Natural Born Economic Killers: BC's NDP

With opportunities of Liquefied Natural Gas (LNG), pipelines and mining available within the borders of its province (not even having to go out of its way to attract these industries), BC could have made its own provincial economy look like Alberta's on steroids during the early 2000s when oil approached US$147/barrel.

But no, succumbing to all things "sustainable", all economic prosperity is bad, anything to do with oil will not happen in the Pacific Time Zone (or in other words, things are different west of those mountains), tens of thousands of job will not come to fruition and future tax bases for the NDP government to invoke their idyllic green agenda will have vanished.

BC obviously did not learn from its neighbour to the east (Alberta).  It looks like two houses (provinces) are going to be burning down soon.

http://business.financialpost.com/commodities/energy/a-tragedy-for-canada-petronas-cancels-36b-lng-project-as-b-c-jacks-up-demands/wcm/de2567c8-499d-489f-9dec-3826a01c932c

Oops: Your Foolish Ontario Liberals and Waste of Tax Dollars at Work....

Well, there it is. The Kathleen's "vision" all represented on a nice cartoon like diagram.  Simple, idyllic, truthful and easy to understand, right? Who knows how much this study cost (I will do some digging); however, the depiction is out of touch with the simplest of realities - a road grader versus a tractor for farming. Now the updated picture has been doctored and neither grader nor tractor is there.

Here is your Ontario for the future - electric cars, gardens and quiet, carbon free trains all co-existing in the same little neighbourhoods (if someone agrees to "in their backyard").

The question is - who and how is this going to be paid for? I suppose it will be "balanced" budgets where The Kathleen and her Merry Band of Taxing Liberals will borrow more and receive more and more federal handouts.  Somehow, that is "balanced".

http://nationalpost.com/g00/news/canada/ontario-climate-change-report-weirdly-shows-a-highway-grader-destroying-a-farm/wcm/2e4ea165-9b46-4d96-808f-b8f3a6110a31?i10c.referrer=http%3A%2F%2Fnationalpost.com%2Fg00%2F%3Fi10c.referrer%3Dhttp%253A%252F%252Ftu9srvbirvvtmjekbmf0aw9uywxwb3n0lmnvbq00.g00.financialpost.com%252Fg00%252F2_YnVzaW5lc3MuZmluYW5jaWFscG9zdC5jb20%25253D_%252FTU9SRVBIRVVTMjEkaHR0cDovL25hdGlvbmFscG9zdC5jb20v_%2524%252F%2524

Hydro One: Trading Aftermath

Upon announcement of the proposed transaction, Hydro One (TSX:H) shares felt the usual acquiror pain on the first day of trading. However, since then the shares have recovered and are not "basically flat" but are "exactly flat".

Very unusual in trading that such a steady share price has been maintained. What does this mean?

First of all, the dividend for shareholders will be maintained.  That means the business of Hydro One will have to be managed with this in mind. However, this is where things become curious.

Don't forget the Ontario Liberals headed by " The Kathleen" and her Merry Band of Taxing Liberals are also a shareholder. As such, the Ontario government will also receive dividends in addition to the extra delivery charges, carbon taxes etc that are showing on your bill every month.

The Ontario government also controls, sets and allows the prices to be charged for a utility (ie electricity). As a shareholder, will the Kathleen allow a dividend to be forgone for the greater good of Ontarians?  In other words, the Kathleen will allow and approve price increases such that Hydro One (and its Ontario territory) is guaranteed a profit and even further allowed operate without the loss of jobs as most "real" businesses ( publicly listed companies ) have to face when dealing with a "real" income and cash flow statement.

Buy Hydro One for the safety of the dividend because you might as well benefit from the higher rates coming to support this conflict ridden, pseudo - communist operating regime that we see in countries like China and Russia. 

Recommendations for Financial Podcasts: You Must Take Financial Matters Into Your Own Hands

http://business.financialpost.com/investing/david-kaufman-the-three-financial-podcasts-i-cant-live-without/wcm/4187985e-0ffc-4ba0-896d-ea1b62ea1e48

Where Are the Synergies? Hydro One Deal

http://business.financialpost.com/opinion/terence-corcoran-hydro-ones-takeover-of-avista-is-fake-capitalism-for-monopolies/wcm/2c02a38c-9a36-47c8-813c-a078e4eaaaa1

As stated in earlier post (along the lines of this transaction will be a fail due to the forces of reality or a government backed and guaranteed success), the dividend is either going to be rock solid and Ontarians on the hook for paying higher prices to keep it this way, or a complete meltdown as the market wakes up to how this anomaly actually works.

Hydro One on the Acquisition Trail? "The Kathleen" and Her Merry Band of Taxing Liberals Must be Breathing Easier

The trend is there for Canadian public companies acquitting other utilities in the US; however, although Hydro One is public, it is not your average publicly listed company on the Toronto Stock Exchange. It is majority owned by the Ontario government with Ontarians screaming either for "those are the Assets of the people of Ontario!" or "great, it's public now pay me a dividend!".

Either way the culture of bloated pensions and benefits, a cozy club of "sunshine list" earners (greater" than  $100,000/year) and from many reports, rarely a full 8hr work day worked, continues throughout.

The fact an acquisition was made gives the Ontario Liberals another angle of shirking any responsibility as now the government's position will have been diluted and they will argue out of both sides of their mouths to Ontario voters that they have a vastly reduced say or influence as a significant shareholder going forward, so throwing their hands up in the air...yet claiming they did the right thing originally in floating Hydro One as a public entity (thereby pleasing leftist union supporters and reality based capitalists).

As reported, no layoffs are expected at Avista Corp. which for any acquisition is rare, further exemplifying the Ontario Liberals' tentacles and "hire everyone, fire no one" approach are still lingering.  Also, at first pass, it seems there is little in the way of any synergies as the operating territories do not overlap. Conclusion,  Investment Banking 101 would seem this announcement is a head scratcher.

If closed, going forward one of two things are going to happen: the new US subsidiary will either morph into the old Ontario Hydro culture that still permeates the public company today, or Hydro One will actually have to start behaving like a real business and have a more stringent view on compensation and take a hard and close review of the long term pension obligations.

We will see which result wins. I suspect the real winner is the firm raising the US$1.1B in equity and the US$2.6B in debt will be the horse to back.

Another Canadian Utility Nabs U.S. Assets in a $3.4 Billion Deal
https://www.bloomberg.com/news/articles/2017-07-19/hydro-one-reaches-5-3-billion-deal-to-buy-u-s-utility-avista

CFL 2017: Typical Start, The West is Best and the East is .500

Another year and another strong start for the West, this time Edmonton is undefeated, with Calgary in a shocking 2 wins, a loss and an opening tie against its Grey Cup counterpart from last year as start.  Saskatchewan has a win, so the extremes between undefeated and winless are not there this year.

In the East, the Argoooooooooooos are on top with a .500 record, and last year's Grey Cup winning REDBlacks are nowhere to be seen.  They must have been celebrating right through training camp....