Hydro One customers: use less, pay more

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What Hydro One is doing to over a million ratepayers is a shame

People who know me know it’s like Christmas for me when the Ontario Energy Board (OEB) posts the Yearbook of Distributors and it’s true, the data is a big gift!  You can imagine how a banker might react when confronted with the details the OEB releases.  It gets better when you look at it in detail.

Here is my take on the information as it relates to Hydro One, only one of Ontario’s 73 LDCs (local distribution companies). Hydro One is a monopoly that services 1,221,100 customers (according to the Yearbook) in Ontario, and has exclusive rights to the transmission of energy generation.  Caution some of the fact that follow may disturb some readers.

  • Total Hydro One full-time employees as at December 31, 2013 was 5,641, plus what are referred to as “non-regular” employees numbering 2,109.  In 2002 Hydro One had 3,933 regular employees, so full-time employees have grown by 1,708 (up 43.4%).
  • In 2002, Hydro One had 1,219,614 customers; at year-end December 31, 2013, they reported 1,221,100 customers but they apparently needed 1,708 additional full-time employees to service those additional 1,486 customers.   (The number of “non-regular” employees for 2002 was not available.)
  • Total “Purchased Power” by the 73 local distribution companies in 2013 was 125,306 million kWh and by Hydro One was 25,829 million, or 20.6% of the total. Yet Hydro One services 24.7% of all Ontario ratepayers.
  • The average OMA (operations, management and administration) costs for the 73 local distribution companies was $325.00 per ratepayer, but for Hydro One’s customers it was $495.60—that’s $170.60 more, or 52.5% higher.
  • If one removes the hard data for Hydro One and calculates the OMA for 2013 for the 72 LDCs the average comes to $269,  meaning Hydro One’s OMA is 84.8% higher. For 2012 it was only (I use the term lightly) 65.4% higher.
  • Gross Income (net of Power Purchased) was $3.418 billion for all 73 local distribution companies but for Hydro One it was $1,323 billion or 38.7% of all the Gross Revenue from those 24.7% of ratepayers.
  • Net Income, after PILT (payment in lieu of taxes) was $624.6 million for the 73 local distribution companies and $258.3 million for Hydro One—that represents 41.3% of Net Income for only 24.7 of all ratepayers.
  • Average monthly kWh (kilowatt hours) consumed per customer was 2,112 for all customers of the 73 local distribution companies, but only 1,764 kWh for Hydro One’s customers. That means Hydro One’s customers consume 16.5% less kWh. But… (see the next bullet for the other shoe to drop).
  • Average Power & Distribution Revenue less Cost of Power & Related Costs per customer annually for all customers for the73 local distribution customers was $691.35; for Hydro One (24.7% of all ratepayers) it was $1,084.10— a difference of $392.75 or 56.8% higher for Hydro One ratepayers.
  • Average Power & Distribution Revenue less Cost of Power & Related Costs per total kWh purchased for all 73 local distribution companies was 0.027 cents/kWh; for Hydro One customers it was 0.051 cents/kWh, a difference of 0.024 cents or about 89% higher.
  • Line losses, which we are all billed for, vary and those averaged 4.1% for all 73 local distribution companies; but for Hydro One they amounted to 6.8% or 69.5% more.
  • If one adds the 900 employees Hydro One outsourced in 2002 to Inergi to for their customer service/billing process to the 3,291 reported to be employed in their LDC unit, and then add that number to the 10,022 employees all 73 LDCs reported, Hydro One employees represent 38.4% of all LDC employees, while servicing only 24.7% of all ratepayers.
  • If one calculates the number of customers per employee of the foregoing it works out to 2,914 customers per Hydro One employee and 5,532 for the other 72 LDCs. In other words, employees of the other LDCs support 2,616 more ratepayers per employee compared to Hydro One.
  • Why are Hydro One employees paid more on average if they service 47.3 % fewer ratepayers?

There are a lot more damning statistics that even a mediocre mathematician could use to demonstrate how Hydro One is the least efficient of the 73 LDCs. I believe it is obvious that there are standards applied to municipally owned LDCs that simply do not apply to Hydro One.  They are given carte blanche by the regulator, the OEB,  to run roughshod over 24.7% of all of the ratepayers of the province without consequences.

The Ontario Ombudsman’s report, expected in the fall of 2014, will highlight the mess of Hydro One’s billing system; what will the Ontario Liberal Government do to correct the blatant mistreatment of over a million ratepayers by Hydro One?

©Parker Gallant

August 27, 2014

The views expressed here are those of the author.

Wind farms and radar:Environment Canada posts map showing effect

What’s the weather going to be today? Any major storms on the way? Well, in the western portion of Ontario, where hundreds of wind turbines have already been built and still more are on the way, it will be tougher for Environment Canada to track weather systems, due to interference from the turbines.

Environment Canada has now posted a map to indicate the degree of interference at its Exeter radar station. See the map and full information here.

This map shows a view of the Exeter weather radar located at coordinates 43.37199° latitude and -81.38056° longitude. A circle is defined around the radar with a radius of 50 km. There is also a coloured region indicating the locations where a turbine is visible to the radar. As well, major cities and roads are shown. An explanation on how to view this map can be found in the section “How to view the map”.

Hydro One: are you kidding?


by Parker Gallant

If you check in with Hydro One to see how those “smart” meters work when coupled with the outsourced Inergi billing and customer service system, you’re in for a shock!

The Hydro One outsourced service is apparently not working out too well, and the constant rumours and stories about smart meter replacement seems to be an indication that the devices are not as smart as they were supposed to be!  Put the two together, allow people to voice their complaints to Andre Marin, Ontario’s Ombudsman and the result is thousands of complaints. Many of them are truly bizarre.

Here is a snip from the outsourcing agreement from the 2002 year-end MDA (Management Discussion & Analysis) of Hydro One:

“On March 1, 2002, we commenced an outsourcing services agreement with Inergi LP (Inergi), an affiliate of Cap Gemini Ernst & Young Canada Inc. Under this agreement, Inergi provides, among other things, customer service operations, supply management, pay operations, information technology, and finance and accounting services over a ten-year term. As part of this outsourcing arrangement, approximately 900 of our employees were transferred to Inergi. The initial fee payable to Inergi will be approximately $130 million in the first full year of the contract declining to approximately $90 million in the tenth year of the agreement, net of inflation adjustments and subject to decreases based on external benchmarking analysis every three years. Because this outsourcing arrangement provides for a defined competitive and continuously improved price for the outsourced services, we believe that it will allow us to continue to reduce our cost base and improve our competitive position. As part of this agreement, we are still responsible for the capital expenditures associated with these services.”

Surely a recap of Hydro One’s new billing system is also appropriate; this note can be found in the 2013 2nd Quarter MDA of Hydro One under the heading Future Capital Expenditures:

“Other capital expenditures are expected to be approximately $200 million in each of 2013, 2014 and 2015. These expenditures include investments to replace our end-of-life customer billing system with a new CIS and smaller projects related to the continued realization of increased productivity from our enterprise-wide information system.”

I have already highlighted the problems with Hydro One’s new CIS (Customer Information Service?) in several articles including one just before the launch of the Ombudsman’s investigation.  (Find it here!)

Other articles focused on those smart meters including one I wrote (found here) indicating that the smart meters were actually being replaced way back in 2010 shortly after they were installed at a cost of  $700.54 each.

Hydro One recently released their 2014 2nd Quarter results and a August 14, 2014 article in the Toronto Star had this quote from the Director, Corporate Communications, Daffyd Roderick: “ ‘Many Hydro One customers have electric heat,’ said spokesman Daffyd Roderick, ‘and had trouble keeping up with bills that were 20 to 30 per cent higher than normal. That boosted the number of accounts in arrears, and the amount they owe.’ ”

Had Mr. Roderick checked his own press release he would have quickly noted it stated Hydro One’s cost of power was 18% higher as were Hydro One’s Operating costs when the first two quarters are compared to the prior year.   The fact is, increased consumption because of the cold winter played only a minor role in causing the accounts to be in arrears.

We can all hope that  Andre Marin’s report will tell the truth, rather than the spin put out by Hydro One.

©Parker Gallant,

August 25, 2014

Stay tuned for the next installment on Hydro One as more interesting facts are disclosed and we will have a look at how well that 2002 outsourcing agreement has reflected itself in the reduction of their “cost base.”

The views expressed here are those of the author.

Parker Gallant will be speaking in Exeter and Grand Bend on August 26th

Aviation safety and wind farms: you be the judge

On Saturday, the London Free Press published a story about the letter from NAV Canada to the wind power developer planning a power project in East Oxford, near Woodstock, Ontario.

Though the letter to the developer lists several concerns about the impact of the wind power project on radar and airport operations, a NAV Canada official was quoted as saying the problems could be corrected simply with “software.”

We invite you to read the actual letter from NAV Canada here, and see if you are satisfied that the wind power developer could achieve the mitigation measures necessary to ensure safety. 14-0925 NAV Canada GunnsHill

Key points from the NAV Canada letter:

“We have evaluated the captioned proposal and our analysis shows that all 10 of the proposed turbines are visible to the London Radar while turbines 4-10 are visible to the Hamilton Radar and turbines 1-3 are marginally visible to the Hamilton Radar with the following impacts:

·         a number of nuisance (false) primary radar targets in the wind farm geographical limits and its immediate vicinity.

·         a reduction to our capability to identify and track primary surveillance targets in the above mentioned area.

·         a reduced capability to provide traffic information to our aviation customers when a primary only surveillance target (s) is in the area.

·         an increase in the controllers’ workload in the affected area, and

·         a decrease in flight safety for aircraft operating in the area, especially in adverse weather conditions.”

The community group in East Oxford also notes that emergency medical transport by air to and from the nearby Woodstock hospital could also be affected by this wind power project.

NAV Canada’s mission statement reads, “Safety is our first priority.”



Parker Gallant on Hydro One: explaining the unexplainable

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Norfolk Power: a good deal for somebody. Not you.

If you are, or could be in future a Hydro One customer there is no reason to cheer about their 2014 second quarter news release … unless you are a ratepayer in Norfolk.

Hydro One’s news release of August 14, 2014 stated the company has received an “approval to acquire Norfolk Power Inc. (Norfolk Power).” The sale price announced last year was $93 million.  For the ratepayers in Norfolk that acquisition will mean a five-year holiday from distribution rate increases.

But there is more: Hydro One is now committed to paying 30.4 times the annual profit of Norfolk Power for the year ended December 31, 2013. That price is referred to as the P/E (price/earnings) multiple. The purchase price by Hydro One is pure insanity as the P/E of utility companies trading in the market has traditionally been in the 10/15 times P/E range.  Why is Hydro One using taxpayer dollars to benefit only the ratepayers and taxpayers of Norfolk, and why did the Ontario Energy Board (OEB) bless the purchase?

The Hydro One press release had lots of bad news: even though revenue was up by $163 million for the quarter it was due principally to the cost of power increasing by $140 million for the additional 0.2 TWh (terawatt hours) purchased.   Doing the math on the extra 0.2 TWh shows a price of $700 per MWh (megawatt hour) or the equivalent of 70 cents per kilowatt hour.   That jump pushed the cost of power for the first six months of 2014 for Hydro One customers — up by 17.8%, and 20.5% for the recent three months.

Why is Hydro One paying so much for the additional power? Are all the other LDCs in the same position?

More bad news: Hydro One’s net income was down by $53 million (32%) in the last three months and $70 million (16%) in the first six months of the current year.  Comparing the second quarter, 2014 with the same quarter in 2013 shows that profit for Hydro One’s transmission business was up slightly, but profit for the distribution business dropped by $45 million or 53%.  What that means is Hydro One will be applying to the OEB for a rate increase for the distribution side.

This was also in the news release, related to the drop in net income:  “The reductions in net income were primarily due to higher operation, maintenance and administration costs resulting from increased aging of accounts receivable as a result of a combination of the impact of cold winter weather on customer bills based on increased electricity consumption and prices, as well as our customer service recovery initiatives.”

Translation: they are connecting the reduction of net income to “increased aging of accounts receivable” which is a stretch, unless they ramped up administration costs to collect delinquent ratepayer bills!  That might have something to do with the flawed billing system under investigation by the Ombudsman.  Or, it could have something to do with “energy poverty” as more and more Ontarians can’t pay the ramped up electricity and distribution costs.

Whatever the answer, it has obviously been caused by one or a combination of all three of these issues which are symptomatic of poor management of expenses,  faulty execution of the revamped billing system, and higher energy prices.

Higher prices are the direct result of the push for large-scale renewable power sources by the incumbent Liberal government.

Customers of Hydro One deserve an answers … and the truth.

©Parker Gallant

August 22,2014

The views expressed are those of the author.

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Law firm: negative action expected in Ontario energy sector

This is a very long and complicated but absolutely crucial opinion on Ontario’s electricity sector: what has possibly gone wrong, and what government might do in future to counteract its failures.

Prospects of negative governmental action in Ontario’s energy sector

Gowlings Knowledge Centre, August 2014

By James J. Shanks

When investments are made in the private sector sophisticated financial models are developed, complete with multiple inputs, all designed to predict a range of best and worst case scenarios. If a significant model input strays beyond its originally anticipated value range for example, if customer demand for a business’s products collapses then the financial model for the business may fail. If so, stakeholders in the business will likely face a restructuring of their investments.

The chances of a restructuring are far less likely when government is the main customer of the business, not only because governments are presumed to have deep pockets, but also because, in those businesses where government acts as an intermediary between the business and the ultimate consumers of the business’s products, the government’s intermediation tends to insulate the business from model failure and its usual consequences. Nevertheless, if model failure is severe and persistent enough, history in Canada suggests that governments may be tempted to impose a restructuring even on these sorts of businesses.

In the years leading up to Ontario’s Feed-in-Tariff (FIT) program, it was generally accepted that Ontario was approaching a near-term shortage of electricity as surging demand threatened massive brownouts.  Government financial models, no doubt, assumed that the cost of developing renewable energy infrastructure involving long-term power purchases at prices significantly above market could be recouped by steadily increasing electricity rates over time, all without unduly reducing customer demand.1 However, subsequent experience seems to suggest that Ontario’s electricity demand may have been more elastic than anticipated, especially as many urban and rural electricity consumers have reacted to increasing prices by switching some of their electricity needs to lower-priced natural gas and propane. Moreover, as price increases in the Province have outpaced those in neighbouring jurisdictions (leaving Ontario’s electricity prices 30-60% higher than in those jurisdictions), some large commercial users have reacted by moving their operations out of Ontario, further depressing overall demand.2  In fact, far from remaining steady, electricity demand in the Province is now projected to decline until at least 2021.3

Even as electricity demand has declined, Ontario’s generating capacity has increased.  Overall generating capacity in Ontario has increased by 13% since 2003, while demand has decreased by 10% since 2005.4 The end result has been a large and continuing surplus of generating capacity, with Ontario’s generating capacity expected to exceed forecast (normal weather peak) demand this summer by 25-50%.5  Partly as a consequence, electricity spot prices in the Province have plummeted, sometimes falling to $0.025/kWh.6  Higher-priced, surplus Ontario electricity is sometimes resold to neighbouring jurisdictions at a substantial discount7 and the Global Adjustment amount charged to Ontario consumers has now risen to record levels.8

In summation, some of the model inputs in the Province’s original financial models may already have strayed beyond their initially anticipated value ranges, suggesting at least the possibility that model failure has occurred in the sector or that it may be imminent.  If so, then recent entrants into Ontario’s energy sector, otherwise dependent on the continuance of long-term government purchases, are quite right to be concerned about the possibility of a government-imposed restructuring in their sector.

Unlike private sector restructurings which typically involve a court process, government-imposed restructurings generally take the form of confiscatory legislation or some other form of negative governmental action.  It should come as no surprise that governments in Canada have from time to time engaged in various sorts of negative governmental action, invariably with the intent of modifying (or even abrogating altogether) undesirable government obligations.  Such action has even occurred previously in Ontario’s utility sector.9 For example, in the 1930’s, successive Ontario governments enacted several pieces of legislation abrogating various contractual commitments to private sector power producers, all with the intent of assisting the then-fledgling, and government-owned Ontario Hydro to become the dominant power producer and distributor in the Province.  Indeed, overall, scholarly research suggests that negative governmental action usually occurs (if it occurs at all): (a) when technological change in a given industry sector is occurring rapidly, (b) when pricing, demand or other important financial variables cannot be perfectly forecast, and (c) when governments have entered into long-term contracts that cannot easily be altered.10 In other words, the restructuring risk increases on model failure occurring within this context.  

Negative governmental action can take many forms, including specifically, the passage of legislation modifying government payables, authorizing or curing contract breaches, limiting court access, amending or cancelling contract commitments, and even expropriating completed projects. A recent, well publicized, example of negative governmental action in Canada occurred in the early 1990s when the federal government summarily cancelled several long-term contracts with private sector participants for the redevelopment of Toronto’s Pearson Airport.11 Bill C-22, passed by the House of Commons provided that: (a) all contracts relating to the redevelopment were declared not to have come into existence or to have had any legal effect, (b) all obligations, rights and interests arising out of the contracts were declared not to have come into existence, (c) no action or proceeding, including for damages for breach of contract, could be brought against the government, and (d) every action against the federal government was summarily dismissed.  Bill C-22 also authorized the relevant federal Minister, for a period of 30 days, to enter into agreements with aggrieved stakeholders to pay compensation in such amounts as the Minister considered appropriate.  Notably, compensation for lost profits was expressly prohibited under the legislation.

Using Bill C-22 as an example, it may appear at first blush that governments in Canada hold all the cards when it comes to negative governmental action. However, stakeholders should note that there are various countervailing influences that will moderate the actual exercise of such extraordinary power. For example, government will be mindful of reputational concerns.12 Specifically, international credit rating agencies may react to negative governmental action by downgrading the subject government’s public debt due to increased “country risk”, thereby increasing future borrowing costs for the subject government. Foreign governments may impose “tit-for-tat” sanctions on projects in their jurisdictions that are intended to hurt nationals of the expropriating state. Judgments rendered by sympathetic foreign courts may be executable against the subject government’s assets located in foreign jurisdictions. And finally, equity investors in non-related sectors may avoid investment in the jurisdiction altogether for fear of falling victim to similar governmental action.

Aside from reputational concerns, some jurisdictions offer constitutional safeguards against negative governmental action without due process. The Fifth and Fourteenth Amendments to the US Constitution are good examples.  Unfortunately, no such constitutional protection currently exists in Canada.13 Specifically, Canada’s Charter of Rights and Freedoms contains no express provision for the protection of property, economic, or even contract rights.14 And based on a string of Charter cases decided by the Supreme Court of Canada, it is unlikely that any general protection of this nature will be implied any time soon.15 Instead, stakeholders in Canada will have to derive comfort from the fact that Canadian courts will generally construe confiscatory legislation very strictly against the subject government, straining if at all possible to find that the legislation does not exclude the payment of appropriate levels of compensation or review by the judiciary. Nevertheless, if the legislation is sufficiently precise, even a strict constructionist approach will be of little use to an aggrieved stakeholder.

In such circumstances, Canada’s free trade agreements may assist, but only if the stakeholder is a national of a treaty-protected country. As is well known, Canada is a signatory to a number of free-trade and foreign investment protection agreements, some of which prohibit confiscatory action without payment of appropriate compensation.  For example, under Article 1110 of the North American Free Trade Agreement (NAFTA), no federal or provincial government is permitted to “nationalize or expropriate an investment of a [US or Mexican] investor…or take a measure tantamount to nationalization or expropriation”, unless such action is: (a) for a public purpose, (b) effected on a non-discriminatory basis, (c) effected in accordance with due process, and (d) carried out upon payment of compensation equivalent to the fair market value of the expropriated investment.

Particularly instructive here is the case of Metalclad Corporation v. Mexico16, a NAFTA case brought by an American company against the state of Mexico in 2000.  In that case, an arbitral tribunal ruled that, as a result of numerous laws and other negative governmental actions passed and undertaken by Mexican state and municipal authorities, Mexico had effectively expropriated Metalclad’s newly-constructed waste facility in Guadalcaza. The tribunal awarded Metalclad US$16,685,000 in damages representing Metalclad’s sunk costs of the investment.17 While damages awarded against Mexico did not include an amount on account of discounted lost profits, such damages are thought to be sustainable under NAFTA in certain circumstances.

Equally instructive is a 2012 NAFTA case brought against Canada by the Abitibi-Bowater group and involving certain confiscatory legislation passed by the Province of Newfoundland. In this case, the provincial legislation provided for: (a) the expropriation of significant Abitibi-Bowater properties used for hydroelectric generation and transmission, (b) the cancellation of various hydroelectric contracts between the Abitibi-Bowater group and the Province, and (c) the termination of certain timber and water rights. While the legislation provided for compensation for the expropriated properties, no compensation was to be forthcoming for the terminated timber and water rights. The Abitibi-Bowater group brought a NAFTA claim asserting that the Newfoundland legislation constituted an expropriation of its assets without appropriate compensation contrary to NAFTA Article 1110. Faced with the prospect of an uphill fight, the Canadian government opted to settle the claim for $140 million.

Besides NAFTA, and as indicated above, several bilateral trade arrangements exist which contain similar foreign investor protection.18 Importantly, the proposed multilateral Trans-Pacific Partnership currently being negotiated with several Asia-Pacific countries and the proposed Canada-European Union Comprehensive Economic and Trade Agreement (not yet in force) will also contain similar investor protection. Once implemented, these new trade arrangements will significantly expand the list of treaty-protected countries and the range of foreign stakeholders that will be able to benefit from investor protection.  Notably however Canada’s trade agreements cannot be used by Canadian nationals to protect themselves against negative governmental action occurring within Canada in relation to their domestic investments.

With the recent re-election of Ontario’s Liberal government, stakeholders in Ontario’s energy sector are, no doubt, breathing a little easier, as putative threats to tear up the Province’s FIT contracts are now much more clearly off the table.19 Most assuredly, the restructuring risk has subsided.  Still, the issues here are as much financial as they are political, and history in Canada suggests that negative governmental action can never truly be ruled out.  If financial model failure occurs and is considered severe and persistent enough, then negative governmental action will remain a distinct (even if remote) possibility.

1 The comprehensiveness of the Government’s original financial models has been questioned by Ontario Auditor General in the Annual Report of the Office of the Auditor-General of Ontario.

2 Remarks of Greg Abel, Chairman, President and CEO of Spectra Energy, to Economic Club of Canada, June 24, 2014.  See also “Environmental and Economic Consequences of Ontario’s Green Energy Act”, R. R. McKitrick, Report prepared for Fraser Institute, 2013, and also “High Ontario Electricity Prices Hamper Ring of Fire Processing and Other Industry”, L. Di Matteo, February 6, 2011.

3 Ontario’s Electricity Surplus: An Opportunity to Reduce Costs”(the “Ontario Surplus”), a publication of the Ontario Clean Air Alliance Research Inc., July 2012.

4 See Ontario Surplus, supra.  See also “Eighteen Month Outlook: From March 2014 to August 2015” (the “18 Month Outlook”), a publication of the IESO, p. 4.

5 Based on 18 Month Outlook, Tables 3.1, 4.3-4.5.
6 See Ontario Surplus, p.3.
7Ontario’s Power Trip: Power Dumping, Gallant, P., Financial Post, July 20, 2011, and “Ontario’s Power Trip: Province lost $1.2-billion this year exporting power”, Gallant, P., Financial Post, December 2, 2013.
8 “Ontario power fee sets new record: The global adjustment — a fee added to the market price of electricity in Ontario — has reached a record high”, Walton, T., The Toronto Star, September 3, 2013.
9Regulatory Failure and Renewal: The Evolution of the Natural Monopoly Contract”,  J. Baldwin, Ottawa: Economic Council of Canada 1989.
10 See Baldwin, Chaps. 3, 10 and 12, for example.  See also “Public Accountability in the Age of Contracting Out”, E. Atwood and M.J. Trebilcock, (1996) 27 Can. Bus. L.J., v. 27, n. 1, p. 1, at p. 38.
11 A more recent instance occurred when in 2008 the Government of Newfoundland expropriated various power generating and transmission assets of the Abitibi-Bowater group (discussed further below in this article) pursuant to the Abitibi-Consolidated Rights And Assets Act (Newfoundland).
12 See for example “A Constant Recontracting Model of Sovereign Debt”,  J. Bulow & K. Rogoff (1989) Journal of Political Economy, 155.
13 For a contrary view regarding the government’s right to implement negative governmental action, see “Is the Pearson Airport Legislation Unconstitutional?: The Rule of Law as a Limit on Contract Repudiation by Government”, P. Monahan, (1996) Osgoode H.L.J., v. 33, n. 3, p. 411, where the author argues that where legislation like Bill C-22 purports to deny access to the courts, the legislation breaches the rule of law implicitly enshrined in the Charter of Rights and Freedoms, and therefore is unconstitutional.
14 While the Canadian Bill of Rights provides an explicit right to the “enjoyment of property” and the right not to be deprived thereof without due process, the Canadian Bill of Rights only applies to federal laws, may not entitle the aggrieved party to compensation if the confiscatory legislation provides otherwise, and creates rights that do not have the same status as Charter rights.
15 Siemens v. Manitoba (Attorney General), 2003 SCC 3; The Attorney General of Quebec v. Irwin Toy Limited, [1989] 1 S.C.R. 927; Whitbread v. Walley [1991] 2 W.W.R. 195 (SCC); Olympia Interiors Ltd. v. R. (1999), 167 F.T.R. 165 (Fed. T.D.), affirmed (1999), 1999 CarswellNat 1978 (Fed. C.A.), leave to appeal refused (2000), 252 N.R. 393 (S.C.C.); Energy Probe et al. v. The Attorney General Of Canada et al., (1994) 17 O.R. (3d) 717 (Ont. C.J.); and Shaw v. Stein, 2004 SKQB 194.
16 See Metalclad Corporation v. Mexico, ICSID Case No. ARB(AF)/97/1 (NAFTA), Award. For an unsuccessful appeal of the NAFTA award to British Columbia Supreme Court, see United Mexican States v. Metalclad Corp., 2001 BCSC 664.
17 Damages were based on the claimant’s actual investment in the property because the facility had not been operational long enough, and thus had not established a sufficient record of profitability, such that damages for lost profits could be proven.  The tribunal suggested that a “fair market value” award of damages for a going concern with a history of profitable operations would usually be based on an estimate of future profits, subject to a discounted cash flow analysis.  See  also Biloune, et al. v. Ghana Investment Centre, et al., 95 I.L.R.183, 207-10 (1993).
18 See, for example, Article 9.1 of the Canada-Panama Free Trade Agreement, Article G-10 of the Canada-Chile Free Trade Agreement, and Article 8.11 of the Canada-Korea Free Trade Agreement (not yet in force), all of which provide compensation for expropriatory measures taken by the federal or any provincial government.
19 See, for example, the Alliance for Renewable Energy’s view of the threat in: “June 12 Provincial Election will determine the Future of Ontario FIT Programs”,  June 3, 2014.

Read the entire article here

Thanks to Ontario Wind Resistance for the tip! And, notice two references by our own Parker Gallant.

Parker Gallant has questions for Energy Minister Chiarelli


Parker Gallant has written a letter to Ontario Minister of Energy Bob Chiarelli, as a concerned citizen of Ontario. He has included a series of pointed questions on the energy portfolio in Ontario, specifically what value there is for taxpayers and ratepayers, and what the effect will be on the Ontario economy.

Sample questions:

Why does the Ontario Power Authority claim it will pick up old refrigerators for “free” when the truth is, everyone is paying for that service?

Why does Ontario list “conservation” as a source of power when you can’t exactly plug a toaster into it.

Why does Ontario hand out grants of $650 to people buying energy-efficient air conditioners but only give $400 to less than 1% of Ontario’s citizens who are suffering from “energy poverty” and can’t pay their electricity bills? (And don’t get him started on the huge grants to people buying expensive Tesla electric cars…)

Read the full letter here! Letter to Energy Minister with questions

Samsung’s “secret deal”: higher bills, debt for Ontario

In today’s Letters section in The Financial Post, are criticisms of Ontario Finance Minister Charles Sousa’s claim that his government is improving life for Ontario citizens and business.

Here’s one which refers to electricity bills and Ontario’s future.

In reading this letter of Mr Sousa (July 23), I wonder where the Liberal government’s compassion was when needed. This Liberal government has raised Ontario’s debt from $130 billion to a whopping $300-billion.

This close to $170-billion increase has only benefitted the Public service and Liberal cronies, and funded the pocket of Samsung because a secret deal was made. The citizens of Ontario were left holding the bag with increased taxes and high hydro rates.

This is what Sousa says “will help improve people’s lives and communities.”

Joyce Conley, Calgary

Wind farm appeals a “stacked deck”

Judges quash majority of turbine appeal

Setback issue to be argued Sept. 3
The Environmental Review Tribunal has ruled that only issues related to an amendment to the HAF Wind Energy Project will be heard next month. The majority of the issues raised in West Lincoln resident Anne Fairfeild’s appeal will not be argued.
Grimsby Lincoln News

WEST LINCOLN — The case against the five industrial wind turbines already spinning in West Lincoln is “still partially alive.”

Anne Fairfield, who appealed the province’s approval of the HAF Wind Energy Project, appeared before the Environmental Review Tribunal for a preliminary hearing last week. All of the issues raised in her original appeal were quashed, meaning only those mentioned in her appeal to the province’s subsequent approval of an amendment to the project will be heard at a hearing next month.

“They knocked out everything not mentioned in the amendment,” said Fairfield. “All we’re left with are property lines and the withdrawing of post construction raptor monitoring.”

Project proponents Rankin Wind Energy and Vineland Power Inc. had to submit an amendment to their application after it came to light that four of the five turbines were built closer to property lines than regulations allow.

According to the Green Energy Act, turbines must be located a minimum of a blade length from the nearest property — in this case, 95 metres.

The province approved the amended application June 20. Fairfield filed her appeal July 3.

Come Sept. 3 Fairfield will only be able to argue on the issue of property line setback infractions and post-construction raptor monitoring. The West Lincoln resident will no longer be able to present on issues of health, gas wells. hazardous waste and the impact on Charter rights — the issues Fairfield raised in her original appeal to the project’s approval.

Fairfield and members of the West Lincoln Glanbrook WInd Action Group met with Niagara West-Glanbrook MPP Tim Hudak Monday to discuss the upcoming tribunal.

Judges quashes majority of turbine appeal

West Lincoln-Glanbrook MPP Tim Hudak meets with constituents in resident’s home

Hudak was vocal in his opposition to the Green Energy Act in his time as PC Party Leader. He raised the issue several times at Queen’s Park on behalf of his constituents in West Lincoln and the province at large, calling for a complete moratorium on more than one occasion. He has called on the Minister of Energy, Bob Chiarelli, twice now to “do the right thing” in the case of the HAF project.

“If you had been caught speeding on Twenty Road, you wouldn’t get a redo,” said Hudak, speaking on the province’s approval of the amended application.

“It only makes sense for the government to follow its own laws.”

Hudak, fresh on the heels of his loss to Kathleen Wynne in the race to become premier, said he would do what he can to help his constituents but realizes his influence is not as strong as it could have been had the outcome had been different in June.

“My goal was to win the election and stop this thing in its tracks,” said Hudak. “I’ve met with Wynne and McGuinty, face to face like we are now, to say this is a bad idea for the province as a whole.”

Fairfield asked if the PC party would continue to push against the Liberal’s green agenda without Hudak at helm. Hudak said he appointed Lisa Thompson to the post of energy critic because her own riding of Huron-Bruce was home to several turbine projects. He was confident the party would continue to push against “one of the most destructive policy decisions in recent history.”

Hudak, like the half dozen residents gathered at Veldman’s house, did not have the same level of confidence the Environmental Review Tribunal would side with Fairfield.

“It’s an incredibly stacked deck,” said Hudak.

“ERTs don’t work,” said Fairfield, noting ultimately the decision will lie in either appeals court or in a judicial review, both of which she is prepared to more forward with.

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Editor’s Note: the Environmental Review Tribunal Panel is NOT made up of “judges” but rather lawyers who are civil servants, employed by the Province of Ontario.