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Economists cool to Doug Ford’s warning of ‘carbon tax recession’

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Ontario Premier Doug Ford is warning that the federal government’s carbon tax risks triggering a recession, but it’s hard to find economists eager to back up his claim.

Ford used a speech to Economic Club of Canada to predict that Prime Minister Justin Trudeau’s carbon pricing plan will hurt the economy .

“A carbon tax will be a total economic disaster,” Ford told the estimated 1,000 paying guests at the lunchtime event in downtown Toronto on Monday.

“There are already economic warning signs on the horizon,” he said. “I’m here today to ring the warning bell that the risk of a carbon tax recession is very, very real.”

Ford did not offer any details in the speech about how the carbon pricing scheme would lead to recession. He did not take questions from reporters afterward.

Ontario Premier Doug Ford arrives on stage to speak at the Economic Club of Canada in Toronto on Monday. (Nathan Denette/The Canadian Press)

Asked by CBC News for clarification, Ford’s press secretary pointed to a study by the Conference Board of Canada that suggests a federally imposed carbon tax would shrink the nation’s economy by $3 billion. While that sounds like a big number, it is only a fraction of a per cent of the country’s $2.1 trillion GDP.

“Our analysis suggests the economy will shrink marginally in response to the carbon tax,” the authors said. “While the overall economic impact is small, the distribution is not equal across sectors, with some industries bearing notable costs.”

The report does not say that the carbon tax will cause a recession. Nor do other economists.

In its most recent monetary policy report, the Bank of Canada lays out what it sees as the major risks to the economy in 2019. The looming carbon tax is not even mentioned as a factor.

CBC News asked economists from four of Canada’s big banks to weigh in on Ford’s statement on Monday, but none agreed to comment.

There’s no evidence to substantiate Ford’s claim, says Dale Beugin, executive director of Canada’s Ecofiscal Commission. It’s a group of economists specializing in economic and environmental policy, led by an advisory board that spans the political spectrum, including the former Reform Party leader Preston Manning.

According to the Ecofiscal Commission’s analysis, the likely economic impacts of carbon pricing will be modest. It forecasts the Canadian economy to grow slightly more slowly than it would have without a carbon tax but to remain “a very, very far step away from a recession,” said Beugin.

“That money being collected is not being burned, it is being sent back into the economy in different ways,” Beugin said Monday in a phone interview with CBC News. He said the federal backstop model would keep the economy buoyant by sending carbon tax revenue back to households to be spent.

He points to the experience of jurisdictions that have put carbon pricing in place.

The British Columbia economy kept ticking along after a carbon tax was imposed in 2007 by the government of then-premier Gordon Campbell (who recently led Ford’s financial commission of inquiry into Ontario’s deficit).  The cap-and- trade system did not tank Ontario’s economy after Kathleen Wynne’s Liberal government launched it in 2017. Various carbon pricing schemes did not harm the economies of Quebec, Alberta and California in recent years.

“Sweden is another example where we’ve seen a really high carbon price over time and the economy has continued to grow even as emissions have declined,” said Beugin.

Last week, a list of 45 senior economists from across the U.S. political spectrum published a statement in the Wall Street Journal endorsing a carbon tax, with all revenue given back to citizens. The list includes former White House economic advisers, treasury secretaries, Federal Reserve chairs and Nobel laureates.

This will not likely be the last time you hear the phrase “carbon tax recession” from Ford. Two conservative strategists told CBC Toronto they expect the Ontario premier will continue to use this messaging in the coming months, as carbon pricing becomes a key issue in the federal election.

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The ‘Maple Majestic’ wants to be Canada’s homegrown Tesla

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Look out Tesla, Canada has a homegrown electric sedan on the way. Well, that’s if AK International Motor Corporation can drum up enough investment to make its EV a reality. Dubbed the “Maple Majestic,” the vehicle is a battery-electric designed to “excel in extreme climate performance without adversely affecting the climate, as befits a vehicle from Canada,” according to its website.

What’s in a name? — The company says the maple leaf is a “symbol of Canada’s warmth and friendliness towards all cultures,” while “majestic” refers to the country’s “status as a Constitutional Monarchy.”

That patriotism carries over into Maple Majestic’s parent company’s lofty goals. AK Motor founder Arkadiusz Kaminski says he wants the company, which he founded in 2012, to become “Canada’s first multi-brand automotive OEM,” and that the “Maple Majestic is intended to be Canada’s flagship brand of automobiles on the world stage.”

Partnerships are key — “We acknowledge that the best chance for the Maple Majestic brand to succeed, lies in continuing to build the relationship with Canada’s parts suppliers and technological innovators, whether they be academic institutions, corporations, or individual inventors,” the company explains. “We are currently seeking partners in automotive engineering, parts manufacturing, automotive assembly, electric propulsion technology, battery technology, autonomous technology, and hybrid power generation technology.”

In other words, don’t expect to be able to buy a Maple Majestic any time soon… and don’t expect to pour over 0-60 mph times, power output, range, or other key stats, because those don’t currently exist. For now, all we have are pictures and a short video clip. But at least those are arresting.

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PE-backed Quorum Software to merge with Canadian energy tech firm

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Houston-based energy technology company Quorum Software will merge with a Canadian tech firm to bolster its presence in oil and gas services.

Quorum announced Feb. 15 it plans to merge with Calgary, Alberta-based Aucerna, a global provider of planning, execution and reserves software for the energy sector. The combined firm will operate under the Quorum Software brand.

Gene Austin, CEO of Quorum Software, will continue in his capacity as chief executive of the combined firm. Austin, former CEO of Austin-based marketing tech firm Bazaarvoice Inc., became CEO of Quorum in December 2018.

Aucerna co-founder and CEO Wayne Sim will be appointed to the Quorum Software board of directors. Both companies are backed by San Francisco- and Chicago-based private equity firm Thoma Bravo.

“Over the last 20 years, Quorum has become the leading innovator of software deployed by North American energy companies,” said Austin. “Today, Quorum is expanding the scope of our technology and expertise to all energy-producing regions of the globe. Customers everywhere will have access to a cloud technology ecosystem that connects decision-ready data from operations to the boardroom.”

In addition to the merger announcement, Quorum Software announced it had entered into an agreement with Finnish IT firm TietoEvry to purchase TietoEvry’s entire oil and gas business. The agreement, which includes hydrocarbon management, personnel and material logistics software and related services, is valued at 155 million euros, or $188 million, according to a statement from TietoEvry.

“Our three organizations complement each other — from the software that our great people design to the energy markets where we operate,” said Sim. “Our new company will be able to deliver value to our stakeholders, while accelerating the growth of our combined business and the energy industry’s software transformation.”

The combined company will serve over 1,800 energy companies in 55 countries, according to the announcement. With its headquarters in Houston, Quorum will continue to have a significant presence in Calgary and in Norway, the headquarters for TietoEvry’s oil and gas software business. Quorum will have other offices throughout North America, Latin America, Europe, Asia and the Middle East.

As of Sept. 30, 2020, private equity firm Thoma Bravo had more than $73 billion in assets under management. In late December 2020, Thoma Bravo agreed to acquire Richardson, Texas-based tech firm RealPage in a roughly $10 billion acquisition.

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Piece of Kitchener technology lands on Mars on Perseverance rover

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KITCHENER — A piece of Kitchener technology has landed on Mars, thanks to NASA’s Perseverance rover.

The rover settled on the planet’s surface on Thursday afternoon. It’s been travelling through space since it was launched from Cape Canaveral, Fla. in July.

“The whole idea of being on a device that we’re sending to another plant with the express mission of looking for traces of past life, it’s pretty mind boggling actually,” said Rafal Pawluczyk, chief technical officer for FiberTech Optica.

The Kitchener-based company made fibre optic cables for the rover’s SuperCam that will examine samples with a camera, laser and spectrometers.

“The cables that we built take the light from that multiplexer and deliver it to each spectrograph,” Pawluczyk said.

The cables connect a device on the rover to the SuperCam, which will be used to examine rock and soil samples, to spectrometers. They’ll relay information from one device to another.

The project started four years ago with a connection to Los Alamos National Lab, where the instruments connected to the cables were developed.

“We could actually demonstrate we can design something that will meet their really hard engineering requirements,” Pawluczyk said.

The Jezero Crater is where the Perseverance rover, with FiberTech Optica’s technology onboard, landed Thursday. Scientists believe it was once flooded with water and is the best bet for finding any evidence of life. FiberTech’s cables will help that in that search.

Ioannis Haranas, an astrophysicist and professor at Wilfrid Laurier University, said the rover isn’t looking for “green men.”

“They’re looking for microbial, single-cell life, any type of fossils and stuff like that,” Haranas said. “That’s why they chose a special landing site. This could be very fertile land for that.”

“It’s very ambitious,” said Ralf Gellert, a physics professor at the University of Guelph.

Gellert helped with previous rover missions and said it’s the first time a Mars rover has landed without a piece of Guelph technology on it. While he’s not part of Perseverance’s mission, he said the possibilities are exciting.

“Every new landing site is a new piece of the puzzle that you can put together with the new results that we have from the other landing sites,” he said.

“It’s scientifically very interesting because, even though we don’t have an instrument on that rover, we can compare what the new rover Perseverance finds at this new landing site,” he said.

Now that Perseverance has landed on Mars, FiberTech is looking ahead to its next possible mission into space.

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