Premier Doug Ford's Ontario

[W. K. Lis]

https://twitter.com/x/status/1649174114689589248

 

[Northern Light]

So we're out this morning w/the details on the Volkswagen investment in their battery plant.

I have to say I'm appalled.

The low ball number for the Federal subsidy alone is over 8B; and may range as high as 13B; while Ontario is throwing in a minimum of 500M in direct subsidies beyond that.

Problem. Volkswagen's share of the investment is only 7B.

Where can I sign up for this deal? I'll have no problem getting financing when discussing it with my bank. I put down 1M and the gov't just gives 2M and I get to keep the entire company/investment.

This could be great for my retirement.......oh wait. Its my (our) money being handed out here............

Ontario Newsroom

news.ontario.ca

 

[Northern Light]

To follow up on the above; Trudeau is out saying but it will create 3,000 jobs, that's the math that matter............

Ahem

$13, 200,000,000 / 3,000 ............ $4,400,000 per job? At 100k per year, the break-even would be in 44 years........... you must be kidding me.

 

[DirectionNorth]

The Americans are subsidizing EVs. Do we let our remaining industries atrophy and die?

Our country already has a lack of value-add jobs. We sit around complaining about that, then we complain that they are going to add these jobs, creating a battery supply chain in the process. If you look at the agreement, the VW subsidies are tied to American subsidies. That's not a coincidence.

I'd rather have our own domestic companies build these plants. But as a society, we don't care. Is it a race to the bottom? Maybe it is, but what else could we do ... ?

 

[Northern Light]

The Americans are subsidizing EVs. Do we let our remaining industries atrophy and die?

Our country already has a lack of value-add jobs. We sit around complaining about that, then we complain that they are going to add these jobs, creating a battery supply chain in the process. If you look at the agreement, the VW subsidies are tied to American subsidies. That's not a coincidence.

I'd rather have our own domestic companies build these plants. But as a society, we don't care. Is it a race to the bottom? Maybe it is, but what else could we do ... ?

Here's the problem with that; just like the real estate ponzi scheme, it never ends, it never gets smaller.............it just keeps going

This is the antithesis of Free Trade.

****

My choice? Legislate that any business subsidy by a foreign power, including any corporate tax rate below Canada's constitutes interference with free trade.

Penalties for the company range from having to pay back the subsidy it received to Canada (in the form of tariff) per product sold in Canada, to prohibition from access to the Canadian market entirely, with individual sanctions applied to all senior executives of said company and any shareholder with a board seat or equity of 10% or greater.

In fairness, we reduce all domestic corporate subsides to zero.

Let's burn crony capitalism to the ground.

****

To be clear, I'm fully aware of the challenges w/the above and my tongue is partially in my cheek. Still, while I agree we need value-add jobs, I'm not prepared to pay 4.4M per job, that's insane. We could just build the thing with a Crown Corporation and retain ownership if were doing that.

 

[afransen]

Canada benefits from all the subsidies the US is giving to EVs and battery production. Production in Canada qualifies for the US tax credits.

 

[afransen]

Is the $8-13B a cash grant? In kind? Tax abatement? Or is it an equity investment. $13B is crazy for a grant, as NL points out.

 

[Northern Light]

Is the $8-13B a cash grant? In kind? Tax abatement? Or is it an equity investment. $13B is crazy for a grant, as NL points out.

The capital grants for construction a bit over a 1B.

The balance is described in multiple places as a production subsidy paid per unit produced the range quoted above being based on how many units made.

 

[Northern Light]

As a side note....13.2B divided by $350,000 to construct one affordable housing unit would equal just over 37,000 affordable housing units; more or less enough to house every single homeless person in Canada (estimated at 35,000 on any given night.)

 

[W. K. Lis]

Ontario Science Centre lease could stand in way of Ford's plans​

From link.

Premier Doug Ford’s plan to relocate the Science Centre to Ontario Place as part of the waterfront space’s redevelopment may have hit a roadblock.

In an email to CTV News Toronto, a spokesperson for the City of Toronto confirmed while the old Science Centre can be torn down, there is a catch.

The current lease, which was negotiated back in 1965 on a 99-year term, only allows for the construction of structures “for purposes of operating as a science centre.”

That will likely be unwelcome news for the premier, who said earlier this week he wants to build new housing at the Don Mills Road and Eglinton Avenue site.

“We are in desperate need of housing,” Ford told reporters on Tuesday. “There's going to be thousands of units there.”

The announcement was the latest development in the Ford government’s plans for Ontario Place, which sits at Toronto’s waterfront and has been decommissioned since 2012.

While still in the approvals phase, the province says it hopes to reimagine the space with 42 acres of public land, an all-season concert stage, and a 22,000 square-metre structure that has been described as a “mega spa.”

The land at the current Ontario Science Centre location is owned by the City and the Toronto and Region Conservation Authority (TRCA), and was jointly leased to the museum for $1 a year.

That lease stands until 2064 and the Ontario government would need to renegotiate the terms before any shovels go into the ground to build housing at the site, the TRCA told CTV News Toronto in an email.

CTV News Toronto reached out to the Ontario government to see how it plans to build housing at the current Science Centre site under the conditions of the lease agreement, but did not receive a response.

On top of that, on Thursday, a motion was passed at city hall to defer the consideration of a land swap from the city to the province – of which 16 acres is needed to produce the Ontario Place overhaul.

According to Coun. Gord Perks’ motion, the land exchange won’t be considered until the development application is approved by council, the provincial government provides its lease agreement with Austrian resort developer Therme Canada, and the federal government expresses its “interest or disinterest” in taking over the land.

Consultations on the future of Ontario Place are open to the public and started last weekend. Those discussions are expected to continue over the next several months.

 

[wopchop]

Ontario Science Centre lease could stand in way of Ford's plans​

From link.

I'm no expert, but I believe the Province could legislate their way around this, no?

 

[afransen]

I find this argument about moving OSC to build housing rather thin. Why not have the province become more active in assembling land near MTSAs and develop them through joint ventures with private developers. Maybe even keep some land aside at major interchanges for commercial/employment.

 

[W. K. Lis]

‘Something really stinks here’: Why you still don’t know when the Eglinton LRT will start running​

Documents obtained by the Star show how Doug Ford’s government keeps a tight rein on what the public is allowed to know about the troubled transit project.​

From link.

Seven months after Metrolinx announced the Eglinton Crosstown LRT would once again fail to meet its target date, the public knows virtually nothing about how the project is going or when the line will finally open.

Asked by the Star this week when the light rail transit line, which has been under construction since 2011 and was once expected to be complete in 2020, might be done, Metrolinx said it did not have new details to offer, and put the blame on Crosslinx Transit Solutions (CTS), the construction consortium building the project.

“Metrolinx has been clear that we will not declare an opening date until we have a credible project schedule from CTS,” Metrolinx media relations wrote in a statement. Crosslinx did not respond to requests for comment.

“We are working through the most important phase right now, which includes testing, commissioning, certification and documentation to affirm that we can open a safe and reliable transit system,” Metrolinx said.

What is Metrolinx testing and commissioning? The Star asked. No response. What is the outstanding work that still needs to be done? No response. Is the project still on budget? No response.

And, a reporter’s final plea: “Would it be possible to answer my questions?”

Eglinton LRT costs and timeline have grown way past initial estimate​

As the Eglinton Crosstown LRT has spiralled beyond its initial estimates, both in cost and in timeline, details made public have become few and far between, raising questions about transparency and accountability at the provincial transit agency responsible for overseeing the project, as well as other multibillion-dollar transit projects across the Greater Toronto and Hamilton Area.

Even as reporters, city officials and Metrolinx’s board members press for answers, few are forthcoming. But internal emails viewed by the Star give an indication as to who is managing the messaging and why answers to basic questions are so hard to come by.

According to communications the Star obtained through a freedom of information request, Metrolinx has at times wanted to give the public more information about the Eglinton LRT, but the provincial government directed staff at the transit agency not to.

Documents show close links between Doug Ford government and Metrolinx​

The documents, which span from July to October of last year, show how information about the Eglinton LRT flows from Metrolinx to the public, and the close relationship between the provincial transit agency and Doug Ford’s government. Critics say it is the latest example of political interference by the province with Metrolinx, which was designed as an arm’s-length agency in order to be able to implement the best transit policy based on evidence.

Instead, it has become one more layer of bureaucracy that conceals updates on the Eglinton LRT’s progress — or lack of it.

“This is an enormous project, and you’ve got no effective oversight, and no effective transparency and no effective accountability,” said Mark Winfield, professor of environmental and urban change at York University, referring to the Eglinton Crosstown LRT as a “$13-billion black hole.”

As of September 2022, the approved budget for the project was $12.8 billion.

Because Metrolinx does not have a regulator that it must publicly report to, it operates in a “vacuum,” Winfield said, adding there needs to be an effective third-party authority to oversee the province’s transit planning and development. The government does not have the capacity, expertise, or impartiality to oversee such an enormous entity as Metrolinx, Winfield added.

“The interventions you get from the minister’s office … are completely for the purposes of political management.”

Eglinton LRT raises questions about Ontario Line​

Winfield said the Eglinton Crosstown LRT’s track record does not inspire faith in Metrolinx’s other projects — notably, the Ontario Line, which has already doubled in cost to more than $17 billion and which will necessitate heavy construction downtown for the next decade.

The Star previously reported that Transportation Minister Caroline Mulroney’s office directed Metrolinx to leave two Toronto New Democrat MPPs off a notice sent to city and federal politicians about tree removals in their jurisdictions — against the transit agency’s advice.

“As a crown agency, naturally the Minister’s office works closely with Metrolinx, which has been the process for over a decade,” Ministry of Transportation spokesperson Dakota Brasier wrote in response to questions from the Star.

“Our focus is to ensure the Eglinton Crosstown LRT is operational as soon as possible,” Brasier added, before nearly repeating what Metrolinx said: “Metrolinx is working through the most important phase right now, which includes testing, commissioning, certification and documentation and we will not compromise the safety and reliability of the system at any point, as we get much-needed transportation infrastructure built.”

When completed, the Eglinton Crosstown LRT will run for 19 kilometres, between Kennedy in the east and Mount Dennis in the west, connecting with 54 bus routes, three TTC stations and GO lines, according to Metrolinx. But its construction has meant more than a decade of disruption for residents, commuters and local businesses — some of which have been forced to shutter as a result.

Metrolinx emails raise transparency questions​

“Something really stinks here. I don’t know why we don’t have the transparency we deserve,” said Joel Harden, NDP transit critic and MPP for Ottawa Centre. “These delays are expensive and costly, and we need to know why they’re happening.”

When Crosslinx was awarded the contract to build the LRT in 2015, its projected completion date was September 2021. But the years since have seen legal battles and additional payments made to Crosslinx to keep the project on track after the pandemic ramped up costs. In December 2021, Metrolinx said the transit line would be complete by September 2022 and ready for service in 2023. But in September, the Star reported the line was delayed again, this time with no new end date on record.

Eglinton LRT delays a mystery​

Very little has been said publicly about what’s behind the current delays.

Metrolinx has previously cited defects in old infrastructure under the TTC Eglinton station as a reason for the delays, and recent comments by Metrolinx’s chief capital officer for rapid transit suggest there is still outstanding work to be done in that part of the line.

At a Metrolinx board meeting in February, Andrew Hope said Crosslinx has some work to finish, “most notably at Yonge and Eglinton, which is the flagship station of the line, where there is very good progress happening at the station, but still some utility and road restoration work to happen in that location which we expect to be finished later this year.”

Neither Metrolinx nor the Ministry of Transportation answered a question from the Star this week about where the work at Yonge and Eglinton stands now. On Friday, the TTC announced there would be no subway service this weekend between York Mills and St. Clair stations (including Eglinton) due to Metrolinx construction of the Eglinton Crosstown LRT.

 

[W. K. Lis]

Metrolinx CEO video quashed​

Last fall, Metrolinx had planned to give the public a closer look at the construction, including a specific update focused on Eglinton station. According to a draft communications plan from September viewed by the Star, Metrolinx intended to produce a video with Metrolinx CEO Phil Verster, TTC CEO Rick Leary and Crosslinx CEO Bill Gifford “offering project construction and operational updates to create a ‘visual’ status update.”

The portion of the video featuring Verster was filmed — but it never saw the light of day.

On Sept. 9, Mike DeRuyter, assistant director of strategic communications for the Ministry of Transportation, circulated the draft communications plan with ministry staff. One week later, Mulroney’s then-issues director Jordanna Colwill wrote to DeRuyter: “Can we confirm with Metrolinx that they haven’t made any movement on the proposed video update yet? Just want to ensure the plan is (Premier’s office) approved before they start any co-ordination on that front.” According to a response from DeRuyter, Metrolinx confirmed the video of Verster had been filmed.

On Sept. 22, Colwill wrote to Steven Hobbs, Metrolinx’s chief of staff: “I understand you spoke with Mike Beaton (Mulroney’s chief of staff) about a potential new approach for Metrolinx (Eglinton Crosstown LRT) comms. Here is the new statement, which we propose comes from Phil (Verster).” What followed was the statement that Metrolinx ended up posting on its blog the next day.

That statement had been workshopped the day before by staff at the Ministry of Transportation and the Premier’s office, according to internal emails.

The first version of the proposed statement shared by Colwill included the line: “We have made significant progress; however it is taking longer than expected to finalize testing and operational readiness for the project.”

Doug Ford’s office weighs in on LRT messaging​

Ivana Yelich, then Ford’s executive director of media relations, responded: “This is misleading. Testing and operational readiness is not the reason for delay.”

The next morning, on Sept. 22, Yelich sent the final statement, which blamed Crosslinx for the delay. “Unfortunately, while progress has been made, Crosslinx Transit Solutions have fallen behind schedule, are unable to finalize construction and testing, and therefore the system will not be operational on this timeline,” part of the statement read.

The 124-word statement that was posted on Metrolinx’s blog on Sept. 23 is the last the public has heard from the agency about the Eglinton Crosstown LRT.

In the days after, reporters asked Metrolinx repeatedly for more information, but documents suggest the direction from the province was to say nothing more.

On Sept. 26, Metrolinx communications manager Lyndsay Miller emailed Ministry of Transportation staff looking for direction on how to respond to media requests from CP24 and CBC’s “Metro Morning.”

 

[afransen]

The capital grants for construction a bit over a 1B.

The balance is described in multiple places as a production subsidy paid per unit produced the range quoted above being based on how many units made.

I think this has been poorly communicated by the media.

It is a production subsidy that matches, and is contingent upon the continued existence of the US Inflation Reduction Act battery subsidy. So it is essentially Canada matching the US subsidy. I would not be terribly surprised to see the IRA go once the GOP retakes the House and Senate, perhaps as early as 2024 (though looking doubtful if Trump is the nominee).

On the other hand, I do not have a lot of faith in VW's continued existence as an automaker. There is going to be a lot of dislocation in the auto business resulting from electrification and TaaS. I can't imagine the legacy OEM survival rate being higher than 50%. Hyundai, Ford and VW look like contenders to survive, but it seems like VW was having faltering conviction on their EV transformation after ousting their previous CEO and postponing plans for their dedicated EV platform. The real unknown is how successfully the legacy OEMs will be able to exit ICE fleet and plant/equipment without it pulling them under.

I know Tesla has been kicking up dust in the Montreal area around a large new factory. Tesla has since announced a massive new facility in Monterry. My read is that it is not that Monterry beat out Montreal as a location, as I understand Monterry is intended to serve developing markets with low cost vehicles. The rumour is that Montreal may be a battery material if not battery production location. Tesla's MO is to produce vehicles and batteries at the same location, but if it is battery inputs (cathode materials etc) it could be a smaller facility.

Tesla is looking less for financial inducements and more for speed to develop. The capex for new plants is not a substantial barrier for their growth. They are getting 18-24 month paybacks on new capacity, largely due to their very strong margins.