Carbon Tax Increase Will Boost Energy Poverty for Ontarians

Recently I was asked by an individual who visits my blog; what was the cost of the carbon tax added to the generation of electricity in Ontario for 2019?  Coincidently my natural gas bill had arrived the day before so this inspired me to both respond to his question and to examine how the planned expansion of the Federal Government’s carbon tax jumping from the current $30/ton to $170/ton by 2030 would affect the price of electricity and additionally, the cost to heat our homes with natural gas.

Completing a reasonably quick calculation (math involved)* of his question related to IESO’s reported generation of 9.5 TWh of electricity in 2019 at the current $30/ton carbon tax levy of 5.87 cents a cubic meter indicated a cost of about $110 million.  The effect of that tax amounted to an additional cost of gas generation of 1.2 cents/kWh.  The HST would add another $14 million and push the extra cost to 1.3 cents/kWh.  By 2030 when the carbon tax reaches $170/ton the cost of the taxes for 9.5 TWh (assuming the market price for gas remains the same) would be $625 million and the HST would add $81 million.  The $706 million would increase the per kWh cost by 7.4 cents.  As most Ontarians know, the principal reason, we have a relatively large capacity of gas plant generation is to ensure we have the power to meet demand when the wind isn’t blowing or the sun isn’t shining.  That is the time when those weather dependent sources of generation are unable to produce power and we; like California and Southern Australia; would experience blackouts without the gas plants to back-up wind and solar.   

In respect to home heating, the average consumption (2019) of natural gas in Ontario was 2,442 cubic meters (Canadian Gas Association) so at 5.87 cents per cubic meter the cost is about $145 per household.  For the 3.5 million households who heat with natural gas in the province it is almost $510 million and including the $66 million HST on the $510 million the cost is $576 million or $165 per household.  By 2030 the cost per household (including HST of $377 million) will climb to $936 per household so in total will amount to almost $3.277 billion. 

This is what virtue signaling, via the carbon tax, will partially cost Ontario’s households and will effectively drive many more into “energy poverty”** meaning “heat or eat” will become a much more common happening than it is!

*It takes 7,000 cubic feet of natural gas to generate one (1) MWh.

**An Ontario Energy Board report Dated December 22, 2014 indicated 500,000 low-income households suffered from “energy poverty

OPG Delivers lots of Cash to the Provincial Coffers

A recent article pointed out electricity generation costs in Ontario have leaped since 2009 by $6.5 billion or 74.6%.  The Ford government have reputedly noticed and we were told, via the Provincial Budget; they developed; “a comprehensive plan to address the job-killing high costs of electricity, saving medium size and larger industrial and commercial employers about 14 and 16 per cent respectively, on average, on their electricity bills (at an additional expense of $1.3 billion over three years);”.  The views on the cost were disputed with facts indicating the calculations were off and the actual expense would be closer to $1.3 billion per year.  On top of that taxpayers were earlier obliged by the Ford government to pick up other costs (Ontario Electricity Rebate) as a top-up of the Wynne led governments “Fair Hydro Plan” which represents about $5 billion annually.

The foregoing raised the question: is the public arm of the electricity sector contributing to the provinces revenue base and if so how much?

A look at the recent Provincial Budget along with OPG’s financial statements suggests Ontario’s ratepayers not only pay for the cost of electricity generated by OPG but also pay other costs.

Payments in lieu of Taxes

One example referenced in the budget is, “Electricity Payments in Lieu of Taxes” (PIL) and for the year ended March 31, 2020 it was $505 million (up $70 million).  OPG and all publicly owned LDC (local distribution companies generally owned by the municipality they serve) pay those “taxes” with the exception being Hydro One as Premier Wynne’s sale of 55% of it resulted in it becoming a “private” company.  Upon sale of the 55% ownership, Hydro One’s obligations to pay taxes became the same as all private companies.  OPG represents the major portion of the $505 million noted and for the first 9 months of the current year have allocated $325 million (up $190 million). In 2019 OPGs PIL was $190 million which when divided by the full generation of 77.8 TWh added 0.24 cents per kWh to ratepayer costs. The full PIL for 2020 will add a further 0.24 cents/kWh.

OPG and municipally owned LDC pay the PIL whereas other Crown Corporations such as the LCBO, Ontario Lottery and Gaming Corp, Infrastructure Ontario, etc. are all tax exempt! One should wonder why publicly owned electricity sector companies are obligated to pay taxes when other publicly owned companies are exempt?

Water fuel charge   

OPG’s hydro capacity was 6,420 MW per their 2019 annual report and generated 30.5 TWh (terawatt hours).* Another 3.8 TWh were spilled due to SBG (surplus baseload generation) probably due to wind and solar generation during low demand times. Fuel used to power the numerous hydro dams is water created by rain and snowmelt. In 2019 OPG’s annual report allocated the fuel (water) cost levied by the province for hydro generation was $336 million. The “regulated” price per MWh (megawatt hour) reported by OPG for hydro was $45.45 or 4.5 cents/kWh. If one calculates the “fuel charge” by simply dividing the $336 million by the 30.5 TWh one notes the cost of the “water” fuel was 1.1 cents/kWh meaning without the charge hydro costs would have been 3.4 cents/kWh.

The foregoing begs the question; why is hydro generation charged for fuel that falls from the sky, winds up in lakes and rivers with hydro dams and gives us cheap energy? On the other hand, fuel powering wind and solar generators get free fuel.  All three fuels are provided by Mother Nature but only one generator pays for the fuel they use!  Another subsidy penalizing ratepayers and taxpayers!  The State of Wyoming has been taxing their wind farms for a while and in a recent meeting of their revenue committee are considering a further hike in the tax. Perhaps Ontario should consider this or drop the hydro fuel tax.

Return on Equity

Another issue that should bother ratepayers is how the OEB regulates the electricity system in respect to setting the standards such as, an “acceptable” ROE (Return on Equity) factored into what is referred to as “the cost of capital parameters”.  For 2019 it was set at 8.98%, for 2020, 8.52% and for 2021 8.34%.  If one looks at the ROE for the 16 utility companies listed on the NYSE it is interesting to observe they have started the year trading at ROE multiples of 7.49%. So why does the OEB allow a higher ROE?  Allowing higher rate increases to meet the OEB standards extracts dollars from ratepayer and taxpayer pockets yet OEB’s “Vision” states “The OEB supports and guides the continuing evolution of the Ontario energy sector by promoting outcomes and innovation that deliver value for all Ontario energy consumers..”! 

Hmm, let’s ponder that “vision”!

OPG’s equity at the end of 2016 was $10.508 billion and at the end of 2019 it had grown to $14.275 billion for a gain of $3.767 billion. Generation by OPG accepted into the grid in 2016 was 78.2 TWh but it shrunk slightly in 2019 to 77.8 TWh. Net of fuel costs the revenue in 2016 generated a cost per MWh (megawatt hour) of $62.99 and for 2019 it increased to $68.71 a growth of just over 3% annually.  For the first 9 months of 2020 the cost per MWh (net of fuel costs) jumped to $77.60 MWh an increase of 11.8% from 2019 as the ROE achieved by OPG was 9.4%. **

 The OEB’s perception that publicly owned utilities should benefit more than private sector utilities should be recognized as a failure to “deliver value for all Ontario energy consumers”! Their delay in adjusting the ROE parameters impacted ratepayers to a much larger degree as OPG’s equity base grew by the aforementioned $3.767 billion meaning the impact of their delay effectively increased ratepayer costs.  OPG’s revenue in the 9 months ending September 30, 2020 shot up $876 million (net of fuel costs) or 19.5% over 2019 comparable revenue. Based on OPG’s generation for the 9 months of 2020 of 62.9 TWh that jump represents an increase in costs of $13.92/MWh and 1.4 cents/kWh.

As is obvious from all of the foregoing one of the reasons the cost of electricity in the province climbed in 2020 was the treatment of OPG by the OEB and the revenue gains of $500 million in the Province’s budget from the electricity sector reflect that! 

Now may be the time for the Ford Government to tax the wind and solar generators in an effort to increase the revenue base without bringing more pain to the ratepayers and taxpayers of the Province.

Oh, and while they are doing that instruct the OEB to better focus on their vision!  

* Enough to power almost 3.5 million average households for the full year. 

** The OEB failed to act on a rate application submitted to them by OPG for almost two years in respect to the nuclear refurbishments so granted a large increase to allow them to catch up.

Tracking Ontario’s Ruinous Green Energy Experiment

Ontarians will no doubt recall the 2008 Great Recession and how Canada emerged from it better off than most of the G7 and G20 countries. In Ontario we faired pretty well to the point where the McGuinty led Liberal government decided to usher in the Green Energy and Green Economy Act (GEA) in 2009 under the guidance of the then Minister of Energy, George Smitherman. Smitherman promised us electricity rates would only increase 1%!  He suggested wind and solar contracts under the GEA were the way to reduce emissions while keeping electricity price increases low!

From the foregoing perspective it is interesting to look back at the electricity sector in the province to see what has emerged since enactment of the GEA to see how we ratepayers/taxpayers have been affected and how Smitherman’s forecast worked out.  My friend, Scott Luft, makes the foregoing task relatively easy by downloading data from IESO on a regular basis.  His update to the end of 2020 below can also be found on his twitter page!

What is initially evident (adjusted for exports/imports) is consumption was down 1.6 TW (terawatts) in 2020 compared to 2019. The Covid-19 pandemic presumably was the cause however, costs increased by $381 million meaning the average cost of generation per kWh went up from 10.6 cents/kWh to 11.7 cents/kWh. In Ontario using less electricity somehow always costs more!

Eleven years after the GEA clicked in

It has now been over eleven years since the GEA received third reading in Ontario’s legislature and most of the 20-year large wind and solar contracts to (mainly foreign) companies were signed shortly after it was passed.  Scott Luft’s chart provides an opportunity to look at the figures at the end of 2009 and compare them to 2020 to see the effect on our electricity costs.

The chart indicates the cost of electricity delivered to both the TX (transmission grid) and the DX (distribution grid) in 2009 cost us $8.965 billion and in 2020 it was $15.459 billion, an increase of $6.494 billion or 72.4%.  The increase in consumption (adjusted for imports/exports) was 3.2 TWh more as Ontario’s population increased 1.6 million from 2009.  The result was, the average generation cost of a kWh went from 6.34 cents/kWh to 11.07 cents/kWh or 74.6%.

The burden of those increased costs played out differently depending on rate class, with those labelled Class A paying less and Class B ratepayers (residential and small/medium businesses) paying more.  Needless to say; “energy poverty” has increased.

Cost increase drivers

So, after noting the huge increase in annual costs of $6.5 billion since 2009 it is worth examining why those costs jumped:

First wind and solar generation in 2020 was 17.5 TWh (2.9 TWh less than our gross exports) with an additional 2.4 TWh curtailed and together their combined costs were $215.9 million per grid accepted TWh (21.6 cents/kWh) adding about $3.8 billion in costs. In 2009 it was 2.5 TWh at a cost of $246 million.

 Secondly hydro costs shot up by $800 million** and while accepted generation indicated a decrease of 0.62 TWh it doesn’t include the 4 TWh OPG was forced to spill in 2020.  Hydro’s grid accepted cost came in at 5.38 cents/kWh in 2020 with inclusion of the spilled hydro and 3.7 cents/kWh in 2009. 

Finally, nuclear generation costs were also up considerably by $2.9 billion*** as both generation and per kWh costs increased.  In 2009 nuclear generation supplied 55.28% of all generation (including net exports) * and that increased to 56.71% in 2020. The per TWh cost in 2009 was $58.2 million (5.82 cents/kWh) and $87.5 million per TWh (8.75 cents/kWh) in 2020. 

The above three costs total $7.5 billion. If one deducts the cost of coal generation in 2009 of $750 million the net increase becomes $6.75 billion which is close to the increase noted above of $6.5 billion.

Reviewing Scott Luft’s chart highlights the fact wind and solar were the principal culprits in driving up Ontario’s electricity costs.  The McGunity/Wynne led governing Ontario Liberal Party handed out the contracts at above market rates with “first to the grid” rights despite the unreliable and intermittent nature of wind and solar generation.  The combined per kilowatt cost (21.6 cents/kWh) of those two sources of generation is two to three times the cost of non-emitting clean energy such as nuclear or hydro which together have the ability to supply Ontario with well over 95% of its electricity needs.

The Green Energy Experiment has cost Ontarians dearly!

* Net exports is total exports minus total imports.

**OPG spent $1.5 billion on two large hydro projects which were Big Becky and another $2.6 billion on expansion of the hydro available from the Mattagami River which collectively added about 500 MW of additional capacity

***Nuclear cost increases were mainly related to refurbishments of Bruce (two units), Darlington (one unit) and extension costs associated with maintenance upgrades at Pickering.

IESO Saves Ontario Ratepayer’s Money by Favouring Industrial Wind

For the last three hours of December 30th and the first three hours of December 31st grid connected IWT generated more power than hydro during each of those hours.  Hydro could have generated more then the 20,694 MWh accepted but, IESO instead, took the full 22,218 MWh generated by IWT.

IESO’s choice wasn’t driven by a view wind generation is cleaner than hydro; it was driven by the objective of curtailing the cheapest generation. If wind is curtailed Ontario’s ratepayers are burdened with a cost of $120/MWh so save only $15/MWh whereas if they instruct OPG to spill water the cost is about 50% of the IWT curtailment cost.  In those six hours IESO can claim they saved us $1.3 million as curtailing wind would have cost double that amount due to contracts signed by the previous Ontario Liberal government.  The contracts when negotiated were “must take”, and when IESO became concerned about potential grid problems due to excessive IWT generation during low demand periods the agreement reached with CanWEA* (Canadian Wind Energy Association) was they would curtail their generation but each MWh curtailed would cost $120.  OPG became upset they would be obliged to spill hydro for nothing! Eventually IESO supported by the OEB and the then Minister of Energy agreed to reimburse OPG for the value of their OEB approved cost per MWh which was 50% of the $120/MWh offered to IWT generators.  Ratepayers are still obliged to pick up both of those costs.

Habitually Ontario demand falls after the supper hour and December 30th was no exception as it reached 18,479 MW during hour 18 and dropped to an average of less than 15,000 MW during the latter 3 hours and even dipped below 13,000 MW of demand by hour 3 of December 31st. The drop in demand resulted in exports of 15,331 MWh during the 6 hours and the average sale price was $7.34/MWh meaning revenue from the sale to Michigan, NY, etc. was $112K while we paid out almost $3 million for what IWT provided. Exports represented 69% of what wind delivered over those 6 hours suggesting Ontario ratepayers were simply lining the owner’s pockets of those intermittent and unreliable IWT.

The above happened while we Ontarians were all locked down (except for a few politicians)!  It begs the question, why hasn’t the Ford Government and the Minister of Energy done something to stop the bleeding of our after-tax dollars? If you can lock-down all of Ontario you should be capable of stopping the incessant cost of wind and solar we continue to pay for! 

Take action before we become Ontazuela!

*CanWea and CanSIA agreed to merge July 1, 2020 to form the Canadian Renewable Energy Association.

Electric Vehicles amid IESO’s Annual Planning Outlook or

In the Christmas Spirit, sung to the tune of;

“Rudolph the Red Nosed Reindeer”: 

Now do you recall, the most ironic politician of all?

A year ago, Federal Environment Minister, Jonathan Wilkinson approved a proposal by China National Offshore Oil Corp. (CNOOC) following an environmental assessment process. Wilkinson gave them the green lightto hunt for oil and gas under the sea floor.” offshore of Newfoundland and Labrador!  One wonders, why China, and doesn’t Wilkinson consider oil and gas “fossil fuels” or is it only when they are located in the western provinces of Canada or create jobs and benefits for Canadians?

Now, almost a year later and Wilkinson presents his report; “A Healthy Environment and a Healthy Economy” and it is filled with the wonders of wind and solar generation, electric vehicles (EV), etc. and declares they will use our tax dollars to support those “wonders”!  His report notes; EV must be used to reduce carbon emissions in the transportation sector stating: “To support this shift domestically, the Government of Canada previously established sales targets of 10% by 2025, 30% by 2030 and 100% by 2040.”  He also supports those targets with grants to purchase those EV!

IESO’s 2020 Annual Planning Outlook notes a Shifting Energy Landscape!

Ontario’s Independent Electricity System Operator (IESO) obviously looked at Wilkinson’s report as their recently released  2020 Annual Planning Outlook (APO) said the following:  “The federal government has set a long-term target to sell 100 per cent zero-emission vehicles by 2040, with interim sales goals of 10 per cent by 2025 and 30 per cent by 2030.“  As a result the APO states: “Ontario demand will remain lower in the short term due to the economic impact of the COVID-19 pandemic. In the longer term, however, demand is expected to rebound past levels forecast in the previous APO due to growth in electric vehicles, and in the agricultural and residential sectors.”

Interestingly the APO also discloses how they view the ability of the 5.5 GW (gigawatt) capacity of industrial wind and the 2.7 GW of solar to generate power during Ontario’s peak demand periods occurring in the summer and winter seasons.  They forecast IWT ability to deliver generated power when it’s needed during summer months at only 5.8% of its capacity and in winter 17.4% and solar’s ability during summer months at 15.2% and in winter at a miserly 2.9%.  What is obvious is, without nuclear, hydro and gas generation Ontarian’s would suffer badly from rolling blackouts if we were counting on Wilkinson’s “renewable” sources to keep us warm in winter and cool in summer.

Where will the $24 billion (2018) in lost fuel taxes come from?

I have wondered what happens when there are no ICE vehicles using gasoline or diesel fuels and the money going to the Federal and Provincial governments from gas taxes will be zip?  The Canadian Taxpayers Federation estimated in 2018 provincial and federal taxes for gasoline and diesel would generate $24 billion from their sales, most of which, one assumes, went towards the upkeep of Canada’s roads and highways. Will those EV charging stations subsidized with our tax dollars start collecting taxes so roads and highways will be repaired? Does Wilkinson have a plan to replace pavement with something other than an oil derivative?  Wonder what that will be?

A major issue with EV is their limited range: “Depending on road conditions and your driving habits, the average is 140 to 450 km on a single charge in Canada.”  As if to further burden us, by 2050, when Wilkinson expects us all to be driving EV; those EV may restrict us further during the winter as another study indicates “while fuel-powered cars may lose 12 to 15 percent of their efficiency in temperatures at or below 20 degrees Fahrenheit, battery-only EVs can lose a staggering 57% of their range in similar conditions.”  Based on the foregoing many driving lower cost EV with shorter ranges may not even be able to travel to work and back without charging them, ie: the 140 km range becomes only 60 kms during our cold winter days!  Sure, doesn’t sound like utopia!

Anyone who has experienced electricity rates doubling in Ontario in under 10 years (due to the push for renewable wind and solar generation), should be concerned, as the need to charge the approximately 23 million (StatCan for 2019) registered light vehicles will be a problem particularly if the outcome of providing the power comes from wind and solar. With millions hooked up to the grid in 2050 recharging their EV, it is likely we will start experiencing higher electricity rates along with brownouts or rolling blackouts.  

Echo’s of California!

This appears to be what Environment Minister; Wilkinson has in mind while allowing China to extract our oil and gas for their own use!

Now that is truly ironic!

Canada sees Fast Reactions from the Drama Teacher and his Rhodes Scholars

Criticism of our Prime Minister, Justin Trudeau on his handling of the Covid-19 pandemic received a lot of media attention for the early failures to halt incoming flights and the Health Ministry waffling on contagion and mask wearing.  Now along comes a financial update and the MSM once again appears enamoured! One wonders why?

To quickly summarize we first had one of two Rhodes Scholars in the Trudeau Cabinet, Minister of Finance, Chrystia Freeland, present a fiscal update telling us the deficit has reached $381 billion in the current year.  She also announced planned spending of another $100 billion to stimulate the economy.

Shortly after Minister Freeland delivered the bad news about the huge deficit; she was interviewed by BNNBloomberg.  In the December 4th interview she referenced the BMO Chief Economist, Doug Porter and his remark about the $170 billion in cash held by businesses and households.  Porter stated: “I do see the cash mountain, in both Canada and the U.S., as a serious source of potential upside to next year’s growth”. According to the Bloomberg report the CIBC had earlier suggested savings by households in Canada was at $90 billion and $80 billion by businesses. When queried about that “cash mountain” Minister Freeland said: “It would be great if that money could go towards our recovery.  I want to make an offer to your listeners.  If people have ideas on how the government can act to unlock that preloaded stimulus, I am very, very, interested!”

What is readily apparent is that the unlimited spending that created the $381 billion deficit, plus the additional $100 billion she promises to spend, is not (in her mind) enough to make our economy rebound so she wants us to spend whatever we may have left, if any, for those rainy days ahead.  The planned $100 billion in spending is “intended to build a greener, more inclusive, more innovative and competitive economy — will launch after a vaccine is distributed and life begins to return to normal.”

Well, as it happens, either she wasn’t willing to wait until that “vaccine is distributed and life begins to return to normal” or she became impatient we didn’t immediately crank up our spending! 

As we recently saw some of that $100 billion will be spent on planting trees, paying subsidies if you buy an EV, etc. etc. according to the report from Jonathan Wilkinson, Minister of the Environment and Climate Change titled “A Healthy Environment and a Healthy Economy”. Wilkinson’s will spend $15 billion along with $6 billion from the Infrastructure Bank on “clean infrastructure”.  It is all “green” in his Rhodes Scholar’s mind but included with plans to spend money on green things are a huge increase in the “carbon tax” and the implementation of the “CFS” (clean fuel standard) both of which will take billions of tax dollars out of our pockets each and every year. The average family of four who Freeland wants to “unlock that preloaded stimulus,” may have tucked away $10K for a rainy day, the down payment on a house, their children’s education or even retirement. Having viewed the waste of the Trudeau government over the last five years I have doubts they see any rainbows in their future and are reluctant to rush out and spend their savings!

Those households will see those new taxes meant to “green” Canada are not an inducement to spend their savings or perhaps, for them to even have faith in the future of the country.

Do Rhodes Scholars have to take a hypocritic oath to generate a report such as: A Healthy Environment and a Healthy Economy?

Should one spend a little time examining the captioned report from Canada’s Minister of the Environment and Climate Change (MOECC), Jonathon Wilkinson, one notes, he tries hard to obscure the fact the “carbon tax” will increase from its current $30/tonne to $170/tonne by 2030 and you will wind up bewildered.

Connecting the various claims, discloses a sense that whomever authored the report is a hypocrite!  The report stated our Federal Government will spend “$15 billion in investments in addition to the Canada Infrastructure Bank’s $6 billion for clean infrastructure announced this fall as part of its growth plan”! Apparently extracting billions of tax dollars from our paychecks is a now a “growth plan”!  The minister appears to view all Canadians as gullible sheep so spins hypocrisy in the reports 79 pages.

Examples of hypocrisy:   

The report states: “Canada is the steward of some of the world’s most critical natural environments: 28% of the world’s boreal forest (“lungs” of the planet)” and in another section about boreal forests says:

Canada is home to one quarter of the earth’s boreal forests and wetlands. As a member of both the High Ambition Coalition for Nature and People and the Global Ocean AllianceCanada will push for targets to conserve 30% of the world’s lands.” Both of the two organizations have been endorsed by the UN.

In another section of the report the following is an example of how Wilkinson claims they are fighting “climate change”:

The Canadian forest sector is working to advance Canada’s bioeconomy and create jobs while fighting climate change. For example, Granule 777 Inc., in Quebec, is building the first fully integrated industrial wood pellet and sawmill complex in Canada. The Government of Canada has invested $20 million in the project to enable the company to build the complex and acquire strategic and innovative production equipment. The new complex will generate wood pellets and biomass which can replace fossil fuels and lower emissions, while creating new jobs and diversifying the mill’s product base.”

Not sure how burning wood pellets for energy creation fights climate change? An article out of Columbia University notes “Today’s biomass-burning power plants actually produce more global warming CO2 than fossil fuel plants: 65 percent more CO2 per megawatt hour than modern coal plants and 285 percent more CO2 than natural gas combined cycle plants”.

Perhaps another observation from the report aims to neutralize the $20 million investment in the wood pellet and sawmill and at the same time satisfy Trudeau’s promise to Greta Thunberg, the “how dare you” young lady as it states:

Invest up to $3.16 billion over 10 years, to partner with provinces, territories, non-government organizations, Indigenous communities, municipalities, private landowners, and others to plant two billion trees.”

As an aside, a Washington Post article from 2015 contained global tree counts by country and stated;  Canada had 318.3 billion trees second only to Russia!  It went on to note, “There are a whopping 8,953 trees per person in Canada.”  We are # 1 in the world but Trudeau wants to up the count by another 600/700 trees per person.  The “how dare you” teenager from Sweden should get busy planting as Sweden has only 3,200 trees per person.  Should Canada plant the 2 billion trees for the $3.16 billion it would represent about $4,000 in additional taxes spent for a family of four with no benefit to the family.

The above reminded me of an article I posted in Energy Probe in March 2014 about the Drax coal plant in the UK being converted from coal to biomass titled “Biomass is carbon neutral and the world is flat”!  DRAX imported their wood pellets from North and South America and presumably still does. In an article from 2013 the following claim was made: ”Drax calculates that this will reduce carbon emissions by 80 per cent compared to coal – a saving of some 10 million tonnes of CO2 a year compared to levels today. When all three units are done, Drax will use seven to eight million tonnes of wood pellets annually.”  So, follow this logic: cutting down trees to manufacture wood pellets will reduce CO2 but live trees absorb CO2 so let’s plant more!  Is this the new “circular economy”?

More hypocrisy

Yet another example of hypocrisy is evident is the following from the report: “The good news is that cleaner electricity is increasingly the least-cost source of power generation. According to the International Energy Agency, solar power is now the cheapest source of electricity in history.”

The foregoing “least-cost” reference is related to the “capital costs” per megawatt (MW) of solar but not the cost of generating a MW hour. A simple fact-check by Minister Wilkinson would have disclosed a federal department; the Canada Energy Regulator (CER) noted the following about solar power: “Capacity factors tend to be 18% or below in Canada.” In simple terms that means one would need anywhere from three to five times the solar capacity to match the output of nuclear, hydro, coal, natural gas or even biomass! As an example, to replace the 10,277MW of natural gas plants in Ontario would require a land area of about 300 square miles for solar panels, which is more land than Greater Toronto occupies. 

The report rambles on suggesting: “The growing electricity sector will provide a wide range of jobs, from wind turbine and rooftop solar installers to software engineers developing new ways to improve Canada’s grids.”  Had Wilkinson and his crew researched Ontario’s claims when they brought in the Green Energy Act in 2009, they would have discovered electricity costs rose well over 100% which caused job losses despite the initial claims it would create 50,000 jobs. The money spent connecting wind and solar generation to the grid was one of the reasons the cost of electricity shot up and caused a huge rise in energy poverty in the province!

Even more Hypocrisy

The following dissertation from the report also makes many incorrect claims: In 2014, clean electricity made up the largest share of total clean energy exports at $7.7 billion. By 2019, the clean electricity and power equipment total grew to almost $9 billion, which is an annual rate of nearly 5.1%. Of the clean electricity total, 38% was for electricity exports, with the rest made up of equipment exports to help with renewable production as well as distribution and power-handling equipment.” 6

The ”6” highlighted suggests the authors of the report obtained their information elsewhere and it led to the IRPP (INSTITUTE FOR RESEARCH ON PUBLIC POLICY).  A brief review of their March 31, 2020 annual report noted the Chair of the Board’s remarks stated: “The IRPP received a $10 million grant from the federal government to establish the Centre of Excellence on the Canadian Federation. We renovated and expanded our offices in Montreal to accommodate the Centre.” Noting where those tax dollars went, a look at the website of the Centre of Excellence on the Canadian Federation took me to an online magazine; “Policy Options” and one of their articles. The article posted November 17, 2020 was titled “Canada’s clean-energy gazelles are outperforming fossil fuels”!  The author was Dave Sayer whose short bio claims he is “principal economist at the Canadian Institute for Climate Choices” (CICC) where he is one of the 17 staff benefiting from the $20 million of our tax dollars funding its creation.  It should be noted I wrote four articles on CICC debunking many of their claims in reports they issued including one called “Charting our Course”!  Reverting to the claim in the Healthy Environment and a Healthy Economy report and the $9 billion in exports of clean electricity and power equipment generated in 2019 it is obvious the authors used information from the Saylor’s article to draw their conclusions which is hypocritical based on readily available facts such as the following.

The cost to Ontario’s ratepayers for the 19.8 TWh exported in 2019 was about $2.5 billion. Those 19.8 TWh sold to our neighbours generated only $350 million in revenue from their sale. The claim in the report suggests all of Canada’s exports reputedly earned $3.4 billion (38% X $9 billion) but fails to mention the $2.150 billion of subsidies principally caused by wind and solar generation out of sync with demand. The power equipment sold was presumably small hydro turbines manufactured by Canadian companies and nothing to do with the “climate change” push. Canada has been a leader in hydroelectric power for well over a century including the manufacturing of them dating back to 1870.

The few selected claims above from the “Healthy Environment and a Healthy Economy “report highlight how eco-warriors twist facts and how our ruling politicians, be they Rhodes Scholars or drama teachers, use those twisted facts to demonstrate how hypocrisy has become the mantra of governing Canada!  A truly sad state of affairs.

More energy poverty coming compliments of the increasing Carbon Tax

Having received our natural gas bill Friday shortly after hearing our PM, Justin Trudeau, announce he was raising the carbon tax to $170/ton by 2030 I had a serious look at how much tax was already on our bill. One should recall the “carbon tax” was on its way to reach a maximum $50/ton by April 1, 2022. Our bill spelled out the cost of gas used, along with; the Federal Carbon Charge as well as a Federal Carbon Price Adjustment.  Neither were referenced as a “tax” but they are!  Additionally, the bill included the HST and when I added those three together and compared them with the actual cost of the natural gas used at 13.1697cents/m3 I was shocked to note taxes represented 106.3% of the actual fuel cost and at only $30/ton or 5.87cents/m3. The “carbon tax” is scheduled to rise to $40/ton on April 1, 2021.  Wondering what the taxes would represent in 2030, a quick calculation showed (without adjusting the HST), the “carbon tax” portion of the bill would represent 314% of the cost of the natural gas we would use for the month in 2030 should the cost of the gas remain the same!

Curiosity piqued; why not review the total impact on all households in Canada* who use natural gas to stay warm in our cold winters.

The Canada Energy Regulator (CER) tells us “not all homes in Canada use natural gas, but for those that do, average use is 88.4 gigajoules (GJ) per year.” A gigajoule of natural gas is about 25.5 m3 meaning the average home would consume 2250 m3 annually.  The answer to my next question was available from Enbridge where their website notedOver six million homeowners use natural gas to heat their houses and their water.”

With the information from CER and Enbridge and the knowledge of the existing cost of the $30/ton for the carbon tax, it was relatively easy to calculate the effects on the average household leading up to 2030 when it will reach the $170/ton.  

The calculations indicate by 2030 the average household heating with natural gas will pay $738.00 annually for the carbon tax rather than the $132.00 they currently pay. At that time the Federal Government will be receiving about $4.4 billion from the carbon tax, up from the approximately $800 million in 2020.  Over the next ten years the Federal Government will collect about $27.7 billion or $4,500.00 from each “average” household.

 Energy poverty

The Canadian Energy Agency, CER based on 2015 stats stated:  “In 2015, Canadian households spent an average of nearly 3% of their total income on electricity, natural gas and heating oil. A household may be described as experiencing fuel poverty when it spends more than 10% of its income on utilities. By this measure, an estimated 8% of Canadian households experience fuel poverty.”

The foregoing information has not been updated but one should logically suspect the number of Canadian households experiencing fuel poverty has increased as the unemployment level in 2015 was 6.9% and as of September 2020 was reported as 9% by Statistics Canada.  No doubt the pandemic has pushed many families closer to, or over the energy poverty line!

It is truly ironic that Liberal parties, be they Federal or Provincial seem focused on the creation of “energy poverty” to save us from that dreaded “climate change”!  Ontarians saw it happen under the McGuinty/Wynne led Ontario Liberal Party in their push for renewable energy in the form of wind and solar generation. Now the Federal Liberal Party has doubled down with their plan to increase the “carbon tax” to $170/ton driving up the cost of natural gas used by over 60% of Ontario’s households.

One wonders what level of “energy poverty” do “liberals” view as being acceptable? Perhaps they should change their name to the “Heat or Eat Party”!

*The calculations are based on all of Canada whereas the carbon tax will reputedly only apply in the provinces of Ontario, Alberta, Manitoba and Saskatchewan. It should be noted those provinces have the bulk of their households using natural gas for heating whereas Quebec households predominantly use their low-cost hydro.

The Great Reset, Climate Blueprint, ESG, Building Back Better, Green New Deal, Net-zero Emissions or the Circular Economy—Pick One!

As the Covid-19 pandemic closes in on its zenith with the forthcoming vaccine(s) to immunize us, most are hoping it will allow a return to a normal life but don’t count on it!  It seems when we read an MSM article about the pandemic they frequently mention the next major upcoming global pandemic is the “climate change crisis”.  If we don’t reduce our emissions the planet will die and mankind will be doomed!  The hope, we are told by many, is to choose one of the plans proposed by those ENGO surviving with the tax dollars they receive or the philanthropy of billionaires like the Bloomberg’s, Bezos’s or George Soros’s of the world.

It is becoming evident the influences of the billionaires and the cash they hand out to ENGO pushing their agenda is gaining much traction with not only politicians but financial institutions such as Canada’s largest bank; the RBC. The RBC recently launched their “Climate Blueprint” (3 pages) and on October 7, 2020 put out a YouTube video to tell the world they will “Increase our sourcing of electricity from renewable and non-emitting sources to 100% by 2025”.  One wonders; will they put solar panels on their 1209 branches and install batteries to back them up?  Supplying ATMs with renewable energy will also be tricky and expensive and those additional costs will result in an increase in bank fees.  Will Brinks be required to use EV trucks to deliver cash to their branches and ATMS?

RBC’s three page “Climate Blueprint” includes a message from their CEO, David McKay promising: “$100 billion in sustainable financing by 2025.” The “$100 billion” would represent approximately 16% of their total loan portfolio as of October 31, 2019 and 51% of their wholesale loan portfolio. The “Blueprint” highlights nine (9) organizations RBC “partner with” which are: UNEP Finance Initiative, the PRI (Principles for Responsible Investment), The Green Bond Principles, TCFD (Task Force on Climate-Related Financial Disclosures) CDP (a not-for-profit charity), CPLC (Carbon Pricing Leadership Coalition), Smart Prosperity, the Business Renewable Centre and the Climate Bonds Initiative (CBI).

It appears the CPLC was created at the COP 21 Paris Accord in 2015 and a picture on their website indicates a strong Canadian presence with at least four Premiers, the Federal Minister of the Environment and Climate Change and Glen Murray, then Ontario’s Minister of the Environment and Climate Change in the picture. 

The Climate Bond Initiative’s (CBI) purpose is summed up as “a hugely ambitious agenda to mobilize bond markets for climate change solutions.” The CBI was a UK creation and has a large Advisory Panel from many countries but only one is from Canada. That individual is Cynthia Williams the Osler Chair in Business Law, Osgoode Hall Law School for the Canada Climate Law Initiative. The latter is out of the University of British Columbia and York University.  Williams authored and in September 2020 released a report titled: “Troubling Incrementalism’: Is the Canadian Pension Plan Fund Doing Enough to Advance the Transition to a Low-carbon Economy?“. 

Williams report is sprinkled with words we continue to hear from other lawyers such as Stewart Elgie of Smart Prosperity including; “Building Back Better, ESG, zero emissions by 2050, circular economy as well as wind and solar energy”!  Needless to say, MS. Williams is critical of CPP stating; “CPP Investment’s actions could have the effect of contributing to Canada’s failure to meet its international and domestic commitments to transition to a low-carbon economy.” After itemizing some of CPPI’s investment of approximately $10/12 billion (about 3% of total assets) made in the oil and gas sector Williams states the following in a Summary: “There is much of concern in this pattern of investments from a climate change perspective. These are all investments in expanding fossil fuel technologies and producing more oil and gas at a time when every scientifically credible analysis shows the world needs to be transitioning away from oil and gas.”

It seems in the minds of someone with a law degree and operating in the public sector, they are also blessed with talents in both science and economics but fail to examine opposing scientific analysis. As a lawyer one would assume Williams is mindful, in a court of law there are both the plaintiff and the defendant!  Her opinion is judgmental suggesting we defendants have no “scientifically credible analysis”!

Williams was paid $171,501 by York University in 2019. She presumably has an indexed government pension plan that will reward her nicely when she retires.  To top that off her pension is taxpayer guaranteed in the event her plan is unable to meet its commitments! Despite her presumably knowing that, she thinks CPP investments, whose maximum payout to millions of Canadians is $14,110 annually should only be invested in zero emission companies in a “circular economy”! The hypocrisy of those pushing the net-zero emissions economy is mind blowing and indicates they truly believe they are the “elites” of our society!

Exposing the Carbon Tax Scam

Marc Patrone, host of his show on SAUGA 960 AM, had me on to chat about the carbon tax. We covered a lot of ground including how anything Canadians do to reduce emissions and get to “net-zero” by 2050 will be meaningless on global emissions but very damaging to our economy and life style.

You can hear our conversation on the podcast of December 7th, 2020 starting at 48.27 and ending at 01.01 here:

You can also find it posted on NEWSTALK CANADA if you are a subscriber. The page and conversation can be found here:

https://newstalkcanada.com/