Category Archives: Ontario

Nanny McGuinty strikes again

I understand the thinking that piling a whole bunch of young people into one car can be a bad idea, but I’m stunned that the Ontario government wants to forbid it entirely. Under legislation introduced today in the interests of road safety, teens can’t carpool for a night out (or to summer jobs) and they can’t be designated drivers.

It amounts to a whole lot of pig-headed moralizing on the part of the McGuinty government:

Premier Dalton McGuinty said Tuesday the “modest restrictions” will include a zero blood-alcohol limit for all Ontario drivers aged 21 and under and escalating sanctions for young drivers who speed, starting with a 30-day licence suspension.

Drivers between 16 and 19 will also be limited to having only one teenage passenger in the vehicle, which Mr. McGuinty conceded will mean three 19-year-old adults could not go to a movie — or church — in the same car.

“Perhaps the most precious thing we have in society is our children, and that includes our older children,” Mr. McGuinty said.

Adam Radwanski dissects it all skilfully here. And one of his commenters points out an additional problem: the 30-day licence suspension for younger drivers caught speeding to any extent at all will put them in an impossible position, given that the normal speed on any road anywhere is usually 10 to 20 kilometres per hour above the legally posted limit.

Enforcing speed limits has always been at the discretion of the police, and discretionary laws are pretty much always bad because they give enforcers too much power, but this’ll crank up street officers’ authority over even 21-year-old drivers tremendously.

Subsidies to big companies are NOT conservative

Bit of an up-and-down day as the federal Conservative government doles out goodies in advance of an expected election call.

The up: Pushing the use of low-speed electric trucks, mostly for whirring around large industrial sites, ports, resorts and that kind of thing.

The down: Eighty freaking million dollars for Ford, in a “repayable” loan in support of a project to build greener engines. Big engines, mind you, for big cars — the same ones the Ontario Liberals kicked in $30 million for not long ago. The Tories say that that the outside, their loan will “create or sustain” 757 jobs, making the price tag about $106,000 per, in a project that apparently no bank or other professional investment entity was interested in supporting.

The Conservatives must know this is nuts, contrary to every economic principle they have previously espoused. Governments shouldn’t pick winners, even in pursuit of worthy causes like environmentalism. But apparently when there’s an election to win, all that goes out the window. It’s troubling that there’s no longer any party that seems to stand for letting big companies live or die on their own.

Ontario and Quebec do cap-and-trade

It took some doing, but I finally found a copy of the Quebec–Ontario cap-and-trade deal (PDF) on the website of Quebec Premier Jean Charest. Here’s the text, if you’re looking for it yourself. My commentary’s beneath.

***

Provincial – Territorial
Cap and Trade Initiative
Memorandum of Understanding

WHEREAS the Intergovernmental Panel on Climate Change (IPCC) recently concluded that warming of the climate system is unequivocal and that most of the observed increase in global average temperatures is due to human activities; and

WHEREAS strong, immediate and sustained action is an absolute requirement to minimize the risks posed by climate change; and

WHEREAS early action to reduce greenhouse gas emissions is now understood to be less costly than the severe economic impacts associated with inaction; and

WHEREAS reliance on intensity-based targets does not provide for sufficient certainty of real reductions in greenhouse gas emissions; and

WHEREAS collaboration among provinces, territories and states of the United States and Mexico engaged in developing and implementing climate change policies provides a consistent approach to achieving absolute greenhouse gas emissions reductions; and

WHEREAS Ontario, Québec and other provinces and territories have joined The Climate Registry; and

WHEREAS cap and trade systems are a flexible, market-based mechanism that can facilitate the reduction in greenhouse gas emissions and provide opportunities for lowering the global costs of greenhouse gas emissions reductions; and

WHEREAS greenhouse gas cap and trade systems can facilitate the transition to a low carbon economy and encourage technological innovation, economic growth and job creation; and

WHEREAS the ability to link to other jurisdictional greenhouse gas cap and trade systems can provide greenhouse gas emission reductions at lower cost, allow for larger trading volumes and improved liquidity and improve the pace of innovation; and

WHEREAS harmonizing reporting requirements with other jurisdictions will facilitate the joining of new partners and linkages with other cap and trade systems; and

WHEREAS Ontario and Québec agree that like-minded provinces and territories are invited to sign this Memorandum of Understanding and work together collaboratively on this cap and trade initiative.

NOW THEREFORE, the signatories to this Memorandum of Understanding agree to collaborate on a Provincial and Territorial Greenhouse Gas Cap and Trade Initiative including the design and implementation of a cap and trade system in conjunction with broader regional trading systems already under development to reduce greenhouse gas emissions in their jurisdiction respectively. This collaboration shall include, but is not limited to:

  • Working co-operatively and with other provinces, territories and states on the design and implementation of a joint regional market-based multi-sector greenhouse gas cap and trade system, based on real reductions that could be implemented as early as January 1, 2010;
  • Facilitating participation and linkages with broader North American and international trading systems, to the extent permitted by applicable provincial, territorial, state and federal laws;
  • Providing an intergovernmental forum for collaboration between provinces and territories dedicated to developing and implementing a greenhouse gas cap and trade system in addition to other greenhouse gas emissions reductions policies
  • Recognizing early action in reducing greenhouse gas emissions based on the internationally accepted base year of 1990 for entities owning or controlling covered facilities or sources that have an established and credible record of emissions reductions for those facilities or sources;
  • Harmonizing greenhouse gas reporting requirements with other jurisdictions to facilitate the joining of new partners and linkages with other cap and trade systems so that regulated sectors do not face duplicative reporting requirements.

The signatories to this Memorandum of Understanding agree to direct their respective staff and appropriate agencies to meet as soon as is practicable to develop a work plan to deliver this initiative.

The signatories to this Memorandum of Understanding agree that other provinces and territories may join this initiative by signing a copy of this Memorandum of Understanding and provide a copy of it to all other signatories.

***

Given that it’s not an actual cap-and-trade deal, but rather a deal to make a deal soon, it strikes me as pretty thorough. Aside from the stuff obviously meant to tweak the federal government’s nose (like the part about using 1990 as a base year, which matters not at all in comparison to the percentage you’re promising to cut from that point), the commitment to absolute rather than intensity-based targets is significant, and so’s the commitment to link up with other carbon trading systems, which should lead to money finding its way to the most economically efficient emissions cuts, over time.

That much “real” stuff in the accord, and the 2010 target date for getting this thing going, suggests that both Dalton McGuinty and Charest grasp that this is a policy initiative that will reward swift innovation. You want to be ahead of this curve. Charest said as much, apparently:

Quebec Premier Jean Charest warned the federal government is missing the boat on a worldwide term.

“Ottawa won’t have a choice,” Charest said. “Ultimately, between you and me, the day the Americans elect a new government, the new government gets elected and says from now there will be a ceiling and such and such level and the trading will work this, don’t kid yourself,” he said.

“It’s not Canada which will say to Europe, ‘No, no, we’re doing our own system.’ Come on. They will be isolated at that moment.”

Naturally, the feds are frothing, but pretty ineffectually. It’s true that all the details, including the pivotal ones of how permits are to be distributed and whether there will be a “safety valve” price for unlimited permits from governments, have yet to be worked out. But it doesn’t seem fair to criticize a deal-to-make-a-deal for not actually being a deal. The extent of the desperation for material is suggested in this CBC story:

In the House of Commons on Monday, NDP Leader Jack Layton said the two Liberal premiers are filling a “vacuum of leadership” on the issue of cutting greenhouse gas emissions.

In response, Prime Minister Stephen Harper criticized the plan for not establishing a regulatory mechanism and suggested the new Montreal Climate Exchange will have to fill that void.

Canada’s first carbon trading market, a joint venture between the Montreal Exchange and Chicago Climate Exchange, was launched last Friday.

They’re going to leave the details to a privately operated market and that’s a problem? Remind me — who are the conservatives, again?

Blackening the “green-collar” label

Here’s a bizarre story from the Toronto Star, on a union-led effort to get Ontario’s economy retooled for green industries. What’s weird about it is the apparently straight-faced conflation of environmental-friendliness with unionization and government-mandated wage standards.

If it were just reported as a standard organized-labour-wants-better-working-conditions story, it would make sense. But instead it’s headlined as if it were a story about green industry, and instead it’s on and on and on about minimum wages and regulating the marginal-work sections of the economy:

Statistics show parents are working and jobs are available, says the report, noting that Ontario’s unemployment rate was just 6.1 per cent in February. The problem is that stable, well-paying manufacturing jobs that helped build the province’s middle class over the past 30 years are disappearing and being replaced by low-wage service sector, temporary and contract work.

Of Ontario’s 345,000 poor kids, 41 per cent had a parent who was working full-time all year, the report says.

The report uses Statistics Canada’s pre-tax, low-income cut-off as a measure of the minimum salary of a good job. For a family of four in a large city like Toronto a “good-job” salary was $40,259 in 2007. For that same family in a smaller community, it was $34,671.

The average worker who loses a manufacturing job in Ontario experiences a 25 per cent cut in income when he or she finds new work, the report says. For Toronto parent Phuong Le, 48, who lost her $44,000-a-year job assembling light switches in 2005, the drop was even more dramatic. Today she works part time at a big box retailer earning just $14,000 annually.

“I would like to work more hours but all they will give me is part time,” says Le, who didn’t want her real name used for fear of retribution from her employer.

For Le and her husband, both immigrants who have lived and worked in Toronto for 28 and 35 years, respectively, factory work allowed them to raise their son and daughter in a stable middle-class home. But today, as work dwindles at the auto-parts plant where her 51-year-old husband works, Le fears for the future.

“If my husband gets laid off, I don’t know what we’ll do,” she says. “We are too old to retrain and too young to retire. Nobody wants us.”

I mean, yes, it’s a serious problem for Ontario that a combination of the high (oil-driven) Canadian dollar and competition from India and Asia are battering the long-established manufacturing sector. But this is just restating the problem again and again and again.

The truth is, the headline torques the actual report an awful lot for play on the Star‘s front page. The report’s about the lousy state of the manufacturing economy: promoting green industry is only a small part of it.

Predictably and unfortunately, by the time we get to the actual recommendations, it’s the same old stuff: spend public dollars on domestic procurement, subsidize, regulate, etc.

Here’s a principle: if your nominally private-sector job depends on a straight cash public-sector handout and shows no signs of stopping, it’s not a good job.

Salting the roads

Good piece in the Toronto Star today on the tradeoffs governments make to keep the roads clear of snow and ice in Canada’s cold climate:

Our roads may stay snow-bare, but our heavy dependence on road salt is toxic to the environment.

The salt burns trees, chokes vegetation, and contaminates soil. It depletes water of oxygen, and is toxic to many fish. Salts also accelerate the corrosion of automobiles, roads, bridges and sidewalks.

So why do we keep using piles of the stuff?

It comes down to money. Salt is cheap. There are less harmful alternatives – some man-made, others naturally derived, from corn or sugar beets for example – and many jurisdictions in the United States, such as Colorado, New Jersey and Ohio, are beginning to put them into heavy use. But they are expensive.

The fact that Toronto and the province have all but passed them over in favour of salt underscores a cold calculation: To the government, reducing environmental harm is apparently not worth the extra cost.

Solar-power showpieces

Radically different governments, same principle: spend pots of public money on solar power in hopes of … well, having a lot of economically unsustainable solar power.

In Ontario, the Globe and Mail reports, The Ontario Power Authority is pleased to have signed contracts for 250 megawatts of solar-power systems:

If all those who have promised to install panels follow through with their plans, Ontario will have some of the biggest solar farms on the planet, and an important “green” industry will be kick-started in the province.

Still, the solar-power generation business is essentially starting from scratch. At year-end only an infinitesimal 0.3 MW of sun-generated energy was being sold to Ontario’s power grid. The biggest completed project so far is a series of panels on the roof of the horse barn at the Canadian National Exhibition in Toronto.

The industry will be “kick-started,” but the contracts call for the providers to be paid 42 cents per kilowatt-hour, which is about seven times the going rate for electricity in hydro- and nuclear-rich Ontario most of the time. Even in high summer, the spot price for power rarely tops 30 cents a kilowatt-hour. Later in the story, a spokesman for one of the companies involved says 42 cents a kW/h is barely a break-even price for his operation.

So I guess the hope is that this subsidy, for a subsidy it is, will help Ontario-based companies work out some of the kinks in solar-energy generation and move in the direction of the going market prices.

But still — seven times the market price? Wouldn’t the money be better spent on nuclear technology, if energy’s what the government’s determined to spend it on?

AbuDhabi

Abu Dhabi, meanwhile, is happily announcing the imminent construction of a Dongtan-style concept town called Masdar City, which is supposed to be a carbon-neutral residence for 50,000.

Abu Dhabi sits on most of the UAE’s oil and gas reserves, ranked respectively as fifth and fourth in the world. Proven oil reserves on their own are expected to last for another 150 years.

But like most oil-producing countries, the UAE also wants to diversify to ease its traditional economic dependency on oil.

The zero-carbon city, part of the wider Masdar Initiative launched by the wealthy Abu Dhabi government in 2006, is also a flagship project of the global conservation group WWF.

Masdar chief executive Sultan al-Jaber described Masdar — Arabic for “source” — as as an entirely new economic sector fully dedicated to alternative energy, which will have a positive impact on the emirate’s economy.

It’ll have transportation pods like Star Trek turbolifts, according to Agence France-Presse, where you’ll be able to walk in and say your destination and it’ll take you there.

Cool. Practical? No. It can function only with massive ongoing subsidies from Abu Dhabi’s oil-drenched economy. That’s the opposite of sustainable.

No subsidies for car companies

That’s the word from the federal government, according to the Globe and Mail:

Ontario Premier Dalton McGuinty said this morning that Prime Minister Stephen Harper made it clear when he met with the premiers last Friday that Ottawa is not prepared to inject funding into specific projects.

“He told me very directly, ‘look, I operate at the macro level. We’ll cut taxes, offer some regional incentives, but we’re not prepared to take it one step down,’” Mr. McGuinty said.

He said the two leaders have a “fundamental philosophical difference” when it comes to addressing the economic slowdown that is taking its biggest toll on a manufacturers in Ontario and Quebec.

“They think you cut taxes, sit back and allow economic fortunes to kind of play themselves out,” Mr. McGuinty said. “I think we have a heavy responsibility and that responsibility is to find ways to provide supports to those who are losing their jobs and provide incentives to businesses to make additional investments to make them stronger.

As if the businesses, especially automakers, don’t have the incentives to make those investments themselves.

I can see the argument that sometimes governments have to compete with different subsidy packages when major businesses are deciding where to locate new plants — if Ford is trying to decide whether to put a $2-billion, 3,000-job plant in Ontario or Illinois or Kentucky and a $50-million R&D subsidy fund might make the difference, I can understand why it’d be tempting for a premier to provide it. I don’t think it’s a good idea, but I get where it comes from.

Writing cheques to multibillion-dollar corporations — using money taken from individuals and much smaller companies — just to carry on business as they normally would, though, is crazy talk. Staying out of their way is the best investment a government could make.