MONEY GOES UP IN TOKE

Pot Grow-Ops Cost Ontarians $260m From 2000 to 2003

HAVE YOU ever paid for a bit of homegrown Ontario pot? No? Draw the
blinds, folks, because your hydro company, your insurance company,
your landlord and even the police think you have.

Add up the stolen electricity, electrical repairs, fires at grow-ops,
the expensive and toxic mould cleanup and policing costs to combat the
flourishing industry, and the costs passed on to the public are staggering.

In the period from 2000 to 2003, the province's Green Tide Summit
estimated the marijuana industry cost Ontarians $260 million. That's a
little under $60 for every household in the province.

Markham Hydro alone estimates that each of its paying customers
shelled out an average of $50 to pay for the hydro costs of grow-ops
in 2002.

The Electricity Distributors Association, which represents 95 local
utilities across Ontario, figures there are at least 30 more of its
members facing similar costs.

"Some police reports are saying those costs are conservative," said
Charlie Macaluso, the association's CEO.

"The growth is rampant, it's fast and it's expensive in terms of the
impact on the consumer."

Macaluso said the phenomenon's province-wide, but concentrated across
the 905 area where local residents likely pay a higher price on their
utility bills (such as Markham) than people in less affected areas.

Here's how the power that feeds the lights for a basement pot farm
ends up on your tab.

The growers rewire the electrical supply around a home's meter in
order to avoid setting off alarm bells at the local hydro company. The
grow house then sucks up between $1,500 and $2,000 a month in
electricity for free. The local hydro company then has to pay the
generating company for that power.

Wiring Repaired

That's where you come in.

"It has to be paid for by someone," Hydro One spokesman Oded Hubert
says. "Ultimately, it results in extra costs to our customers."

Once the operation has been shut down (either because the plants are
harvested, or police sniff it out) it costs another $3,500 to repair
the wiring and cover administrative costs, both Markham Hydro and
Whitby Hydro estimate. Stretch those figures across the province and
repair costs alone are estimated to have cost $18 million last year,
and more the year before.

Insurance companies in B.C. started receiving claims from house fires
and gutted homes that had been grow-ops several years back and saw an
enormous problem barrelling toward them. With the average costs of
fire-related damage pegged at $36,000 a house, the estimated cost
across Ontario is about $2 million a year.

Simply repairing a house that had been used to farm pot could be even
higher, according to Insurance Bureau of Canada's Dave Way.

"The average claim was in the area of $50,000 to $60,000 and was seen
to be rising," said Way, co-ordinator of ICB's underwriting committee.

"The mould remediation is very, very expensive."

The solution for many insurance companies was to exclude such illegal
operations from coverage, whether or not the owner of the property was
aware of what was happening inside the home.

"More people appeared to be getting involved in this so we made the
decision we would back out of having to cover it," explained
Co-operators Insurance spokesman Shawn Murray.

"If they are included, then everyone ends up paying for
those."

But with the homemade wiring and chemical-use of such operations
making them veritable fire traps, there are still costs that
ultimately hit.

"There's no insurance on (the grow-op) should it burn to the ground,
but the problem arises should that fire spread to neighbouring homes,"
Way said.

For the criminals, it's simply on to the next house or apartment. That
in itself has a broader impact on the public, said Peter Norman,
vice-president of real-estate consulting company Clayton Research.

His company hasn't crunched any numbers on the phenomenon, but Norman
was confident the pot-growing industry is making its mark on the price
of property.

"I think the estimates are something like 100,000 of these operations
are under way across Canada," Norman said.

"My instinct is you can't really take 100,000 units out of the product
stock of housing and not have an impact on the way the market works."

Community Safety Minister Monte Kwinter said the cost of policing --
investigating, raiding and charging grow operators -- added up to
$33.8 million between 2000 and 2003.

When you factor in that grow-op pot is traded in the U.S. for guns and
hard drugs, and that the profits feed organized crime, the related
policing costs become staggering, Kwinter said.

Delays at the U.S. border, where officials try to stem the flood of
Canadian weed into their country, cost Ontario residents and
businesses time and money, he added.

"It's become a virtual scourge," Kwinter said.

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HIGH COST OF GROW-OPS

Average cost of fire-related damage per house: $36,000

Repair electrical wiring: $3,500

Stolen electricity: $1,500 to $2,000 a month

Cost of pot policing in Ontario: $33.8 million 2000-2003