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Ontario Economy

OPG partners with First Nation for $300M project – by Alan S. Hale (Timmins Daily Press – August 28, 2015)

The Daily Press is the city of Timmins broadsheet newspaper.

SMOOTH ROCK FALLS – Nearly 30 years of work by the members of the Taykwa Tagamou First Nation culminated in a ceremony held along the bank on the New Post Creek north of Smooth Rock Falls on Thursday morning.

The location is the future site of the Peter Sutherland Sr. Generating Station, which is a joint project between Ontario Power Generation (OPG) and a band-owned company, Coral Rapids Power. Although construction began on the $300 million hydroelectric dam months ago, the official announcement of the project was an emotional one for the First Nation members; some of whom have worked for decades to make it a reality.

“It took a big team to put this together. We had to push hard for it, and sometimes it nearly went off the rails. But we had a dream, and it is now a reality,” said band councillor and former chief Peter Archibald, who has worked on the project since 1979. “When this started, I had long hair that was black. Look at me now — falling out and white!”

Once completed, the new dam will produce 28 megawatts of power; enough to power 1,000 to 2,000 homes. The construction of the dam is expected to create 220 construction jobs.

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Why Ontario should look west, not east, for hydro power – by Wil Tishinski (Globe and Mail – August 20, 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.

Will Tishinski is former vice-president of power supply planning (retired) for Manitoba Hydro.

It was recently reported that Ontario is looking to buy power from Newfoundland and Labrador. This is the wrong direction. Ontario should be looking westward to Manitoba, which is more accessible.

Manitoba currently receives 75 per cent of its electricity requirements from the Nelson River, which has an ultimate capacity of 6,000 megawatts. Only half of that potential is developed today. To meet its own needs, Manitoba will build the generating sites incrementally, with the last plant being constructed perhaps 50 years down the road.

It makes more sense to develop the unharnessed 3,000 MW now and to share at least half that with Ontario. The entire block of power could be transmitted by direct-current transmission to a converter station near Dryden, Ont.

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Toronto-Waterloo corridor could be Canada’s own Silicon Valley – by Iain Klugman and Kevin Lynch (Globe and Mail – August 19, 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.

But it takes more than geography and statistics to build an innovation ecosystem
capable of driving national productivity and growth. It requires an incredibly
intensive interplay among world-class university research, targeted government
support for technology development, industry R&D, venture capital and astute
early adopters of the newly created technology. (Iain Klugman and Kevin Lynch)

Iain Klugman is CEO of Communitech. Kevin Lynch is vice-chair of Bank of Montreal.

Each September, thousands of new students stream into Ontario’s universities, carrying their clothes, books and increasingly global ambitions. The question for Ontario and Canada is: Where will those ambitions ultimately take them?

If they are technically brilliant, entrepreneurial and highly motivated, as many of our graduates are, Silicon Valley will beckon – and it has only a little to do with the California weather.

With a population of just more than three million, the single corridor between San Francisco and San Jose has the greatest concentration of high-tech jobs in the United States; is the headquarters for technology companies with billions in sales and trillions in market capitalization;

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Ontario’s Power Trip: How Hydro is walloping Ontario business – by Parker Gallant (National Post – August 19, 2015)

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

Over the past several months there has been a constant din of noise from all business segments in Ontario about the high price of electricity and its effects. Electricity prices have risen as they have absorbed the high costs of 20-year contracts for renewable energy in the form of wind and solar as additions to Ontario’s electricity grid. Ontario currently has a huge surplus which results in as much as 20 per cent of our generation exported at fire sale prices.

Couple that with a drop in demand, annual spending of $400 million on conservation messages, smart meters that allow time of use (TOU) pricing and the Hydro One, OPG and other Ministry of Energy employees enjoying wages and benefits that outstrip the private sector means electricity bills for all segments of businesses and households are now a drain on the economy versus an attraction for new business and the jobs they might create.

The foregoing recently manifested itself in a report from the Ontario Chamber of Commerce entitled: “Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market.” The report stated soaring electricity prices would cause one (1) in 20 Ontario businesses to shut their doors within the next 5 years.

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Ontario’s 2,400-km power pipe dream – by Terence Corcoran (National Post – July 21, 2015)

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

In its 2013 long-term energy plan, the Ontario government said it would begin looking at importing electricity from other jurisdictions when such imports “are cost effective for Ontario ratepayers.” On Monday, Ontario Energy Minister Bob Chiarelli appears to have noticed that electricity rates in the province have already soared beyond the point of cost-effectiveness, thereby making it attractive to look at importing cheap power, as per plan, from other jurisdictions.

In comments surrounding the announcement of a joint “high-level working group” to study electricity trade between Ontario and Newfoundland & Labrador, Chiarelli said the objective is to “bring down rates” in Ontario. Well, that’s news.

Anyone who follows his public pronouncements knows that he has been blissfully unperturbed by Ontario’s soaring electricity prices. So his acknowledgment it might be necessary to bring rates down will be welcome by consumers and industries. In the past, the minister has mostly rejected the idea that electricity rates are all that high and need to be reduced.

Less encouraging, however, is the proposed source of the cheaper electricity, hydro power development in Newfoundland & Labrador, from where electricity would have to be wheeled about 2,400 kilometres to make it to Toronto.

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Is Brad Wall the only premier who cares about 2015, not just 2050? – by Rex Murphy (National Post – July 18, 2015)

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

The distant future is a politician’s most useful friend — it is where every good and noble thing they promise actually happens. It is where the clutter of present events and the roiling fortunes of this busy harsh and confounding world do not impinge on their their wildest wishes.

For example, under Ontario’s green ambitions, we are given to understand the goal is to reduce carbon dioxide emissions by a full 80 per cent by 2050. This is Premier Kathleen Wynn’s pledge, a commitment that will take merely 35 years to be tested — a generous breathing space by any standards for a political commitment, and which happily just might be the identical term it takes to learn all there is to know about the infamous billion-dollar cancellation of a couple of Ontario gas plants a couple of elections ago.

We have long since learned, and from a thousand examples, that the promises of most politicians barely survive the time it takes to make them. Antiques like me remember the bitter mocking Pierre Trudeau once gave Robert Stanfield on the latter’s promise to introduce wage and price controls — “Zap! You’re frozen!,” said the wily Trudeau — only to pirouette mere days after an election to introduce … wage and price controls.

Pledges three, four or 10 decades out are perfect vapourings. To call them useless is to elevate their dignity. To build present-day policy under the umbrella of such projections is to blend fantasy and irresponsibility.

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Going green: Does Ontario’s energy shift have the power to sustain itself? – by Richard Blackwell (Globe and Mail – July 11, 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.

TILLSONBURG, ONT – In a huge factory on the outskirts of Tillsonburg, the transformation of Ontario’s manufacturing economy is under way.

Here, in what was once a Magna International auto parts plant, German industrial conglomerate Siemens AG is building giant wind turbine blades, massive components formed from fibreglass, epoxy and balsa wood that are half the length of a football field. About 350 workers mould, bake and trim the huge blades, which are shipped to wind farms throughout Southern Ontario.

The plant’s car-parts past is both symbolic and significant. As the province’s traditional – largely automotive – manufacturing sector shrinks, the Liberal government has attempted to hasten a shift to green technology. The 2009 Green Energy Act (GEA), in particular, was designed to achieve this end – along with weaning the province off dirty, coal-fired electricity production.

By subsidizing wind, solar and other technologies, and forcing developers to buy components and services from local companies, a clean manufacturing sector would be kick-started. At least that was the theory. On the surface, the plan appears to have worked. The province is now sprinkled with green businesses that have – at least in part – replaced some of the collapsing manufacturing infrastructure.

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Ontario is no Greece, but its debt is more than a casual concern – by Konrad Yakabuski (Globe and Mail – July 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.

This was the week the debt merry-go-round jerked and lurched and the whole world got nauseous.

Greece, which hit its debt wall years ago, once again took Europe to a precipice. Whatever the outcome of Sunday’s “final deadline” for a deal with its creditors, Greece is a goner, sadly. How much damage it does to the rest of the world remains to be seen.

Greece’s fate could also await Puerto Rico, whose governor suddenly declared that the $72-billion (U.S.) debt the U.S. territory in the Caribbean has racked up is “not payable.” That somehow came as a shocker to bondholders who had been breezily plugging coins into the island’s debt merry-go-round.

Then there’s China, whose debt-induced stock market bubble continued to deflate despite the Communist regime’s best efforts to defy the capitalist laws of gravity. It may take another Chinese miracle to contain the fallout caused by amateur investors who bought stocks on margin.

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Ontario’s job killer: Business sounds alarm over soaring electricity prices – by Ross McKitrick and Tom Adams (National Post – July 10, 2015)

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

The Ontario Chamber of Commerce this week released the findings of an unprecedented consultation with its members and the results are painfully clear: soaring electricity prices are killing business in Ontario. One in 20 Ontario businesses now expect to shut their doors in the next five years due to electricity costs, and nearly 40 per cent report that electricity costs have already forced them to delay or cancel investment decisions.

The Chamber acknowledges that the larger policy picture from Queen’s Park is grim, with plans for cap-and-trade, higher minimum wages, rising workplace safety premiums and a new government-run pension system. But their report, Empowering Ontario, focuses above all on soaring electricity costs, a problem unique to Ontario that is directly traceable to a decade of foolish policy decisions.

The Chamber is to be applauded for taking on this issue. Many Ontario businesses have tried to shield themselves by seeking beggar-thy-neighbour gimmicks that merely shift their costs onto others, resulting in a less efficient and transparent pricing system. For instance the Chamber slams the Class A/B rate split that benefits large consumers by redirecting some of their costs onto households and small businesses.

Perhaps Ontario business leaders are finally realizing that moving their deck chairs to the high side of a sinking ship is not a long-term solution.

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High hydro rates hurting business: OCC – by Carol Mulligan (Sudbury Star – July 9, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The Greater Sudbury Chamber of Commerce is calling on the Ontario government to address the impact of rising electricity rates on businesses by increasing transparency and reducing the complexity of understanding hydro rates in the province.

The Sudbury chamber, which represents about 1,000 businesses, has added its voice to a report released Wednesday by the Ontario Chamber of Commerce, an umbrella organization representing 60,000 members in Ontario.

The report, Empowering Ontario: Constraining costs and staying competitive in the electricity market, makes five recommendations for government and energy agencies to curb rising hydro costs and help businesses survive.

If those measures aren’t taken, the report shows one in 20 businesses in Ontario, or 5%, could be out of business within five years.

Geoff Jeffery, a lawyer with Weaver Simmons LLP, is immediate past chair of the Greater Sudbury chamber.

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National Post View: Ontario has to get its house in order now, while it still can (National Post – July 8, 2015)

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

If Charles Sousa ever tires of being Ontario’s finance minister, he might find a second career as a corporate communications expert. Specialty: disaster management.

When Moody’s Investors Service reduced the province’s debt outlook from stable to negative a year ago, Sousa responded that it was no big deal. “The bankers aren’t freaking here.… What has happened is the degree of revenue has not met expectations,” Sousa said, as if a revenue shortfall in a chronically indebted economy wasn’t worth troubling himself with.

Similarly, when Standard & Poor’s downgraded Ontario’s long-term credit rating on Monday, Sousa managed once again to find the tiny ray of sunshine in the gathering gloom. “Part of the basis for S&P’s stable rating is that Ontario has a stable, majority government,” he beamed. “The report,” he added, “further notes that Ontario has ‘had some success in bending its cost curve over the past several years.”

The provincial debt is on track to reach $298 billion this year, almost half the size of the federal debt in an economy barely a third as large; servicing it costs $11 billion a year, the third-largest expense in the budget, even at today’s record-low interest rates; and the province’s productivity, according to a recent study by the Centre for the Study of Living Standards, is growing at the second-slowest rate in the country: just 0.5% a year between 2000 and 2012.

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Ontario’s credit rating downgraded over heavy debt load, budgeting – by Jane Taber (Globe and Mail – July 7, 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.

TORONTO — Standard & Poor’s is downgrading Ontario’s long-term credit rating, saying the province may be tackling its deficit but a multibillion-dollar 10-year plan for infrastructure spending will exacerbate its debt load

The downgrade, from double-A-negative to A-plus, comes because of a combination of “very high debt burden” and “very weak budgetary performance,” the major credit-rating agency says.

Since being re-elected last year, Ontario has been moving to cut the province’s deficit – projected to fall to $8.5-billion this year – by squeezing health care and education spending. But S&P is focusing, among other things, on the government’s intention to spend $130-billion over the next 10 years on transit and other infrastructure.

In addition to raising a red flag on the province’s long-term infrastructure plans, the rating agency chastised Queen’s Park for not being stricter on reining in its spending.

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Port of Algoma plan shows promise – by Elaine Della-Mattia (Sault Star – June 13, 2015)

http://www.saultstar.com/

The idea of turning Sault Ste. Marie into a transportation or trade hub has been around for more than 100 years.

Strategically located in the heart of the Great Lakes, in the centre of Canada and in close proximity to the Midwest, Sault Ste. Marie was created as a trading post.

And over the past century, the city has been mainly industry-focused, with its port locations at the city’s western edge, already well utilized to ship product and materials in and out of Sault Ste. Marie and area.

Developing A Port of Algoma, which would have direct access to rail, road and barge connectivity and utilize the expertise of Essar Ports management, could create vast regional economic potential.

The historical value of Sault Ste. Marie’s strategic location is not lost on Anshumali Dwivedi, chief executive officer of the Port of Algoma.

Dwivedi has only been in Sault Ste. Marie for a year but, as an expert on port development, he already sees the economic development potential.

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Car czar plans to keep Ontario in auto hunt – by Peter Epp (North Bay Nugget – June 11, 2015)

http://www.nugget.ca/

That Ontario would appoint an auto industry czar speaks volumes of how quickly this province’s once-mighty auto industry has been diminished.

Ray Tanguay, a former Toyota executive, was given the nod Tuesday. He’s tasked with bringing focus to Ontario’s efforts to not only secure the industry as it exists today, but to help ensure this province remains in the hunt.

It wasn’t that long ago Ontario produced the most automobiles of any jurisdiction in North America. But Michigan and Mexico have surpassed Ontario’s output, and new investment is pouring into Mexico and several southern U.S. states.

In 2014, Ontario produced 2.1 million vehicles, down substantially from the three million produced only a few years ago. Currently, our province is ranked 10th in the world for auto production, down from seventh.

Automobile manufacturing helped build Ontario in the post-war years. To see our relevance within the global manufacturing community diminished is alarming. It speaks to lost jobs, lost taxes and lost opportunities.

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Why Kathleen Wynne’s Hydro One sell-off is a sellout – by Martin Regg Cohn (Toronto Star – May 19, 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.

The reality about the partial sale of a key government asset is that the Liberals are choosing privatization because it is not an unpopular as taxation.

Selling Hydro One is no ordinary sales job for Kathleen Wynne. For a premier who places a premium on conversations, consultations and consensus, the proposed sale is a done deal. Wynne is pushing her privatization plan through the Legislature with minimal discussion, leaving key questions unanswered.

Amid the Hydro One hyperbole and hypocrisy — the Liberals and Progressive Conservatives keep reversing stances — here’s the good, the bad, the ugly, and the reality on electricity. The Liberals are using their majority to rush the sale without providing the fine print on secret deals with the unions, or protection of the public interest.

A government-appointed panel on privatization, headed by ex-TD Bank chief executive Ed Clark, concluded last November that “Hydro One transmission should remain in public ownership as a core asset.”

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