Pan-Canadian Expert Collaboration, Phase Four

As Yogi Berra once said, “it’s déjà vu all over again”!

My somewhat relentless review of the electricity sector started about 10 years ago as Ontario embarked on the unmitigated disaster that was the Green Energy Act and its focus on acquiring unreliable wind and solar generation. I was recently reminded; many of the ENGO names and individuals associated with my research back then are still around and have become more verbose. They are imbibing in more of the panic exercised years ago and using more tax dollars in the process. That conclusion was reached by researching the “collaborators” participating in the captioned, connecting names, reviewing websites and CRA’s Charities files to see where the money comes from and where it goes.  Those ENGO and individuals have moved on from renewable energy worship to “carbon tax” endorsement!

One example was one of those chosen as an expert collaborator highlighted in Phase Three.  MaRS Discovery District, a creation of the McGuinty led, Ontario Liberal ruling party. In 2014, MaRS received $26.7 million from the province and zero from the Feds. In 2018 the province gave them $31.7 and the Feds coughed up $2.9 million.  In other words, our tax dollars to them increased $7.8 million (29.2%) in four years.  Most readers will recall Ontario’s taxpayers bailed out MaRS failed real estate deal to the tune of $308 million. MaRS also receives revenue from other charities ($2.8 million in 2018) and hands out money to other charities such as Evergreen, (somewhere between $100/$500 thousand) one of the other “collaborators” in the P-CEC group.  MaRS also handed out grants to CEGN (Canadian Environmental Grantmakers Network), a Bruce Lourie creation renamed Environment Funders Canada. Lourie is President of the Ivey Foundation another “collaborator” in the P-CEC group.

From outward appearances the chosen ones are destined to tell PM Trudeau’s government and his new “Environment Minister”, Jonathan Wilkinson, how much to UP the “carbon tax”!  MaRS, as noted in Phase Three, also received grants from the Trillium Foundation (provincially owned) and were granted money from another McGuinty creation; Friends of the Greenbelt (FOTG)–funded by taxpayers and another member of Environment Funders Canada. FOTG hand out grants to ENGO’s such as Environmental Defence where Lourie once held a vaunted position. As an aside the CEO of MaRS earns a salary north of $350,000 annually-not too shabby for a registered charity!

Now let’s look at two more of the “collaborators” connected with the Ivey Foundation:

Evergreen and Future Cities Canada—a P-CEC “collaborator”

It’s unclear what Evergreen brings to the table as a collaborator as their focus for almost 20 years has been to convert an old brickworks plant into what is an urban farmer’s and garden market.  Their CEO doesn’t appear to have a degree related to “climate” issues but according to their filing with the CRA it appears he may be paid in excess of $250K per year. Evergreen have done a remarkable job at raising charitable funds over the years, so, maybe that is the key to being chosen.  Revenue in 2008 was $5.758 million and in 2018 was $21.762 million, an increase of 277% in only 10 years.  Their 2018 annual report shows they received over $1 million from both the Provincial and Federal governments and over $500K from the Trillium Foundation (Lourie was a former Director and Trillium are members of Environment Funders Canada). The J. W. McConnell Foundation is also included in the same contributing group as Trillium and also have been a major grantor to one of the Lourie creations (more on that one in the future) and are also members of Environment Funders Canada. They donated $1.1 million in 2017 and $775 thousand in 2018 to Evergreen. In reviewing the Trillium grants listing, it shows they have granted over $1.8 million over the past few years to Evergreen.  MaRS (another collaborator) is credited with donating somewhere between $50K to $100K in 2018 and the same in earlier years. The Ivey Foundation has granted them at least $60K in the past few years.

Adaptation to Climate Change Team (ACT), Simon Fraser University—a P-CEC “collaborator”

Often when researching individuals involved in predicting the end of the world due to “climate change” one finds the parties leading the predictions have little or no affiliation with the sciences needed to logically develop that line of thought.  In the case of ACT, it is led by Deborah Harford.  Ms. Harford is the Executive Director of ACT and her formal training indicates she holds an SFU “Bachelor of Communications and English, Communication and Media Studies”.  Ms. Harford is active in posting any articles favouring the concept of “climate change” as one would expect from her degree, but she posts none on the ACT website with a differing view. SFU prides itself on its affiliation with similar institutions including Clean Energy Canada (launched by Tides Canada) as they attract donations from charitable institutions such as the IVEY Foundation* (over $1 million since 2014), $900K from the McConnell Family Foundation, $2.3 million from the Trottier Family Foundation (another P-CEC “collaborator”!   Both of the latter are members of Environment Funders Canada.

Perhaps if one augments the perceptions of those handing out the grants, the money will continue to flow, to those who produce the prejudicial and supportive reports the grantor sought!  Just an abstract thought!

While Phases one through four of this series have raised the connection concept of the Ivey Foundation’s relationship with six of the P-CEC named “collaborators” there are a few more of interest. The tale of the tangled web will continue in the next Phase!

*A few hundred thousand dollars was also granted to Tides Canada.

Consuming less drives up costs for Class B ratepayers

The IESO (Independent Electricity System Operator) released their September 2019 Monthly Market Report last week.  Ontario’s total consumption was 10.319 TWh (terawatt hours).  Looking back as far as September 2010 for comparison (the year following enactment of the GEA) Ontario consumption in September 2019 was lower than every year since then.  Consumption by Class B ratepayers this past September was down 8.7% (690.000 MWh-750,000 average households’ annual consumption) from September 2018. Class A ratepayers also consumed less (102,000 MWh or 3%) compared to September 2019.

Consuming less means lower costs, right?

The foregoing question/assertion certainly applies to pretty well everything we consume, if the price remains stable.

Due to the perplexity of how the electricity system functions in Ontario consuming less has a limited ability to reduce our costs.  Each and every generation source is basically treated differently in respect to their rank; on access to the grid, pricing (guaranteed or set by the OEB), length of contract term(s), and their perceived effect on global warming!  Both solar and wind generation, as examples of the latter, are granted “first to the grid” rights meaning they rank higher than nuclear plants and hydro generation units.  Additionally, original contract(s) offered prices in 2010 guaranteed for 20 years with large solar at 63.5 cents/kWh and wind at 13.5 cents/kWh along with a 20% guaranteed escalation clause related to increases in the cost of living (CoL).  At the same time IESO must contend with a trading market referenced as HOEP (Hourly Ontario Energy Price). IESO buys or sells generation based on shortages or surpluses to our grid connected markets such as New York, Michigan, etc.   What the HOEP values generation at and what we pay for it via those contracts evolved into what is known as the GA (Global Adjustment Mechanism) ie; contract value minus HOEP = GA.  Contracting for unreliable intermittent generation like wind and solar has made Ontario a supplier of cheap power for Michigan, NY, Quebec and other connected markets as the GA is not a part of the HOEP sale price.

As noted, Class B ratepayers consumed 8.7% less power in September 2019 versus 2018 and IESO reports our all-in cost (GA+HOEP) was $136.97/MWh versus $115.78 in 2018 for a jump of $21.19/MWh or 18.4%!  In the case of Class A ratepayers, because the HOEP fell from $29.94 in 2018 to $14.34 in 2019 they saw a reduction in their cost per MWh falling 7.7% from $77.70/MWh in 2018 to $71.73 in 2019.  The methodology of Class A pricing results in Class B ratepayers paying more of the GA when the HOEP is lower.

The next question one should ask is why is the HOEP lower if we consume less?

That question is related to facts such as, wind and solar generation get “first to the grid” rights.  As noted, September was a low consumption month as are most spring and fall months but that is when wind (in particular) generates the bulk of its power and is surplus to our needs.  The result is IESO is obliged to accept it and sell via the HOEP market or curtail it, which we also pay for.  IESO will also steam off nuclear or spill hydro both of which we also pay for.  When they are selling off the surplus our neighbours may not need the power but if it is really cheap, they will snap it up.  In September, as an example TX (transmission connected) and DX (distribution connected) wind combined was (according to my friend Scott Luft) 948,951 MWh including 141,485 MWh of curtailed wind.  Together the costs of unneeded generation was $126 million. The accepted wind generation was HOEP valued at less than $7.4 million adding $118.6 million to the GA pool. As it turned out accepted wind represented 75.7% of our net exports of 1,067,040 MWh and 50.9% of our total exports of 1,586,880 MWh in September. We clearly didn’t need wind generation in September nor since we started handing out those contracts!

To make the foregoing much clearer a read of Scott Luft’s recent post provides an excellent review of how much wind (accepted and curtailed) he calculated, was not exported.  It is truly shocking to see it is less than 10% in each year going back to 2006. Using September’s costs as the base to calculate how much it has affected ratepayers and taxpayers in Ontario for its output (over 37 TWh) since 2006 is a simple task.

Shockingly it represents a pocketbook cost of over $5.5 billion.

The electricity sector has taken $5.5 billion from the pockets of Ontario’s ratepayers/taxpayers just for wind related contracts.  The $5.5 billion could have actually been used to provide things like; better health care, tax reduction, infrastructure investments, electricity price reduction or flattening which would have attracted investments and created jobs.  Instead, we allowed our provincial government to hand out lucrative contracts to foreign wind and solar developers.  Many of those who rushed here to obtain those contracts have taken our money and sold their projects to our government pension funds and left Ontario for “greener” fields!

What the above shows is the Green Energy and Green Economy Act was a disaster for Ontario and will continue to negatively affect us until the contracts expire or our current government acts to cancel or amend them!

Canada’s government wants us to pay for our GHG emissions … and everybody else’s, too

From today’s Financial Post, another look at Canada’s emissions, and again, wondering why our government portrays us as the environmental bad guys?

Early in my banking career in a discussion about statistics I was told an old joke that rang true enough that it stayed with me. The story goes like this: An interview for a job opening attracted a mathematician, a statistician and an economist. The employer asks them each to calculate the answer to two plus two. The mathematician says four. The statistician, after studying it for an hour, declared the answer to be somewhere between three and five. And several hours later, the economist raises his hand to ask: What answer would you prefer?

The joke explains why it’s so interesting to examine economic data presented in isolation of other related data. For example: the popular manner to present data related to GHG (greenhouse gas) emissions is via “per capita” output, but a better measure would calculate GHG emissions against the economic output of the country. The reason is that the impact on emissions is affected by a country’s population density, its climate and its trade (especially exports) all of which have an effect on GHG emissions.

As one example, the new NAFTA (or USMCA) is a trade deal between Canada, with a population density of four people per square mile; Mexico, with 57 people per square mile; and the U.S., with 92 people per square mile. Obviously, density per square mile will have a direct impact on GHG emissions, and the ability to get products to business and consumer markets, be they imported or exported or produced locally. Similarly, each country’s climate will impact GHG emissions. Canada is much colder than either Mexico or the U.S. It’s why Canadians who can afford it head south in the winter, while the rest of us stay home and try to stay warm by generating GHG emissions.

Canada’s GDP in 2017 was $1.653 trillion and our international trade saw us export $549.6 billion or 33.2 per cent of our GDP. We imported $573.6 billion, leaving us with a trade deficit of $24 billion. Our largest exports were “energy products,” totaling $94.8 billion, mainly crude oil and crude bitumen.

Natural Resources Canada notes of Canada’s crude oil production: “GHG emissions per barrel of oil produced in the oilsands have fallen 29 per cent since 2000” and “Canada is the fourth largest producer and fourth largest exporter of oil in the world.” It also notes that the oilsands emit about 60 megatonnes of GHGs per year. That’s 8.5 per cent of Canada’s total emissions and 0.13 per cent of annual global emissions. Eighty per cent of the emissions in a barrel of Canadian oil are emitted by the end user — almost all of it outside of Canada.

Now, if one examines GHG emissions of Middle Eastern oil-producing countries such as Saudi Arabia, UAE, Kuwait, Qatar and Oman, one finds they emit more GHGs “per capita” than Canada — and way more GHG emissions per $1,000 of GDP.

In 2017 Canada exported $444.9 billion to its biggest markets: NAFTA and China (comprising 81 per cent of all Canadian exports). Those exports generated GHG emissions of 301 kilograms per $1,000 of GDP, totaling approximately 133,915 kilotons.

Our imports from the U.S., Mexico and China amounted to $414.5 billion and represented about 181,386 kilotons of GHG emissions produced in those three countries. So, despite importing $30.4 billion less from the U.S., Mexico and China, the GHGs that those countries produced to make goods imported by Canada was around 47,471 kilotons higher than the GHGs Canada produced to export goods to those three countries — exports of which oil made up the largest share, and exports that were actually worth more in total value than the higher-emitting imports.

Despite this, Prime Minister Justin Trudeau and Minister of the Environment Catherine McKenna want to hit all Canadians with a carbon tax. In effect, they want us to pay for our trading partners’ emissions as well as our own. But if we really wanted to contribute to a global reduction in GHGs, perhaps the better way would be to build a pipeline or two in order to get our low-emission crude to foreign markets. That would generate good jobs and tax revenue for Canada while reducing global emissions. Who knows? It might even help balance the federal balance the federal budget.

Parker Gallant is a retired bank executive.

 

What are the indirect costs of the Trudeau government carbon tax?

Families should plan now for their carbon tax — er, “pollution tax” rebate.  You might soon be told you’ll need sweaters as part of a climate action plan.

[Photo: Dan Gold]
Trying to determine exactly what the federal Liberal government is doing with their plan to tax “pollution” via a carbon tax is an exercise in total frustration. The recent announcement from Prime Minister Justin Trudeau promised taxpayers in the four* provinces that said they will not impose a carbon tax, was that he will be hitting them with “a price on pollution that causes climate change from coast to coast to coast”!

He went on to say he would help Canadians adjust to the tax by handing out rebates to 80% of the families in those four provinces and claimed “eight in ten families will get back more than they pay directly”!

What they will pay indirectly is unknown.

Curiosity piqued, I decided to calculate how much that might be.

Emissions by the four provinces total (Source: StatsCan 2016) 273.1 megatonnes so, at $20 per tonne, the “pollution” tax should** generate $5,462 billion (rounded to $5.4 billion).

StatsCan (2015) says there are 6,513,000 households in the four provinces. Trudeau said rebates in the first year to each household would be as follows: Ontario $307, New Brunswick $248, Manitoba $336 and Saskatchewan $598. The total rebates will therefore be around $1.6 billion meaning about $3.4/3.8 billion will be “indirect” *** taxes increasing the cost of other consumption by $522 per household.

So, the “rebate” will represent about 30% of the total “pollution” tax the federal government will levy under the “National Carbon Plan” or NCP. The Prime Minister claims all the funds collected under the NCP will be disbursed to other recipients such as schools, universities, municipalities, hospitals, etc. etc.

Now, forgive me if I engage in wild speculation about the future when Canadian households start to experience the NCPP (National Carbon Poverty Plan). It might be like Ontario households when they experienced the cost of electricity surging over 100% in just 10 years. I suspect we will experience rhetoric similar to that from Ontario’s various energy ministers such as Bob Chiarelli and his “It’s less than a cup of Tim Hortons’ coffee a year,” response to the $1.1 billion cost of the gas plant scandal. Beyond that Energy Minister Chiarelli also linked in to the WWF (World Wildlife Fund)**** when he and other Ontario Liberal Ministers in early 2014 joined WWF to celebrate “National Sweater Day”! The message conveyed was that Ontarians could fight climate change by Putting on a sweater and turning down the thermostat. If every Canadian turned down their thermostat in the winter we could save 2.2 megatonnes of carbon dioxide per year”.

Two years later, after Dianne Saxe was appointed Ontario’s Environmental Commissioner by the Wynne government, she issued her first report to the Ontario Legislature. In it is this statement: “the energy required to heat an existing home can be reduced many different ways (see Figure 1.1), including by:  reducing the target temperature and putting on a sweater”.

What we are liable to see in a few years, should the Justin Trudeau Liberals win a second term is a lot more about sweaters. (It’s already out there: simply Google “Justin Trudeau+sweaters”! The search will get 126,000 hits.)

Maybe Canadian households receiving the rebate in 2019 should resolve now to use the money to immediately purchase one of the many “Trudeau” variety of sweaters available in the marketplace.

PARKER GALLANT

*Manitoba, New Brunswick, Ontario and Saskatchewan.

**Larger companies will be taxed at a lower rate of 80/90% escalating to 100% over time.

***Direct taxes apply to tax on fuel for home heating and for transportation.

****Gerald Butts, senior political advisor to the PM was the CEO of WWF from 2008 to 2012