How best to shut down the Canadian Economy? It’s Complicated!

On June 7, 2020 the Globe and Mail published an article by Adam Radwanski criticizing an earlier piece by Christopher Ragan and Andrew Potter of McGill University. The McGill team advocated the “green recovery” plan as an “excellent opportunity to substantially increase the federal carbon tax”–“rather than trying to pick climate-change winners through government spending”. Ragan, founder of the Ecofiscal Commission, and a strong advocate for the carbon tax, has suggested it would have to increase to $210/tonne to be effective in the reduction of emissions to contain global warming.

Radwanski’s article shows he isn’t a huge fan of the carbon tax. In his words: “it’s hard to imagine any government deciding to immediately “double or triple” a carbon price in the middle of the worst economic crisis since the Great Depression.” Anyone with a small amount of common sense would support his view! Raising taxes as we try to emerge from a chronic financial crisis and record unemployment rates does seem a bad plan. As Radwanski notes, the government would need to impose “huge costs on businesses”. This would likely result in many businesses either failing or moving to friendly jurisdictions like the US that have pulled out of the Paris Accord and where only a few states impose carbon taxes.

Radwanski’s article then undertakes a review of other options for intervention – and subsidization. These are just the sorts of things the Eco-Fiscal Commission argued against. He speaks favourably about government subsidizing building retrofits and electric vehicle purchases which he says are: “two of the most obvious potential stimulus measures”. He goes on to say the public won’t buy EVs “if there isn’t enough charging infrastructure” implying the need for government support there too. He notes that transit systems can’t afford to buy electric buses due to ridership drops and opines how the Feds could help finance their purchases. He also expresses concern and the need “to accelerate the end of coalfired power” and avoid “a looming ramp-up of gas-fired energy generation in Ontario.” Interestingly, he avoids mentioning the fact that the very same “gas-fired energy generation” in Ontario is required to back up the McGuinty/Wynne contracted intermittent and unreliable wind and solar generation that drove up energy costs.

Radwanski’s conclusion? The shift – by which he seems to mean to a green future – is going to require more than one policy tool. One assumes he means some combination of carbon taxes and various interventions that pick favourites with government subsidies.

And that’s where Mr Gerald Butts and Mr Bruce Lourie enter the conversation.

The former, in his tweet of June 9th said: “Strong piece by @aradwanski just set the global standard for a clean recovery”! Hours later Bruce Lourie’s response was simply: “It’s complicated”!

Well there you go. Two leading architects of the last two decades of interventionist and expensive government action on energy in Ontario and Canada applaud a piece saying, in sum, that we need more, not less, taxation and intervention going forward.

The Green Energy Act – where both Butts and Lourie had a hand – resulted in Ontario having some of the highest electricity prices in North America. But there is no talk of that here. There is no talk of how all those programmes and policies they thought up have hurt affordability, and with it our competitiveness. No, all we get is the statement that Radwanski’s call for more initiatives is setting a “global standard” and the very helpful comment that “it’s complicated.” Lourie and Butts are greenwashing Canada’s taxpayers and seem hell-bent on further destroying the Canadian economy –their new “Resilient Recovery” initiative is a case in point.

What none of these people -= Ragan, Potter, Butts, Lourie or Radwanski ever talk about is the fact that the Canadian consumer is being hit again and again with more and more costs. When will this end? Only when someone steps forward and says stop – pull out of the Paris Accord, abandon ridiculous targets that hurt Canadians, and get on with allowing Canadians to get on with trying to recover from these messes. It isn’t that complicated!

NB:  Also published on Canadians for Affordable Energy.

How best to shut down the Canadian Economy? It’s Complicated!

Dan McTeague, former Liberal MP and well known as the “Gas Price Wizard” is also President of Canadians for Affordable Energy. Dan invited me to submit a post which is now up on that website.

It covers a fair amount of ground referencing a couple of Globe & Mail articles and the reaction to them by Gerald Butts and Bruce Lourie.  I think you will find it interesting and not too “complicated”!   Find it here:

http://www.affordableenergy.ca/lourie_and_butts_wrestle?utm_campaign=how_best_to_shut_down&utm_medium=email&utm_source=affordableenergy

Report of power shortage in Ontario a Chicken Little story

October 16, 2018

IESO says the sky isn’t really falling. So why does the Globe and Mail say it is?

Reading the lead article in today’s Globe and Mail business section of October 16, 2018 headlined “Ontario faces electricity shortfall within five years” one would think the sky is falling.  The article references an IESO report which the Globe reporter suggests “In its forecast IESO concluded the projected summer peak shortfall will be about 1,400 megawatts in 2023 and will grow to 3,500 megawatts later in the decade”.

Wow!

But, spend some time reviewing the 130-page IESO document 2018 Technical Planning Conference and you will discover under the heading “Energy adequacy outlook-key observations” this statement from the IESO.

“Absent continued availability of existing resources post contract expiration, Ontario is expected to remain energy adequate until the late 2020s. Energy production shortfalls would begin to emerge in the late 2020s.”

The forecast goes on: “However, with continued availability of existing resources post-contract expiration, Ontario is expected to remain energy adequate throughout the planning outlook.”*

That means the IESO forecast, without existing expiring contracted generation, is that Ontario is “energy adequate” until the late 2020s and with continued availability until 2035!

Why the dire headline?

The IESO forecast of “Higher Demand” for Ontario starts in 2019 at about 143 TWh increasing to 163 TWh by 2035. The “Lower Demand” scenario starts at about 139 TWh in 2019 and drops to 134 TWh in 2035. To put that in context, total Ontario demand in 2017 was 136.55 TWh and generation 150.7 TWh.

On the generation side, IESO are forecasting “Energy adequacy outlook” (including exports) at 161 TWh dipping slightly after the Pickering nuclear closings and increasing to about 169 TWh in 2035. If the current generation capacity and “continued availability of existing resources” is to remain adequate and generate that output we appear to be in a comfortable position. The forecast clearly contains the caveat that shortages will occur in circumstances “Without continued availability of existing resources post contract expiry.”

What that means: any shortfalls will be occasional in nature and occur during a few peak hours. It appears IESO have plans to cover off those forecasted rare shortfalls via the Industrial Conservation Initiative (ICI) etc., as they note “The current impact of ICI is estimated to be 1,400 MW.”

How and why the Globe’s energy reporter headline suggests the sky is falling is upsetting; the latter part of his article articulates some of the factual information outlined above, yet the headline paints a dire picture.

Perhaps scary headlines sell more newspapers?

PARKER GALLANT

*The outlook period in the forecast extends to 2035.