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Ontario Economy

Canada forgot to plan for its future by leaning on oil and the loonie – by Saeid Fard (Globe and Mail – January 9, 2016)

http://www.theglobeandmail.com/

Saeid Fard is a blogger and digital designer in Vancouver.

When the United States and much of world entered into a recession following the global financial collapse of 2008, Canadians escaped relatively unscathed, thanks in part to a well-regulated banking system that had greater reserve requirements and was less entangled in the global financial web than its U.S. and European counterparts.

But an unfortunate consequence of our insulation from global ills was that we did not subject ourselves to the kind of economic self-examination forced on other countries. Instead, consumer debt continued to rise, real estate prices continued to escalate and our economy grew worryingly reliant on just two industries: petroleum and housing.

Off the backs of those industries, Canada’s gross domestic product (GDP) grew by 19 per cent between 2010 and 2014. But most of that growth was driven by factors outside Canada’s control. China’s economy was booming and, with it, its insatiable need for resources.

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[Only Road Between East and West Canada Severed] New Bridge crippled (Thunder Bay Chronicle-Journal – January 11, 2016)

http://www.chroniclejournal.com/

The newly-constructed Nipigon River Bridge has come apart, sparking a state of emergency in the Municipality of Greenstone and blocking traffic along the Trans-Canada Highway.

Provincial police closed off the road along Highway 11/17 near the Northern Ontario township Sunday afternoon. With the bridge out, this leaves motorists with no options to directly drive across the country. They would need to take a long detour through the United States.

In a news release, the Ministry of Transportation said that safety is their top priority and conditions are being assessed. The official MTO Twitter handle — @511Ontario — stated “duration of (closure) unknown at this time, possibly will be days.”

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Ontario’s surging electricity prices endanger domestic manufacturing – by Adam White (Globe and Mail – December 14, 2015)

http://www.theglobeandmail.com/

Adam White is the President of the Association of Major Power Consumers in Ontario.

Mexico and other competing jurisdictions stand to capitalize from the monstrous megawatt rates Ontario imposes on manufacturers.

As an advocate for some of Ontario’s largest manufacturers, we fear the province’s long-term electricity plan is placing too high a financial burden on industry.

Our manufacturers are currently paying excessively high electricity rates for power the system doesn’t need; this surplus energy is then sold to our competitors in neighbouring jurisdictions (Quebec, New York, Michigan, Illinois) for a heavily discounted price. The math just doesn’t make sense.

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Ontario’s energy mismanagement should feed fears about its cap-and-trade plans – by Kelly McParland (National Post – December 4, 2015)

http://news.nationalpost.com/

The overwhelming impression conveyed by Auditor General Bonnie Lysyk’s sweeping denunciation of Ontario’s management of the electricity system is the sheer audacity of a government that shows no hesitation whatever to putting political considerations ahead of the cost to consumers and the interests of the province.

Again and again, it shows, the governments of premiers Dalton McGuinty and Kathleen Wynne simply ignore the sensible advice they get from experts hired to oversee and operate the electricity grid on a safe, effective and efficient manner.

Tens of billions of dollars are poured into actions that please Liberal political aspirations but mean soaring costs to consumers.

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Ontario Liberals’ power regime a fiasco – by Terence Corcoran (National Post – December 3, 2015)

The National Post is Canada’s second largest national paper.

At least now it must be seen as official: Ontario’s electricity regime is a gargantuan fiasco, a dysfunctional, overpriced, mismanaged system that for most of the last decade has been abandoned to the provincial Liberals’ gross incompetence and deliberate abuse of governance.

In strong language and clear analysis leading to straight-shooting conclusions, Ontario Auditor General Bonnie Lysyk has delivered one of the most devastating audit reports on government bungling and malpractice in Canadian history.

Ontario consumers and small business owners already know the hard fact: the cost of electricity has almost doubled under the McGuinty/Wynne regimes, from 5.32 cents per kilowatt hour to 10.10 cents, with many more increases to come.

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Ontario’s Liberals have completely broken the electricity system – Editorial (Globe and Mail – December 3, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

In politics, as we wrote Wednesday, people get upset about the little things. Remember Bev Oda’s $16 glass of orange juice?

In the context of a 12-figure federal budget, or ministerial trips justifiably running into the tens of thousands of dollars, some overpriced OJ hardly mattered.

And yet it galled. Small misdeeds are relatable. A big, complicated and massively costly government screw-up, in contrast, sometimes leaves people cold.

Let’s see if this warms you up. On Wednesday, Ontario’s Auditor-General announced that, between 2006 and 2014, thanks to incompetence and mismanagement on the part of the province’s Liberal government, Ontarians overpaid for electricity to the tune of $37-billion.

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Deciphering Ontario’s job-killing carbon tax – by Christine Van Geyn (National Post – November 24, 2015)

The National Post is Canada’s second largest national paper.

On Nov. 13, Ontario Premier Kathleen Wynne and Environment Minister Glen Murray circulated a discussion paper to industry and business groups outlining some of their proposals for a cap-and-trade scheme.

Unfortunately, the people who will ultimately bear the cost of the program — the public, which will face higher prices on everything from fuel to manufactured goods — are not part of this “discussion.” In fact, the so-called “discussion paper” is not even available on the Ministry of the Environment website.

The 66-page document might as well have been written in another language for all the clarity of terms it provides.

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Industry crisis testing the mettle of steel makers – by Greg Keenan (Globe and Mail – November 14, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

As a 36-year veteran of the steel mill that dominates Sault Ste. Marie, Ont., Steve Johnson didn’t lose any sleep Monday night after Essar Steel Algoma Inc. was granted creditor protection.

“If I look at the horizon, it hasn’t changed,” Mr. Johnson says. “They’re still making steel. They’re still making iron. We can tell by which smokestack is emitting fumes what’s going on.”

It is the third time in a quarter century that Algoma has been granted protection under the Companies’ Creditors Arrangement Act. The steel maker has interest payments of $25-million (U.S.) that it is unable to make amid a collapse in the price of steel and a court battle with an iron ore supplier.

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Algoma granted creditor protection again amid plunging steel prices – by Greg Keenan and Ian McGugan (Globe and Mail – November 10, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Essar Steel Algoma Inc., the economic backbone of Sault Ste. Marie, Ont., for more than a century, will make its third trip through creditor protection amid a collapse in steel prices and a battle with a critical supplier.

The steel maker, which was founded in 1901 to make rails for the growing railway industry, was granted protection Monday under the Companies’ Creditors Arrangement Act, saying it does not have enough money to make $25-million in debt payments due next week or special payments on pension funds with a combined deficit topping $500-million.

“The urgency of the need for immediate cash is unquestioned,” Ontario Superior Court Justice Frank Newbould said in granting the company creditor protection.

The filing underlines the battered state of much of the steel sector in Canada and North America. Essar Algoma joins U.S. Steel Canada Inc., which was granted CCAA protection in September, 2014 – the second trip for the former Stelco Inc. through a court-supervised restructuring.

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Ontario is playing politics with power – again – by Margaret Wente (Globe and Mail – November 3, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Do you understand your electricity bill? Me neither. All I know is that it keeps going up. There was a rate increase in May, and Ontarians got another one this week.

The provincial government made it sound like nothing. An increase of only 3.4 per cent, on average. Four bucks and change a month! A latte at Starbucks costs more. But this isn’t the truth, of course. The truth is that residential electricity rates have gone up a whopping 12.6 per cent since last winter, says Tom Adams, an independent energy consultant who is an expert on energy politics in Ontario.

The average Ontario household is paying about a third more for power than in 2010. On Jan. 1, bills will go up again when the government cancels the 10-per-cent rebate that it cheerily calls the “clean energy benefit.” There will also be a new tax to subsidize low-income users. Suck it up, people. There is no end in sight.

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Why privatizing Hydro One is proving politically costly – by Martin Regg Cohn (Toronto Star – November 1, 2015)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Hydro One sell-off not a risk not worth taking — mostly because of the public policy peril, not financial risk.

As Hydro One is slowly sold off, it won’t be so much missed as misunderstood. And misrepresented.

Misunderstood, because most people living in the Greater Toronto Area have never dealt directly with Hydro One and might reasonably wonder what, if anything, its sale has to do with rising electricity bills. (Answers below.)

Misrepresented, because a political fight over the sell-off of this provincially owned utility is obscured by predictable government contortions and opposition distortions. (Miscalculations below.)

Hydro One is back in the news thanks to the foresight of Ontario’s New Democrats.

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Hydro One sale could cost Ontario $500-million a year in lost revenues: budget watchdog – by Ashley Csanady (National Post – October 29, 2015)

The National Post is Canada’s second largest national paper.

The Ontario Liberals’ plans to sell Hydro One could cost the treasury $500-million annually and will eventually increase the province’s net debt, the financial accountability officer has found.

Stephen LeClair’s inaugural report slams the Liberal government’s plans to sell 60 per cent of the utility — which transmits most electricity in the province — as a short-sighted cash grab that will cost more than it makes in the long run.

The report notes that, in the short term, the sell-off will make it easier for Ontario to balance its budget by its planned deadline of 2017/18, but the lost revenues will hurt the bottom line over the longer term and make it harder to balance future budgets. The plan is to sell a 15 per cent stake in the Crown corporation each year until 2019, when the province’s stake will be reduced to 40 per cent.

“Once the full 60 per cent has been sold, the province would experience an ongoing negative impact on budget balance from foregone net income and payments-in-lieu of taxes from Hydro One,” the report notes, putting that number at $100 million annually.

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GLOBE EDITORIAL: TPP-Less than hoped for, less than feared.(Globe and Mail – October 6, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The Trans-Pacific Partnership (TPP) trade and investment agreement reached by 12 countries on Monday morning looks like a good deal – good, and not quite as big as promised. Both the positives and negatives in the deal appear to be smaller than hoped, or feared.

The broad strokes of the deal are known, though the precise details won’t be out for a few days. The TPP will open closed sectors of the Canadian economy, such as dairy, poultry and eggs – but by less than expected. In pharmaceutical patents, an area of concern to Canadians, the TPP’s changes to the status quo also appear to be smaller than advertised. And while the agreement, which includes Japan and the United States (but not China), is being sold as the biggest trade deal ever, it is not as revolutionary as all that.

Thanks to three decades of trade liberalization, from the Canada-U.S. Free Trade Agreement to NAFTA to the World Trade Organization, Canada’s trade is already largely free. The remaining old-style tariff barriers are few and generally low. The TPP is mostly about taking one more step down that path.

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Canada’s auto industry could lose 20,000 jobs because of TPP trade deal, union says – by Kristine Owram (National Post – October 6, 2015)

The National Post is Canada’s second largest national paper.

The Trans-Pacific Partnership trade deal could have major ramifications for Canada’s already struggling auto industry, resulting in cheaper vehicles for consumers, but a more competitive landscape for Canadian manufacturers.

Unifor, the union that represents Canadian workers at the Detroit Three, said the deal would put an estimated 20,000 auto jobs at risk by eliminating tariffs and significantly reducing content rules for vehicles and auto parts.

Under the TPP agreement, Canada will phase out its existing 6.1 per cent tariff on imported passenger vehicles over the next five years — a move that is expected to lower the cost of Japanese-made vehicles for Canadian consumers.

“Certainly it’s good news for consumers and to us that means it’s good news across the board,” said Michael Hatch, chief economist at the Canadian Automobile Dealers Association.

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Canada reaches sweeping Trans-Pacific trade deal – by Barrie McKenna (Globe and Mail – October 5, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Ottawa — Canada is joining a massive Pacific Rim free trade zone, but has sacrificed some long-held protections for the country’s dairy, poultry and auto industries to gain entry.

Negotiators for the 12 members of the Trans-Pacific Partnership struck a tentative deal in Atlanta early Monday morning that will eliminate most tariffs in a region spanning roughly 40 per cent of the global economy.

But that will come at a hefty price for some sectors, and for taxpayers.

Ottawa said Monday it will spend $4.3-billion over 15 years to compensate dairy, chicken and egg farmers, who are ceding what Canadian officials called “limited access” to their now highly protected markets under the TPP deal. The subsidies will “keep producers whole,” according to a government press release.

The deal, originally slated to be announced Friday, was delayed numerous times over the weekend as countries haggled over last-minute details on autos, patent protection for drugs and agricultural products.

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