Thoughts and Opinions On Today's Important Issues

Monday, January 25, 2010

Dwight As Premier of Ontario

Wow, Craig Pearson takes his job seriously:
  • "my editor's unusual request - write a column on Windsor's bright side."

It seems, according to Craig, if you favour spending money on public health labs and local festivals that draw huge crowds rather than wasting $10M to improve the profits of the Red Bull corporation, then you are a Boo-bird.

If there are serious issues that need discussion that deal with a huge secretive deal with Samsung, then you are a Boo-bird according to Mr. Sunshine.

So I am a Boo-bird. That's an honour with the kind of politicians we have.

Clearly Dalton McGuinty will not be round for the next election. Does Dwight Duncan really want to replace him at this stage with things seemingly going so badly?

Dalton's legacy before resigning before the election in favour of a new Liberal leader is to introduce full-day kindergarten as I wrote before, to be known as the "Green" Premier with the Samsung deal as a starter and maybe even to sell the HST as beneficial.

Whoever replaces him, perhaps our own Spanky, may turn out to be one of the shortest-lived Ontario leaders if the people hammer him/her and the Liberals with the HST and realize what the extra cost of green power will add to their utility bills if the Samsung deal becomes a scandal.

Is a short leadership career what Dwight really wants?

Is it be 1996 all over again if Dwight decides to run to be Leader or are there other alternatives for him:
  • "I think my mother and father would tell you politics has been my vice and my addiction, the 37-year-old Windsor native said.

    He has been at it since Grade 8. At the University of Windsor, where he completed an MBA after an undergraduate economics degree from McGill University, Duncan worked part-time for Herb Gray, the veteran Liberal MP from Windsor and a mentor to Duncan.

    Suddenly, the lifelong political junkie finds himself grabbing for the brass ring. He is a candidate to become Liberal leader of Ontario at the party's Nov. 30 convention."

He may get the prize this time unlike previously, but not for very long.

Let us look at the Samsung deal in gory detail. Is it starting to unravel already?

Is that why Smitherman as Minister of Energy and Infrastructure left to run for Mayor of Toronto and not just because of the e-Health scandal?

  • "It may be that some cabinet colleagues, in addition to feeling the popular Caplan had been shafted, had grown alarmed at what problems might arise from Smitherman's assiduous wooing of the South Korean Samsung Group as an energy investor in Ontario.

    That Furious George was, as the Star's Robert Benzie has reported, "gang-tackled" by his cabinet colleagues on the concessions he was making to Samsung was remarkable.

    That word of this leaked out spoke volumes about the declining regard in which he was held."

We learned that:

  • "Former energy minister George Smitherman, who has since resigned to run for mayor of Toronto, personally negotiated the arrangement and directed the Ontario Power Authority to set aside at least 500 megawatts of scarce transmission capacity for Samsung."

Gerry Phillips, the interim Minister replaced him, and then was replaced right before the Samsung announcement by Brad Duguid. The Toronto Star does note:

  • "Sources told the Star that interim energy minister Gerry Phillips and at least two other senior cabinet members tried to scuttle it after Smitherman left provincial politics earlier this winter."

The Ministers leaving means they cannot be asked questions under the rules at Queen's Park. Only the present Minister speaks for his Department and he just inherited it.

Mini-Gord tells us this is the Premier's deal and who in the Party will dare take him on, not Dwight that is for sure:

  • "Politically, the deal is completely owned by Premier Dalton McGuinty, who announced it himself Thursday."

What is very interesting is the dispute within the Liberals over this deal. But so what. The nature of politics has changed it seems. The arena deal, the DRIC bridge and road. They made no sense economically for taxpayers but they are supported by the powers-that-be. Here is a terrific quote I found about the Samsung deal that explains matters in a different perspective:

  • "For more than 100 years, the consensus on power in Ontario was that the purpose of the system was to make it as cheap as possible, Adams said. In other words, it's always been a consumer-oriented policy.

    Now McGuinty has made the purpose of electricity policy to pursue other objectives like creating green jobs, he said.

    "The guts of it is that the old rules about efficiency and competitive procurement, none of that applies any more. In this new world, if a company can come along and say that they're going to be able to deliver the kind of 'dream team' of some green jobs and some more wind turbines, that is such an attractive proposition that it's worth throwing out all the government rules on competitive procurement."

Sandra gave us absolute proof of this:

  • "Taxpayers will find the incentives and the rest of the agreement completely justified, Pupatello said, once they understand the scope of the Samsung project, its job creation potential and its contribution to Ontario's economy...

    "We brought in a giant to kickstart an industry here..."

    "We are determined to be the leader in the world in this industry."

As did the Minister:

  • "By executing this project, the Ontario government will be one step closer to taking the lead in the North American green energy industry by securing the industrial infrastructure for low-carbon growth, creating new jobs and establishing a renewable energy cluster."

No wonder the Windsor Star had to run a story on the local wind turbine story right after my BLOG to try to silence the questions I was raising about that mere $3M deal. It would show if the questions could not be answered that the Government has not undertaken due diligence

The natives are restless in the Liberal party

  • "This thing was just presented as a fait accompli," said one Liberal privy to the 40-minute call last Tuesday, which was chaired by two senior McGuinty aides.

    "It's the same goddamned thing as on the HST," the MPP said, referring to the way the 13 per cent harmonized sales tax was foisted upon the Liberal caucus last March after McGuinty and Prime Minister Stephen Harper had agreed to meld the 8 per cent provincial sales tax with the 5 per cent federal GST.

    "The sense around the place is that it's just one-man rule. The morale in caucus is lower than a gutter snake in a puddle on a back country road."

The big political decision for Dwight will be should he run to replace Dalton and perhaps then lose in the next provincial election or let someone else be the equivalent of an "interim" Stéphane Dion and then and try and be Leader subsequently---pulling an Iggy! He might be "too old" then and would miss his chance for the brass ring again. What a dilemma for him. What should he do to protect his political career?

Why is the Samsung deal being questioned? This sums it up:

  • "Hudak warned that the agreement, which McGuinty will unveil Thursday at The Exchange Tower, could end up being "a massive multibillion-dollar giveaway to a foreign-based conglomerate without even the most basic of public reviews."

    "At its core, it is a preferential, sole-sourced deal that is likely in violation of Ontario's procurement rules," the Tory leader said Wednesday at Queen's Park.

    "Dalton McGuinty once famously promised the people of Ontario that he would end sole-sourced, secretive and untendered contracts. Yet this sweetheart deal with Samsung is the mother of all untendered contracts."

It may explain mini-Gord's comment that "the politicians all seemed to be in hiding when news of the deal leaked to the press:"

Here are concerns in detail:

1)"Green economics is a wonderful thing, except for consumers.

The subsidy means that over the next 25 years Ontario electricity users will pay 50% more for the wind and solar electricity produced under the Samsung deal than they would buying the same power from conventional sources."

2)"Over 25 years, the government says the Koreans will deliver 110-million megawatt hours at these guaranteed prices, equal to 110-billion kWh. Based on operating assumptions for the wind-solar balance, that means the Koreans will receive about a guaranteed $25-billion from Ontario electricity consumers at an average price of maybe 23¢ per kWh. But the current price for new gas-fired power, with all costs accounted for, is maybe 12¢ or about $13-billion. Ontario, in other words, will pay about $10-billion or maybe even $12-billion in subsidy to the Korean consortium over 25 years, equal to about $4-billion in net present value."

3) There is an issue re access to the grid. Good old Dwight was being accurate but narrow
  • "Duncan refuted critics who claim Samsung will displace smaller investors crowding into Ontario's renewable energy field, including those committed to building smaller solar arrays. "Those that already have their signed agreements with the Ontario Power Authority will still have access to the grid," Duncan said."

The issue is with companies who have been working for years already on their projects and may now NOT be able to access the grid because of the guarantees to Samsung re access:

  • "Ontario's $7-billion energy deal with South Korea's Samsung Group could jeopardize construction of Essex County's biggest wind turbine project, which has had eight years of local planning and environmental study.

  • Brookfield Renewable Power wants to build close to 100 turbines in Lakeshore with a cost in excess of $400 million for the 200-megawatt project.

  • Lakeshore Mayor Tom Bain is worried that Samsung and its partners have been allocated transmission capacity on the power grid here for its future projects that companies like Brookfield were counting on.."

  • "If Samsung has been quietly allocated grid capacity in Essex County, not just wind, but solar projects at various stages of planning may also be shut out, Bain said."

4) The Auditor General may be called in as part of the Opposition poltical effort to unseat the Liberals

  • "Tim Hudak, the leader of Ontario's opposition Progressive Conservative party, said in a statement Thursday that McGuinty must call in Ontario's auditor general to review "his secret multibillion dollar deal with Samsung to guarantee the deal is fair to Ontario ratepayers."

  • "We're offended that it's a secret deal with no transparency or openness or opportunity for others to compete," said David Butters, president of the Association of Power Producers of Ontario.

5) While the deal may give us jobs, it may also cost us jobs too:

  • "We have at least 12 projects in the pipeline across the region and this deal will place them in jeopardy," said Sol Furer, who represents the International Brotherhood of Electrical Workers.

  • "As far as we know, Samsung has no projects approved and no land procured so to hold capacity for them at the expense of companies who do have deals in place is not good planning."
    Furer said if the approved projects are put on hold, it would place his members' jobs in jeopardy."

6) Expect the "Buy Canadian" issue to be raised as well

  • "I don't think it's right to reserve capacity for a foreign competitor at the expense of our own domestic projects and then pay them slightly more than the feed-in rate," said Furer."

  • "Along with concerned hydro ratepayers, some MPPs are already hearing from domestic green-energy producers shut out of what Progressive Conservative Leader Tim Hudak has dubbed "a sweetheart deal."

    "People are ticked. They want to know why Ontario companies couldn't get this," a Liberal said.

    "We're afraid it's going to blow up in our faces – just like the HST."
  • "But detractors are now questioning why the province is handing over a sizeable part of its energy future to a foreign company without ever opening a proper tender process."

7) The Province was forced into this because it foolishly planned to shut down all of its coal-fired power plants by 2014

8) Is Samsung a real player on which Ontario should bet a good part of its future

  • "Still, Samsung isn't primarily known for its renewable power-generation capabilities either. It is a powerhouse in electronics as one of the world's top makers of LCD screens and memory chips. It also makes ships and petrochemicals, and even once made airliners.

    Samsung has "rapidly expanding expertise" in the renewable energy sector, Samsung C&T Corp. president Sung-ha Chi said in a news release.

    The company cited projects it is working on in Korea, Italy, Greece, Turkey, Costa Rica and the United States, without providing details."
  • "These guys have no track record," said Dave Butters, president of the Association of Power Producers of Ontario, which represents more than 100 companies involved in generating electricity in the province."

So if you were advising poor Dwight, what would you say? To me, it's easy. As one of his friends suggested a long time ago to me:

  1. Get out now. Resign while you can with honour and join some big economic powerhouse, say OMERS, and make a big salary in the 7 figures for a few years to help out in your old age
  2. Then leave that job and go for Iggy's job after you have all that cash in the bank. After all, Iggy's positon will be open after the next election if the Conservatives win big and Dwight did learn how to speak French.

Now that is something that Craig can be happy about.