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Ontario Economy

Ontario should play role in moving resourses: Wynne – by Antonella Artuso (Toronto Sun – October 25, 2013)

http://www.sunnewsnetwork.ca/home.html

TORONTO — Ontario has a big role to play helping sister provinces move their natural resources across the country in a responsible way, Premier Kathleen Wynne says.

Wynne is in the midst of a whirlwind western tour where oil and gas, along with CPP enhancements and a national securities regulator, will be up for discussion with Alberta Premier Alison Redford and Manitoba Premier Greg Selinger.

As First Nations and environmental protesters increasingly gear up to battle pipelines and other energy projects, Wynne said she thinks there is a way to move forward with these types of initiatives.

“It’s quite evident, if you look at what’s happened over the past few months, whether you’re talking about rail or whether you’re talking about pipe or whether you’re talking about road, there are issues and there are challenges associated with transporting resources like this,” Wynne told QMI Agency on Thursday. “So we have to do everything in our power to make sure that the safety and environmental precautions are in place.

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Ontario shuts down Lambton power plant ahead of schedule – by Adrian Morrow (Globe and Mail – October 23, 2013)

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 — One of the last coal-fired power plants in Ontario has been shut down early, bringing the province’s Liberal government closer to fulfilling a long-delayed promise, industry and Queen’s Park sources told The Globe and Mail.

Energy Minister Bob Chiarelli will announce Wednesday that the coal plant in Lambton, near Sarnia, Ont., finished operating in late September, three months ahead of schedule, the sources said. The government, which is on a long-term mission to replace all of the province’s coal facilities with greener sources of energy, said in January that the Lambton plant, along with another in Nanticoke, would close by the end of the year.

But one source said the government moved the time-frame for Lambton up to the end of September, and the plant burnt its last coal Sept. 26. The source said the Nanticoke plant is set to keep burning until Dec. 31.

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Wynne’s [Ontario] electricity disaster – by Lorrie Goldstein (Toronto Sun – October 20, 2013)

http://www.calgarysun.com/home

Ontario’s Liberal government is making up its energy policy on the fly, for its own political ends

In explaining why Ontario’s Liberal government scrapped its previous intention to build two new nuclear reactors, Energy Minister Bob Chiarelli offered up that the province now has a “comfortable surplus” of electricity.

That’s a strange way of describing the decimation of Ontario’s manufacturing sector — in part due to the uber-high electricity rates the Liberals have contributed to with their insane rush into expensive and unreliable wind and solar power.

Indeed, the main reason Ontario now has a “comfortable surplus” of electricity — whereas a mere decade ago we were worried about shortages and rolling brownouts — is not because our supply is better but because our economy is worse.

Simply put, when there are fewer manufacturers producing fewer goods, electricity demand goes down. If and when our manufacturing sector recovers, electricity demand will rise again, and that’s when we’ll need adequate sources of it if we’re not to return to the dire situation of just 10 years ago when Ontario was routinely described as “power starved” by energy experts.

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Ontario drives manufacturers away with overpriced electricity – by Barrie McKenna (Globe and Mail – October 14, 2013)

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.

“Ontario is probably the worst electricity market in the world,” said Pierre-Olivier
Pineau, an associate professor and electricity market expert at the University of
Montreal’s HEC business school. (Globe and Mail – October 14, 2013)

OTTAWA — The laws of economics suggest that when supply goes up, prices fall. Not so in Ontario’s increasingly twisted electricity market. Here, heavily discounted surplus power is routinely sold to neighbouring utilities in Quebec and various U.S. states, while customers at home face a steady diet of higher rates.

Ontario had net exports of more than 1,000 megawatts of electricity last year, or enough to power a million homes. Occasionally, Ontario Power Authority even pays Hydro-Québec to take electricity off its hands – power the Quebec utility can then resell in New England at a profit.

Al Yousef, process improvement manager at plastic packaging maker Par-Pak Ltd. of Brampton, Ont., is appalled by this bitter irony. The company pays 12 to 14 cents per kilowatt hour for electricity at its three Toronto-area plants – four or five times the price charged to Ontario’s neighbours in the wholesale market.

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Ontario MNR gets failing grade – Thunder Bay Chronicle-Journal (October 11, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

WHEN Ontario’s Liberal government considered the mounting budget deficit and how to keep it from further damaging the province’s economy and its regions, it called in an expert. Respected former banker Don Drummond was asked to provide a detailed analysis of government spending and recommendations on how to save money.

The Drummond report became Ontario’s budgetary blueprint going forward, as they say. Now the other shoe has dropped.
Not many Ontario citizens disagreed with the general nature of this independent advice. No department was spared at least a detailed examination and most were ordered to provide minor and not-so-minor scenarios to reduce spending.

Education escaped the knife and some arbitrated contract settlements excepted a general wage freeze. But for the most part tough love was felt government-wide. Ontario would pretty much cut spending across the board and thus responsibly recover from the recession that took such a toll, south to north.

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Duplicitous Dalton, Inc. – by Rex Murphy (National Post – October 12, 2013)

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

The Auditor-General of Ontario has released her report on the provincial Liberal government’s brazenly political decision to cancel two gas-fired power plants. Her estimate of the ultimate cost: about $1.1-billion, potentially reaching $1.5-billion.

This obscenity of mismanagement and prevarication came out of Duplicitous Dalton, Inc., a.k.a. the McGuinty government, an administration we now know was, politically, so venal as to toss perhaps as much as a billion and a half taxpayer dollars into the devouring — but politically favourable — wind.

D.D., Inc. even had the brass to insist, originally, that the cost to cancel just the Oakville, Ont., plant was only $40-million. The Auditor-General this week, after a cautionary distribution of Gravol tablets to the assembled press, offered a more altitudinous range of $675-million to $810-million — 15 to 20 times as much! And from the very beginning of the noxious affair, to any question the Liberal response was delay, obfuscate, stone-wall, delete emails, deny said deletions, miraculously locate the not-so-deleted emails, and, of course, insult and hector any and all critics.

Let there be no more “used car salesmen” jokes about political leaders. Used car salesmen are pillars of candour and conscience compared to this lot.

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Michigan usurps Ontario as auto-making king – by Greg Keenan (Globe and Mail – October 11, 2013)

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 days of Ontario bragging about being the largest auto-making jurisdiction in Canada and the United States are coming to an end.

Michigan has roared into first place in vehicle manufacturing among states and provinces this year, knocking Ontario off the perch it has enjoyed since 2004.

The Great Lakes State is forecast to hang on to the lead when year-end statistics are tabulated. Michigan and some other U.S. states have been the biggest beneficiaries of the robust recovery in the U.S. market that has the Detroit Three auto makers rushing to boost production as quickly as they can.

The U.S. state’s leapfrog over Ontario is the latest troubling sign for the province’s most important manufacturing industry, which has fallen behind in the highly competitive global contest for automotive investment.

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Why the rebirth of manufacturing is bypassing Canada – by Barrie McKenna (Globe and Mail – October 7, 2013)

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 — The footwear industry has always been hypersensitive to labour costs. In the hunt for savings, manufacturers are forever scouring the planet for the next best place to produce shoes and boots.

That’s why it’s notable that Merchant House International Ltd., which makes boots for Wal-Mart Stores Inc. and Sears Holdings Corp., announced last month that it will open its first U.S. plant in Tennessee early next year. Until now, the Hong Kong-based company has made its footwear exclusively at factories in China.

The so-called reshoring phenomenon is now spreading to industries that experts long ago gave up for dead in North America, including clothing, textiles and footwear.

But it isn’t just clothing and textiles. More than half of U.S. executives at manufacturers with sales of at least $1-billion (U.S.) say they are planning to repatriate some production to the United States from China, according to an August survey by Boston Consulting Group. Respondents cited factors such as proximity to customers, product quality and lower transportation costs, competitive wage rates and skilled labour.

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Theirs to recover: Why Ontario’s fiscal ‘time bomb’ is still not defused – by Scott Stinson and Armina Ligaya (National Post – September 13, 2013)

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

The Chestnut Conference Centre, once a hotel but now part of a non-descript student residence in downtown Toronto, is only a short walk from Queen’s Park but worlds apart from the stately brass and wood fittings of the seat of the provincial government.

As such, it was a suitable neutral ground for the first skirmishes of The Great Ontario Labour War of 2012. It was at the Chestnut that representatives of the McGuinty government met with officials of the province’s teachers’ unions to begin what all sides knew were going to be brutal contract negotiations.

The government’s objective was simple. They were to tell the unions that there was no money — none — for salary or benefit increases. The province’s fiscal picture was bleak. These were the financial parameters that had to be met.

On the afternoon of Feb. 22, the leadership of the Elementary Teachers Federation of Ontario, along with more than a dozen regional chairs, took their seats across from a small group representing the government side. A scripted statement outlining the province’s dire position was delivered. There was no new money.

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In Ontario, electricity bills are reason to weep – by Konrad Yakauski (Globe and Mail – September 12, 2013)

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.

If you live in Ontario, deciphering your electricity bill is like trying to crack the encryption on a BlackBerry. It might tax even the professional snoopers at the U.S. National Security Agency.

It’s not as simple as multiplying the amount of power you use each month by the market price per kilowatt-hour. Beyond your “electricity” charge, there’s a “delivery” charge, a “regulatory” charge, a “debt retirement” charge and an Orwellian-sounding “clean energy benefit.”

And there’s a twisted political saga behind each one of them. If you manage to unbundle it all, you’ll discover that the market value of the power you consume accounts for only a tiny portion of your bill. Most of the rest of what you fork out goes to pay for decades of bungled energy policy-making. And pay you will, for years to come.

Indeed, the most important charge is the one that doesn’t directly appear on most people’s monthly statements. It’s called the “global adjustment” fee and it’s tacked on to your electricity charge to cover the government’s cost of buying above-market-priced wind, solar, nuclear and gas-fired power from private operators.

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Industrial policy good place to start generating Ontario’s economic growth -by Martin Regg Cohn (Toronto Star – August 29, 2013)

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 recovery from the 2008 economic slump has been feeble. Against that backdrop, all three parties are flailing. Time to get serious about jobs.

The party that best persuades voters it is serious about Ontario’s economic future will be best positioned to win the next campaign.

The recovery from the 2008 economic slump has been feeble. The political leadership has been equally weak. All these years later, all three parties are flailing.

The Tories have produced a dozen discussion papers that retreat into union-bashing and privatization to drive economic renewal. The New Democrats are obsessed with hiking corporate taxes as a panacea for prosperity.

And after a decade in power, the governing Liberals are adrift. Seven months after taking over, Premier Kathleen Wynne has yet to make her economic mark or even hint at a new vision for growth.

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How to fix southwestern Ontario’s economy – by Mike Moffatt (Canadian Business Magazine – August 27, 2013)

http://www.canadianbusiness.com/

No silver bullet, but a salvo of ideas.

While the national unemployment rate currently stands at 7.2%, some regions are suffering more than others. Southwestern Ontario is one such place, with Windsor and London showing 9.2% and 8.6%, respectively. And so, as a business school economist in London, Ontario, it isn’t surprising that the question I’m most frequently asked by non-economists is some variant of “How can we grow southwestern Ontario’s economy?”

My first response is to point to some recommended reading on the topic, including several research papers by the Mowat Institute (see here, here and here). I’m also looking forward to coming recommendations from the Ivey School of Business’ Lawrence Centre which is working on a number of regional research projects. (On the other hand, if I’m at a cocktail party and feeling glib, my response is similar to that which I gave in the middle-class roundtable.)

But there is no silver bullet—it will take a suite of smart policies and a willingness to experiment. That’s the short answer. The longer answer is not policy prescriptions per se, but rather things we should be mindful of when developing and promoting policy ideas.

Support at the industry level should be general and based on real comparative advantages. Identifying the region’s well-positioned industries is an easier task than identifying companies, particularly when examined from the point of view of comparative advantage.

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Ontario’s power policies an example of what not to do – Gwyn Morgan (Globe and Mail – August 19, 2013)

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 political firestorm raging in Ontario about the cost of cancelling two natural-gas-fired power plants reminds me of a conversation I had with then-premier Dalton McGuinty in 2005. At the time, I was head of Encana Corp. and we were co-chairing a Public Policy Forum event.

As we chatted privately before the dinner, he said: “As a gas producer, you must be happy we’re going to close our coal-fired power plants.” I replied: “Well, it’s not a big deal in the context of our North American gas markets, but you’d better make sure those gas power plants are built before you shut the coal plants.”

Eight years later, Ontario power consumers are stuck paying $585-million for two gas-fired plants that were never built. That’s just the tip of the iceberg. Mr. McGuinty’s decision to shutter the coal-fired plants was followed in 2010 by his government’s Green Energy and Economy Act, aimed at replacing some of the coal-fired power with highly subsidized wind and solar energy while, supposedly, turning Ontario into the green power capital of North America.

Ontario offered so-called feed-in rates almost four times the existing system rates for wind, and more than 10 times for solar power. Like bees to honey, wind and solar companies rushed to sign 20-year, rate-guaranteed contracts. 

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Ontario: The ‘have not’ province – by Peter Andre Globensky (Wawatay News – August 8, 2013)

http://www.wawataynews.ca/

There is considerable evidence to indicate that the reckless and hell-bent-for-leather policy of developing the Alberta tar sands at all costs has been, in fact, quite costly. Not only to First Nations communities in northern Alberta who live “downstream” from the goo and the guck and the ravaged natural environment, but to the economy of the country – particularly to the economy of Ontario.

The rise in the value of the Canadian petro-dollar, fuelled by escalating oil prices, has made Canadian exports much more expensive for foreign buyers to purchase. The result: a too-rapid decline in Ontario’s manufacturing sector and an attendant decrease in commercial and industrial taxes have helped reduce Ontario to a “have not” province.

It is now a recipient of transfer payments from the federal government when once it was a contributor of those payments to other provinces. At one time not so long ago, Ontario had a well-earned reputation for playing a leadership role in the Canadian federation – being the mediator between the federal government and the other provinces who always seemed to have squabbling with each other and the feds as a favoured pastime. However, no longer can it claim that high ground.

What is even more disturbing, however, is how far Ontario has fallen behind other, more progressive Canadian jurisdictions in recognizing the need for and actively promoting a constructive dialogue around resource development and revenue sharing with First Nation communities. In that way as well, Ontario has become a “have not” province.

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Wynne’s green power blues – by Lorrie Goldstein (Toronto Sun – July 21, 2013)

 http://www.torontosun.com/

Liberals have gone too far to admit the obvious — their renewable energy program is a disaster

Considering the albatross it has become around their necks, Premier Kathleen Wynne and the Liberals must be wondering exactly when their green energy program turned into a political disaster.

No doubt they long for the good old days — specifically, Nov. 24, 2009 — when global warming guru Al Gore, speaking in Toronto at a gala dinner, bestowed his blessing on their former leader, Dalton McGuinty.

With McGuinty and his Canadian cheerleader, David Suzuki, looking on, Gore declared the premier’s Green Energy Act (GEA) was “widely recognized now as the single best green energy program on the North American continent.” But that was then and this is now. Today, McGuinty is long gone and the GEA sits like a dead weight on the Liberals.

Last week angry demonstrators — furious the GEA took away their right to any say in the location of huge, industrial wind turbines in their communities — showed up to protest while Wynne was trying to jump-start the by-election campaign of London West Liberal candidate Ken Coran.

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