Yesterday on the Ontario subreddit, there was some comments about the debt retirement charge for Ontario electricity consumers. Curious, using only the least amount of google fu effort, I found this Toronto Sun article. Interestingly, the Ontario government is tying together or at least trying to the end of the debt retirement charge with the ending of the 10% Clean Energy Benefit subsidy:
The provincial government is trying to rejig hydro bills to ensure
that customers aren’t hit with a sharp increase when the Ontario Clean
Energy Benefit is phased out, Energy Minister Bob Chiarelli says.
The government is scheduled to end the benefit, a 10% break on hydro bills, at the end of 2015.
The plan was to also eliminate the debt retirement charge on hydro bills at the same time, he said Wednesday.
“It was scheduled to come off at the time the Clean Energy Benefit
was coming off, and they would balance each other out more or less,” he
said.
When the old Ontario Hydro was broken up into Hydro One and Ontario
Power Generation in 1999, its $20.9-billion stranded debt was handed
over to the Ontario Electricity Financial Corp.
Looks like that may not happen though:
Chiarelli said retiring that debt is taking a little longer than originally anticipated.
“The financial projections turned out not to be as precise as they were anticipated,” he said.
I would be curious to know the total amount that has been paid over the years for the debt retirement charge. No doubt it is quite high.
A blog about Hamilton and Ontario politics and economy. Or whatever I find interesting.
Thursday, February 27, 2014
Wednesday, February 26, 2014
January Ontario Electricity Global Adjustment Finalized, February Estimate Out
The actual global adjustment for January is out on the IESO website and it is really low, both overall and compared to the first estimate. The first estimate was 3.63 cents per kilowatt hour versus the final value of 1.26 cents per kilowatt hour. Likely the reason was high overall power use from people using supplemental electrical heating during the unusually cold January combined with low green energy production (solar is going to be weak in dark January). Interestingly, that's a big difference from the overall record global adjustment for November of 8.47 cents per kilowatt hour and last year's value of 5.00 cents per kilowatt hour.
The February first estimate is out and it is rather low as well at 2.23 cents per kilowatt hour compared to 4.81 in 2013. No doubt that's due to the fact February was quite cold. March looks like it will be starting off cold as well so expect that month's global adjustment to be lower than 2013's value of 4.93.
The February first estimate is out and it is rather low as well at 2.23 cents per kilowatt hour compared to 4.81 in 2013. No doubt that's due to the fact February was quite cold. March looks like it will be starting off cold as well so expect that month's global adjustment to be lower than 2013's value of 4.93.
Sunday, February 9, 2014
Canada's Janurary Employment Numbers Are Out, No Recovery for Ontario from Big December Drop
Statscan has the employment numbers out for January, available here. After a big dive of over 40,000 in December, the country as a whole bounced back with 29,000 jobs.
One thing about the numbers that the media didn't pick up on was that Ontario didn't bounce back at all in January. Although the media in general doesn't seem to care a lot about the individual Ontario numbers. In December Ontario lost a massive 39,000 jobs (which would be the equivalent of losing over 900,000 jobs in a month in the entire US). With the ice storm affecting Southern Ontario in December, conceivably some jobs weren't filled and perhaps they would show up in the January numbers. But they didn't:
"Although employment was little changed in Ontario, the unemployment rate fell 0.4 percentage points to 7.5% as fewer people looked for work. On a year-over-year basis, employment in the province rose by 54,000 or 0.8%, the same growth rate as the national average."
That's not really reassuring although at least Ontario didn't lose jobs two months in a row. The number of jobs increasing by 0.8% over a year isn't that fantastic considering the province's population grows at 1% at year currently (from Wikipedia).
Again the February numbers should be interesting to try and discern a trend. For the provincial treasury, low job growth isn't going to help income tax revenue, so the budget should be interesting to say the least.
One thing about the numbers that the media didn't pick up on was that Ontario didn't bounce back at all in January. Although the media in general doesn't seem to care a lot about the individual Ontario numbers. In December Ontario lost a massive 39,000 jobs (which would be the equivalent of losing over 900,000 jobs in a month in the entire US). With the ice storm affecting Southern Ontario in December, conceivably some jobs weren't filled and perhaps they would show up in the January numbers. But they didn't:
"Although employment was little changed in Ontario, the unemployment rate fell 0.4 percentage points to 7.5% as fewer people looked for work. On a year-over-year basis, employment in the province rose by 54,000 or 0.8%, the same growth rate as the national average."
That's not really reassuring although at least Ontario didn't lose jobs two months in a row. The number of jobs increasing by 0.8% over a year isn't that fantastic considering the province's population grows at 1% at year currently (from Wikipedia).
Again the February numbers should be interesting to try and discern a trend. For the provincial treasury, low job growth isn't going to help income tax revenue, so the budget should be interesting to say the least.
Monday, February 3, 2014
Ontario's Demographics: In and Out Migration from Other Provinces
Surly Hamiltonian has long held that Ontario is a pyramid scheme built on more and more people coming and propping up real estate prices. OK, that's some hyperbole, but with Ontario's malaise in manufacturing and ever increasing housing prices despite flat incomes it sometimes feels that way.
With Ontario's low birth rate, population growth isn't going to come from that, but from immigration, both from other countries and other provinces. With Ontario having slow economic growth for the past ten years, those two sources are changing.
In this post I thought I would look at interprovincial migration. From the Ontario Finance's ministry's demographic quarterly website, here's the most recent migration to Ontario numbers:
Third Quarter 2012, 22,300
Fourth Quarter 2012, 11,000
First Quarter 2013, 13,500
Second Quarter 2013, 22,900
Here's the numbers for people leaving Ontario for other provinces:
Third Quarter 2012, 27,900
Fourth Quarter 2012, 15,100
First Quarter 2013, 20,400
Second Quarter 2013, 27,700
One thing that jumps out at me is that people don't seem to move much interprovincially in the fourth quarter compared to the other quarters. That's not really surprising. People don't move during Christmas time.
The main take away is that more people are leaving Ontario than arriving interprovincially. Here's departures minus arrivals:
Third Quarter 2012, 5,600
Fourth Quarter 2012, 4,100
First Quarter 2013, 6,900
Second Quarter 2013, 6,800
There was a time recently when Ontario drew in more people from other provinces than it lost. Those days are gone for now. Over the year, that's only 23,400 out of a population of 13.51 million people in 2012 according to Wikipedia. However those people leaving definitely lower the rate of growth of the province compared to previous times when the interprovincical migration was in Ontario's favour. If international immigrants are choosing other provinces over Ontario, Ontario's population growth rate will take an additional hit.
I take away two things from this. Ontario's GDP growth has had population growth as a big factor the past ten years as the per capita GDP growth has been quite stagnant. My guess is that per capita growth will remain stagnant and thus with lower population growth overall GDP growth in Ontario is going to be poor (not that it has been any great shakes in the last ten years).
The second thing is that if the population is growing less, there's less of a demand for housing. I think with current house prices compared to incomes and people choosing to leave the province, Ontario's days of rapidly rising housing prices will be coming to an end. I'm sure they can continue on for some time, but with lower population pressure they won't be as high as they could have.
Actually, one final thing. With more people leaving the province, the long term population projections for Ontario and its cities and towns are probably off. Something to consider for infrastructure.
And wait one more thing, at the risk of imitating Steve Jobs. Since the latest number as of this posting is the second quarter of 2013, I'm curious at the numbers for the rest of the year. Since Ontario lost 39,000 jobs in December 2013, I have to believe that will be reflected in the final quarter numbers or perhaps in the first quarter of 2014. Certainly something to watch.
With Ontario's low birth rate, population growth isn't going to come from that, but from immigration, both from other countries and other provinces. With Ontario having slow economic growth for the past ten years, those two sources are changing.
In this post I thought I would look at interprovincial migration. From the Ontario Finance's ministry's demographic quarterly website, here's the most recent migration to Ontario numbers:
Third Quarter 2012, 22,300
Fourth Quarter 2012, 11,000
First Quarter 2013, 13,500
Second Quarter 2013, 22,900
Here's the numbers for people leaving Ontario for other provinces:
Third Quarter 2012, 27,900
Fourth Quarter 2012, 15,100
First Quarter 2013, 20,400
Second Quarter 2013, 27,700
One thing that jumps out at me is that people don't seem to move much interprovincially in the fourth quarter compared to the other quarters. That's not really surprising. People don't move during Christmas time.
The main take away is that more people are leaving Ontario than arriving interprovincially. Here's departures minus arrivals:
Third Quarter 2012, 5,600
Fourth Quarter 2012, 4,100
First Quarter 2013, 6,900
Second Quarter 2013, 6,800
There was a time recently when Ontario drew in more people from other provinces than it lost. Those days are gone for now. Over the year, that's only 23,400 out of a population of 13.51 million people in 2012 according to Wikipedia. However those people leaving definitely lower the rate of growth of the province compared to previous times when the interprovincical migration was in Ontario's favour. If international immigrants are choosing other provinces over Ontario, Ontario's population growth rate will take an additional hit.
I take away two things from this. Ontario's GDP growth has had population growth as a big factor the past ten years as the per capita GDP growth has been quite stagnant. My guess is that per capita growth will remain stagnant and thus with lower population growth overall GDP growth in Ontario is going to be poor (not that it has been any great shakes in the last ten years).
The second thing is that if the population is growing less, there's less of a demand for housing. I think with current house prices compared to incomes and people choosing to leave the province, Ontario's days of rapidly rising housing prices will be coming to an end. I'm sure they can continue on for some time, but with lower population pressure they won't be as high as they could have.
Actually, one final thing. With more people leaving the province, the long term population projections for Ontario and its cities and towns are probably off. Something to consider for infrastructure.
And wait one more thing, at the risk of imitating Steve Jobs. Since the latest number as of this posting is the second quarter of 2013, I'm curious at the numbers for the rest of the year. Since Ontario lost 39,000 jobs in December 2013, I have to believe that will be reflected in the final quarter numbers or perhaps in the first quarter of 2014. Certainly something to watch.
Saturday, February 1, 2014
Canada's November GDP Growth 0.2%, What will December's Numbers be for Ontario?
Canada reported 0.2% GDP growth in November according to this Financial Post article. What I found most interesting from the article was this:
"The overall increase in gross domestic product was in line with forecasts, while still below the previous month’s pace of 0.3%.
“The three-month trend in growth is now running at a nifty 3.8% annualized clip,” said Douglas Porter, chief economist at BMO Capital Markets.
“However, we look for a setback in next month’s report, as the brutal December weather — notably the ice storm in Ontario — is expected to produce a GDP decline for that month.”"
If GDP growth for December is negative for the country because of the ice storm, how bad will it be for Ontario? We've already seen 39,000 jobs lost in Ontario in December, so we can assume it will be quite poor and hence the overall fourth quarter numbers will be poor. One bright spot could be that hiring was suppressed in Ontario in December and will bounce back strongly in January. Those numbers should be out soon.
Canada's overall GDP growth was 2.7% in the third quarter of 2013, compared to 2.3% for Ontario (from the Ontario Finance Ministry's website, released in January 2014):
"Ontario’s real Gross Domestic Product (GDP) increased 0.6% (2.3% annualized) in the third quarter of 2013."
"The overall increase in gross domestic product was in line with forecasts, while still below the previous month’s pace of 0.3%.
“The three-month trend in growth is now running at a nifty 3.8% annualized clip,” said Douglas Porter, chief economist at BMO Capital Markets.
“However, we look for a setback in next month’s report, as the brutal December weather — notably the ice storm in Ontario — is expected to produce a GDP decline for that month.”"
If GDP growth for December is negative for the country because of the ice storm, how bad will it be for Ontario? We've already seen 39,000 jobs lost in Ontario in December, so we can assume it will be quite poor and hence the overall fourth quarter numbers will be poor. One bright spot could be that hiring was suppressed in Ontario in December and will bounce back strongly in January. Those numbers should be out soon.
Canada's overall GDP growth was 2.7% in the third quarter of 2013, compared to 2.3% for Ontario (from the Ontario Finance Ministry's website, released in January 2014):
"Ontario’s real Gross Domestic Product (GDP) increased 0.6% (2.3% annualized) in the third quarter of 2013."