Tag Archives: rising electricity bills Ontario

Public sector investment in ON up, actual business investment down

13 Tuesday May 2014

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Here, from today’s Financial Post, an opinion piece by Philip Cross, former Chief Economic Analyst at Statistics Canada.

Philip Cross: Public sector investment never ‘kick-starts’ more business investment

Philip Cross, Special to Financial Post | May 13, 2014 | Last Updated: May 13 10:12 AM ET

Ontario public sector investment has tripled, while business investment stagnates

Business investment is the most important dynamic in a growing economy. It commits a firm to a plan for its growth and creates jobs. Investments made today determine what our industrial structure will look like years from now, and how productive those industries will be. For Canada, watching business investment pour into our energy sector 10 times faster than the rest of the economy so far this century locks in that our future lies in producing oil and gas and transporting this to new markets inside and outside of Canada.

FE0513_investment_310_MF

So what does investment say about Ontario’s future? A look at the graph to the right tells an alarming story, with public sector investment tripling since 1998 while private sector investment has stagnated. Over the past 16 years, private sector investment in Ontario rose a total of only 17% from $39.8-billion to $46.4-billion, or 1% a year. Meanwhile, investment by the public sector soared 293% from $9.9-billion to $29.0-billion, or 18% a year (the public sector includes public administration, health, education and utilities, since Ontario’s electricity utilities clearly make decisions at the behest of their political masters, not on the basis of market principles). After a spike related to infrastructure spending during the 2009 recession, public sector investment has settled back into its long-term growth path. As a result, public sector investment has risen from one-quarter the size of private sector investment in 1998 to nearly two-thirds this year. Private and public sector investment are actually converging more than the graph shows, since the billions government is spending on urban transit cannot be separated out from the rest of transportation, which is allocated to the private sector.

One insight jumps out from comparing private versus public sector investment in Ontario. Public sector investment never “kick-starts” more business investment, creating the virtuous circle governments always hope for when launching the latest wave of government capital spending. Instead, more public sector spending creates a vicious circle, where a “failure” of business investment to respond to higher public sector spending justifies the perceived need to further boost public sector investment “to fill the gap.” Repeated enough times over more than a decade of parochial provincial budgets, and the result is a tripling of public service spending while business investment stagnates.

What businesses have been the most reluctant to invest in Ontario’s future, despite the much-vaunted benefits of an engorged public sector, including a highly-educated labour force? Pretty much all of them. Since the peak in 2008, business investment has fallen by $3-billion. The drop is widespread across all industries. Overall, 11 major industry groups have cut back, while only five have invested more. Manufacturing posted the largest drop, with 15 of its 22 member industries paring investment outlays. Before 2008, manufacturing consistently was the largest industry investing in Ontario. Now it has slipped to fourth place. But this is far more than a story of weak manufacturing investment, with important declines also occurring in finance, retail and wholesale trade, recreation, and information and culture among others.

It is not just that public sector investment crowds out business investment, although that clearly is a factor. The aggressive expansion of public sector investment is symptomatic of a wide range of public sector policies that discourage business spending in Ontario— uncompetitive electricity rates, higher minimum wages, more regulation, a new pension plan tax, and high budget deficits that promise future tax hikes….

Read the full story here.

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SW Liberal ridings in trouble

21 Monday Apr 2014

Posted by in Renewable energy, Wind power

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Problem-plagued LIberals have lost support in 10 ridings in SW Ontario

April 20, 2014

Deborah Van Brenk

If the minority Liberal government can’t pass its budget next month, Ontario will be plunged into a widely expected spring election. Deb Van Brenk tested the early voter mood in the 10-riding London region, driving its Hwy. 401 backbone. Once almost solidly Liberal, the region now has only one Grit left standing. High power bills, the gas plants scandal, wind turbines — voters are chafing at many issues.

HOW THE REGION HAS VOTED

2011 (Liberal minority government):

Conservatives: 7

Liberals: 2 (MPP Chris Bentley later resigned in 2013)

NDP: 1 (gained Bentley’s London West seat in 2013 byelection)

2007 (Liberal majority)

Conservatives: 2

Liberals: 8

2003 (Liberal majority)

Conservatives: 1

Liberals: 9

Glen Ure says he doesn’t want wind turbines on his property, because of potential difficulties selling his farm near Chatham, not because he’s worried about any health issues as his farm is surrounded by the large structures. Mike Hensen/The London Free Press/QMI Agency

Where: Hwy 401 at Kent Bridge Rd. (Chatham-Kent-Essex riding)

Who: Farmer Glen Ure

From just this overpass, between the West Lorne and Chatham exits, 76 wind turbines are visible in the near and far horizon.

Some sprout just beyond the borders of Glen Ure’s farm, where he’s lived all his life and where his parents farmed before him.

Elsewhere in the region, others battle turbines out of health concerns but Ure rejected offers to be a wind landlord because he wasn’t satisfied with the wind companies’ answers to his many questions. Governments and energy companies control enough of his life and he’s not about to let them control his land, too.

Anyone looking for his vote will face a barrage of questions:

— Why have his power bills soared to $6,600 a year, even as he uses less electricity?

— Why spend more than $1 billion, as the Liberal government did, to relocate two gas plants because of city people’s concerns while ignoring rural issues?

— Why have taxes gone up without measurable benefit to him and his neighbours?

His biggest question? Why, in his 70 years of farming and then trucking and then farming and retirement, have governments promised the world but delivered less than dirt?

“An old farmer told me, when I was 10 years old, ‘politics is like pig farming. You get one person in, fatten him up and kick him out, get another one in, fatten them up and kick them out.’ You vote people in and think they’re going to do all right (but they don’t follow through).”

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Read the full story and comments here.

Ontario needs real change, not blame: WCO

03 Tuesday Dec 2013

Posted by in Ottawa, Renewable energy, Wind power

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Wynne continues wind folly with Long Term Energy Plan

Province needs change not blame, says advocacy group

December 2, 2013, For Immediate Release

 

Toronto—Ontario’s new Long Term Energy Plan released by Energy Minister Bob Chiarelli today has no real change, and maintains the same targets for wind power development, just a longer time frame. That’s bad news for ratepayers and taxpayers affected by higher electricity rates as a result of the province’s push for “green” power.

“Ontario never did a cost-benefit analysis for wind power, but now we know what the costs are,” said Wind Concerns Ontario president Jane Wilson. “Very little power produced, power produced out of phase with demand, and few of the thousands of jobs promised. At the same time, the costs are skyrocketing electricity rates, plummeting property values, and absolute tyranny through industrialization of Ontario’s rural communities with huge wind power plants.”

Wilson noted that the Energy Minister’s response to criticism about electricity rates is to produce a new website that featured a tutorial on how consumers can better use electricity.

“That was pure insult,” she said, “especially to rural residents forced to pay horrendous delivery charges for power, and who are already doing all they can to conserve while the government continues with policies that drive up costs.

“We need change, not blame.”

Wind Concerns Ontario also notes that though municipalities and citizens throughout the province demanded a stronger role in siting wind power generation projects, the government hasn’t budged.

Wind Concerns Ontario policy calls for no new Feed In Tariff or subsidy contracts for wind, cancellation of the contracts where construction has not yet begun, and compensation for people who have lost value in their properties neighbouring wind power projects, or whose health has been affected.

www.Windconcernsontario.ca

FACTS about wind power in Ontario

  • Currently 3,700 Megawatts of wind power under contract but not yet connected to the grid: could mean another $1 billion per year to Ontario costs or $250 to average ratepayer’s bill annually
  • Over 6,700 huge industrial wind turbines are already built or are proposed for Ontario
  • 76 Ontario communities have declared themselves “Not A Willing Host” to wind power projects

Wind Concerns Ontario is a coalition of individuals and community groups concerned about the negative impacts on health, environment and the economy from industrial-scale wind power generation projects.

The wind power lobbyists get rich: David Frum

27 Sunday Jan 2013

Posted by in Health, Ottawa, Renewable energy, Wind power

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Excellent summary of what wind power in Ontario is really all about from columnist David Frum. Using the example of the egregious project proposed –and now approved–for Prince Edward County and Ostrander Point, Mr Frum says wind power is harming the environment, not helping it.

Add to that the health impacts for residents nearby wind power generation facilities (they’re not “farms”) and you have a lose-lose situation.

http://fullcomment.nationalpost.com/2013/01/26/david-frum-expensive-power-ruined-landscapes/

Expensive power, ruined lands

David Frum

Must we despoil Ontario’s environment in order to save it?

On Feb. 8, the Environmental Review Tribunal will consider an application to build nine large wind turbines on one of the most scenic points in one of Ontario’s most scenic places.

Ostrander Point Road bisects the small peninsula leading to the Prince Edward Point National Wildlife Area. The peninsula is an open area of meadows and wood thickets, bounded to north and south by the Lake. It’s a true beauty spot, but it also happens to get a lot of wind. Which is why the Ministry of the Environment has approved a project to generate up to 22.5 megawatts of electricity from wind turbines 200-300 feet tall.

This project is the first of many planned for Prince Edward County. This uniquely beautiful region of Ontario — now enjoying an economic revival thanks to winemaking, artisan farming and tourism — is to be spiked with turbines to realize the McGuinty government’s green-energy ambitions.

Moving Ontario off coal is a laudable aspiration. But moving to power that flunks the market test is no boon to the environment. Money is a limited resource, too, and money that is wasted on projects that don’ t make sense is money unavailable for other purposes: hazardous waste clean up, water purification, land conservation.

Wind energy continues to flunk the market test. Ontario buys wind energy at a price 50% higher than it would have to pay for electricity from natural gas. (A new natural gas facility can make money selling electricity at 7-8 cents a kilowatt-hour. Ontario buys newly installed windpower at prices of about 11 cents per kilowatt-hour.)

Worse, unlike solar power, windpower is not likely to become more economic in the future. The main items in the cost of wind are the cost of acquiring the ground underneath the turbines, the cost of wiring turbines to the grid, and the cost of maintaining those wires — in other words, land and labor. Solar power can at least promise to slide down a cost curve. Wind can’t.

Yet Ontario already has installed 1,500 megawatts of wind capacity and is committing to more. Why? There are cheaper and less landscape-blotting ways to go green. But a series of bad decisions in the past have pushed Ontario into a cul-de-sac demanding more and more bad decisions in the years ahead.

The cheapest and cleanest of all energy sources is hydropower. That was true in the past, and it remains true now. Canada has abundant hydro potential — and in fact Manitoba and Quebec have abundant hydro for sale right now.

But if Hydro is cheap in the long run, it requires big investments in the here and now: big investments not only in dams and other facilities, but also big investments in the transmission wires to move the electricity to market.

Those investments must be financed by debt, and Ontario flinches from piling new debt atop its terrifying mountain of existing debt.

Here’s the real beauty of windpower from the McGuinty government’s point of view: The higher cost of wind electricity can be hidden from view, tucked into Hydro consumers’ bills, hidden by gimmicks that few people notice and fewer people understand.

In exchange for receiving a higher price for his power — a much higher price — the wind power producer shoulders the capital cost of financing new electricity capacity. The transaction has the same loan-shark logic as “rent to own” vs. borrowing to buy: You pay more over the life of the product in return for not tapping your dwindling credit.

The bad decision is pushed along by a heavy seasoning of ideology: wind good! dams bad!

And of course lobbying and interest-group politicking exert their own sway over Queen’s Park: A power source that costs 50% more than its next competitor can always find a few hundred thousand dollars to hire and reward friends and supporters.

Wind enriches lobbyists. It satisfies certain varieties of environmentalists. And it protects the McGuinty government from awkward financial realities. That’s a win-win-win all around, except for the over-charged power customers (who won’t know what’s happening until it’s too late) and the people who live upon the brutalized landscape of Prince Edward County (and how many of them — us! — are there anyway)?

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