Archive for the News Category


Politics in general, and electoral politics in particular, have sadly never been a venue for frank explanations or sensible solutions for important public policy challenges.  The provincial election now underway in Ontario is certainly no exception to that rule, and no issue better captures the exasperating truth of this observation than the issue of electricity costs in Ontario.

That is not to say that the three major parties are ignoring the issue.  The incumbent Liberals have already chopped 8% from the bills paid by ratepayers across the province, with another 17% to follow shortly.  And rural ratepayers are to receive a subsidy to offset their higher power delivery charges that will knock a further 15-25% off their total energy bill.

The poll leading PCs want to up the ante by shaving an even 37% off the bills paid by all Ontarians, and will roll back salaries and severance benefits from the executives of the recently privatized  Hydro One.  The surging NDP has its own comparable offering: 30% off all bills, a further 15% cut for rural customers to offset higher delivery charges, the end of time-of –use rates differentials and a promise to negotiate with the federal government to eliminate the 5% GST from hydro bills, AND the buy-back of the 51% sold off by the province in the privatization of Ontario Hydro.

From the look of these platforms, one would have to conclude that it is pretty easy to cut hydro rates; it looks like a 35% rate reduction is just table stakes for this election.  However, on closer examination, it seems that these rate cuts are only easy because they are not what they claim to be.

Ontario has a problem with its hydro rates because of overcapacity.  Over the last 15 years, high cost electricity has come on line with the execution of contracts negotiated with private generators of solar and wind energy.  At the time that these green energy initiatives were entered into, they were justified in part as part of a plan to decommission carbon-generating gas plants and as part of an industrial strategy to establish Ontario as a leader in the manufacture of panels and turbines required to support green power generation.

Unfortunately, that strategy was flawed on both fronts.  Both at that time and at the present, green energy requires the maintenance of traditional generating capacity equal to peak demand, because there must be light and power when the sun don’t shine and the wind don’t blow.  And both of the traditional generation modes used extensively in Ontario (nukes 61%, hydro 24%) are high fixed, low marginal cost capacity.  So Ontario ended up with its existing full generating capacity that was buttressed by duplicative high cost green energy.

Even that problem was not so bad until the full impact of the 2008 global recession hit.  Economic activity fell precipitously as did the demand for power just as the bulk of these high tariff take-or-pay green energy contracts came on line.  Suddenly Ontario was an exporter of high cost power for which the market would pay only a fraction of the production cost.  Ouch.

So there is the problem.  Let’s look at the solutions that the politicians are offering.  Cuts to the cost of generation can only arise by one or both of two means.  One is entirely cosmetic.  Shifting the cost of power generation from rate payers to tax payers is truly meaningless.  Every ratepayer is also a taxpayer (with the exception of the homeless, who are neither), and given that electricity consumption is reasonably correlated to income, the burden of hydro costs are probably allocated progressively in either a utility or tax bill.  This strategy is nothing more than a shell game, pure and simple.

The other is to shift the cost generationally, incurring long term debt to fund the excess costs of today. If this is to be the strategy, the best and most transparent way to raise that debt is by issuing more government debt, where the creditworthiness of the province’s tax base, howsoever tarnished by excessive borrowing, will still result in lower interest costs than an issuance by the utility itself.  The worst and least transparent way to do it is to set up a special purpose vehicle under Ontario Power Generation to issue the debt, thereby adding even more structuring costs to the already higher issuance costs that OPG itself would attract.  Alas, the Wynne government went with the latter.   As a result, Provincial Auditor Bonnie Lysyk has noted that the rate relief program will incur $4 billion in additional interest costs to create a structure that can only be justified on the tenuous argument that it permits the government to exclude the debt from its own books.  Given the choice between a shell game and kick-the-can, the government chose the latter and then promptly kicked the can under a car.

The only part of this whole thing that has any remotely rational basis is the subsidization of delivery costs for rural users.  One can certainly quibble about the public policy justification for subsidizing more remote Ontario communities, but to the extent that there is a consensus on this policy, it is an effective mechanism to collectivize the cost and spread the pain.

The reality is that Ontario finds itself with electricity rates that are certainly high by Canadian standards, but still modest relative to those of many US jurisdictions.  There is no magic solution to reduce these costs in the short term.  It is time to stop the children’s games and have an adult conversation about how much of the cost can and should be deferred and how to finance that deferral most economically.


The horrific bus crash that took the lives of 16 players, coaches and team personnel from a Saskatchewan Junior Hockey League team has sparked a national outpouring of grief that is nothing short of a cultural phenomenon.  Since the April 6th crash, Canadian media has been filled with stories that have acquainted readers, listeners and viewers with every detail about the Humboldt Broncos team and town and the names, lives, billets and hometowns of each and every one of the deceased and several of the injured.  The public has responded with a wide variety of tributes, from the touchingly symbolic (leaving hockey sticks outside our doors at night) to the breathtakingly tangible (just under $12 million raised to date through a record-breaking GoFundMe campaign to benefit victims and their families).  And it all seems entirely appropriate.  Sixteen people, thirteen of whom were between the ages of 16 and 21, lost their lives; another thirteen have been grievously, and is some cases, permanently injured.  It is by any measure, a massive tragedy.

Yet there is something extraordinary at work here.  The nation, and perhaps parts of the world, have been galvanized in the face of this tragedy in a way that is unprecedented.  These sixteen motor vehicle fatalities will, after all, be less than 3/4 of 1% of the motor vehicle deaths that will occur in Canada in 2018 if this is a typical year.  Even adjusted for the age of the bulk of the victims, it will still likely only account for just over 3% of motor vehicle deaths among Canadians between the ages of 16 and 24.

Even as a single tragic event, the scope and breadth of the public grief is unprecedented.  It is even greater than that which followed the Lac Magantic train crash and explosion that killed 47 people, including an identical number of victims between the ages of 16 and 21, on July 6, 2013.  It is also a far greater chorus of grief than that which greeted the September 18, 2013 collision in Ottawa of an OC Transpo bus and a train.  While the latter involved only six fatalities, the prospect of a bus colliding with a train in the middle of a city is a far more personal horror story for Canada’s largely urban population than an accident involving a coach bus at a rural intersection.

But perhaps it is exactly that distinction that is at work here.  A train rolling down a grade and exploding in a town or a bus colliding with a train at a level crossing are horrible tragedies that can happen anywhere.  A coach bus full of young hockey players from a small town heading across the Prairies to a playoff game in an unusually cold Canadian spring hit by a transport truck carrying a load of peat moss killing 16 and injuring 13 others: that is an iconic Canadian tragedy.  Gordon Lightfoot could (and might) write a song about it; Gordon Pinsent could (and might) play the wizened and wise old coach in the movie.  It is not just a tragedy; it is viewed both within Canada and abroad through a sentimental and nostalgic lens as a quintessential Canadian tragedy.

The Humboldt Broncos have shown yet again that, despite fifty years of unceasing urbanization, massive diverse immigration and American cultural imperialism, Canadian iconography endures in the hearts of its citizens and the world.


On February 9, 2018, a Saskatchewan jury constituted in accordance with the Criminal Code of Canada acquitted farmer Gerald Stanley in the death of Colten Boushie, a 22-year old First Nations man.  The death resulted from an incident on the Stanley farm in which Mr. Boushie and three friends arrived in a disabled vehicle and attempted to start Mr. Stanley’s all-terrain vehicle before being confronted by Mr. Stanley and his son.  Mr. Stanley was charged and tried for second degree murder and the lesser included offence of manslaughter.

On the basis of the portions of the testimony of the witnesses that are not in dispute, many commentators have noted that it would be difficult to support either a finding of guilt for second degree murder or an outright acquittal in this case.   The fact that the jury nonetheless acquitted Mr. Stanley has understandably given rise to questions with respect to systemic elements of racism in the justice system, including particularly the use of peremptory challenges in the process of jury selection.

Shocked and disapproving reaction to the acquittal by the First Nations community, the broader community and the Canadian government itself has been swift.  Rallies have been held across the country, and both the Prime Minister and the Minister of Justice expressed resolve to act to address systemic issues that may have contributed to this troubling verdict.  The Boushie family arrived in Ottawa only four days after the decision, and has already met with the Prime Minister and three Cabinet ministers.  The resolve for change is undeniable.

Meanwhile, on January 26, 2016, after five years of foot dragging, jurisdictional challenges and a full throated defence by the Government of Canada, the Canadian Human Rights Tribunal (“CHRT”) ruled against the federal government in a challenge brought to its chronic and undeniable underfunding of critical social services to First Nations children and families relative to the level of equivalent services provided to Canada’s non-First Nations citizenry.  Since the date of that decision, three compliance orders have been issued by the CHRT, and yet the government has still not come forward with any concrete plan to address the deficiencies detailed by the CHRT.

The government’s resolve to address the systemic issues that may have contributed to the Colten Boushie jury finding is admirable and should not be discouraged.  However, the issues to be addressed, including that of the availability and use of peremptory challenges, are complex, and have implications that can as often help as hurt victims and accused parties from minority communities seeking justice through the court system.  The solutions will not be simple, and will not be found and implemented quickly.

The CHRT ruling, on the other hand, specifies a funding formula for services that can be applied without further study and lengthy deliberation.  The finding of a court of competent jurisdiction with respect to the Canadian government’s abrogation of the human rights of child soldier Omar Khadr was sufficient to prompt a quick financial settlement in that case despite public outrage against that settlement.  It is both confounding and disappointing that the government has not found the same decisive resolve respect to the CHRT ruling.  I am certain that the First Nations’ community, and perhaps even the Boushie family itself, would agree that a far greater good could come from this tragedy and the collective frustration and goodwill that have emerged in the face of Colten Boushie’s death if the government addressed the specifics of the CHRT ruling in priority to the vagaries of jury selection mechanics.

Justice Minister and Attorney General Jody Wilson-Raybould had it right in her tweet last Friday: “As a country, we can and must do better”.