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Ontario Economy

Governments can’t find the ‘secret sauce’ of Silicon Valley – by Alex Whalley and Trevor Tombe (Financial Post – November 30, 2016)

http://business.financialpost.com/

“We should not be known for our resources,” said Prime Minister Trudeau at this year’s World Economic Forum in Davos, “but for our resourcefulness.” With that in mind, the government has put innovation policy near the top of its agenda and recently announced $800 million for a “cluster networks strategy” where Ottawa will focus innovation subsidies on particular industries and locations. Though it is receiving much attention, it may not be smart policy.

First, innovation is but a means to the end of higher living standards and productivity. Based on the most recent data from the Penn World Table (the leading source for international comparisons), Canada is about 20 per cent less productive than the United States — equivalent to a staggering $15,000 in lost economic output per person per year. Ottawa is right to focus on closing this gap.

But to improve productivity, developing new technologies ourselves is not the only way. Adopting better technologies from elsewhere has value too, but this is often neglected or explicitly inhibited. Consider municipal restrictions on Uber or Airbnb, or federal restrictions on foreign activity in telecom or airlines.

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Mexico Overtakes Canada as No. 2 U.S. Exporter Ahead of Trump – by Greg Quinn and Nacha Cattan (Bloomberg News – December 6, 2016)

https://www.bloomberg.com/

Mexico is overtaking Canada as the No. 2 exporter of goods to the U.S. this year, in a sign of how economic ties have deepened between the two countries even as the relationship is being questioned by President-elect Donald Trump.

Shipments from Mexico totaled $245 billion in the first 10 months of the year, according to Commerce Department figures released Tuesday, ahead of Canada’s $230 billion. If the trend continues, it would be the first time ever the U.S. bought more imports from its neighbor to the south. The two countries ended 2015 tied in exports to the U.S.

The trend of catching up to Canada puts China and Mexico as the top two exporters to the U.S. just as Trump prepares to take office in January, reflecting the strong pull of lower cost jurisdictions for the U.S. economy. Canada, which has one of the highest cost bases in the Americas, has seen its share of U.S. imports fall to about 13 percent from around 20 percent two decades ago.

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Wynne admits that breaking Hydro was a mistake. Ontarians will keep paying the – by Kelly McParland (National Post – November 24, 2016)

http://news.nationalpost.com/

Oshawa Mayor John Henry recently told the Oshawa Express, “The cost
of energy is destroying the economy of Ontario.”

Kathleen Wynne has admitted it was a “mistake” to so radically reshape Ontario’s power industry that people have to decide between buying food or paying their electricity bill. Even more, she has accepted the blame personally. In a confessional moment on the weekend, she confided: “I take responsibility as leader for not paying close enough attention to some of the daily stresses in Ontarians’ lives. Electricity prices are the prime example.”

It’s worth noting that Wynne offered her mea culpa not to the people of Ontario, i.e. the ones paying the usurious bills that drop through the mail slot, but to fellow Liberals meeting to discuss party issues, who were no doubt concerned at the government’s plummeting popularity.

A few more months scraping along below 20% approval and serious re-election doubts might arise. So Wynne’s admission may be an attempt to reassure agitated party colleagues as much as a show of remorse towards the great unwashed — or in this case the great unheated.

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Ontario advises other provinces to keep an eye on hydro bills as coal phased out – by Keith Leslie (Guelph Today – November 21, 2016)

https://www.guelphtoday.com/

Canadian Press – TORONTO — Ontario has some advice for its fellow provinces as they move to meet the federal government’s newly unveiled goal of eliminating coal-fired power generation in Canada by 2030: keep an eye on those electricity bills.

The province’s Liberal government likes to boast that shutting down coal plants has all but eliminated Ontario’s once-ubiquitous smog days, making life easier for people with asthma and other breathing problems.

But it cost billions of dollars to build new transmission lines and replace coal with power from natural gas, wind, solar and biomass projects — not to mention maintaining a fleet of expensive nuclear reactors that still supply about half of Ontario’s electricity.

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Even Trudeau knows the road to Marrakech is paved with carbon – by Terence Corcoran (Financial Post – November 8, 2016)

http://business.financialpost.com/

The Institute for Energy Research last year reported that “China is building
one coal-fired power plant every 7 to 10 days, while Japan plans to build 43
coal-fired power projects to replace its shuttered nuclear units.”

Seems a little odd that Prime Minister Trudeau should show up in Vancouver Monday to outline plans to make the harbour safe for oil- and gas-tanker traffic on the same day the world’s climate community gathers in Marrakech to outline their plans to shut down such traffic.

Welcome to the wonky world of carbon contradiction, in which the backers of the 2015 Paris climate agreement go about the earnest business of global carbon reduction while the same nations — including Canada — join hands with big business to keep the carbon economy humming.

About 10,000 politicians, bureaucrats, corporate PR weasels, green activists, NGOs, rent-seekers, UN officials and other members of the carbon-control movement have descended on the Moroccan city for the 22nd meeting of the Congress of the Parties (COP) under the United Nations Framework Convention on Climate Change.

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Bedrock Industries reaches deal to buy U.S. Steel Canada (CBC News Hamilton – November 1, 2016)

http://www.cbc.ca/news/canada/hamilton/

American Company Bedrock Industries Group has reached a deal to buy beleaguered U.S. Steel Canada, U.S. Steel announced today. The sale is subject to court approvals.

In a statement, provincial minister of finance Charles Sousa called the move an important step towards the former Stelco’s restructuring that will “save jobs, protect pensions and assist in providing post-employment benefits for active and retired employees at USSC’s Hamilton and Lake Erie facilities.”

The agreement comes as the latest in a lengthy restructuring and court process that continues to roll on — and one that is certainly not complete. While the province has a rosy outlook about the news, the steelworker’s union has a decidedly bleaker one.

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The untold Ontario green-energy scandal is that it’s devastating our rural areas – by Garth Manning (Financial Post – November 2, 2016)

http://business.financialpost.com/

The biggest unreported story in the Ontario media, despite all its talented investigative journalists, is the destruction of rural Ontario by massive wind “farms” and solar projects.

Wind turbines are not “farms” but sophisticated industrial machines, each taller than Toronto’s Royal York Hotel or the Ottawa Peace Tower. They will never be built in urban centres. So rural Ontario is being progressively devastated while residents of towns and cities, along with the media, remain uncaring.

Large wind and solar factories give the finger to rural economies, heritage, and property and business values and landscapes, while vast flocks of migrating birds, including endangered species, are killed by these lofty Cuisinarts. All these obvious outcomes are denied by an industry that cares not about climate change and only about government-enforced profits.

There is a lot here worth investigating.

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Ontario is headed for a fatal future and only ending the renewable deals can prevent it – by Lawrence Solomon (Financial Post – October 29, 2016)

http://business.financialpost.com/

Ontario was once the engine of the Canadian economy, a Triple-A-rated powerhouse commanding more than 40 per cent of the country’s GDP. Today this once-proud place is a have-not province whose credit rating is near the bottom of the pack, a loser that collects subsidies from the rest of the country.

Ontario lost its lustrous Triple-A credit rating when Ontario Hydro went out of control, ending the province’s low-price advantage, making industry uncompetitive and sinking the province in a morass of debt.

Ontario’s credit rating then continued to sink, in tandem with continuing boondoggles in the energy sector that now leave Ontario the world’s most indebted sub-national jurisdiction. According to a 2012 MacDonald-Laurier Institute study by Marc Joffe, a former senior director at Moody’s Analytics, the province’s likelihood of defaulting over the next two decades is 43 per cent.

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The dream of cheap hydro to fix Ontario’s price hikes – by Martin Regg Cohn (Toronto Star – October 20, 2016)

https://www.thestar.com/

Quebec comes to the table with a seeming abundance of low-cost, low-carbon hydroelectricity available for export.

Soaring electricity rates are sending Liberal support tumbling. Wind and solar are down and out. Carbon pricing is looming. Nuclear power remains radioactive. Is there a silver bullet to rescue the Ontario government from its energy morass?

Here’s a hint: Quebec Premier Philippe Couillard is in town Friday with his top ministers for a joint meeting with Kathleen Wynne’s cabinet. On the agenda: Electricity sharing between the two neighbouring provinces.

Quebec comes to the table with a seeming abundance of low-cost, low-carbon hydroelectricity available for export. Ontario has its back to the wall, weighed down by rising prices and an electricity system that seems out of sync with the times.

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Boondoggle: How Ontario’s pursuit of renewable energy broke the province’s electricity system – by Terence Corcoran (Financial Post – October 7, 2016)

http://business.financialpost.com/

Back in 2010, deep green environmentalist Rick Smith, then head of Environmental Defence Canada, hailed Ontario’s Green Energy and Green Economy Act regime as a cost-free operation that would catapult the province into the big leagues of renewable energy. Through fat subsidies and high prices offered to wind, solar and other renewable industry players, jobs and growth would boom and Ontario would be free of its dirty coal plants. It was the End of Coal, the government said. The birth of a renewable miracle.

Asked whether the plan might lead to higher prices for consumers, “No,” said Dr. Smith — he likes to be called doctor in recognition of his PhD in biology. “No. Not at all.”

Smith was absolutely sure that Ontario’s campaign to become the North American leader in renewable energy would not be a burden on consumers. He had the facts, the study, and the numbers. Renewable is doable. “We’ve done some modelling on this and we’re talking a penny’s increase to your average person’s electricity bill,” he said. “Ontarians won’t even notice any impact on their electricity rates.”

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Ontario Liberals’ huge green energy about-face shows renewables aren’t so doable after all – by Terence Corcoran (Financial Post – September 28, 2016)

http://business.financialpost.com/

One should never underestimate the ability of politicians to convert massive policy failure into a dazzling display of green concern for the welfare of voters. That’s the trick now being attempted by the Liberal government of Ontario as it begins to unravel parts of its financially disastrous green energy program.

Glenn Thibeault, the province’s latest energy minister on Tuesday read through the script provided by the spin-meisters within Premier Kathleen Wynne’s government. The province, he said in a speech to the Ontario Energy Association, had decided to “suspend procurement” of 1,000 additional megawatts of unneeded wind and solar power.

The cancellation is “expected to save $3.8 billion in electricity system costs,” thereby saving a typical residential consumer “an average of approximately $2.45 per month.” Only a government can get away with declaring a saving for consumers by not spending on projects that are not needed.

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NEWS RELEASE: New commentary suggests a prosperous future for Northern Ontario rests on how we are governed

Click here for full document: http://www.northernpolicy.ca/upload/documents/publications/commentaries/final-en-commentary-mackinnon-governance.pdf

September 27, 2016 – A new commentary released by Northern Policy Institute suggests that many of Northern Ontario’s economic and social problems are linked to how the region is governed.

In the last thirty years, Northern Ontario’s economy has not performed as well as the province as a whole – or than the economies of northern parts of other provinces. Beyond economic issues, Northern Ontario is also underperforming in education and general conditions of its population, particularly Indigenous peoples.

Governance in Northern Ontario: Taking Ownership of the Future, by David MacKinnon, uses evidence to propose that Northern Ontario should pursue a regional governance model – people in a region determining their collective ends, means, and values – as a major step forward for the region.

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MAKE THE RING OF FIRE A PRIORITY OF NATIONAL SIGNIFICANCE  – SUBMITTED BY THE GREATER SUDBURY CHAMBER OF COMMERCE (September 2016)

Co-sponsored by the Thunder Bay Chamber of Commerce, the North Bay & District Chamber of Commerce and the Sault Ste. Marie Chamber of Commerce.

Issue

The Ring of Fire is a transformative project for Canada. Federal action is required to expedite the development of the Ring of Fire and ensure the economic and social potential of this nationally-significant, multigenerational project is realized.

Background

The Ring of Fire is a mineral resource rich area of approximately 5,120 km2 located in the James Bay Lowlands region of Northern Ontario. There are a number of First Nations communities in close proximity to the Ring of Fire. Since the early 2000s, significant deposits of copper, zinc, nickel, platinum, palladium, vanadium, and gold along with the first and largest deposit of chromite in North America have been discovered. Based on current projections, the Ring of Fire is estimated to hold more than $60 billion in geological riches (1) with deposits being significant enough to sustain activity for a century. (2)

The Ring of Fire is not a Northern Ontario or Ontario project but will have far reaching impacts across the nation. In the first ten years, the GDP impact outside Ontario will range from $2.1 to $6.3 billion; in the first 32 years, the GDP impact outside of Ontario will range from $5.8 to $16.8 billion throughout the country.

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U.S. Steel Canada receives $500-million lifeline – by Greg Keenan (Globe and Mail – September 22, 2016)

http://www.theglobeandmail.com/

A U.S. metals and mining company is offering to invest about $500-million to purchase U.S. Steel Canada Inc. and keep the troubled steel maker operating. Bedrock Industries LP has emerged from among several contenders as the Ontario government’s preferred candidate to complete the restructuring of U.S. Steel Canada, which is now into its third year.

Miami-based Bedrock is prepared to restructure the company with a cash infusion, a pension contribution and payments to the province of Ontario and U.S. Steel Canada’s former parent, United States Steel Corp., said sources familiar with a deal reached between the province and Bedrock.

The deal is supported by the national office of the United Steelworkers union (USW) and gained qualified support from other stakeholders that have participated in the company’s saga of protection under the Companies’ Creditors Arrangement Act.

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GM deal promises new vehicle for Oshawa plant – by Vanessa Lu (Toronto Star – September 21, 2016)

https://www.thestar.com/

Autoworkers at General Motors are breathing a sigh of a relief that the company has made new product commitments for Oshawa and St. Catharines, hoping it begins the turnaround for the Canadian auto industry.

As part of the deal reached late Monday between the automaker and Unifor, GM is also reversing a trend where automakers have been moving manufacturing to Mexico and the southern U.S. to cut costs. Monday’s deal includes a promise to move some engine production from Mexico to St. Catharines.

“We can really say that the tide is changing,” said Jerry Dias, Unifor’s national president, in an interview Tuesday. “I think it’s fair to say we have hit home runs all over the place.” The union said it won wage increases for workers, a higher start rate for new hires and a signing bonus. Ratification votes for almost 4,000 workers are scheduled for Sunday.

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