Provincial Debt getting more expensive

[Liberalman]

Ontarios situation is simple.

We use to make stuff....now we don't...we buy stuff made for pennies a day.

If we had oil spewing out of the ground that would not be a problem.

We don't....so it is.

For every business that closes a new one can open up.

In Toronto in the last century The Telegram a newspaper closed it's doors and the people that got laid off got together and started their own paper called the Toronto Sun which was smaller and later they expanded accross the country.

When companies close down and move their operations to other countries and leave the employees high and dry then they sould get together and start a new one and with the help of the government they can make it into a good one

 

[Cabbagesandking]

I am not sure where the parameters of this discussion are since it has extended far beyond the effects of a credit rating. As it needs to.

There are many factors in Ontario's predicament and the knee jerk blame of McGuinty is short sighted. The McGuinty government inherited a deficit and increasing debt fro Harris: debt and deficit that was entirely ideological and economically unnecessary. With that came a reduced revenue flow and a social fabric badly torn and in need of repair that could only be achieved with money.

At the same time, the Canadian dollar began a rapid rise in value over a four year period from 2004 to 2008 that was, mostly due to Canada's resource exports and directly tracked the spiralling price of oil. Ontario, through quirks in the federal financial system that had not been objected to in the days of Ontario's prosperity, also contributes billions more to the federal treasury than it receives in services. There needs to be a fundamental realignment of the way Canada meets its financial needs. Ontario would be the chief beneficiary of fairness.

With respect to energy, Ontario is now the leading jurisdiction in North America (or close to it) through its Green Energy Act and the Feed-in-Tariff. In that, it is following the highly successful German model that has seen the creation of almost half a million jobs in that country. Five or six years ago in Ontario there were no such jobs. Now there are around ten thousand with billions more investment in the pipeline and the potential for tens of thousands more over the next decade or so. Good jobs, and permanent : not the minimum wage jobs that have so far distinguished the last two recoveries from recessions.

In Germany and Denmark and increasingly in some other countries, "Green Energy," particularly wind power is nor competitive with traditional sources. Cheaper when the externalities are factored in. Health effects and environmental degradation. Also, the subsides for sustainably energy are small compared to the ongoing subsides for fossil fuels - including oil in Canada. Worldwide, those subsides amount to between $350 billion and $550 billion )annuallydepending on what supports are actually considered subsides).

Ontario is on track to become a leader in this economically and environmentally beneficial change.

As an aside, Alberta is also developing substantial wind power BUT it is also building new coal generating facilities and, with the blessing of the federal government, planning a fourfold increase in Oil Sands production - an increase that will further harm Ontario's competitiveness. .

 

[lone wolf]

Ontario's situation today is the result of many decisions made by multiple administrations over many years. I believe that the recent crop of politicians zigged when they should have zagged - but that's all hindsight now.

On the sale of Ontario Hydro Electricity; I can see that having an impact, but ultimately, the reality is that the province was probably subsidizing electricity to keep the costs down to the consumer. That may have meant that the 'public company' was losing money and adding a burden to the provincial operating costs.

Only if we were able to review both the audited and unaudited books relative to both the public and private ops could we realistically provide an educated opinion on the utility and make comparisons, but I suspect that the circumstance in Ont is/was not different than when AB deregulated (and sold-off) the utilities

The Province was definitely subsidizing rates. That's why the Commission was created (in 1906) as they knew an at-cost power grid wasn't cheap. Over the years, there has been wasteful practice and Bev Oda-type administration. The widsom devolved - now the industry they sought to attract is moving away

 

[captain morgan]

I am not educated in the wastefulness or mismanagement in the past, but I am not surprised if that was the case.

Ont Hydro (likely) developed a model that allowed for the over supply of power such that they could sell into the large US demand in the NE USA... In a way, those sales acted to subsidize the Canadian consumers, however, that strategy generates great results when the demand is high and the facilities/infrastructure is new(er).

The op costs begin to steadily rise as the facilities/infrastructure need replacing and there is more competition in the sector. There's nothing that can be done about it, but I would suggest that the sale of the utility (with contracts/caveats, etc) was likely a smart move in the medium and long run.