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Ontario Election: June 12, 2014

Ontario Heads Back to The Polls

By Derek Satnik.

 

Here we go Again…

img_voteIt’s official. There will be an election in Ontario in 2014. The present government has struggled to speak anything constructive for the last several years, and the venom in Queens Park has been growing rapidly of late.

Ontario’s reigning Liberal Party has managed to maintain power since Oct. 2003, when it is said that they won their majority government because of a fresh campaign approach that focused less on decrying their opponents and more on offering solutions. According to wikipedia, voters saw the PC government of the day as unnecessarily confrontational and divisive, and some of the Liberal Party’s strength was empowered by a commitment to change the combative tone of Ontario’s government.

While the combative tone has not really improved, the Liberals did manage to win another majority government in 2007, and a strong minority government in 2011. The next normal election date would be Oct. 2015, but the PCs and NDP have made their plans, and Ontarians will now vote for a new government on June 12, 2014.

 

Party Positions

Mindscape is not aligned to any one political party, but we have strong and well-informed beliefs about issues related to energy and buildings, so this blog will attempt to summarize the highlights of where the various government parties are at on the topics we hold dear, particularly those related to energy and buildings, with a hint of interest in anything that helps small businesses.

 

Liberals

img_politician_ON_Wynne_openThe Liberal party gave us the present energy regime, and is committed to continue it, though less aggressively. If re-elected, we can expect the Liberals to continue to:

  • Support the FIT program while it modestly limps along at ~200 MW of new solar projects each year (50 MW of microFIT, home sized projects, and 150 MW of Small FIT, for commercial buildings). There will be programs to support biogas and to also support larger scale procurement of renewable energy, but their Long Term Energy Plan includes admission that the grid is already filling up, and there is little other capacity for new generators. We do not expect to see any new wind energy projects in the near future.
  • Support conservation: the Liberals won’t come out and say that they don’t support nuclear, but they understand that we can’t afford new nuclear energy, and they will continue to “commit” to refurbish nuclear plants at some date just beyond the horizon, all the while promoting conservation plans and hoping to defer nuclear projects indefinitely. After a few more years of growth in the conservation programs, there will be a much stronger arguement to cancel more of the nuclear rebuilds altogether.
  • cert_colBuilding energy efficiency labeling: The Liberals included language in the Green Energy Act that introduces a requirement for all buildings to be given labels that tell how much energy they use, at the time of sale. This act of labeling has never been enforced, but the last few years have seen a great deal of effort spent with Natural Resources Canada to move towards enforcement, and the tools will be in place this coming year. This is a major positive for the building industry.
  • Home energy loans: the Liberals changed the Municipal Planning Act to enable municipalities to provide loans to home and building owners to help them save energy. The intent is that the loan could then be repaid through the savings. Toronto has launched a pilot program using this concept, and other cities will soon follow. Mindscape has written a brief 3-page white paper on the subject here.

In short, the Liberal plan has acknowledged that the grid needs to be rebuilt, and that it will cost money to rebuild, and they have placed their efforts accordingly on (1) conservation (to avoid rebuilding any more than the minimal amount necessary) and (2) on privately held renewable based generation, where the project proponents (not the province) bear all project risk (ie: through FIT contracts). The Liberal plan is working, albeit slowly, and with much room for improvement. There are other elements of the Liberal plan which I find much less attractive, but as far as energy and buildings are concerned, their plan has the right key elements.

 

Progressive Conservatives (PC)

img_politician_ON_Hudak_2014If given power, the PC plan includes:

  • Monetizing (ie: selling) Hydro One and Ontario Power Generation.
  • Encouraging consolidation of local electrical power distribution companies.
  • Increasing commitment to nuclear energy.
  • Cancelling the Feed-in Tariff program.
  • Exploring opportunities to buy imported power rather than build new supply in Ontario.
  • Invest in hydrogen as a source of power.
  • Abolishing the College of Trades.

In short, the PC party would take Ontario’s energy sector back a good ten years, and that at great financial expense. Even while the rest of the world is moving away from nuclear energy, and even after the Federal Government gave away the CANDU reactor company to SNC Lavalin for less than 1/10th what the Feds used to pay in annual subsidies to CANDU, the PC’s are imagining that OPG would somehow be an attractive investment, and that nuclear will somehow work out different here in Ontario than it has anywhere else in the world. Even France is planning reductions in it’s nuclear fleet from ~75% of their grid to ~50%. The only jurisdiction in the world that wants nuclear technology right now is Iran, and their reasons are blatantly political. My skepticism is surely obvious at this point.

The only transparent price Ontarians pay for electricity is revealed in the Feed-in Tariff program, and the PC’s oppose it. Even though projects connected through the FIT program continue to represent less than 5% of Ontario’s grid, and have contributed disproportionately large numbers of jobs to the economy, the PCs continue to pretend that FIT is to blame for Ontario’s economic woes, which the PC’s have exaggerated to mythic proportions. Refer to a recent letter by MPP MacNaughton which I explained in a previous post. If Hudak makes good on his threat to cancel wind and solar contracts, then the project proponents who have those contracts will get paid out (because the contracts are binding), and would be free to sell their electricity in the open market. It would cost 20 yrs. worth of electricity up front and would gain the province nothing. The good news is that the project proponents would be protected, but otherwise this is a foolish idea.

img_ElecRates_Fraser_2014-05Tragically, the PC party is the most venomous, and regularly accuses the Liberals of things that are untrue. The PC party homepage presently claims that Ontario’s electricity rates have more than doubled since 2003. The truth is that Ontario’s electricity rates have risen by approximately 25% since 2002. Noteworthy to be sure, but quite different than the >200% that the PC’s are claiming. Stats are all online at www.ieso.ca, and some are summarized in a previous blog I wrote about Ontario’s manufacturing sector and the costs they’re experiencing. The typically conservative Fraser Institute just released a report confirming that, contrary to PC claims, Ontario’s energy rates are actually quite competitive across North America.

The only good idea in Hudak’s platform is that he stands to abolish the College of Trades: a very good idea indeed, and the only one I see.

 

New Democratic Party (NDP)

The NDP has been struggling to find it’s way on the whole for the past four years, but has emerged as an increasingly centre-left group, with a relatively clear and defensible position on energy.

If elected, the NDP seeks to:

  • img_politician_ON_HorvathRemove the HST from home energy bills;
  • Lower taxes on small business;
  • Reinstate home energy retrofit rebates;
  • Build 50,000 new affordable housing units over 10 years;
  • Introduce  a new housing benefit to help low-income families afford their rent;
  • Merge the Ontario Power Authority, Independent Electricity System Operator, and Hydro One.
  • Add a target of 5,000 MW of new CHP (Combined Heat and Power) projects over the next 10 years;
  • Have Ontario join the Western Climate Initiative to formally join the voluntary carbon trading market in North America;
  • Officially oppose nuclear and work towards canceling all future rebuilds, in favour of conservation first, and locally owned renewable energy (FIT program) second.

Honestly, there’s not much I can say about this. These are all good ideas that need to be done. Not all the NDP’s original ideas, but I’m glad to see them listening to intelligent voices.

  

Green Party

img_politician_ON_SchreinerThe Green Party has always been the fringe cousin on the sidelines that rarely gets taken seriously, and yet their negotiations have had greater impact on the budget in each of the past several years than the PC party has had, despite the Greens not having a seat in the legislature.

This time around, the Greens are calling for:

  • No nuclear, and a transition off of existing nuclear in favour of conservation and renewable energy;
  • Implement significant refundable tax credits for home owners and tenants over four years for investments in energy efficiency, and the same again for businesses;
  • Raise the energy efficiency standards in the building code to EnerGuide 86 for new homes, and require all new homes to be Solar Ready;
  • Develop a strategic plan to move all new buildings to net-zero designs;
  • Require all homes to have energy labels at the time of sale, and work with the financial sector to ensure home owners are informed about energy benefits during the purchase process;
  • Build on and prioritize the municipal energy retrofit loan program launched by the Liberals;
  • Significant support for Combined Heat and Power and of district heating systems;
  • Support investment in Ontario’s “Smart Grid” infrastructure and in several initiatives that enable utilities to be more innovative and proactive with their conservation programming;
  • Negotiate power purchase agreements with Quebec and Manitoba to access low-cost hydro (water) electricity from them first, eliminating cost overruns for Ontario’s nuclear plants
  • Expand the FIT program, prioritize grid access for locally owned community energy systems, establish a loan guarantee program for community owned generation projects.

In principle, I love all of these ideas except that of raising the building code minimum energy efficiency value for homes (EnerGuide 86). I will support doing that in the next version of the code (2020), but the present code has just been increased, and to increase it further to 86 would be badly timed: the next few years will give the industry time to adapt before considering a further increase.  Now is the time to warn that further increases are coming. Otherwise this list of policy ideas is nearly what I would have written myself.

 

Perspective, and What it all Means

So, no surprise, but the Liberals are doing ok, the NDP is better, the Greens are better still, and the PC’s are so far off the mark that one wonders whether they even read or have any understanding of the true economics of their ideas. The PC’s will cause immeasurable harm to Ontario’s economy if elected, and any other option would be preferable. Among the other three parties, Mindscape’s clients will benefit regardless of who comes to power.

It should be noted that the Liberals and NDP criticized the PC’s in 2003 for “skyrocketing” energy prices during the PC reign under Ernie Eves (2002). The reality is that energy prices have been a political weapon for some time, but the actual price of energy has changed relatively little in the last decade. It is true that more changes are coming though, and whether we rebuild nuclear plants or we let the private market fund FIT projects, we the taxpayers of Ontario will need to pay for all the wires and gizmos in between to be upgraded, and that has a price tag to it that none of the parties wants to own.

 

Decisions, Decisions…

img_Future_next-exitThis campaign period should be interesting. I’ll go out on a limb and say that I don’t think much will change. I expect the PC’s will have a loyal following that will blindly support their venom, but that the rest of Ontarians will vomit over the lies the PC’s are telling. The NDP will make gains at the expense of the Liberals and PC’s (despite what the polls say right now), and the Liberals will win a weaker minority, but they will win. And in another two or three years, we’ll do this all again.

Perhaps the most exciting shakeup in this election, if I read my crystal ball right, is that Mike Schreiner of the Green Party is not unlikely to win his campaign in Guelph, earning the first Green Party seat in Ontario.

Here’s hoping for good news on June 12, and lots of patience with the media and rhetoric until then.

 

Contact Us for help saving energy and $$$

Derek SatnikDerek Satnik is a LEED® Accredited Professional Engineer, and internationally awarded expert in sustainable buildings and renewable energy systems. He lives in Kitchener at the Ontario Green Home, and is the Managing Director of local consultant Mindscape Innovations Group (www.mi-group.ca).

 


4 Comments

  1. Steven Snary

    Just a couple of clarifications on your information regarding Tim Hudak….

    The Ontario Energy Board does show a doubling of electricity rates since the 4.3 cents/KWH in 2002 to the current 8.6 to 10.1 cents/KWH.

    And the doubling of the price quoted by Tim Hudak would be a 100% increase and not the 200% that you had quoted.

    Thanks for the informative newsletter!
    Steve

    • Thanks Steve. Great comment.

      The catch with measuring electricity rates is that there are many dishonest ways to report change: the base rate has changed, but so has the global adjustment, and the average price paid by Ontarians at home on their bill has really not changed in quite some time. The base rate affects certain industry niches (ie: the folks who don’t get billed the same way that we homeowners do), but very few politicians take the time to understand this properly, and if they do, then they’ll also understand that this rate will continue to increase regardless of who comes to power: we simply have too much grid to rebuild, and can’t do that for free. My concern is the volume of nuclear costs that are getting hidden inside the global adjustment. Hudak’s plan will result in significant increases to our costs, and he hasn’t demonstrated any understanding of this (or perhaps is choosing not to).

      All told, the NDP and the Greens have energy plans that work. The Liberals have a record of making slow progress on this, and the PC’s seem to have their heads in the sand.

      Either way, I’m glad to have people watching me and keeping me honest 🙂 Thanks again for the comment Steve.

  2. Tim Short

    Excellent post, Derek. I agree entirely with your party summaries.

    And so it is that we keep our fingers crossed.

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