Ontario Economy – Page 16 – Republic of Mining

Ontario’s credit rating downgraded over heavy debt load, budgeting – by Jane Taber (Globe and Mail – July 7, 2015)

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.

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

June 16, 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.

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

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.

Why Kathleen Wynne’s Hydro One sell-off is a sellout – by Martin Regg Cohn (Toronto Star – May 19, 2015)

May 22, 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.”

Wynne’s Ontario Transit Spending No Bogeyman for Bonds – by Josh Wingrove and Matthew Winkler (Bloomberg News – May 19, 2015)

May 19, 2015

http://www.bloomberg.com/

Investors are voting for infrastructure over austerity in Kathleen Wynne’s Ontario.

The province’s debt is outperforming the average of its peers as Premier Wynne pledges to spend C$130 billion ($108 billion) on roads, transit and hospitals over the next 10 years and Moody’s Investors Service has labeled it the world’s largest sub-sovereign debtor. The government is so confident of strong demand for the initial public offering of its Hydro One Inc. utility it plans to pay investment banks a quarter of the standard fees for the sale.

The demand signals markets are buying into Wynne’s Liberal Party vision for investing in the economy to help stoke growth. While jurisdictions from Greece to Italy are cutting spending to restore fiscal balance, the 61-year-old Wynne is taking a go-slow approach that is winning investors over.

“It’s encouraging, because we are at this moment having a very difficult discussion in Ontario about how we’re going to go about building this infrastructure,” Wynne said in an interview at Bloomberg’s New York headquarters on May 14, along with her finance minister, Charles Sousa. “This reinforces what Charles and I know to be true, which is – this is what’s needed in Ontario in order for us to be able to compete.”

Ontario Northland president: “We want to move away from entitlement” (CBC News Sudbury – May 8, 2015)

May 8, 2015

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

“We want to move away from the fact that, you know, we deserve things because we’re Ontario Northland.” Corina Moore says the company is bleeding.

The interim president of the Ontario Northland Transportation Commission gave a stark warning to municipal leaders gathered in Sudbury this week for the Northern Ontario Federation of Municipalities conference.

“That highlights crisis situation for the agency,” said Moore. She said it has reached a pivotal point where Ontario Northland can’t continue to lose money if it expects to exist in the future.

Moore admitted the future will be challenging because the company hasn’t seen much change in 113 years.

“We want to move away from entitlement. We want to move away from the fact that we deserve things because we’re Ontario Northland. We are here to say that, starting now, we are focused on performance-based thinking and the way we do things. It’s a culture shift and it’s a tough one.”

Highway 407 debacle looms over Hydro One sell-off – by Martin Regg Cohn (Toronto Star – April 16, 2015)

April 16, 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.

How can the Liberals credibly persuade the province to try another hydro hopscotch?

A Hydro One sell-off will be a tough sell for Kathleen Wynne. As it has been for every other premier making a similar sales pitch.

Wynne’s Liberal predecessor, Dalton McGuinty, ultimately had second thoughts about putting hydro utilities on the market in 2010. A Progressive Conservative government also abandoned a sale in 2002. Hanging over any hydro sale are memories of the botched Highway 407 fire sale, which enriched foreign investors and infuriated Ontarians.

Now, after all that renouncing and denouncing of privatizing, can the governing Liberals credibly reverse course? How do they persuade the rest of the province to try another hydro hopscotch?

For Thursday’s announcement, Wynne is getting political cover from a panel of outside experts that includes ex-politicians of the left and right, headed by ex-TD Bank CEO Ed Clark (himself a former federal deputy minister).

The panel’s diversified composition is a counterpoint to the forces of ideology and personality that drove ex-PC premier Mike Harris to begin dismantling Ontario Hydro nearly two decades ago.

Liberals will sell 60% of Hydro One to fund transit infrastructure – by Robert Benzie, Richard J. Brennan and Rob Ferguson (Toronto Star – April 16, 2015)

April 16, 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.

Premier Kathleen Wynne’s Liberals will sell off 60 per cent of the province’s $16-billion Hydro One transmission utility

Premier Kathleen Wynne’s Liberals will sell off 60 per cent of the province’s $16-billion Hydro One transmission utility to bankroll new transit infrastructure, the Star has learned.

Queen’s Park will retain a 40 per cent stake and minority shareholders will be limited to a 10 per cent ownership, sources say. At the same time, Hydro One Brampton and Hydro One Networks’ distribution arm will be spun off into a separate company and sold outright for up to $3 billion.

The Hydro One changes — and a plan to allow the sale of beer in about 300 supermarkets — are key recommendations in a major report to be released Thursday by Wynne’s privatization guru Ed Clark, the former TD Bank CEO.

Insiders confide that Wynne will immediately accept Clark’s findings and move forward ahead of Finance Minister Charles Sousa’s April 23 budget.

Does the sale of Hydro One assets add up? – by Martin Regg Cohn (Toronto Star – March 30, 2015)

April 10, 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.

If cabinet opts to sell off part of the Hydro One transmission network, it will be a live wire.

With cabinet set to huddle soon over privatization, here’s a cheat sheet for ministers listening on the inside. And the rest of us watching from the outside.

All the buzz about booze has drowned out the static over privatizing our publicly owned electricity system. If cabinet opts to sell off part of the Hydro One transmission network, it will be a live wire.

A cabinet decision on expanded beer sales will be easier to swallow: The government is merely liberalizing — not privatizing — the Beer Store, because that quasi-monopoly is already privately owned. That’s why the debate over booze will be largely sociological, not ideological.

But when it comes to electricity, ideology is always an undercurrent. Remember the old Ontario Hydro? In 1906, the Progressive Conservatives had the vision to set up Ontario Hydro as a publicly owned enterprise. A century later, a more myopic PC party dismembered and disowned it, with no discernible benefits.

PC blunder over Highway 407 looms over Liberals on Hydro – by Martin Regg Cohn (Toronto Star – March 30, 2015)

April 9, 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.

Unless we learn the lessons of the 407 fiasco, we are condemned to be fleeced again — this time on Hydro One.

If you build it, they will come. And pay the toll. When Highway 407 opened in 1997, drivers not only came, they kept coming back — transforming the toll road into a short-lived success story.

Two years later, the storyline changed: The PC government of the day took an abrupt detour by brokering a 99-year lease of the highway for a fraction of its true value. If you lease it — and undervalue it — they will profit. At our expense.

The 407 deal is now considered a financial blunder on a par with Newfoundland’s lease of Churchill Falls to Quebec, and China’s surrender of Hong Kong to Britain, for equally ill-fated 99-year leases.

As today’s Liberal government ponders selling off part of Hydro One’s transmission lines, after more than a century of public ownership, the 407 debacle looms over the debate. Unless we learn the lessons of that fiasco, we are condemned to be fleeced once again.

If the toll highway hadn’t been handed off for a pittance in 1999, it could have been paid off by now. Imagine driving free on the 407, instead of being hit up for steadily increasing tolls that have flowed to the consortium’s overseas owners for years.

Ontario’s Power Trip: No windfall in selling off part of Hydro One – by Mike Hilson and Tom Adams (National Post – March 19, 2015)

March 19, 2015

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

A proposal leaked out from Ontario Premier Kathleen Wynne’s government to privatize a portion of Hydro One, the Crown-owned electricity transmission and distribution company. Although the Premier stressed that the decision wasn’t final and that it will remain regulated to protect ratepayers, she has been clear about her motivation.

Referring to the ongoing Advisory Council on Government Assets headed by former TD Bank CEO Ed Clark, she stated that the reason for the asset review is to leverage dollars to invest in transit and transportation infrastructure across the province.

The prospect of an IPO for Hydro One had commentators, opponents and supporters debating whether to cash in on the “windfall” and how much the haul might be. Generally agreed is the proposition that a sale would, as one columnist wrote, “generate a one-time cash haul for the government.”

The government’s proposal and the discussion around it has so far almost completely ignored the basic facts of financial life underpinning Ontario’s electricity system.

Hydro One’s numbers seem impressive – it claims $22.55 billion total assets and net equity of $7.93 billion – but there is a catch. Hydro One’s entire value is already spoken for.

Where’s the logic in Ontario’s power play? – by Konrad Yakabuski (Globe and Mail – March 16, 2015)

March 16, 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 mandate Ontario’s Liberal government handed former TD Bank chief Ed Clark was flawed from the outset. Selling off prized electricity assets to pay for transit projects smacked more of a cash grab than a considered approach to maximizing value and making sound energy policy.

In the end, Mr. Clark’s panel recommended last fall that Ontario maintain full ownership of Hydro One’s transmission assets, made up of 30,000 kilometres of high-voltage lines across the province, and privatize the utility’s distribution arm, which serves 1.4 million Ontarians. “There is far less reason to regard distribution as a core strategic asset than transmission,” the panel said.

As The Globe and Mail revealed last week, however, Premier Kathleen Wynne’s government is now thinking of both selling up to 60 per cent of the transmission business to investors and privatizing the distribution arm in order to spur a sector-wide consolidation among the spate of “local distribution companies” that interface with electricity customers across the province.

Both are interesting ideas. But the devil is in the details. And when it comes to Ontario governments meddling in the electricity sector, the details always seem to ruin everything.

On what grounds can the provincial government justify using proceeds from selling electricity assets to fund transit?

Spring budget is Liberals’ fire sale to cure 12 years of mismanagement – by Christina Blizzard (Toronto Sun – March 14, 2015)

March 16, 2015

http://www.torontosun.com/

TORONTO – The deficit-plagued Liberal government of Kathleen Wynne is hanging the “For Sale” sign on government assets. The Liberals’ spring budget won’t be so much a fiscally responsible financial document outlining the government’s plan to prudently manage government programs as it will be a fire sale to help fund the Liberals’ 12 years of mismanagement.

Suddenly, Hydro One is for sale. And the government is going to open up wine and beer sales to large grocery stores and rake in millions in franchise fees.

This all has a Nixon to China flavour to it. If a Conservative government suggests changes to liquor sales or selling off utilities, it’s accused of being in the pockets of big business.

When Mike Harris’ government suggested selling off parts of Hydro One more than a decade ago, it was slammed for trading away the province’s “central nervous system.”

The difference back then was that Harris suggested selling off Hydro One because his government philosophically believed the private sector could do a better job. In hindsight, looking at the mess Hydro One is in, Harris was right.

[Northern Ontario – Iroquois Falls] Small Town Shut Down – The Agenda’s Steve Paikin interviews Michael Shea, Jamison Steeve, Madge Richardson and Stan Sudol (March 11, 2015)

March 14, 2016March 13, 2015

http://theagenda.tvo.org/ Resolute Forest Products is shutting down the newsprint mill in Iroquois Falls, Ontario, a move that will result in the loss of 182 jobs , continuing to erode livelihoods in a town of just 4600. The forestry company essentially built Iroquois Falls a century ago and was its largest employer. Like many other single-resource …

What’s so smart about unaffordable housing? – by Konrad Yakabuski (Globe and Mail – January 26, 2015)

January 26, 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.

Of all the lofty attributes Canada’s world-class cities have touted in recent years, making a home unaffordable for average folks is perhaps the least enviable. It was also avoidable. But self-proclaimed “smart growth” policies have proven the opposite of smart, contributing to an affordability crisis with little to show in the way of a cleaner environment.

The biggest losers are millennials now entering their 30s, a generation urban planners and creative-class types predicted would always prefer downtown living over the suburbs. For these echo boomers, moving up to a single- or semi-detached home to raise a family is no longer even an option. Bringing up junior in a 600-square-foot condo is not as cool as it might sound. Yet that’s the choice many face.

Vancouver is considered the world’s second-most unaffordable housing market, after Hong Kong. A median-priced Vancouver home costs 10.6 times the city’s median household income, according to the latest Demographia International Housing Affordability Survey. Vancouver’s price-to-income ratio has doubled in the past decade.

At 6.5 times income, Toronto’s house price-to-income ratio has risen 65 per cent over the same period. Demographia defines a multiple above 5.1 as “severely unaffordable.” Toronto is now even more unaffordable than New York.