By Ray Rivers

November 29th, 2018

BURLINGTON, ON

It is nothing short of dishonest for federal Conservative leader Andrew Scheer to blame the announced closing of General Motors (GM) operations in Oshawa next year on a federal carbon tax – which has yet to be implemented. It is equally dishonest for the Ontario premier to be running around blaming everything on the policies of the previous Liberal government.

One of the bigger business operations in the province had decided to leave. There was nothing the province could do to keep them.

GM was clear that this was a corporate-wide restructure which is closing at least one plant in Canada and several more in the USA. It has to do with excess production capacity for gas guzzlers and the company’s failure to adjust to changing markets. And nothing Mr. Ford could offer, be it lower taxes, lower electricity rates, fewer labour regulations or a cash grant, would make the company change its mind. Ford was told definitively by GM’s management, as they hung up the phone – ‘the ship has left the dock’.

The traditional big three North American auto giants, and GM in particular, are chronic slow learners and always late to the game. The first electric car was invented by a Hungarian dude back in the early 1800s, over half a decade before Mr. Benz patented the first gas guzzler. By the turn of the century there were almost twice as many electric as petroleum vehicles on the road in America. But cleanliness, simplicity of operation and fast acceleration eventually lost out to the increased range and the lower costs of the more complicated Model T.

GM is not fondly remembered for its own history with electricity. In response to California’s emerging tough fuel and emissions standards in the 1990s, the company piloted the EV1 project. Everybody who drove one loved the car but for some suspicious reason GM killed the project and destroyed the cars anyway.

Two decades later, to compete with the Prius hybrid, the Chevy Volt, a miserable compromise of inadequate battery range and an inefficient on-board gasoline charging system, showed up. Its ultimate demise this coming year will result in few tears. Only last year GM finally got the memo and produced the all-electric Chevy Bolt with a battery range into Tesla territory. These cars are built in Michigan and their batteries in Korea.

Neither our governments nor the company saw the writing on the wall – that doing the same things will give you the same result.

It was barely a decade ago when, as GM nearly folded-up camp, it came cap-in-hand to the Canadian and US federal and sub-national governments, begging for a handout to ride out the GW Bush recession. Canada and Ontario wasted no time asking how much, and we ended up with a combination of loans and equity totaling almost $14 billion.

The US set specific environmental conditions before issuing the lending instruments and ultimately got all of its money back and then some. The Harper government sold off our equity early in order to present a balanced budget for the 2015 election, and ended up losing $3.5 billion as a result.

In addition there was apparently a billion dollars which had been signed over to a GM entity which no longer exists. There was some kind of ‘old GM’, as opposed to a “new GM“ and the new one isn’t about to pay the money back. This for a company which earned over six billion in profits last year.

Cars are like a narcotic. If GM is a junkie then our governments are the the enablers, feeding its habits and ignoring the consequences. Neither our governments nor the company saw the writing on the wall – that doing the same things will give you the same result. Instead of sending the company to rehab, the governments just benignly encouraged GM to keep doing business as usual – making the same old cars – the same old mistakes.

GM claims the 60 year old Oshawa plant is unsuitable for production of the new generation of EVs and autonomous diving cars. Indeed the facility may be old but isn’t a car a car? Auto companies regularly run different models on the same assembly line. GM is doing that now, building trucks on a line formerly used for sedans.

And why have we all been blindsided by this closure announcement? The company has a contract with its labour union which extends beyond the planned closure date, surely the union should have been consulted. The union president is convinced GM is on a path to also close the other two factories it operates in Canada. What does that hold for the security of pension and benefit obligations?

The Leggat family have been in the car retailing business for a long long time.

GM was once Canada’s largest auto maker. Does its executive brain trust think there will be any remaining buyer loyalty after this caper? Once the dust has settled GM might as well take their dealership operations with it if it closes the door on Canadian production. The union boss, Jerry Dias, wants Mr. Trudeau and Mr. Trump to impose a 40% tariff on GM cars built in Mexico and China. That would teach it a lesson Dias says.

We know little of GM’s corporate decision making process, but perhaps somebody should have listened when it warned that Donald Trump’s recent tariffs would end up in a smaller GM. Trump’s reaction to the US plant closures, threatening to remove the federal subsidies for buyers of GM EVs, is as wrong headed as his tariffs were. Those EVs are currently built in America, after all.

GM claims that it has seen the light, joining Ford Motors, Volkswagen and others in shifting from gasoline to EV production. Once upon a time, six months ago, Ontario buyers used to get a provincial incentive for new EVs, as buyers do in several other jurisdictions across Canada and throughout the USA. And a carbon tax raising the cost of gasoline would encourage more car buyers to join the EV crowd. These policies are consistent with the direction the new GM is heading.

Leader of the federal opposition Andrew Scheer with Ontario Premier Doug Ford. Note the picture to the left of former Toronto Mayor the late Rob Ford

But it doesn’t sound like retaining those Wynne government pro-EV policies would have kept the Oshawa plant open any more than Mr. Ford’s killing them did.  Scheer and Ford need to take a step back and re-examine their own policies before they heap unwarranted blame on their political opponents.

Pointing fingers and slinging mud are unhelpful at this time. And putting up signs saying ‘Ontario is open for business’ is a waste of time when the business model the government is using dates back at least thirty years. Like the evolution of the automobile its past time to move into the 21st century.

Ray Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers

Background links:

Who Killed the Electric –      History of the Electric Car –      GM Trade Unertainty –

Open for Business –      Trump’s unintended Consequences –      Trump Tariffs –

Bailouts Don’t Work –

By Gary Scobie

November 25th, 2018

BURLINGTON, ON

There are two major issues need repair at City Hall.

First up is respect. That would encompass respect by members of Council for one another as well as respect by Council for citizens that come to City Hall to delegate their concerns. It is not a small matter to appear at Council with a prepared delegation text. It takes time and thought to prepare an argument for or against a motion and hopefully allow a better solution if there is one. The standard “Thank you for coming” response is quite a de-motivator for most citizens to ever think of appearing a second time.
I’m hoping a near total refresh of Council will start off respecting themselves and others. Citizens will be watching.

Second up is the attitude by the current Council (henceforth referred to as the old Council) of eight years that the Province alone is to blame for the over-intensification of downtown Burlington. No, the Province didn’t mandate 20 plus storey high rises on Brant and Martha Streets. The Council of 2005 accepted without a whimper the designations of Urban Growth Centre and Anchor Mobility Hub downtown. They both designate density targets within these overlapping zones, but not height. It was the developers, the Planning Department and in end the old Council that translated density over an area into one-off high rise buildings that each over-intensified the lot they sat on. It was and is the cumulative affect of adding tall buildings, without adequate parking, expanded roadways or inviting transit that will clog our streets for decades to come if it is unchecked by the new Council.

The old Council looked at the downtown as an infill area to intensify beyond targets, beyond our current Official Plan and against the wishes of the current residents. The Planning Department aided and abetted. The developers cheered. Building only for future residents without keeping in mind current residents is not a recipe for success, especially if future residents realize what a transportation-restrictive neighbourhood they have bought into to now become current residents.

The rush to pass a flawed Official Plan before the election put the icing on the cake for over-intensification. Most of the new Council ran on platforms against the new Official Plan over-development.

The new Council can talk to the Province about the two designations, can talk to the Region about the Official Plan and can talk to (and hopefully listen to this time) citizens who will accept moderate intensification and no more.

It may take longer than 100 days, but these are the issues that I would like the new Council to tackle.

Gary Scobie is a ward 3 resident who has delegated and usually gave more than he got from a Council that didn’t have much time for him He has served on Advisory Committees and has been active citizen by any standard.  In this photograph he is seen delegating before city council.

By Ray Rivers

November 24th, 2018

BURLINGTON, ON

The only similarity between the federal economic statement and the one Ontario announced last week was that neither has a plan to deal with their growing deficits. Canada’s debt as a percentage of its GDP is the second lowest among G7 countries – higher than Germany but lower than the USA and less than half of Japan’s numbers.

We cant just print the money we need.

Despite all the alarm-ism during the last election, Ontario’s debt compared to its GDP is quite a bit lower than that of our national government. But unlike a provinces, which can only control its levels of taxation and spending, the federal government also controls and/or influences interest rates, currency exchange rates and the money supply, including printing our money.

When Donald Trump cut US business taxes Canada had to respond or run the risk of watching new business investment move to larger markets south of the border. Canada has long had lower effective corporate taxation rates than the USA but that competitive advantage has now mostly vanished. And cutting corporate taxes to restore that advantage would have added tens of billions more to the deficit, making it a non-starter.

“America was no longer the fair-minded economic partner we had come to know.”

But it was really Trump’s trade policies that made our government sit up and take notice. America was no longer the fair-minded economic partner we had come to know. The painful process of renewing NAFTA, the unwarranted and costly tariffs on steel and aluminum, and the US role in slashing the price of Alberta oil required a new strategy – one of trade diversification.

For those who lived through the government of the first Trudeau this is a bout of deja vu. Pierre, faced with an unfriendly Nixon administration, developed what was called the ‘Third Option’ – hoping to diversify our dependency on trade away from the US. The Third Option, which also gave us our domestic metric system, largely failed as a trade strategy.

Britain was joining Europe which was itself pre-occupied resolving internal trade barriers, Japan was struggling with its identity as an emerging economic powerhouse, and China turned the tables on us making us trade-subservient to them. Then Richard and Pierre were replaced by Ronnie and Brian who bonded beautifully, and they buried what was left of the third option. Canada and US agreed to lower trade barriers in a process that eventually included Mexico in NAFTA, and the rest is history.

We are so tightly integrated to the American economy that it would be very difficult – if possible – to lessen that integration.

So today we are even more closely integrated into the US economy with three quarters of our exports and a third of our GDP tied to US markets. After all it is so much simpler to just load a truck and drive it across the border than to be bothered shipping overseas to foreigners. We share a common culture and language (except for Quebec), and the US is a prime travel destination for Canadians looking to escape the cold, making us sometimes more American than the Americans.

But we do pay a price when it comes to national identity, and in the end we can find ourselves alone, being bullied by our major economic partner who thinks it has found its own third or fourth option – the nationalist cry of America First. We have since negotiated a number of other so-called free trade agreements, most importantly with Europe (CETA) and also Asia and the Antipodes (CPTPP,) so it is time we put our money where our mouths are on trade diversification.

But it will take some money to restructure our economy onto more of an export footing. The goal of boosting Canada’s overseas exports by 50 per cent by 2025, will not be met just by accelerated depreciation, but it is a good start. And the business community, manufacturing in particular, is besides itself with praise of this mini-budget. For once they are not complaining about a growing budgetary deficit.

Increased manufacturing would enable Canada to better diversify its exports beyond our current raw materials mix, and may also lead to greater import substitution – though that is not the stated goal. Almost as a footnote, companies investing in clean energy production also get this break.

And just to be fair, other businesses will also be entitled to an accelerated depreciation though at a lower rate. Depreciation rates will be raised from four to twelve percent for a pipeline company, for example. And where is our pipeline is the lament of the Alberta oil industry and its government?

The Alberta government wants the federal government to help pay for oil tankers – Ottawa hasn’t said yes to that request.

They were disappointed that the federal government didn’t pamper them by supporting the price of oil in this budget, or offer to pay for more rail cars – after it had already bought a pipeline company. Perhaps Mr. Trudeau was concerned that he’d be accused of starting a national energy program? And besides how could he reconcile a subsidy for oil when the government is imposing a carbon tax?

The federal government is also planning to redirect and speed up some of its planned funding for the national infrastructure program into marine ports, roads and railways to expedite overseas trading opportunities. And yes this throws last election’s deficit targets into the toilet not that Mr. Trudeau was on the road to balance the budget next year anyway.

There is no guarantee even if Trump is defeated in the next federal election that Democrats would not be just as protective when it come to trade. In fact there have already been rumblings from the new Congress-elect that they will want to re-examine USMCA. One has only to recall how the Canada-friendly Obama administration implemented a “Buy American” clause in the US stimulus package as he undertook to fight the 2008/2009 recession.

Conventional wisdom is that you run a deficit in a recession and a surplus in good times. The Liberals are making the case that, given the deficits in our economic infrastructure, there is no better time to invest than when the economy is booming and the money is rolling in. After all, how prudent would it be to balance our federal budget for the short run only to forego investing to make our economy viable for the longer run?

Ray Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers

Background links:

Countries by Debt –     Fall Economic Statement –     Canada’s Economy –

Business Reaction –     Third Option –     50% Export Growth –

Manufacturers Happy –     Will it Work –

By Ray Rivers

November 20th, 2018

BURLINGTON, ON

They’re calling it an ‘economic outlook and fiscal review’. After all it’s been less than six months since Ford rode his big blue machine into the premier’s office. But it’s clear from this economic statement that his team hasn’t yet sorted out all its priorities, even as the brain trust tries to deliver on some of the promises from the election campaign.

The deficit was just one of Ford’s prime promises, and the PC’s s have managed to wrestle it down by a whacking half billion dollars to a mere $14.5 billion. Of course the deficit would be even lower had Ford just accepted the auditor general’s estimate rather than creating his own numbers. But it makes better politics if you can claim you inherited a huge deficit.

And what we are seeing of the accounting is a little confusing because Ford’s finance minister, Vic Fedeli, insists that they actually saved the taxpayers over three billion dollars. He is obviously referring to the price of the environmental programs his government killed. But getting rid of ‘cap and trade’ also killed the goose that laid the golden egg which funded those green initiatives.

The statement is pretty clear. Is it the direction the Ontario economy should be going in?

Conservatives are about nothing if not cutting taxes. And Ford, true to his word, has run up half billion dollars of new debt by providing a tax credit for those earning less than $30,000. This credit, called LIFT, is being sold as an alternative to allowing the minimum wage to rise to $15. But nobody is buying that since two thirds of workers in that income range already don’t pay any taxes. And allowing minimum wages to rise wouldn’t have increased the deficit.

He is also dabbling in trickle down economics by killing the income surtax for the wealthiest in Ontario – those earning more than $300,000. Tax cuts at the top and bottom mean that the middle class will need to make up the difference eventually – subsidizing everyone else.

And while the government may take credit for a four cent gas pump price drop, that should be kept in context. Market forces alone have reduced prices by over 25 cents from earlier this year, and those forces may just as easily reverse direction into the future. And then an imminent federal carbon tax will cost at least another four more cents.

A program that will last less than a year. Very tough on those that lose the benefit.

Perhaps the biggest cost saving in this mini-budget actually comes from dropping the universality of the ‘OHIP plus’ drug plan, excluding those with an existing private health plan. Clearly this was something the previous Liberal government could have done and it is a good example of the kind of efficiency Ford had presumably been talking about. Education spending appears to not have been touched and health spending has increased ever so slightly, helping Ford keep his promise of providing more beds.

The government is taking heat for terminating three oversight agencies which monitored francophone rights, child care and the environment. Despite promises to continue to deliver this oversight through the auditor general or ombudsman offices, it is unlikely the Environmental Bill of Rights will survive. And there is a double whammy for Franco-Ontario residents as a French language university proposed for Toronto is also canned. That is on top of the three satellite university campuses Ford has already chopped.

Is never cutting costs good financial stewardship?

Overall this mini-budget is about austerity as the government looks into the nooks and crannies of its programs to save some tax payer dollars. Of course much of those saving will end up funding the PCs own priorities, like the tax cuts and the senseless fight with the federal government over the carbon tax – which legal experts expect them to lose. A hiring freeze has also helped keep the cost of government down, although Ontario already had the lowest provincial public sector costs per capita in Canada.

And the overall effect of the budget will be contractionary at a time when Ontario is likely nearing the end of its economic boom cycle. Cutting the renewable energy and energy retro-fit programs, formerly a key growth area, will hurt all the working people that Ford keeps promising to help. Trickle down tax cuts for the rich never pay for themselves in increased economic activity and serve more as drain than an economic pump. Finally, the lower income tax cuts pale compared to the economic spending power of a $15 minimum wage for those who spend everything they earn.

But, Ford did deliver on his Buck a Beer promise – sort of.

If this budget was intended to stimulate growth and employment it is a failure. And despite the rhetoric and hype, Ford is pretty much retaining most of the previous government’s initiatives, even if that means turning what he called a Liberal mess into a PC mess.

Except when it comes to the environment! The often promised new climate change plan is nowhere in evidence and if it ever does arrive may likely surface as a piece of tokenism – like a page from the former Harper federal government’s playbook on the environment. But we should remain optimistic.

Catastrophic fires in California are now an annual thing.

Flooding on the east coasts and hurricanes that demolish communities are now part of the hurricane season.

For a budget which does so little, especially even it comes to the deficit, its pictorial presentation as a comic book almost seems appropriate. But there are serious issues facing the province and one of the most critical is nowhere to be seen, not even in the closing statement… “We gladly tighten our own belts now, knowing that it will provide this generation and future ones with the secure, prosperous future they deserve.”

What good is it to balance the books when the very planet our lives and livelihood depend on is in peril?

Notably absent from Ford’s mini-budget is any attempt to mitigate the province’s contribution to global warming. That is no less serious a public concern than the debt, especially for Ontario’s youth. But at least we can take comfort from the immediate extension of liquor store hours and the upcoming whacky weed stores next year.

Ray Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers

Background links:

Mini-Budget –     Cutting Oversight –    More Cutting –

Even More Cuts –     Environmental Commissioner –

We have asked Burlington residents that we know and have communicated with in our seven years of operation what they think the new city council needs to do in its first 100 days.

They get sworn in on December 3rd – tell us what you think has to be done in that first 100 days to set a new path and get out of the rut many feel the city is in.

There are a lot of people unhappy with transit; unhappy with the thinking that is coming out of the Planning department and worried about annual tax increases of around 4%

We asked the people we knew, they aren’t all friends of the Gazette, what they thought could be done and should be done.

Krista Richards doesn’t see much that she likes at city hall.

By Krista Richards
November 13th, 2018
BURLINGTON, ON

This election we almost got a full clean sweep of council.  That is a huge message for this new council.

Lori Jivan, Acting coordinator of budget and policy patiently leads people through an explanation of the budget and the workbook the city created.

Hitting the ground running is an understatement.  The most obvious thing to deal with is the new budget.  And more to it,  how the City treats the taxpayers and Citizens of Burlington with how they spend our money.

In the past 4 years,  City Hall including past council, spent money recklessly on “nice to haves”,  3^rd party contractors,  and consultants that even a high schooler could see was a waste of money.   Meanwhile Mr. and Mrs John Q Taxpayer had  City Staffers  (NOT ALL OF THEM), ignoring emails, phone calls, lying to residents, and giving favors to their friends.    And yet, no transit plan (8 years that has been talked about), infracture is horrible,  the OP,  etc etc etc.  This HAS TO STOP.

The most direct way, to start to right the ship…… control the money!   Control departmental spending, 3^rd party contractors rebilling for the same job 3 times because they messed up.  Stop hiring consultants who are friends of a friend.    These few examples of  reckless spending, goes hand in hand with the Citizens of Burlington being treated like persons of servitude.   There is a great deal of money that could easily be trimmed from the budget with no loss of service.  In some respect,  services could be increased if someone actually put some effort into their department(s).

City manager James Ridge

City Staff at all levels should be put on notice by this new Council that they are there to serve to Citizens and not the other way around.   New Council should be going through old budgets NOW line by line, and not just trust the staffers on what they say.  There is a lot of smoke in those lines.   While doing so,  this will send a clear message for the City Manager and staff to wake up and do their jobs, if not a lot of dead weight, bad attitude paycheck collectors needs to leave.  Making room for people honestly get what public service means and want to do it well.

The Citizens of Burlington voted for change.  We need fiscal, ethical and moral responsibility at City Hall.    If this new council accomplishes this very thing, it wont be easy but they will be well on their way to doing exactly what we elected them to do.

With a new municipal government getting ready to assume power the question is – what will they do first?

What are the big issues?

We asked the readers of the Gazette what they thought the new council should attempt to get done in its first hundred days.

Here are some of their thoughts.

By Fred Crockett
November 9th, 2018
BURLINGTON, ON

Residents want their municipal authority to take care of day to day services on a responsible budget, prudently set aside reserve funds for major capital works, handle emergency services, establish a reasonable planning structure, and to do so in a manner that is respectful to those residents, staff, fellow Councillors, and the broader public.

They do not want a Council that seeks to micromanage everything, and views activities as ego-boosting shenanigans so as to foster perpetual re-election. This past vote showed that some 60% of the electorate was jaundiced by the previous structure, and the rest chose to bounce most of the incumbents.

Council is not measured by the individual accomplishments or goals of its members, but rather by the quality of its collective judgement. Competent and properly paid staff exist to perform the necessary tasks, to provide advice to Council, and to support the policy decisions made by elected representatives.

Within its first 100 days, the new council should reinforce a meaningful code of conduct, pass a responsible budget, support a functional transit system, and revise the pending planning conundrum, all in the interests of the residents.

Fred Crockett is a Burlington based real estate broker.