Lion Electric, King of the EV Jungle Grants?

A recent article in the Financial Post titled: “Lion Electric posts profit as sales and subsidies pick up speed” was eye-catching simply for it’s inference on how it was worded, and suggesting “subsidies” played a role in it posting a profit. The article went on to quote their chief executive as follows; “We delivered the highest quarterly number of vehicles ever with 105 deliveries in Q2,” said Marc Bédard, Lion’s chief executive. The article went on to state: “The good fortune is set to continue, at least for the next little while. As of Aug. 4, the Quebec company’s order book was flush, with 2,357 vehicles valued at $575 million and 226 charging stations representing $3 million.”

Curiosity piqued, a look at how Lion Electric’s stock has performed on the TSE was a must and as it turned out the price over the past year fell from $18.47 CAD a share on August 9, 2021 to a close of $6.95 CAD on August 5, 2022 for a drop of $11.52 (-62.4%) a share over the past year.  Hmm, wonder why, as one would assume a company roaring to a profit would attract investors but that doesn’t seem to be the case for Lion Electric?  Maybe it’s not the king of the school bus and truck EV jungle?

Taxpayer subsidies

An article two weeks before the above article appeared in the FP and headlined “Lion Electric CEO predicts Ottawa’s new EV-truck subsidy will boost demand”.  The following quotes from the article might explain (partially) why Lion suddenly achieved profitability!  The article stated:“Stacking the Quebec subsidy of $144,000 on top of the federal grant would result in a total rebate of nearly $250,000 on the Lion6 model, putting it on par, price-wise, with a comparable diesel-powered truck.” And a further sentence said: “Similarly, stacking the Quebec rebate of $200,000 on the federal grant for the Lion8T would result in a total rebate of $350,000, making it just slightly more expensive than its non-electric competitors.”

An article two weeks before the above article appeared in the FP and headlined “Lion Electric CEO predicts Ottawa’s new EV-truck subsidy will boost demand”.  The following quotes from the article might explain (partially) why Lion suddenly achieved profitability!  The article stated:“Stacking the Quebec subsidy of $144,000 on top of the federal grant would result in a total rebate of nearly $250,000 on the Lion6 model, putting it on par, price-wise, with a comparable diesel-powered truck.” And a further sentence said: “Similarly, stacking the Quebec rebate of $200,000 on the federal grant for the Lion8T would result in a total rebate of $350,000, making it just slightly more expensive than its non-electric competitors.” 

Yet another article appearing in e-magazine Sustainable Bus in March 2022 was about how the Quebec government was investing $18 million into 120 school buses and stated “The subsidy for each bus is worth $150,000. The government’s plan is to electrify 65 per cent of its school buses by 2030.”  It also noted: “Quebec announced last year that the government will fund the majority of the $5 billion purchase of electric buses with $3.65 billion of the contract supplemented by the federal government”! If one goes back to examine the 2nd Quarter results for Lion you note the 105 deliveries consisted of 90 school buses and 15 trucks generating revenue of US $29.5 million  and if we use the $150K per school bus grant and $300K per truck grant the government subsidies amount to approximately CAD $15 million representing approximately 40% of gross revenue in the quarter. Without those subsidies the “operating loss” would have amounted to CAD $43 million!  With those kinds of subsidies, we shouldn’t be surprised Lion is receiving more orders.

Source of Grant Money

As noted above the grants to Lion are sourced principally from the Federal taxpayers with additional funds provided by Quebec taxpayers but in the latter case we should probably surmise it also is funded in large part via those same Federal taxpayers via the “equalization” payments the Federal government pass out.  As noted in the undated letter from Finance Minister Freeland sent to the Quebec Minister of Finance, Eric Girard, Quebec will be handed $13.666 billion or 62.35% of the total equalization payments to the five provinces who receive them, for the 2022-23 year.  Surely that kind of a handout goes a long way to allowing the Province of Quebec to be able to provide grants without tapping into their own tax revenues!

School Bus Orders

One of the largest orders received by Lion for those electric school buses came from First Student a company whose head office is in Cincinnati, Ohio with operations in the US and seven of Canada’s provinces.  Back on May 17, 2021 a press release they issued announced the “largest zero-emission school bus order of 260 buses”.  Assuming the Quebec government handed out the $150K per bus would suggest $39 million will go or has gone to Lion Electric for those buses. 

Another order for Lion’s buses came from Transdev Canadaa public private transport company limited with a Board of Directors and jointly owned by the Caisse des Depots Group (66%) and the Rethmann Group (34%) a German family owned company.  It should be noted CDPQ is the Quebec version of the Canada Pension Plan so they invest the contributions of all Quebec taxpayers to the plan. The order from Transdev Canada was made in early July for another 30 Lion electric school buses in addition to the 27 previously ordered and reputedly already in service.  So, at the $150K per school bus handed out by the province another $8.6 million will find its way into the Lion Electric bank account and future recipients of CDPQ pension payments should cross their fingers those school buses will be as efficient as those fossil fueled ones or Transdev might turn out as a negative investment.

It seems obvious that Lion Electric has twigged the politicians into being convinced electrifying everything is the way to go and will create jobs and benefits to the Quebec economy (possibly via Quebec Hydro for charging those buses)?  As a result Quebec politicians have somehow decided they need to hand out taxpayer funded grants to save the world from “climate change” while picking what they consider new technology and the companies that will benefit!  As an observer over several decades, I am skeptical politicians have ever been able to pick winners but have often picked losers’!

My vote for “King of the EV Grants” goes to Lion Electric!

Weird Happenings as Eco-warriors keep pushing the envelope on climate-change

The eco-warriors around the world have amped up their push for the “net-zero” target recently as demand for those damn “fossil fuels” keeps rising along with their price! It seems apparent, without oil, coal or natural gas mankind will suffer immensely but that’s not stopping the push to get us all to abandon them.  The eco-warriors and their puppet politicians believe we can count on unreliable and intermittent production of energy from wind and solar; stored in batteries at a cost of trillions of dollars globally.  The following are just a few of the weird happenings pushed by the eco-warriors and endorsed by elected politicians we have stupidly voted for in the developed world!

India and China ramp up coal production

While the developed world is doing what our politicians tell us to do to ween us off of fossil fuels, India and China have both announced they are collectively ramping up coal production by 700M tons (300M by China and 400M tons by India) per year which is more than total US output.  In the latter case even though the U.S. is also ramping up their coal production slightly it will only amount to a total of 598.3 million st, (short tons) according to the EIA projections for 2022!  Surely India and China will be castigated by the eco-warriors for ignoring them and the politicians from the developed world!  They will then backtrack on their plans to ramp up their coal production or perhaps they won’t, as they are more focused on improving the livelihood of their citizens?

Prince Charles’ prize backs face mask that cuts methane emissions from cow burps

Back in January 2021 Prince Charles launched the Terra Carta (named after the Magna Carta) whose purpose was defined as; “provides a roadmap to 2030 for businesses to move towards an ambitious and sustainable future; one that will harness the power of Nature”.  He sought pledges from the business community of $10 billion by 2022 and recently handed out the prize of “£50,000” for the inaugural winner of the Terra Carta Design Lab competition. The winning design was a face mask for cows to cut methane emissions from cow burps!  Interestingly enough, if one researches “cow burps” versus “cow farts” an article in Forbes in 2017 suggests those cow farts are worse than cow burps due to the fact that manure is not used much for fertilizer as in the past when it was spread rather then stored in open pits.

Perhaps the time has come for Prince Charles to suggest another competition to capture the methane from those “cow farts” Surely that will be an interesting design and worth that £50,000 prize or more or would it simply be more “Bull Shit”!

New Zealand’s plan to tax cow and sheep burps

A very recent article appearing in the BBC news suggests New Zealand’s astute politicians have also focused on not only cow burps but also sheep burps!  As a result of their observations, they plan to levy a tax on farmers for emissions from those sheep and cows. New Zealand reputedly host 10 million cattle and 26 million sheep grossly outnumbering their 5 million people. At the same time as they plan on levying the tax; New Zealand is involved in the launch of a trade dispute under the Trans-Pacific Partnership (TPP).  The trade dispute is against Canada and associated with our “supply management system” which protects our dairy farmers from cheaper imports.  So, should New Zealand’s “burp tax” become law it will presumably raise the price of their dairy products so one wonders will those increased prices result in their products becoming uncompetitive with the same products from our dairy farmers?  It appears that New Zealand’s politicians are trying to shoot themselves in the foot if they implement the tax making their diary products priced higher. Perhaps they are secretly hoping Canada will impose similar “burp taxes” or under the trade dispute will insist Canada impose the same tax!

As a matter of interest, the Chinese City of Shanghai emits two and a half times more emissions (200MT) than the whole country of New Zealand does even with all those cattle and sheep.   

Take your pick: Clean Energy Credits, Carbon Credits, Carbon Offsets, Voluntary Environmental Credits or Renewable Energy Credits

If you run a business these days you are forced to comply with the wishes of the politicians elected to run the country. Those politicians attended COP-26 and signed up to reduce those invisible emissions we have been told for well over 50 years will surely decimate the planet! The choices you make will drive up your costs but you are told you must comply regardless of what China, India or Russia do.  To reduce those emissions, you will pick one of the listed “credits” or “offsets” in the captioned headline and hope the cost(s) can be passed on in pricing your products or absorbed by increasing your efficiency. Either is a choice impacting your business and those you employ. Bearing in mind the choice you make it is interesting to note not only are the costs and choices varied but many selling them have been called out as false.  

One recent report out of Concordia University is critical of the fact that companies will purchase REC (renewable energy credits) to offset their emissions but are using electricity generated by fossil fuels.  Other reports have criticized purchases of “carbon credits” or “carbon offsets” which as one example found Nature Conservancy reputedly selling unendangered tree offsets.

Now here in Ontario back in January our Minister of Energy Todd Smith suddenly recognized Ontario’s electricity generation is very clean with only about 6% of it creating emissions. As a result he issued a press release suggesting Ontario may be heading to creation of a “Clean Energy Registry” that will make the province attractive for investments. Companies will be able to purchase those CEC from our renewable generators and the money will “reputedly” be returned to Ontario’s ratepayers to reduce electricity costs.

The foregoing looks to be the epitome of the “Circular Economy” and perhaps is what PM Justin Trudeau had in mind when he flew to California and signed the “Canada-California Climate Action and Nature Protection Partnership” on June 9,2022.

Apparently, it’s OK for Trudeau and others in his entourage to create a huge carbon footprint while the rest of us are told to reduce ours!  Seems just a little weird!

Ontario’s Industrial Wind Turbines dig Deep into Ratepayer’s & Taxpayer’s Pockets

May 7th was a typical Spring Day in Ontario with a relatively mild but windy day and we should be pretty sure IWT (industrial wind turbines) owners loved it!

Ontario’s “peak demand” occurred at hour 20 (ending at 8 PM) reaching only 14,439 MW (megawatts) and that demand could have easily been supplied by nuclear and hydro which at hour 21 generated 14,353 MW.

Over the day the Independent Electricity System Operator (IESO) accepted 26,259 MW of wind generation and curtailed about 36,200 MW meaning the almost 4800 MW capacity of IWT could have delivered around 62,300 MW (54% of capacity).  Coincidentally the foregoing accepted and curtailed IWT generation was only slightly more than was sold off to export markets with about 34,500 MW to Michigan and the bulk of the remainder to NY and Quebec.

The buyers of that surplus generation got a great bargain as the average HOEP for the day was 0.50 cents/MWh meaning the total revenue generated from the sale of the 62,300 MW was a miserly $31K! The buyers know when the wind turbines are spinning and when to buy our very cheap surplus and unneeded power!

To put the foregoing in perspective let’s look at what it cost the Ontario ratepayers/taxpayers. What Michigan, NY and Quebec paid and what we received was rather shocking. Under the terms of those IWT contracts we pay IWT generators $135/MWh for accepted generation and $120/MWh for curtailed generation!  Effectively that means they received about $7,877,000 for the accepted and curtailed generation or $299.97/MWh yesterday for grid accepted generation which is 0.30 cents/KWh (kilowatt hour)!  So, we were billed the foregoing for unneeded IWT generation and the principal buyer of the surplus was Michigan who are dependent on fossil fuels for about 70% of their generation! So nice of us to help them out when their Governor, Gretchen Whitmer, is actively trying to shut down Line 5 which provides us Ontarians and Quebecers with propane and other fossil fuels!

If IESO disclosed hydro spillage and the cost of idling gas generators (required to back up the unreliability of IWT and solar panel generation) rest assured the cost of the generation for May 7th would be even higher than the cost noted in the above paragraph!  

It sure would be nice if the buyers of our surplus generation at those bargain basement prices rewarded us with “Clean Energy Credits” (CEC) so we could recover a little bit of the costs. We should assume seeking CEC for subsidization of sales of Ontario’s clean surplus power to our neighbours would entail our politicians doing some serious negotiations to help stop the impact on our continually climbing energy costs.

We shouldn’t count on the foregoing to happen with the present government in Ontario or the other two main parties running in opposition to them!

Grand Delusion: The Liberal Government’s Proposed “Clean” Electricity Standard

The captioned is a slightly edited version of the paper that Robert Lyman and I wrote on behalf of the CCMBC (Coalition of Concerned Manufacturers and Businesses of Canada) in response to the Federal Governments paper: “A Clean Electricity Standard in Support of a net zero electricity sector”.

The article is posted on the C2C Journal a great online publication that was founded in 2007.

I would encourage you to visit the site and either read or reread the report as the edited version has pictures and graphs that bring the report to life.

Find it here:

Grand Delusion: The Liberal Government’s Proposed “Clean” Electricity Standard

Bits and Pieces Related to the “Net-Zero” Push

There were a few recent announcements and events that should have caught the attention of the general population over the past couple of weeks so let’s look quickly at a few of them!

Largest private storage battery in North America’ to help Imperial Oil cut emissions in Sarnia

This one was in the Financial Post back on February 16, 2022 and stated an Italian company would build a 20 MW battery storage unit for Imperial Oil that would reputedly reduce “their energy expenditures by millions of dollars per year.” They would download cheap energy in the middle of the night to charge the battery storage unit and then use it during peak hours. Many of the “Class A” customers in Ontario already take advantage of this using gas generating units firing them up during peak hours saving millions.  Scott Luft noted in a post a couple of years ago; since the ICI (industrial conservation initiative) inception in late 2011 through to the end of 2019 the cost to Class B ratepayers was approximately $1.4 billion (average of about $170 million per annum) paid to reduce the GA for those large industrial ratepayers. One should assume the Ford government could have changed the way the burden is put on Class B ratepayers to subsidize Class A ratepayers but they have done nothing. The burden continues to fall on Class B ratepayers and part of that has been transferred to taxpayers first by the Wynne led government and then increased by the current Ford led government. Hmm, wondering, would it be cheaper for Imperial Oil to buy those Clean Energy Credits (CEC) Minister Smith is considering instead of using that battery storage unit?

Wind Turbine Setback Promises Not Kept

Before and during the last election campaign the Ford led Ontario Conservative Party promised if elected they would review the setbacks for industrial wind turbines (IWT) as well as the contaminated well water in the Chatham/Kent region.  In the almost four years they have been in power they have done nothing related to either of the two foregoing promises.  WCO (Wind Concerns Ontario) have recently (for the umpteenth time) pointed out the 7,000 complaints filed about IWT noise levels and also posted an article from four years ago about the Chatham Kent well water problems which have also been ignored.  Sure, looks to be almost one of those “Promise Made, Promise Missed” sayings which Premier Ford loves to cite except for that final word.

OPG Year-end 2021

OPG released their 2021 year-end results March 10, 2022 and despite a 4.5 TWh drop (5.5%) in generation they still managed to generate $1,325 million a slight (2.6%) fall from 2020.  Forgone generation due to SBG (surplus baseload generation) dropped from 4.3 TWh in 2020 to only 1.9 TWh in 2021 meaning “water rental payments” declined by $30 million. Currently two of the Darlington nuclear units are down for refurbishment with Unit 3 scheduled to be returned to service in the first quarter of 2024 and Unit 1 in the second quarter of 2025. With both those units undergoing refurbishment we should expect greater dependency on our gas generation plants meaning both OPG’s Napanee and Lennox plants should benefit by supplying more peak generation and maintain profitability for OPG without driving costs up.

Bitcoin mining data centre opens in Sarnia

It seems back in yesteryear, mining referenced; “the business or process of working mines” and extracting ore! In recent years it seems all about setting up an elaborate data centre with complicated math problems which when solved supposedly create a “bitcoin”!   One of those bitcoin mines has recently started operations in Sarnia.  Established by “Bitfury Group, an Amsterdam-based Bitcoin mining and crypto tech company” it will start with a 16 MW capacity and expand by 12 MW by May end. It may eventually expand to 200 MW.  To put the latter number in context; a plant capable of generating 200 MW per hour is about what 200,000 average Ontario households would consume annually. The power to support the “mine” will be provided by TransAlta’s Sarnia Cogeneration Plant, a 499 MW capacity natural gas-powered plant. The TASarnia plant is also under contract to IESO and several other Sarnia located companies. Curiosity piqued about how much energy “bitcoin” operations consume globally led to an almost one year old article in the Harvard Business Review. The article suggested, at that time, it was 110 TWh (terawatt hours) which is equivalent to about 80% of Ontario’s annual consumption.  One should assume all of that 110 TWh was/is provided by reliable fossil fuels or nuclear power as intermittent wind and solar could never be relied on to ensure those mining data centres continued to operate.

As one should assume from the foregoing “bits and pieces” the path to net-zero is full of pot-holes eco-warriors and inane politicians seem unable to visualize!

PS:  I was called out on the following “(Scott Luft noted in a post a couple of years ago; since the ICI (industrial conservation initiative) inception in late 2011 through to the end of 2019 the cost to Class B ratepayers was approximately $1.4 billion (average of about $170 million per annum) paid to reduce the GA for those large industrial ratepayers.)”.  I would point out I always have a lot of faith in what Scott posts so I must assume it related to something as simple as a misplaced period “.”!  It turns out the OEB, Market Surveillance Panel back in December 2018 evaluated the ICI and in their report stated:  “In 2017, the ICI shifted $1.2 billion in electricity costs to households and small businesses—nearly four times greater than the amount in 2011. In 2017, the ICI increased the cost of electricity for households and small businesses by 10%.”

Ford Energy Act Revolt (FEAR)

An earlier article reflected on how the Ford led government is kowtowing to the Trudeau led government and FEAR mongering in respect to the “climate change” crusade. It suggested the Minister of Energy, Todd Smith was pushing for more negative action in respect to Ontario’s energy sector via directives to both IESO and the OEB that would serve to punish ratepayers/taxpayers for fossil fuel consumption.

The alarming ones were referenced as Ministerial directives from Minister of Energy, Todd Smith, to IESO with the first related to “Clean Energy Credits” and the second to “Pathways to Decarbonization”.  He also has asked the OEB to investigate options for a “New Ultra-Low Overnight Electricity Rate”.

Let’s examine the directives to IESO!

Clean Energy Credit Directive to IESO

Energy Minister Smith’s letter of direction to IESO instructed them “to provide further value for ratepayers by supporting the creation of a voluntary clean energy credit market“. That suggests he is a believer in increasing costs to consumers to eliminate “emissions”!  Is he simply following orders from above?

Needless to say, IESO take instructions from the Ministry so they have commenced the process by issuing an “Engagement Plan” meant to respond to the Ministerial directive! The amusing thing about his directive is he says the objective is; “making life more affordable and I believe ratepayers can reap further value from the electricity system that they have built.“ Hard to believe requiring ratepayers to purchase Clean Energy Credits (CEC) will make “life more affordable”.  It is somewhat mindboggling to research CEC values as they are all over the map in respect to prices.  A somewhat dated article (January 22, 2021) about prices in the New England states show their costs as anywhere from $11.05/MWh to $233.75/MWh depending on the state involved.

Because Ontario’s electricity sector is one of the lowest emitters of CO 2 Minister Smith seems to believe we can, as an example, get an agreement to those using fossil fuels to heat our homes or running a business to purchase CEC!  The revenue will then be used to reduce our costs; making “life more affordable”.  It sounds too much like the Federally imposed “carbon tax” which does nothing more than increase the number of bureaucrats taxpayer’s support while increasing our cost of living! The “credit offerings” will include: “nuclear, waterpower, wind, solar and bioenergy.“ Smith’s letter doesn’t clarify; if you have solar panels on your roof will you be asked to hand out a CEC or whether you will be paid for doing so? One should suspect the various contracted parties under the FIT (feed in tariff) programs will not willingly pass those CEC’s on unless they are compensated.  The other issue is by requiring those who emit CO 2 to purchase CEC means any household using natural gas as a heating source may be required to purchase those CEC.  We should note those same households are already paying carbon taxes imposed by the Federal Government along with the Provincial Sales tax.  CEC simply look to be a further tax increase!  

One would hope the IESO point out the fallacies with the Ministerial directive and stand up for us ratepayer/taxpayers!

Pathways to Decarbonization

On October 7, 2021 IESO released a report titled “Decarbonization And Ontario’s Electricity System” which was a response to thirty (30) municipalities who had pressured the Ministry of Energy to phase out natural gas plants.  IESO’s report of 27 pages outlined the cost to do that would hit ratepayers with $27 billion and raise the price of household electricity bills by $1,200 annually; an increase of 60%. Not quite what the McGuinty/Wynne led government put us through but still very significant during this high inflation period.

Despite that rather shocking news Minister Smith on the same date (October 7, 2021) as IESO’s report, issued a directive to them and it stated “I would ask that IESO evaluate a moratorium on the procurement of new natural gas generating stations and develop an achievable pathway to zero emissions in the electricity sector.”  One should wonder, did he read the 27 pages of the IESO report or not equate what he was suggesting we do in Ontario with what was happening in Europe?  An article just nine days before he issued the directive noted electricity prices climbing to record highs in the UK and EU countries. Renewable energy’s failure in the form of wind and solar’s absence coupled with low water levels were causing electricity prices to climb to record highs at the same time as a price spike in natural gas arrived.  Anyone even casually, following the news at that time out of the UK and most other European countries would have discovered how the efforts to reach net-zero were causing both economic pain and energy poverty. Needless to say, things are much worse now and all of North America has been affected by the increase in the market prices of oil, gas and coal.

Despite the foregoing, IESO will follow Minister Smith’s directive and have commenced the “engagement process” to develop their response.  One would assume the evaluation will mirror that of their earlier report and likely suggest costs will be even higher.

As the heading on this article implies, we should all be “fearful” of what the Ford government is doing as it seems set to create another sharp rise in the cost of electricity despite the fact Ontario has one of the cleanest non-emitting grids in the world. 

Virtue signaling is costly so perhaps the time has come to repulse the “FEAR” and revolt!

PS:  More to come.

ESG is Fully Endorsed by Public Sector Pension Plans

The Beatles song “Revolution” lyrics should be required reading for all the “woke” generation pushing the “net-zero” concept. When discovering something recently it brought to mind the words of that classic!  Pre-chorus 3 even had the following words: “But if you go carrying pictures of Chairman Mao You ain’t going to make it with anyone anyhow“!  

The ESG Revolution

We often discover, after it happens and behind the scenes; bureaucrats (federal, provincial and municipal) support politicians advocating for what they perceive as beneficial to them and do so, without regard for taxpayers obligated to pay the price for their indulgence.

Such was the case when unbeknown to most of us taxpayers those bureaucrats got together via eight publicly supported pension plans  (PPP) and in a press release dated November 25, 2020 united for a cause advocated by the Federal Liberal Party. The cause was their undated agreement to push for ESG (environmental, social and governance) factors when investing our taxpayer dollars (federal and provincial) in any future investments for the benefit of their member’s pensions.

What the foregoing meant was; those “PPP” agreed to impose ESG standards on publicly traded and private companies.  The impact would be on those companies ability to attract PPP as either shareholders or lenders for debt raising via bond issues, etc.  Those public sector pension plans at the time of the signing of the agreement held $1.6 trillion in assets which was close to what Canada’s GDP (gross domestic product) was in 2020 at US $1.57 trillion. A reflection on the power they hold over us lowly taxpayers!  The agreement is not only undated and mind boggling but also not in tune with most taxpayers as to how they should allocate our tax dollars that created their $1.6 trillion value.

The full text of the short but “undated” and compelling agreement follows:

Companies and investors must put sustainability and inclusive growth at the centre of economic recovery

COVID-19 continues to impose a huge toll on our daily lives, impacting families, businesses, public institutions and civil society worldwide. The pandemic and other tragic events of 2020 have revealed pre-existing business strengths and shortcomings with respect to social inequity, including systemic racism and environmental threats.

It is imperative we rebuild our economies in ways that create greater systemic resiliency and inclusive growth. The time to act is now, and each of us has a role to play. We call on companies and investment partners to help drive lasting change by placing sustainability at the centre of their planning, operations and reporting.

As CEOs of Canada’s eight largest pension plan investment managers, representing $1.6 trillion in assets under management, we are committed to creating more sustainable and inclusive growth by integrating environmental, social and governance (ESG) factors into our strategies and investment decisions. It is not only the right thing to do, it is an integral part of our duty to contributors and beneficiaries. Doing this will unlock opportunities and mitigate risks, supporting our mandates to deliver long-term risk-adjusted returns.

To deliver on our mandates, we require increased transparency from companies. How companies identify and address issues such as diversity and inclusion, human capital, board effectiveness and climate change can significantly contribute to value creation or erosion. Companies have an obligation to disclose their material business risks and opportunities to financial markets and should provide financially relevant, comparable and decision-useful information. While we recognize companies face a myriad of disclosure frameworks and requests, it is vital that they report relevant ESG data in a standardized way.

We ask that companies measure and disclose their performance on material, industry-relevant ESG factors by leveraging the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework to further standardize ESG-related reporting. While the SASB standards focus broadly on industry-relevant sustainability reporting, the TCFD framework calls for climate-specific disclosures across several reporting pillars (governance, strategy, risk, and metrics and targets). Both are useful to investors and informative to companies working to frame their ESG reporting.

We are confident the ability to successfully address and adapt to these 21st-century business risks and opportunities is a distinguishing feature of great companies. While for many this will require greater ambition than in the past, we believe companies demonstrating ESG-astute practices and disclosure will outperform over the long-term.

For our part, we continue to strengthen our own ESG disclosure and integration practices, and allocate capital to investments best placed to deliver long-term sustainable value creation.

Inspired by this historic opportunity to help confront the most urgent challenges facing our global community, we ask others committed to our vision to join us on this journey towards a more sustainable future.“   

The eight CEOs who signed the agreement represented the following public pension plans:

Alberta Investment Management Corporation, British Columbia Investment Management Corporation, Caisse de dépôt et placement du Québec, Canada Pension Plan Investment Board, Healthcare of Ontario Pension Plan, Ontario Municipal Employees Retirement System, Ontario Teachers Pension Plan and the Public Sector Pension Investment Board!

The reference to SASB and TCFD in the agreement suggests these two UN inspired creations from a 2004 letter sent by Secretary General Koffi Annan to 50 CEOs of major financial institutions have completely revised the way we have been measuring financial performance over the centuries. It suggests 2 + 2 no longer equals 4!  To pretend companies will become “great” by adopting ESG factors flies in the face of all logic. The “E” (environmental) in ESG is what the Mark Carney, Michael Bloomberg political fans and eco-warriors have focused on and if the punishment of the middle and lower classes continues under their direction and the politicians they have influenced, we should expect:

As the Beatles opined “You say you want a revolution”!

NB: The Washington based “Institute for Pension Fund Integrity” in a report concluded: “Although there are over $20 trillion in ESG assets under management, it lacks a standardized definition under which all firms can unite and under which regulators can address legitimate concerns.“  

Mandate Letters from PM Justin Trudeau has Canada Targeted for a “Net-Zero” Economy”

Back in June 2020 an article posted on Canadians for Affordable Energy titled,How best to shut down the Canadian Economy? It’s Complicated!” highlighted emissions reductions via the push for high carbon taxes versus government funding (grants) for building retrofits, purchase of EVs (electric vehicles), transit system electrification, etc. etc. along with regulations to achieve the objectives. My view was to oppose those suggestions as either would cause irreparable harm to Canada’s economy.

Fast forward to the recent election which gave the Trudeau led government a minority, but he acts as if he had received a majority. It is therefore no surprise, both of the above methods of going “green”; with the net-zero” emission target, is now firmly entrenched!  Trudeau and his large contingent went to COP26 in Glasgow and committed Canada to reduce emissions by 45% by 2030 and 100% by 2050. That suggests he may have cut a deal for support from the NDP before he left or his puppeteers wrote his script.  He sits as Canada’s Prime Minister and recently issued “mandate letters” to his newly appointed cabinet ministers in addition to: President of the Treasury Board, President of the Queen’s Privy Council and Leader of the Government House of Commons.

Each of the thirty-eight (38) letters he issued contained the following paragraph indicating he, or his puppeteers, are confident we will build that “cleaner, greener future”:

The science is clear. Canadians have been clear. We must not only continue taking real climate action, we must also move faster and go further. As Canadians are increasingly experiencing across the country, climate change is an existential threat. Building a cleaner, greener future will require a sustained and collaborative effort from all of us. As Minister, I expect you to seek opportunities within your portfolio to support our whole-of-government effort to reduce emissions, create clean jobs and address the climate-related challenges communities are already facing.

There are many smart people around the world who clearly enunciate; the science is not clear and conclude there is much more that affects climate change than mankind’s emissions.

PM Trudeau believes reducing emissions, as he promised at COP26, will create clean jobs at little cost. Those were the promises made to us in Ontario!  Dalton McGuinty and his right-hand man, George Smitherman, promised Ontarians those same things and the puppet masters behind that Provincial Liberal Party (Gerald Butts, Ben Chin, etc.) are now pulling the Trudeau strings.  An example follows:

Mandate Letter to Stephen Guilbeault, Minister of Environment and Climate Change

Trudeau’s mandate letter to Stephen Guilbeault, Minister, Environment and Climate Change is but one example of the mandate letters! It contains thirty-nine (39) commitments most ofwhich require Guilbeault to deal with other Federal ministries as well as the provinces and territories!

The following is one (1) of the 39 commitments in the Guilbeault mandate letter;

To achieve Zero Plastic Waste by 2030:

  • Continue to implement the national ban on harmful single-use plastics;
  • Require that all plastic packaging in Canada contain at least 50 per cent recycled content by 2030;
  • Accelerate the implementation of the zero plastic waste action plan, in partnership with provinces and territories;
  • Continue to work with provinces and territories to ensure that producers, not taxpayers, are responsible for the cost of managing their plastic waste;
  • Work with provinces and territories to implement and enforce an ambitious recycling target of 90 per cent – aligned with Quebec and the European Union – for plastic beverage containers; 
  • Introduce labelling rules that prohibit the use of the chasing-arrows symbol unless 80 per cent of Canada’s recycling facilities accept, and have reliable end markets for, these products; and
  • Support provincial and territorial producer responsibility efforts by establishing a federal public registry and requiring producers to report annually on plastics in the Canadian economy.”

As a presumed follow-up to the Mandate letter, Guilbeault’s Ministry issued a “News Release” on December 21, 2021 which presumably starts the response to his boss’s (Trudeau) instructions: 

The Government of Canada’s approach to banning harmful single-use plastics is based on evidence, facts and rigorous science. The proposed Regulations brought forward today are grounded in the findings of the Science Assessment of Plastic Pollution,* which the Government finalized in October 2020 after examining hundreds of scientific studies and other sources of evidence, which confirmed that plastic pollution is everywhere in the environment and that it has harmful environmental impacts.”

The quote in the press release from Minister Guilbeault indicates the “plastics ban” is a reflection of their plan for the plastic “circular economy”!  The upcoming bans on plastic products include the following presumably as stage one of the transition: checkout bags, cutlery, foodservice ware made from or containing problematic plastics, ring carriers, stir sticks and straws.

Reflecting on Trudeau’s mandate letter and Guilbeault’s plans one should wonder:

1.Did Guilbeault use a polyester rope to illegally climb the CN Tower?

2.When Guilbeault climbed the CN Tower was he wearing a polyester work suit?                                      

3.Are the glass frames around his glasses made of hemp?

4.Does the bicycle he has hanging on his wall have any fossil fuel components like say the tires?     

5.Is Guilbeault aware the solar panels he installed on Ralph Kleins house cannot be recycled?                       

6.Will Guilbeault impose tariffs on imported goods and “single-use” plastic packaging material protecting those goods? 

7.Will he insist China does what he is telling Canadians to do?

 *From the report:“In Canada, it is estimated that 1% of plastic waste enters the environment.“                                                                                                                                                                                        

                                                                                                                                                                                                       

ESG appears to be the acronym for Economic Spurious Gibberish

The term “environmental social and governance” (ESG) appears to be a concept developed by Ivo Knoepfel of the University of Zurich via his paper “Who Cares Wins”. The paper led those who claim mankind is responsible for “climate change” to advocate the use of ESG terminology to further their “net-zero” by 2050 target! Interestingly, a recent referendum held in Switzerland related to the plan to reach net-zero emissions by 2050 was rejected by Swiss voters so their politicians will have to back away from their signature to the “Paris Agreement”.

The hypocrisy of those recognized as the “super rich” or the “elites” of the world pushing the “net-zero” emissions by 2050 and the need to audit ESG commitment(s) by all corporations is mind-blowing!

The foregoing was recently highlighted by the world’s largest asset manager BlackRock and one of Canada’s largest, namely Brookfield

An article in the FP highlighted their hypocrisy, with the headline: “Brookfield, BlackRock bids for Saudi Aramco pipeline underscore an ESG dilemma”. Both of these institutions have pushed the “climate change” agenda and the focus to reach net-zero, so one wonders; why are they competitively bidding to acquire a gas pipeline and how would it allow them to achieve their purported end goal?

To reiterate the latter point it is noteworthy to be aware that Larry Fink, founder of BlackRock in his annual letter to CEO’s in 2021 stated:  “we believe all companies – including BlackRock – must begin to address the transition to net zero today. We are taking a number of steps to help investors prepare their portfolios for a net zero world, including capturing opportunities created by the net zero transition.

Likewise if one looks at the claim made by Mark Carney (Vice Chair of Brookfield), after his appointment, he went on to say publicly: “The reason we’re net zero is that we have this enormous renewables business,” he said, and thus “all the avoided emissions that come with that offset existing investments in entities that emit carbon.“  The media pushback on his remark forced him to admit it was a false claim.

Both Larry Fink and Mark Carney are members of the Board of Trustees of the WEF (World Economic Forum) and Klaus Schaub, WEF’s founder, states you won’t be allowed to join the WEF unless the company or organization you represent have committed to achieve net-zero by 2050 or sooner!

Past and Present Brookfield Actions

Brookfield’s history goes back to 1899 but we will look at only a few of their activities in the past decade. Let’s start with their purchase in October 2012 of Enwave Energy for C$480 million owned jointly by the City of Toronto and OMERS (Ontario Municipal Employees Retirement System) at that time.  Enwave was, and still is, a district energy system provider, meaning they don’t generate greenhouse gases as the energy is geothermal (includes lake water) to heat and cool buildings.

Fast forward by almost 9 years to February 2021 and Brookfield announced they sold Enwave for US$4.1 billion (C$5.1 billion) to Ontario Teachers’ Pension Plan and Australian firm IFM Investors (each owning 50%) and presumably celebrated a very nice return on their original investment.  What is sadly amusing about this buying and selling occurrence is that one Government of Ontario pension plan (OMERS) sold their position back in 2012 for a fraction of what another Government of Ontario pension plan (OTPP) purchased it for in 2021. 

To make taxpayers more upset, back in 2019 former Minister of the Environment, Catherine McKenna handed Enwave $10 million of our tax dollars saying this partnership will help create jobs and help tackle climate change in asmarter way.“   

Just days ago, the (CIB) Canada Infrastructure Bank, (created in June 2017 to provide up to $35 billion to support infrastructure projects) issued a press release stating:  “The CIB is committing $600 million to the project which allows Enwave to accelerate and scale the build-out of its district energy systems.” The press release is vague in that it doesn’t indicate if it is an investment or a loan agreement. Either event will simply see tax dollars flying out the door while the Government increases our deficit and borrows the money they claim is for the good of the planet. The CIB now falls under the purview of Minister Dominic LeBlanc who in the past was singled out by Canada’s ethics commissioner when he “broke conflict of interest rules when he awarded a lucrative Arctic surf clam license to a company linked to his wife’s cousin.“

So, one should wonder, what did Brookfield do with that US$4.1 billion to assist them in their push to get to net-zero their Vice Chair Mark Carney, surely emphasized?  We don’t really know, but:

Brookfield wound up competing with Pembina Pipeline Co. for the purchase of Inter Pipeline and they won with a hostile takeover offer by outbidding Pembina with an accepted offer of C$8.6 billion.  One should surely wonder how that will assist Brookfield in getting to the “net-zero” target and how it fits with their 63 page ESG report for 2020?

The CEO’s letter within Brookfield’s ESG report contained the following:

Within our ESG initiatives, we are directing our efforts to the transition to a net zero carbon economy. This transition will affect virtually every business in every country, and we are fully committed to doing our part to decarbonize. In March 2021, we took an important step as part of our commitment to achieving net zero throughout our business: becoming a signatory to the Net Zero Asset Managers (NZAM) initiative.”

One should wonder with the foregoing ESG initiative why would Brookfield purchase a pipeline and pursue another one in the middle east in competition with BlackRock (another NZAM member)?

From all appearances ESG, ie: “Economic Spurious Gibberish“ is the acronym for the heading in this article and has nothing to do with “environmental social and governance” they pretend it does!

Marc Patrone, 960 AM Radio Chat about COP 26, Old Growth Forest, etc.

Marc kindly had me on his show today (November 4, 2021) and we covered a fair amount of ground including what is going on at COP 26, how the UK fired up coal plants to keep the lights on as well as other issues such as lumber prices rising, etc.

You can listen to our chat on the radio podcast here starting at 01:21:35

OR

If a subscriber to NEWSTALK CANADA you can watch and listen to our chat here:

https://www.newstalkcanada.com/?page_id=22