, he said, and pays $32,000 a year in property taxes.
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