FALL/WINTER 2014-15 / Vol 44. No 3

2 NEWS BRIEFS Floating Solar Farms Mid-Rise Wood, Jan 1 Brownie Awards New Duty of Honest Performance NEW MEMBERS  3-5 POINT / COUNTER POINT

Report Digest / Expert Commentary The Economist: THE THIRD GREAT WAVE  6 THE NEW TRANSIT:

CONNECTING HOME TO WORK AT LAST?  7 NEW MAYORS / NEW FOCUS 2012-13 AOLE BOARD  8 LEGISLATIVE UPDATE Fall Economic Statement Asset Recycling ECO—Water Pricing AFP Track Record  9 ANNUAL MEETING



PROFESSIONAL JOURNAL

ASSOCIATION OF LAND ECONOMISTS

55 St. Clair Ave West, Suite 205 , ON M4V 2Y7 Tel: 416-283-0440 (messages) Fax: 1-866-401-3665 (toll free) Email: [email protected] Transition’ in Region Strategic Regional ‘A Research PHOTO: fromGuilhem Vellut, Website: www.aole.org Transit is a key issue for the GTA and for many other regions in Canada and around the world. It was the focus of Real Estate Research Corp co-founder Iain Dobson’s speech after Journal Chair: Keith Hobcraft dinner at the Association’s recent 2014 Annual General Meeting. See page 6 for details, Editor: [email protected] NEWS BRIEFS In Canada, researchers at MIRARCO— Mining Innovation and Laurentian Uni- Welcome FLOATING SOLAR FARMS versity, Sudbury, have developed thin- The United Kingdom’s first floating film flexible floating PV panels which New Members! solar installation went in this year on a they say could float on the surface of Berkshire farm’s reservoir, The Guard- tailings ponds, and “have game- Carl Geiger, MCIP, RPP, PLE ian reported this fall. The 800-panel, changing implications for the mining Town of Whitby 200-kw array is expected to start pro- industry”, especially in remote areas 905-430-4306 x 2355 ducing a return on its £250,000 invest- like the Ring of Fire. [email protected] ment within six years.

 Surya Pulickal, LEED AP BD+C, PLE

647-780-5579 MID-RISE WOOD: [email protected] JAN 1, 2015 In September, Ontario Steven Radenic, AIMA, AMAA, PLE filed O Reg 191/14, to Town of Milton amend the Building 905-878-7252 x 2161 Code to allow wood [email protected] frame construction to six storeys for office, Emma West, MCIP, RPP, LEED AP, residential and mixed PLE PHOTO: Floating Solar PHOTO: FloatingLtd. UK use buildings, starting Planning Alliance January 1. The change 416-583-1525 Farm owner Mark Bennett has estab- has been welcomed by builders and [email protected] lished Floating Solar UK Ltd. to dis- developers. They expect it to increase tribute French firm Ciel et Terre’s pan- the variety of living choices, realize Kam Yuen Cheng, MRICS, PLE els-on-pontoons technology to agricul- cost savings for new home construction Sinopek HK tural, reservoir and utility companies. and homebuyers, and represent a major [email protected] In areas where “working” water bodies step in achieving planned intensifica- are available and land is very costly or tion goals of the Provincial Policy not available at all, floating solar panels Statement (PPS) and the Growth Plan for the Greater Golden Horseshoe. NEW CONTRACT DUTY OF may be the next “in” thing — at small “HONEST PERFORMANCE” scale and large. For example, last No- Other expected benefits include job creation, increased tax base for munici- Several law firms have commented on vember Renewable Energy World re- the Supreme Court of Canada’s Nov 13 ported on a 1.18 MW, 4,500 panel sys- palities and decreased carbon footprint. Details were discussed in The Land decision in Bhasin v Hrynew. That case tem that had become operational in involved a company that provided edu- Okegawa, Japan that summer. The city Economist Vol 44, No 1.  cation saving plan investments and one has shifted reservoir maintenance re- of its retail dealers - and whether the sponsibility to the project developers, BROWNIE AWARDS former has a responsibility to be honest and charges them a usage fee, plus about its intent to terminate the con- property taxes. Clean Technica.com The Canadian Urban Institute presented the 15th Annual Brownie Awards at the tract. The court has held that there is recently reported that India’s National both the traditional general organizing Hydro Power Corp had announced end of October. Best Overall Project and People’s Choice awards both went principle of good faith contractual per- plans for a 50 MW floating solar pro- formance and a new duty of ‘honest ject in July, “but we have not heard to Kitchener projects: The Breithaupt Block and The Tannery District. Other performance’ of the contract. In other much from them since then”. A 2.9 words, the parties must not lie or know- MW project in Nishihira, Japan was Ontario projects honoured include: Reprogram (policy): Horizon Utility ingly mislead each other. While the announced in September, Clean Tech- judge said this does not imply a duty of nica said, but may not hold onto the Infill Development Incentive in Hamil- ton; Remediate (technology): Green- disclosure, and would be clear and easy “World’s Largest” title for long, as a to apply, lawyers say it leaves a num- 7.5 MW system has been announced by wich Mohawk Site’s In Situ Steam- Enhanced Remediaton in ; ber of questions open. See Borden the government of Kawajima-machi, to Ladner Gervais at www.blg.com/en/ begin construction next year. Reinvest (financial): Market Commons; Rebuild (Building Scale): NewsAnd Publications/Documents/ Proponents claim the systems can im- Bridgepoint Active Healthcare in To- Publication_ 3895.pdf and /orBennett prove energy performance of solar pan- ronto, and Renew (Neighbourhood Jones at http://blog.bennettjones.com/ els because they are cooled by the wa- Scale): Sault Ste Marie Waterfront Re- 2014/11/13/new-good-faith-duty- ter below, and may decrease evapora- vitalization. See www.canurb.org/ honesty-contractual-performance- tion loss. publications-archives/cui-news.html recognized-supreme-court-canada/ #page=1  FALL/WINTER 2014-15 / Vol 44, No 3 2 THIRD GREAT WAVE (Digest) POINT/ The Third Great Wave: Why the third wave of industrial revolution may prove far more divisive than the first two COUNTER “In the past new technologies have usually raised wages by boosting productivity,” the article says, with real gains spread across classes and income levels. Exponential growth POINT in computing power has opened up opportunities considered impossible only a few short years ago. But one study says 47% of jobs in America could be automated within a decade A key goal of this Association or so. So far “the digital revolution is opening up a great divide between a skilled and is to increase members’ under- wealthy few and the rest of society.” standing of issues by sharing insights from different special- Technology Isn’t Working: The digital revolution has yet to fulfill its promise of ties. So, we have designed a higher productivity and better jobs new kind of article / report in Not only have industrialized economies been going through slump or stagnation recently, this issue of The Land Econo- the digital technology and globalization are keeping wages flat for the mass of workers. mist Journal. It starts with a Productivity growth has slowed instead of increasing. Some experts claim the innovation isn’t brief description of an interest- powerful enough to offset demographic change, inequality and sovereign indebtedness. Others ing new report — and then pre- say the real impacts are only just beginning. Today, the glut of cheap labour displaced by sents commentary from several technology “has given firms little incentive to make productivity-boosting investments”. experts in different fields. To Those That Have Shall Be Given: Labour is steadily losing out to capital Development of the car displaced horses, breeders and carriage makers, but gave drivers greater productivity. Development of driverless cars funnels efficiency gains away from the human operator. Over the past 30 years, the share of income going to labour has fallen Focus on: steadily the world over. There is a rise in income from wealth and capital. Low-income service jobs are growing, but the middle class is being hollowed out. Technology has cre- The Economist ated a reservoir of less-skilled labour, who are forced into competition against each other and machines, for low wages. Magazine Special Report Home Economics: Sky-high house prices in the most desirable cities are holding back growth and jobs In the 20th century, many manufacturers left cities for cheaper land and labour on the out- skirts. ICT industries have helped stagnating cities turn around, with demand for both of- The World fice space and housing. But cities with restrictive zoning and other regulations now have skyrocketing housing costs. Many people can’t afford to live there. And instead of the new Economy high-paying careers creating new service jobs, more of the gains are being captured by landlords and existing homeowners.

Arrested Development: The development-through-industrialisation model in The Economist’s Special Report emerging economies is on its way out is a fascinating read, bringing Attracting manufacturing industries for low-cost production has been good for many together information from differ- emerging economies. They offered unskilled workers better wages than agriculture, and ent sectors and how they are be- enabled progress to more sophisticated economic activity with widespread trickle-down ing or may be affected by the impacts. However, that model is breaking down as technology allows manufacturers to new technologies of computeri- “unbundle” supply chains and locate in ever-lower wage locations. Physical assembly zation, the internet and robotics. itself is representing less and less of the “value added” calculation. Automation is also The Report consists of seven decimating the number of potential jobs. Meanwhile high-skilled ICT and design workers can related articles on productivity, become rich online. This poses huge challenges for developing countries. income disparity (the privileged few), housing, emerging econo- Silver Lining: How the digital revolution can help some of the workers it displaces mies, new opportunities and eas- Technology offers access to online markets with enormous potential and probably more ing the transition. Brief digests of new opportunities than anyone can currently imagine. Informal and formal online educa- those articles are found at right tion offers some big advantages and lower costs, especially for people in emerging econo- — stripped of illustrations, data mies. However, so far, the opportunities are not offsetting job losses.

and analysis. We recommend Means and Ends: How governments can deal with the labour imbalance members read the October 4, Thanks to earlier technological change, many countries are vastly richer than they were 2014 original, either in hard copy 300 years ago. Humans are flexible, but their governments may not be. Past advances or online at www.economist. have required power shifts to ensure gains were broadly shared. Regulations and policy on com/printedition/2014-10-04 such things as taxation, occupational licencing, building/development, education, and in- come supports must be re-examined. Commentary follows, starting on Page 4

FALL/WINTER 2014-15 / Vol 44, No 3 3

Third Great Wave ... Continued from page 3 The Economist entourage of servants, security force, tenant farmers, peas- KEITH magazine’s report ants and assorted layabouts. HOBCRAFT on the Third Wave President of the Industrial I looked up the Second Industrial Revolution on Wikipedia Bosley Farr Revolution is an (naturally) and discovered that it was roughly the period Associates Ltd. interesting insight 1880 to 1960, starting with the mass production of steel in- into current eco- stead of iron. This could be described as the golden period of nomic and business the Industrial Revolution – we all got relatively rich. Many trends. new skills were required and job training courses were rou- tinely subsidised by companies in order to ensure a future As Journal Chair, I found it raised some major points but supply of skilled workers. Western workers at last benefitted also gave rise to a few speculations over possible social from the surge in productivity which resulted from industrial changes over the ensuing decades. Hopefully my comments activity, and started to enjoy the ‘American Dream’ with here will prompt other members to write more knowledge- good wages, benefits and security. The wage gap was much able and in-depth commentary for Point / Counter Point arti- less than 100 years before. cles in future issues of the Journal. As the Economist points out, the Third Wave is causing mul- I must admit that I had never heard of the Second Industrial tiple disruptions and is not just an extension of the first two. Revolution. The Economist offered six different aspects. After reading them it occurred to me that the third wave is somewhat like We all know about the First. Its taskmasters – such as Mr. the first wave, but in reverse. Gradgrind of Charles Dickens’ Hard Times fame – were notorious for grinding the faces of the poor into the ground. The income gap is back with a vengeance, with a new group Even so, as some historians have noted, rural workers “voted of super-rich employers and increasingly poorer workers. with their feet” and flocked to the new industries. Essentially In the first and second wave workers were sought after to it was the modern world’s first experience of super rich em- man the new machines. In the third wave they are being laid ployers and comparatively poorly paid but freelance workers. off. The often resulting McJobs look increasingly like the

Prior to that the western world was run pretty much by the economic equivalent of back to the farm. gentry – some very rich, some not – but all with a very local Unfortunately the farm has gone too.

DEBORAH The Economist’s professors, regardless of how many times offered. Online SAUCIER special report on the courses also require a degree of discipline that many students Vice Provost world economy1 need to develop over time. A common refrain from students Academic, describes ‘the third is that they desire more contact with their instructors rather University of great wave of inven- than less; they associate contact with better learning outcomes Ontario Institute tion and economic and with greater course satisfaction. of Technology disruption’. The Economist describes This is not to say that the status quo – the face-to-face lecture many aspects of that hasn’t changed since Socrates – should remain the domi- these hypothetical disruptions, although the report focuses nant model. Faculty and students are migrating to the concept primarily on how information and communication technology of ‘hybrid’ lectures (a combination of online resources and has and will change the world, and where opportunity exists face-to-face experiences) because of their ability to foster the to mitigate disruption. outcomes that students and professors want: critical thinking, creativity, planning and team-work; namely, the same factors Two aspects of this report, however, deserve comment. in high demand by employers. The first is the assertion that online courses will reduce the Which brings me to my second comment. As the economy cost of post-secondary education. The utility of online continues to recover from the Great Recession, employers will courses rests on a number of assumptions, including: that increasingly desire employees with greater literacy, numeracy fewer professors can teach more students in an online format; and technological competence than ever before. By providing that courses can be repeated with little modification or effort; the skills that the world economy needs, universities will be- and that this is an effective method for teaching. come even more critical players in the world economy. Re- What is not acknowledged is the cost of developing and search and scholarly work conducted at the University will maintaining rapidly changing information and communica- question how these technologies are affecting society, while at tions infrastructure, as well as the challenges in obtaining the meantime driving further technological development. copyright for digital materials, especially for materials that Thus, with or without online courses, universities are well may be accessed across numerous national borders. Further, poised to partner with young people, to develop key skills and it is clear from early attempts at online courses that these foster creativity, regardless of the academic discipline studied. courses are often more labour intensive for both students and FALL/WINTER 2014-15 / Vol 44, No 3 4 Third Great Wave ... Continued from page 4 The “Home Eco- ton” can approve 51,000 new dwellings because Houston has YOUSAF nomics” section of an adequate supply of suburban greenfield land upon which to SHAH The Economist’s accommodate units at reasonable prices. Central cities such as Consultant October 2014 Spe- San Francisco, New York and London, on the other hand, can Hemson cial Report on The only accommodate growth on a limited supply of land that is Consulting Ltd World Economy often constrained by the capacity of existing infrastructure. attributes the recent The demand for housing in these larger cities is mostly met return to the city through high-rise housing which can take longer to build and (from the suburbs) is more expensive to construct. to the technology revolution of the past two decades. It iden- tifies rapidly rising housing costs (and the corresponding At the middle of the spectrum of housing costs around the economic inequalities that arise with it) as the challenge cit- world is Toronto. The Toronto Region housing market is the ies must overcome in order to realize the full potential of this most heavily regulated in North America. If the author of this resurgence. The author blames rising housing costs on re- paper is correct, then zoning regulations and policies such as strictive regulations that prevent the construction of an ade- the Growth Plan would be largely responsible for rapidly ris- quate supply of housing to meet demand. The article con- ing housing prices in the Greater Toronto Area. We know that cludes that economic gains that could go towards job crea- it does play a part, but that the drivers of housing prices in the tion are instead going to landlords and financial institutions GTA are a lot more complex than that. by way of rents and mortgage debt. In relation to the overall outlook of the housing market in re-

Although it makes intuitive sense on the surface, there are gards to the technology revolution, the housing market will numerous other factors for the rising housing prices beyond likely adjust itself over time with demographic shifts in major “a dense thicket of zoning regulations.” The shortage of an urban centres. As aging boomers move out of large family adequate supply of housing is generally less a matter of units and seek apartments they will free up land supply for building regulations and more a result of a shortage of an younger families seeking additional housing options. adequate supply of land. Most of the major central cities in In conclusion, while reforming regulatory practices may have Europe and North America are built out and have very little an effect on the supply, and thereby the price, of housing in remaining supply of land for more housing. What is left is major cities, it is unlikely to have as significant an effect as priced at a rate that reflects its scarcity. “Freewheeling Hous- the complex economics of real estate markets.

Wondering about the underlying consequence of the revolution. Cities, especially PETER seemingly high price big ones, have become magnets for the highly skilled, highly NORMAN of housing in our productive, high wage ICT workers who like to cluster, share Chief Economist urban areas? Won- ideas and take advantage of urban capital. These highly Research, Valuation der no longer. Its the “cognitive” revolutionaries have a high demand for housing, and Advisory ICT revolution! but the survey points out — rightly I’d say — that most west- Altus Group The Economist ern cities are mired down in a “dense thicket of zoning regula- Economic Research magazine’s recent tions” that date back to the 19th century. By their very nature, Special Report sur- municipal planning policies and these 19th century zoning veys several aspects of the evolving role of technology in the legacies put a focus on slowing fixed capital investment, economy and likens the information, communications and keeping out or burdening with additional costs the newcomers technology (ICT) revolution to the two other great, society- and protecting the assets of established landowners. Strong changing industrial revolutions in the 18th and 19th centuries. demand for housing, a regulatory environment impeding sup- ply; this is clearly a formula for chronic imbalances and sys- Lessons from the past: new technology comes along (such as temically elevated prices. the power loom, electric lighting, the automobile, etc.,) and displaces legions of labour that manage to move and reskill, Of course all this would be simply amusing if not for the dark and ultimately results in an improved standard of living across side of the revolution – the “large swaths” of workers in the the whole community. But the ICT “revolution” is now 30 “middle of the skill and wage distribution” which have lost or years old or so, and most economists can’t pinpoint any dis- are losing the economic battle against new technologies and cernible effect on productivity. Again a lesson from the past: machines. This demographic is being pushed from the cities wait – the effects of the Victorian industrial revolution took a with the most restrictive zoning and planning regulations, and century to mature into the productivity growth post WWII. toward those cities with good jobs that allow lots of new home construction (thus keeping prices down). What’s the bottom So we’re well into a new “revolution” but what does this mean line, according to the survey? Ultimately, the ICT revolution for our cities and property prices? The survey is also quite combined with restrictive planning and zoning is having a frank about this: rising house prices are an imbalance of sup- negative effect on employment, productivity and output. ply and demand. But not just the garden variety version we read about in economic text books – asymmetric market infor- Should Ontario municipalities pay attention to this trend? mation, myopic market agents etc., but rather a more insidious Absolutely. FALL/WINTER 2014-15 / Vol 44, No 3 5 FALL/WINTER 2014 FALL/WINTER increase values. It also helps create helpscreate also It values. increase helps transit around urbanamenities with development mixed use Allowing financed? it be howBut can said. Dobson you,” at page the tionsoff jump solu- transit the theirhomes, to relation in located are jobs employees’ where youat “When look are. thewherejobs to connect people to needs Transit hesaid. ‘hot’,” marketis inthis node “no demand, employer Interms of limited. are development newoffice affordable for options and withcondos, built up being is with amenities those core all the central Meanwhile, theiremployees. and companies newtechnology attract feel that urban walkable amenitiesand the few of allow and development, industrial at aimed many are cies in poli- planning Plus, lemofcongestion. prob- the leaving ofthem”, all missed “have plans transit the of past lot a But nodes. office newer the growtharound future and thefor current isspace There nothing.” like will look congestion system,” transit a on land growthdoesn’t “If that space. newoffice of amount equivalent an need weyears, 30 next theOver etc. clients, see lunch, to get to work, get to to to car a need You said. Dobson seriouscongestion, creating transit are higherorder to connected not are that space feet office square of - area inthe 905 space office growthin vast showingthe with 3 video a showed He geography. commuting and ployment inem- miss issues the real projects and many plans fartoo problemthat is The co Dobson, says Iain Area (GTA), Toronto Greater the transit for in newhope be elections being held this year, there may municipal and the provincial both With to Work Last? At Home Connecting NewThe Transit

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PHOTO: Rowena Moyes New Mayors / New Focus

This December, Ontarians Municipality Former Mayor N e w M a y o r have seen a number of new mayors sworn into office, Susan Fennell Linda Jeffrey along with incumbents returned. Economy, transit, Guelph Karen Farbridge taxes and oversight have Hamilton Bob Bratina been recurring themes. Kingston Mark Gerretson Business groups have ex- pressed hope that, with the Kitchener Carl Zehr David Scott AACI P App, PLE provincial and municipal London Joe Fontana Matt Brown MEMBER BOARD NEW elections now settled, there David is principal mortgage may be a real opportunity Hazel McCallion broker in Avison Young’s for needed action. High on Capital Markets Group, Mort- their wish lists are regional Sudbury gage Services. Impressed by cooperation on such things Toronto Rob Ford the professionalism of mem- as infrastructure and eco- bers and the quality of events, nomic development. Waterloo Brenda Halloran Dave Jaworski David has volunteered “to give back to this industry and assist Other top requests: tell Windsor the Association in whatever residents how the province capacity I am able.” As well as requires intensification so Incumbents Returned having many years in consult- more people can live in ing, financial and insurance, he core areas with transit, and also has assisted other associa- accomplish that end John Henry tions in organizing events. through updated plans, Jim Watson zoning, regulations and Contact: 416-673-4021 or building permit systems. [email protected] 2014-15 AOLE EXECUTIVE BOARD

President Members At Large ANDREA CALLA MICHAEL CANE Tridel Corp. Michael Cane Consultants [email protected] [email protected] Vice President & Secretary JONATHAN HACK JOHN BLACKBURN Sierra Planning and Management Brightstar Corporation [email protected] [email protected] Legislative Chair NAOMI IRIZAWA Treasurer ANDY MANAHAN Urban Planning STEFAN KRZECZUNOWICZ Residential and Civil Construction [email protected] Hemson Consulting Ltd. Alliance of Ontario (RCCAO) [email protected] [email protected] EDWARD SAJECKI City of Mississauga Registrar & Membership Program Chair [email protected] JOHN MORRISON BONNIE BOWERMAN Royal LePage Real Estate Services Romspen Investment Corporation DAVID SCOTT [email protected] [email protected] Avison Young [email protected] Journal Chair Internet Chair KEITH HOBCRAFT MICHAEL J. REAL KEVIN TUNNEY Bosley Farr Associates Realty Tax Consultant Tunney Planning Inc. [email protected] [email protected] [email protected]

FALL/WINTER 2014-15 / Vol 44, No 3 7 When the Clark Panel was given its marching orders, it was done in the con- text of a limited political appetite to in- crease taxes. Interestingly, following the The FES, the Finance Minister admitted that tax hikes could not be entirely ruled out Legislative in the context of the Liberal commitment to balance the budget by 2017-18.

Update The final report is expected to be deliv- ered in spring 2015 prior to the Ontario Budget.

RCCAO has commissioned a study on By Andy Manahan, PLE but to sell off parts of Hydro One. “Unlocking Ontario's Advantages”, which will provide input into the panel’s FALL ECONOMIC STATEMENT The panel estimates that the province can realize between $2 billion and $3 final report by recommending that a Finance Minister Charles Sousa’s Fall billion by selling off up to 60 per cent of more aggressive approach be taken on Economic Statement on November 17th the electrical distribution system such as asset recycling. downgraded the growth forecasts for the Hydro One Brampton. next three years. Revenues will be lower  by $509 million compared to the 2014 Although it is recommended that the Budget forecast. Despite this, a Globe LCBO remain in public hands, updating ECO—WATER PRICING and Mail editorial termed this stubborn its retail and pricing strategies are pre- Gord Miller, the Environmental Com- gap between revenues and expenses a dicted to bring in additional revenue. For missioner of Ontario (ECO), has been “fiscal problem” but not a “fiscal crisis” example, the now-retired TD Bank head consistently critical of the province for and suggested that big ticket items such says that the LCBO can use its buying not following up on key recommenda- as health, education and social services clout to reduce costs and thus maximize tions made by Justice O’Connor related could be delivered more efficiently. profits. Clark also believes that taxpayers to the Walkerton tragedy of 2000. In deserve a fairer share of profits through ECO’s October 2011 annual report it Managing public sector wages and tack- new “franchise fees” from The Beer was pointed out that regulations had not ling the underground economy are major Store which, if it did not cooperate, been drafted following passage of the areas where the Liberals hope to achieve could lose its monopoly. Clark adds that Water Opportunities Act, 2010. This their fiscal targets leading up to the 2018 these additional fees would have to be was termed a “missed opportunity” to general election. In addition, Queen’s paid without increasing beer prices. As achieve greater water conservation Park will continue to beat the drum on well, the LCBO would be allowed to sell through pricing measures (see The Land greater participation from Ottawa for 12-packs of beer, thus cutting into The Economist Vol. 42, No. 1). infrastructure investment, including tran- Beer Store’s market share. sit projects and the Ring of Fire develop- Mr. Miller has once again chastised the ment in northern Ontario, in the lead up Progressive Conservative finance critic provincial government for doing little to to the federal election in 2015. Vic Fedeli commented that the report support full cost recovery. He noted that does not offer any “bold solutions” and it has still not brought forward regula-  that the Liberals need to reduce spend- tions to support the 2010 legislation and that it repealed the Sustainable Water ASSET RECYCLING ing. In a more pointed response penned by David MacNaughton, the former and Sewage Systems legislation which In the last Legislative Beat (Vol. 44, No. was passed in 2002. 2), I indicated that the Finance Minister principal secretary to Dalton McGuinty asserts that “I have always been mysti- was hoping to get a “big (revenue) boost In all ECO reports the relevant Ministry fied by the attachment many of my fel- from ‘asset recycling’, or selling govern- is given a chance to respond. In this low Liberals hold to the notion of public ment assets and turning the proceeds case, MOE (prior to the Climate Change ownership of operating companies.” over to infrastructure.” As it turns out, mandate being added) avoids any refer- Ed Clark and his advisory panel have His opinion in the National Post con- ence to full cost pricing or accounting taken a more cautious approach which is tends that “financing its new spending and makes a statement in which there is revealed in the title of the interim report, through debt, rather than the sale of as- no supporting evidence: “the non- “Retain & Gain: Making Ontario’s As- sets, the Ontario government has opened regulatory infrastructure funding ap- sets Work Better for Taxpayers and Con- itself up to substantial interest rate risk. proach requiring municipal asset man- sumers.” agement plans has been successful in There’s also the potential complication The major thrust calls for the government of not being able to borrow enough encouraging [emphasis added] munici- to maintain long-term ownership of On- money to finance its ambitious infra- palities to develop asset management tario Power Generation and the LCBO structure plan.” plans.” Continued on page 9

FALL/WINTER 2014-15 / Vol 44, No 3 8 Annual General Meeting 2014 The Association’s 2014 Annual Gen- higher at 212 diverse professionals in month and proposed revisions will be eral Meeting of Members was held the economics of land. The Board has sent to members for approval. November 6, at the Royal Canadian been reviewing membership and will Yacht Club in downtown Toronto. make proposals for appropriate fee Journal Chair Keith Hobcraft’s report Following are some highlights: levels this year. (read by Vice-President John Black- burn) noted three informative issues Treasurer Stefan Krzeczunowicz PROGRAM chair Bonnie Bowerman of THE LAND ECONOMIST this presented the audited FINANCIAL reported on the year’s events: year, and thanked all people who have STATEMENTS for April 1, 2013 to Neil Prashad’s presentation at the contributed articles and interviews. March 31, 2014. Revenues were 2013 AGM on Revolutionary $46,866, while expenditures totaled Thinking on Aging in Place, After this year of elections, LEGIS- LATIVE BEAT Chair Andy Mana- $68,656, resulting in a deficit of David Crombie’s March 6 lunch han said we hope to see some align- $21,790, and the operating fund balance speech on Infrastructure, Public ment on much-needed transit. While dropping from $40,679 to $18,889. Service and Cooperation AOLE does not generally advocate on June 3’s Networking Event and This was the first deficit in a very long policy, he noted that many members Tour of the Luminato Festival Hub time, mostly reflecting one-time ex- have influence behind the scenes. penses due to the Association’s 50th with Janice Price, and Anniversary. Early this year the Board the joint RICS-AOLE-CIQS Golf The www.aole.org WEBSITE was approved a balanced budget. Current Tournament on July 31 redesigned, and launched this summer. information suggests this will be AOLE also arranged for special mem- Chair Mike Real invited everyone to achieved if all outstanding member- bers’ pricing at the fall Canadian use it, and welcomed suggestions. ship dues are paid and we hold one Brownfields Conference. more successful event. Thanks to all the participants! Nominations Chair Bonnie Bowerman oversaw the ELECTIONS, which Registrar John Morrison reported that Jonathan Hack reported that the affirmed the existing Executive Com- 16 new members have been approved, BYLAW REVISIONS are going mittee and Board, with the addition of so MEMBERSHIP is marginally through one more legal review next David Scott. See the list on page 7.

LEGISLATIVE UPDATE ...cont from page 8

In fact, a report released by the Asso- sector in achieving long-term financial tially shared primary responsibility for ciation of Municipalities of Ontario sustainability for these assets. the delay on all but two projects. in late 2012 was meant to provide “examples of municipalities that have  John McKendrick, IO’s executive vice president and group head of major pro- made or are moving toward full cost AFP TRACK RECORD recovery and life cycle asset manage- jects, said that in one case there was a Infrastructure Ontario commissioned its caisson design error that could have been ment.” second annual “Alternative Financing dealt with through better due diligence The study, done by CN Watson and snd Procurement (AFP) Track Record or by transferring the design risk through Dillon, found that “approximately half Report” to assess projects that had a Design-Build-Finance-Maintain model of the munici-palities surveyed for this reached substantial completion. The 37 as opposed to the more traditional Build- report [total of 16] have indicated that projects have a total capital value of ap- Finance approach that was used for this they are phasing in full cost recovery proximately $10 billion. health care project.

over a 10 to 15 year period …” The report by Altus Group found that In conclusion, the study promoted the However, the study also states that IO has been able to deliver 36 of the 37 overall advantages of using the AFP “Concern was expressed by the re- projects on budget, with only one pro- approach and emphasized that using maining surveyed municipalities re- ject going marginally over budget based traditional delivery methods would have garding the ability to achieve full cost on the awarded contract value. cost the province more in cases where

recovery given the impact on water By contrast, two thirds of the projects projects are delayed. rates and their ratepayers’ ability to (24 of the 37) were delivered early or on Andy Manahan is Executive Director of afford further increases to their bills.” time, with another three being com- the Residential and Civil Construction While these are valid concerns, this pleted within a month of the scheduled Alliance of Ontario. He is also a member does not suggest, as MOE has in its completion date. The report found that of AOLE's Board of Directors, and its ECO response, that significant pro- of the 13 delayed projects, the project Legislative Chair. gress is being made by the municipal company either fully retained or par-

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