Infrastructure and electricity in Ontario
At the Mississauga Board of Trade’s January meeting of its Environment, Sustainability and Infrastructure Committee, I was invited to spend a half-hour engaging in an Ontario update and a question-and-answer session in late January. Below are the highlights of the briefing. Download the documents referred to in this post. They are well-written, clearly-illustrated and tell the story of the ‘why’ and ‘how’ that you won’t find in media coverage of electricity and infrastructure.
Beginning in Fiscal year 2014-15, Ontario launched a new phase of infrastructure investment: of $190 billion during a 13-year span, ending in the late 2020s. It is the largest infrastructure investment in Ontario’s history.
Much of Ontario’s civil infrastructure: water distribution; waste water removal; storm sewers; roads; bridges; public buildings, schools and universities needs renewal. Ontario has, in contrast of much of the Great Lakes Basin, kept up its assets to a higher standard than our neighbouring provinces and states. They, however, have awoken to the need to do what Ontario has been doing since the early 2000s.
China’s Belt and Road initiative is the world’s biggest infrastructure project, linking some 60 countries along the old Silk Road, with an investment pegged at between $4 and $8 trillion (USF).
The 152,000-member, Virginia-based American Society of Civil Engineers released a 2017 report on the state of infrastructure in the USA, gave a range of unacceptable grades, most of them “D” rankings, to the state of infrastructure in the United States today, estimating an American infrastructure deficit in the range of $2 trillion over ten years.
Ontario’s 13-year infrastructure investment plan breaks out approximately like this:
- Transit: 35%;
- Highways & Transportation: 19%;
- Health: 15%;
- Education (incl. post-secondary): 15%;
- All other: 16%.
The peak years of Ontario infrastructure investment will be between 2018 through 2022, with an estimated average of $20 billion spent on infrastructure projects in each year.
Download a copy (PDF format) of Ontario’s Long-Term Infrastructure Plan. With the luxury of more than ten years’ head start on most other jurisdictions, Ontario can – and does – implement proper asset management toward building, maintenance and integration with municipalities and other partners. Regular, and timely, renewal expenditures save money over infrequent and expensive total rebuilds of infrastructure.
Ontario is considered an example of global best practices, and has the ability to learn and apply the best and timeliest lessons learned abroad on an ongoing basis because the province’s ongoing investment has meant it is not lurching from crisis to crisis. Ontario’s plans now factor in climate change and waste stream mitigation.
Community hubs in new public building infrastructure allow buildings to be used outside normal business hours, and enable a denser neighbourhood to have a central place for a multiple of services. Mississauga’s forthcoming Urgent Care Centre is one such local example.
Each year, for more than a decade, renewal and building of Ontario infrastructure will support some 125,000 high-value, skilled jobs.
Download a copy of the 2017 Greater Golden Horseshoe growth plan. The Hurontario Street LRT will be fully funded by the Province, at an estimated cost of $1.4 billion.
Two years ago, China, the world’s leading hydrocarbon importer and user, announced its move to a low-carbon economy, and cancelled more than 100 coal-fired electricity generating stations. By that time, Ontario had already phased out coal for electricity generation two years previous.
Ontario’s Great Lakes Basin neighbours have a looming electricity crisis. They are losing all their nuclear generation capacity with no (or few) plans to replace it. Their utilities are not building or replacing coal generation. They are a decade behind Ontario in deploying renewable power. Their transmission assets are in a state of long-term neglect. And their utilities are carrying heavy debt loads as Public Utility Commissions have refused to allow power rates to rise and enable electricity infrastructure investment. Natural gas, which produces heavy carbon dioxide emissions, is being used as a stop gap.
Ontario took the pain that our U.S. neighbours have not a decade ago. The Province invested $35 billion in new and renewed electricity generation, and an additional $15 billion in new and upgraded electricity transmission. Our main power generators: Ontario Power Generation and Bruce Power, have light and manageable debt loads, as does Hydro One, Ontario’s main transmitter, and Alectra, the former Enersource, that serves Mississauga. Our transmission and distribution sector continues to consolidate at a healthy rate, and is well-managed.
Download the 2017 Ontario Long-Term Energy Plan.
In 2002-03, Ontario was a net electricity importer, paying other jurisdictions about $1 billion annually to buy electricity, often at spot prices above $1 per kWh. Today, Ontario is a net electricity exporter, earning between $250 million and $350 million annually from the sale of electricity to jurisdictions with which Ontario connects at 26 ‘intertie’ points with Quebec; Manitoba; New York; Michigan; Ohio; Wisconsin and Minnesota.
Quebec is among the largest purchasers of Ontario electricity when, in winter months, Quebec cannot generate sufficient power to meet its domestic demands and its export commitments.
The Darlington nuclear refurbishment investment will increase Ontario’s nominal GDP by a total of $14.9 billion, and a total of $89.9 billion when calculating in 30 more years of station operations. Due to the project’s low import content and heavy reliance on Ontario-based contractors, on average, for every $1 spent on the project, Ontario’s GDP will increase by $1.40. Along with the Darlington nuclear refurbishment project, and ongoing operation of the station, will create about 14,200 jobs per year from 2017 to 2055.