North America

Ontario: Low-Cost, High-Comfort Rail is much better than High-Speed, High-Cost Rail

Average is over. Long live average.

“High-speed rail” is a bit of misleading name: airplanes travel at a much faster speed. It might be better to call it “high-speed for rail” instead. Or call it “average-speed by rail”.

Of course, if you did refer to high-speed rail by any of those names, you probably wouldn’t have governments like Ontario’s pledging to spend 11 billion dollars to build a high-speed rail line from Toronto to Kitchener-Waterloo and London, Ontario. Even to those who support rail transport over less efficient, more polluting air and road transport, this move is difficult to justify from an economic perspective, given the population density of Southwest Ontario.

While high-speed rail is a good idea in populous areas where conventional rail options are already numerous (although even the Boston-New York-Washington corridor does not have one yet, which should set off alarm bells for those who think the Toronto-Guelph-Kitchener-London corridor, or even the larger Toronto-Windsor corridor, should build one) there are five main problems with high-speed rail in a place like Ontario.

One, it is much more expensive to build than conventional rail. Two, it has fewer stops and so can serve fewer cities than conventional rail. Three, it is less fuel-efficient than conventional rail. Four, it has much less capacity than conventional rail (if you double the speed of a rail line, you generally also must double the safe and comfortable distance required between each train, and so end up halving the capacity of the rail line) and so is much more expensive than conventional rail (unless wastefully subsidised by governments).

And fifth, yes it goes faster, but what’s the rush? What’s so bad about the existing 2.5 hour train from Toronto to London, Ontario…especially now that most people will soon have noise-cancelling wireless headphones and ultra-lightweight computers? And especially if e-commuting means that people will not have to make the trip as often as they otherwise might, or might be able to get work done while on the train. And anyway, don’t we continue to be told that automation and digital outsourcing going to do more and more of our work? Why exactly is someone rushing to or from Toronto so frequently that so much of our tax dollars should go to this “high-speed” train?

Ontario-HIgh-Speed-Rail

Instead of high-speed, high-cost rail, what Ontario could spend that 11 billion on instead is low-cost, high-comfort rail: rail on which it would be easy to work, relax, or sleep, and on which the needs of aging Baby Boomers who make up the biggest chunk of Ontario’s population, who are now already in their 60s and 70s, could be catered to more (making it easier to stow heavy suitcases, more bathroom capacity, etc.).

Indeed, what is really needed is not a way for to reach cities like London, Ontario or Kitchener-Waterloo, or even Windsor(-Detroit) without having to take a slow conventional train, but rather a way to reach more distant cities like Ottawa, Montreal, Chicago, and New York (all roughly 400-800 km from Toronto) without having to take a slow conventional train or an airplane. Ideally, we would have a train that is affordably priced, and so comfortable and smooth (i.e. with so few accelerations, decelerations, or bumps) that, at a low speed of 50-100 km an hour, a passenger could sleep easily though the night and wake up 400-800 km away. Even that would probably cost less than high-speed rail.

 

 

 

 

 

 

 

 

 

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Light Rail and Autonomous Vehicles in Toronto

Light rail systems are often a Goldilocks-style compromise between the flexibility of automobiles and the efficiency of trains. The problem is, nobody likes Goldilocks.

If, for instance, Doug Ford is elected premier of Ontario this spring, it is not unlikely that he will cancel the Hamilton, Hurontario, and Sheppard LRTs, leaving only the Eglinton Crosstown and Finch West projects that are already underway. And Toronto’s mayor and city council already voted last year in favour of the suburban Scarborough Subway Extension, over an alternative plan to build that line as an LRT and then use the money saved to help fund an Eglinton East LRT.

On the autonomous vehicles front, meanwhile, a number of significant barriers to entry remain. These include: LIDAR (still very expensive, and still struggles with snow); LIABILITY; the fact that people already own conventional cars; the fact that autonomous cars (even electric ones) still cause traffic and environmental harm; and the risk of autonomous vehicles being used in a terrorist attack (for e.g. if driverless cars are common, a single bombmaker might be able to load numerous vehicles with explosives, and detonate all of them simultaneously at a crowded urban location). And of course there may also be a societal hesistancy to adopt widespread driverless cars.

Because of these barriers, it seems plausible that the partial use of autonomous vehicles will occur before they become fully adopted. Consider, for example, two potential partial usages: autonomous parking lots, and autonomous overnight cargo deliveries. Both of these may not be subject to the barriers listed above:

—LIDAR may not be a challenge for autonomous parking lots, as within a relatively small, mapped area equipped with sensors (the parking lot), cars could drive autonomously without LIDAR. Overnight delivery vehicles might also be able to run without LIDAR, as they could drive at a very slow speed, and stick to running a relatively small number of high-demand routes
—Liability may not be a challenge either, as the parking lot could have no pedestrians or human drivers in it, and its cars could drive at slow speeds. Overnight delivery vehicles could also drive at slow speeds.
—the fact that people already own conventional cars is not a barrier to overnight cargo deliveries, and may not be a barrier to parking lots either. Some companies are even attempting to develop vehicles that can, in effect, tow a conventional car autonomously to and from parking spots
—the fact that autonomous cars still cause traffic and environmental harm may not be a barrier: autonomous parking lots can reduce traffic and pollution if they are located at (for example) train stations, thereby making it more convenient for suburbanites to use transit. And overnight deliveries might cause fewer diesel trucks getting stuck in daytime traffic jams, which create air pollution and other costs
—restricting autonomous vehicles mainly to limited areas like special parking lots, or special times like very late at night, could make it much more difficult for them to be used in a major terror attack (whether a car-bomb/truck-bomb attack or driving a vehicle into pedestrians, involving multiple vehicles simultaneously) as it would then remain suspicious for a driverless truck to be loitering in a crowded urban area
—special autonomous parking lots, and perhaps also overnight autonomous cargo deliveries, are much less likely to be subject to a societal hesitancy towards their adoption

LRTs in particular may benefit from autonomous parking lots and/or autonomous overnight delivery vehicles. Autonomous parking lots may promote transit usage in general, if the parking lots were located at transit stations. But perhaps LRT would benefit from them more than heavy rail would, as the flexibility of LRT relative to heavy rail could allow LRTs to directly access more of these parking lots.

For overnight cargo deliveries, LRTs could be the ideal vehicle to be used autonomously. LRTs are electric and therefore relatively quiet, and being quiet is crucial for overnight usage in cities. Also, electricity prices are cheaper at night than they are in the day (particularly in Ontario, given that the province’s nuclear and wind power cannot shut off at night). And, of course, they are much cleaner than non-electric (or even electric) trucks. In addition, an LRT, unlike heavy rail, could more often travel directly into a building or parking lot to load/unload its cargo.

One main problem that has prevented cargo light rail in the past (outside of a few exceptions, for example in Dresden where a cargo tram has run) has been that trains have less surface friction than wheeled vehicles, so it is difficult for an LRT carrying a heavy amount of cargo to accelerate and decelerate constantly in cities in order to stop for red lights, passenger stops, and — if the LRT is not operating in its own separated lane — cars. At night, however, there are far fewer cars or passenger LRT stops, and green light-red light cycles could be made to run for far longer lengths of time in order to minimize the number of times an LRT has to stop.

With autonomous vehicles, then, LRTs may no longer be only a compromise between heavy rail and autonomobiles, but instead might excel at complementing autonomous parking lots, or being used autonomously to deliver cargo.

What does this mean for Toronto? Well, as mentioned earlier, it is possible that all but the Eglinton Crosstown and Finch West LRT plans may be cancelled as a result of the coming election. The Eglinton and Finch LRTs, as it turns out, have something in common that could be relevant to this discussion: they are next to the city’s two major hydro corridors, the Finch Corridor and the Gatineau Corridor. These corridors could be used as autonomous parking lot systems that are directly accessible to passengers using the LRTs, as well as accessible to passengers using other corridor-adjacent transit stations like Finch Station and Kennedy Station. They would also be accessible to cyclists using the bicycle paths that already exists within these two hydro corridors.

hydro corridor map

Finch Station Parking Lot

If you look at Finch subway station (map above, picture below), you will see that it already has a large parking lot, 1.3 km long and 90 metres wide, within the Finch hydro corridor to both its west and its east. I propose that this lot be extended much longer, to reach north of the Finch West LRT, as an autonomated parking lot corridor. This corridor would mostly remain separate from road traffic and pedestrians, though not entirely separate: it would have to cross north-south streets, and would also have to use bridges on Finch in order to cross topographical barriers like G Ross Lord Park. But that would still be much less of a challenge than a widespread adoption of autonomous vehicles. The Finch corridor is about 210 metres north of Finch in most places, and in some places (such as west of Jane, or west of Bathurst, or between Dufferin and Keele) it widens to connect to Finch Avenue directly.

finch station parking lot.png

Finch Subway Station (Yonge and Finch)

The Gatineau Corridor, meanwhile, intersects with the Eglinton Crosstown just west of Victoria Park, and also (via the narrower Scarborough RT corridor; see bottom image below) at the Crosstown’s terminus station, Kennedy Station (which is also a station on the Bloor-Danforth subway, Scarborough RT, and Stoufville GO train). If the Eginton East LRT extension to the Crosstown is built, its terminus would also be by the Gatineau corridor, at U of T Scarborough campus.

Where Eglinton Crosstown and East LRTs meet hydro corridor.png

Above: 3 Locations Where Gatineau Corridor Meets Eglinton (or Eglinton East) LRT; Below: Kennedy Station

Kennedy Station .png

The corridor could be relatively quiet, since the cars parking in it could travel slowly. It would not be an eyesore; or at least, not more of an eyesore than the hydro towers are themselves. It would also, ideally, be “parking lot neutral”; in other words, by creating more parking on the hydro corridor, it would allow you to convert some existing parking lots elsewhere into buildings/parks/etc. It would promote an increase in transit ridership. And the corridor could also be used, seasonally, as a “bicycling highway” that would be usefully located next to the autonomous parking lot. This could be acheived by simply having a portion of the hydro corridor’s lanes be designated for cycling instead of parking during the warmer months of the year. This could be a transit option that both the suburban, car-driving Ford Nation and the latte-drinking downtown bicycle-lovers could enjoy.

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Autonomous Cars, Semi-Autonomous Cars, and Toronto’s Railways to Nowhere

The City of Toronto has two “railways to nowhere”: the Sheppard subway and the Richmond Hill GO train.

The Sheppard Subway 

The Sheppard subway is 5.5 km long, has five stations, and connects to only one other rail line, the Yonge line. By comparison, the Yonge-University subway will soon be 38.8 km long (when the Vaughn extension begins operation), will have 38 stations, and will connect to many other rail lines, including the Bloor-Danforth subway, the Sheppard subway, 7 GO train lines (all at Union), and eventually also the Eglinton Crosstown.

The Bloor-Danforth subway is 26.2 km long, has 31 stations, and has connections with other rail lines at stations like Dundas West (the Union-Pearson Express train and the Kitchener GO train), Main Street (the Stoufville GO train and Lakeshore East GO train) and Kennedy (the Scarborough RT*, Stoufville GO train, Eglinton, and, if the City’s current transit plans are realized, the Scarborough subway tunnel).

TTC ridership.png

The Richmond Hill GO Train

Before the start of this year, the Richmond Hill GO train line was 34 km long and had five stations, three of which were located within the City of Toronto. With an extension to a new station, Gormley Station, having been opened in 2017, the line is now 42 km long, with six stations—but still only three in the City of Toronto. In contrast, the other six GO lines are between 50-103 km long (for an average of 69.6), have between 9-13 stations (for an average of 11.2), and have between 2-6 stations within Toronto (an average of 4).

go train ridership.png

Read more: Toronto Crow’s Advantage   (…apologies for some of the pictures being blurry and links being broken, I’ll try to fix them soon)

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Demographics, Drivers, and Dreams

On The Future of the Canadian Auto Sector 

There is a profound difference between Canadians, Americans, and Chinese, both in their demographics and in their dreams.

In the US, the largest population group is 20-35 year olds. Many of these Americans will, in the years ahead, be looking to pursue the American Dream: to buy a home and start a family. Indeed, just like the Baby Boomers before them, many of these Millennial Americans have been moving to suburbs and buying SUVs. 

In Canada, in contrast, the largest group is 50-60 year olds. In the years ahead, many of these Canadians will be looking to cut back their work hours, or retire, or transition from manual labour to less physically strenuous jobs. Many will also pursue the Canadian Dream: having a cottage to host one’s grandchildren at.

In China, the largest group is 40-55 year olds. Most of this group works in physically demanding industrial or agricultural jobs. Most of them, particularly in China’s rural areas and inland provinces, still earn between 2-10 dollars a day. The Chinese Dream is to let these aging manual labourers transition to less strenuous work, while also bringing the country’s impoverished rural areas and inland provinces out of poverty.

Ontario’s Position

These demographic trends are not alien to the auto sector in Ontario. A city like Windsor is, in a certain sense, situated in a delicate borderland, between the vast American consumer market on the one hand, and the smaller domestic market of Canada but larger global market on the other hand. This is a risky, though often rewarding, position to be in. When successful, it has allowed Ontario to attract investment from global firms seeking a way to access to the American market without investing too much in the US directly. In the wake of the recent Valiant deal, such investment is increasingly expected to come from China.

Obviously, however, global firms cannot rely for certain on continued favourable access to the American market, regardless of whether or not these firms have investments just across the US-Canada border within Ontario. It is up to Ontario to determine to what extent it wants to orient its production around markets in the United States, and to what it extent it wants to focus on Canadian or global consumers instead.

Motor Vehicle Production

A Possible Divergence

This is where trends such as demographics become relevant. As a result of such trends, it may be the case that consumer demand in the United States will diverge sharply from that of countries like Canada and China in the years ahead. While Americans continue to buy cars and SUVs, in Canada and in global markets it may be instead that auto sector demand will become increasingly dominated by busses and by trucks:

1. The Supply of Drivers 

The global Baby Boomer bulge, of 50 and 60 year olds in the West and of 40 and 50 year olds in China, is likely to create the largest labour shift in human history: manual labourers transitioning to less strenuous work. In spite of what some politicians may claim, these labourers will not often be retrained to become software engineers. Nor will they all move into retail jobs at companies like Walmart, as out-of-work labourers have often done during the past generation. Too many of these retail jobs are being automated out of existence. Rather, the single biggest job these labourers are likely to switch to is driving a motor vehicle.

Not only is driving a bus, truck, or taxi something that can be done by a person who has, say, a bad back, it is also becoming far less strenuous than ever before, as a result of technological additions to modern vehicles. Driving large busses and trucks has been somewhat difficult in the past, particularly in tasks such as parking, turning, or driving on country roads during challenging weather conditions or in the dark of night. Modern vehicles, on the other hand, equipped with cameras, sensors, and high-tech safety features, are in the process of making the job of driving relatively comfortable and safe even for 60 or 70 year olds.

If the Baby Boomers create a glut of drivers globally, the costs of using trucks, busses, mini-busses, etc., will fall.

2.  The Night Moves

Of course, there has also been plenty of discussion in the media about the possibility of self-driving vehicles. If such vehicle actually do become commonplace anytime soon, they will have the largest impact on places and at times in which there is today a scarcity of human drivers. Namely, they will the largest impact on late-night driving (when human drivers are mostly asleep) and on areas such as, for example, Canada’s far northern regions, where — particularly during long, cold winter nights, or in snow storms, or on dangerous ice roads that require almost constant maintenence  — there are few human drivers around.

Autonomous capabilities would have a much greater impact on trucks than on cars, then; and in particular, on short trucks, where labour costs per unit of cargo are much higher than for heavy trucks or transporters. They would also have a greater impact on places with challenging geographies, such as Canada. And they would be especially useful for slow-moving overnight vehicles, like plows, de-icers, and pavers.

Trucks, finally, may experience the benefits of autonomous driving earlier or more than other vehicles  will as a result of government regulation. While governments may be hesitant to allow autonomous cars in general at first, they are far more likely to allow a truck driver to turn on an autonomous cruise control system late at night, when relatively few cars are on the road, so that he or she can get some sleep.

3. More Time, Less Money 

These two trends we have discussed thus far — demographics and automation — may also lead to a phenomenon in which Canadians’ free time will increase at a much faster pace than will their income levels. This could occur because of an aging Canadian worker entering into full or partial retirement, or it could occur because of a Canadian worker losing his or her job to a software system or machine. Either way, Canadians are likely to have more time to fill up their schedules with leisure activities — say, spending more time in cottage country — but will also have to economize on costs in order to afford them.

One way to economize on leisure spending would be to forgo car ownership (or at least, to share a car with a spouse instead of owning two cars per couple) and using transit more. Busses, for example, are slower than cars — as they often make stops to pick up and drop off passengers along their routes —  but also cheaper than cars, particularly once you factor in the cost of car ownership. If the cost of bus drivers declines (which, as we have discussed above, we think it will), busses would become cheaper still. As Canadians’ free time increases faster than Canadians’ incomes, busses might therefore see greater use.

4. The Transit Revolution 

Apart from their sometimes being slow compared to cars, another major reason many people do not use transit regularly is because of the “last-mile” problem: how to get from a transit station to one’s destination, without a car. Also problematic is the “first-mile” problem: how to get to the transit station if the station’s parking lot is full, or if you do not own a car.  Yet these “first-mile/last-mile” problems are likely to be solved—or at least, made far less problematic—in the near future, as a result of technological changes.

One technology to overcome the first-mile/last-mile challenge is that of services like UberPool, wherein passengers and drivers easily co-ordinate door-to-door carpools through their smartphones. This same system could be used by busses or mini-busses too, which would make the rides cheaper but also longer—see the More Time, Less Money section above. Systems like UberPool work best in markets that are “liquid”; i.e. big-city markets, where there lots of passengers and drivers around. The US, being highly suburban, may be less suited to this than Canada (where more people live in large cities) or most global markets.

Another way to overcome the “last-mile” challenge is via car-sharing services, such as Car2Go or Zipcar. These allow people to take a car from the transit station to reach their destination. Use of car-sharing services in Canada is growing. It may eventually make it easier for some people to forego car ownership entirely.

As services like car-sharing and ride-sharing advance, then, transit’s “first-mile/last-mile” problems may be overcome.

5. The Canadian Shield 

If transit really does become more common relative to car usage, it will in many places be dominated by rail transit. Similarly, railways will continue to transport more freight than trucks. Trains are, after all, more efficient than trucks and busses. They will remain more efficient even if the cost of hiring a bus or truck driver falls.

Where trucks and busses will be utilized most, then, is in locations where it is difficult for railways to function. We have already mentioned one location where railways are difficult: Canada’s far north, where permafrost impedes rail construction and maintenance, and ice roads are sometimes the only economical option.

Another region where railway construction is expensive is the Canadian Shield, the result of the Shield’s enormous size, exposed rock shelves and over-abundance of lake (the latter being proble  matic given that trains cannot easily make sharp turns to bypass them, as trucks can). If Canadians, armed with more free time than ever before, seek the Canadian Dream in the lakeside cottages of the Shield, they will have to rely on trucks to transport bulk necessities like food (as the Shield is not suitable for agriculture) and fuel.

Canadian Shield .png

Railways networks are also under-built in mountainous areas, as trains cannot handle either sharp turns or steep inclines well. Three of Canada’s four major cities — Vancouver, Montreal, and Calgary — are located a very short distance from mountains, in contrast to US population centres which tend to be located in spatious coastal plains or the even larger Midwestern/Central Plains. It might be expected that, as a result of having more free time to spare, Canadians will spend more time pursuing leisure activities in mountains.

Meanwhile, countries like China are now actively trying to develop their impoverished inland regions, many of which are mountainous and have relatively little access to either railways or to coastal shipping—and will therefore have to rely on trucks and busses for their transportation. Many other developing economies, in South Asia, Latin America, and Africa, are also mountainous and landlocked. The largest city in NAFTA, Mexico City, is the highest-elevation in the world among cities with at least four million residents. Still, it is China which is the king of highlands. China’s Tibetan Plateau and Himalayan region occupies roughly one-fifth of China’s landmass, and is similar to the Arctic in its permafrost risks, sparse population (it has less than one half of one percent of China’s population), low rail access, and resource wealh.

Conclusion — Canada and the World 

Canada typically has one foot in the American market and one foot in the Canadian and global markets. Canadians companies often wonder what trade regulations or barriers the Americans will insist upon, either for Canadian firms or for foreign-owned firms invested in industrial facilities within Canada. But if, also, markets diverge — if Americans continue to use conventional four-seater cars and SUVs and trains, while Canadians and global market players like China increasingly look to buy busses and trucks — then Canada’s auto sector could also have to answer a more basic Canadian question: just how American are we?

As usual, there are no easy answers here, only risks and rewards.

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Robots & Ontario’s Minimum Wage

Economists have long tried to identify “goldilocks wages”: ideal compromises in the tradeoff between higher minimum wages and higher rates of un(der)employment. This is, of course, far more than merely a theoretical pursuit. With an election coming up in Ontario next year, it is also one of the main issues likely to spill over from economics into politics. The province plans on raising its minimum wage, from $11.40 today to $14 in 2018 and $15 in 2019. Inevitably, this has raised questions as to whether or not it will lead to more jobs being outsourced or automated, if employers decide they cannot afford to pay the higher wages.

Thus far, most of the minimum wage studies that have been conducted have tended to ask questions such as:

  • How many jobs within the jurisdiction that is planning on raising its minimum wage are susceptible to outsourcing or automation?
  • How many workers within the jurisdiction that is planning on raising its minimum wage earn less than what the minimum wage will become?
  • How does the planned minimum wage compare to that of other nearby jurisdictions?
  • How migration-elastic are the jurisdiction’s labour markets (in other words, how likely is there to be an exodus of workers to other jurisdictions, if domestic minimum wages are not raised)?

One of the complicating factors these studies generally reveal is that conditions vary from place to place even within the same jurisdiction. In Ontario, for instance, there are obvious differences between Toronto and most of the other smaller cities and towns in the province. A smaller share of Toronto’s labour force earns less than $14 dollars per hour. A smaller share of Toronto’s labour force may have jobs susceptible to automation. Toronto’s labour force might also be more migration-elastic, given that the population of Toronto is relatively young. Young workers may be somewhat more willing to move to faraway markets like Western Canada or foreign markets like the US (or, linguistically, Quebec) if wages at home are too low.

The Night Moves 

There are many other variables that one could analyze as well when attempting to determine whether a given minimum wage is suitable. Due to current technological trends, two in particular may be worth discussing:

— the disparity between an economy’s manual labour costs and energy prices
— the disparity between an economy’s daytime energy prices and overnight energy prices

The former variable will help decide how likely an economy is to employ sophisticated machines—robots—to substitute for human labour. Robots tend to be energy-intensive, so an economy in which energy is cheap but labour is expensive will, generally speaking, be ripe for roboticization. Arguably, an example of such an economy is Quebec. Its manual labour costs are high because its population is older than the Canadian average, and much older than the US or global averages. Yet its electricity prices are among the lowest in North America. Ontario’s other neighbour, Manitoba, also has some of the cheapest electricity in North America.

The latter variable has the same implications. Because robots which replace manual labour generally consume a lot of energy, and because one of the main advantages of robots relative to human workers is that machines do not need to rest or sleep overnight, an economy in which the cost of energy overnight is cheap compared to the cost of daytime energy might be one in which roboticization will be likelier to occur.

Obviously this conversation remains a speculative one at the moment, since widespread roboticization has not yet occured. Still, it may be important to have it anyway, as it appears to have a special relevance for Ontario:

1) Energy/Labour

Ontario’s energy prices are very high by Canadian standards. They are more than double those of Quebec and Manitoba, for example. Yet Ontario’s energy remains roughly middle-of-the-pack when compared to prices in US states, and is even extremely cheap when compared to many wealthy countries in Europe and East Asia. Electricity in Ontario is only about half as expensive as in Europe’s largest economy, Germany. These lower energy costs, when combined with Canada’s relatively high labour costs, is why some have predicted that Canadian firms will experience among the highest savings from roboticization (see graph below).

For Ontario, there is therefore a risk that jobs will be lost not merely to robots working within Ontario, but also to those working within other nearby Canadian markets where energy prices are far lower than in Ontario.

Labour Cost Savings

Source: Boston Consulting Group 

2) Daytime/Overnight

While Canada in general has a high disparity between energy costs (which are relatively cheap) and labour costs (which are relatively expensive), it is Ontario in particular that has a high disparity between daytime energy costs (which are relatively expensive) and overnight energy costs (which are relatively cheap). This is because Ontario is a world leader in nuclear power generation (see graph below). Nuclear power plants, unlike natural gas or hydroelectric plants, cannot be shut off at night without wasting fuel. Ontario has such a large surplus of overnight electricity that it often has to pay its producers to turn off their power plants at night, and often sells overnight power at prices that are well below the cost of production.

Nuclear Generation

Source: US Energy Information Administration 

At the moment, this is not a situation that is unique to Ontario. Like nuclear plants, coal power plants also cannot easily be shut off at night. Economies which rely on coal therefore often have surplus overnight power as well. In recent years, however, there has begun a major shift from coal-based power to gas or renewables. The Dow Jones U.S. Coal Index has lost more than 95 percent of its value since 2011, for example.

As economies rely less on coal and more on gas plants (which can be shut off at night) and solar power (which cannot help but be shut off at night), nuclear economies like Ontario are becoming far more unique in their disparity between daytime and overnight energy prices. This is true also of Ontario’s wider region: in the US, the two largest nuclear producers by far are Pennsylvania and Illinois, both fellow Great Lake states. Ontario’s immediate neighbours, New York and Michigan, are the fourth and tenth largest producers, respectively.

Moreover, because of its geographic size, Ontario is a burgeoning player in the wind-power industry. Yet  because of its geographic location, Ontario does not produce much solar power. Wind turbines cannot be shut off overnight either without wasting “fuel” (i.e. without wasting wind), whereas solar plants only produce power in the daytime. This too is driving Ontario’s disparity between its daytime and overnight costs.

Because humans rest at night, but robots do not have to, the disparity between an economy’s daytime and overnight power costs could become a major determinant in the susceptibility of its labour force to automation.

Conclusion

These inquiries into the question of roboticization, though preliminary (and perhaps still quite premature), suggest that Ontario should be especially careful when carrying out minimum wage increases. Given the disparity between daytime and overnight energy costs in Ontario, as well as the disparity between energy and labour costs within Canada in general, it may be that employment in the region will face a high level of competition from robots. If Ontario wants to improve the standard of living of its minimum wage workers, it might be wiser to pursue alternative policies, such as reducing income taxes on its lowest tax brackets.

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Talking Trade With Trudeau and Trump

NAFTA stands for the North American Free Trade Act, but President Trump does not. After campaigning on a promise to repeal the Act, then adapting his position to that of merely supporting the Act’s renegotiation, Trump recently announced that he would no longer tolerate the status quo arrangement for American imports of dairy and forestry products originating from Canada.

Proposing, on April 24, to add a 24-percent tariff on US imports of Canadian softwood lumber, Trump kept up the pressure on Canada the following day, tweeting “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”.

Watch! indeed: the value of the Loonie fell sharply the week of the tweet, as investors worried how Canada will fare when it comes to the broader renegotiation of NAFTA Trump continues to promise.

Trump’s targeting of Canada in this way is not likely to have been random. Nor was it entirely economic in its intention. Rather, Trump brought up the issue in order to prove his anti-NAFTA bona fides to his political base, yet in a way that manages to avoid the hairier subjects associated with NAFTA’s other signatory, Mexico, such as immigration, racism, or The Wall.

Trump has admittedly been careful to direct attention to goods of lesser importance, like dairy products and softwood lumber, rather than to Canada’s key exports of oil (from Alberta) and auto parts (from Ontario). Still, he has been far tougher on Canada—at least in his rhetoric—than has any other recent president. To use a Trumpian phrase: Canada has now been put on notice.

Obviously, this may worry Canada’s Prime Minister, Justin Trudeau. Elected with a rare majority government in 2015, Trudeau’s “political honeymoon” now finally seems to be nearing its end. The NAFTA/Trump issue was just one of four indications of this to occur this spring. The other indications were the election of a new federal opposition leader, Conservative Andrew Scheer, on May 28; the expectation of an NDP-Green minority government forming following an election in British Columbia in May; and the continuing decline in oil prices that has occured thus far in 2017.

Of these, the price of oil is likely the most troubling sign for the Canadian economy, and by extension for the approval ratings of Trudeau. West Texas Intermediate crude oil prices crashed in mid-2015, hitting lows of 26 dollars a barrel in February 2016 but staying mostly within a range of 40-55 dollars since then. They began 2017 at 54 dollars, and remained there until mid-April. However in recent weeks they have fallen again, so that as of this writing (June 21) they are at just 43 dollars a barrel. The Western Canadian Select oil price, which is the price that Canadian oil tends to sell at, is barely over 30 dollars. This does not bode well for the Canadian economy.

The biggest political news in Canada, meanwhile, has been the victory of the new Conservative leader, Andrew Scheer. Scheer narrowly (and quite unexpectedly) defeated Quebec MP Maxime Bernier at the Conservative Party convention, and so will now replace the party’s interim leader Rosa Ambrose as Canada’s leader of the opposition.

The impact of Scheer’s victory is likely to be twofold. First, Trudeau now finally has to face a real political opponent in parliament, rather than a mere interim leader as he has faced until now. This may draw some media attention away from political narratives created by Trudeau, instead giving his Conservative opponents some more air time. Indeed, Trudeau may now no longer be the only golden boy in Ottawa. Scheer is just 38, seven years younger than Trudeau.

The second impact of Scheer’s victory is that, unlike Trudeau, Scheer is not from Quebec. Bernier, who had been expected to beat Scheer, would have been the first Conservative leader from Quebec since Brian Mulroney, who was Prime Minister from 1984 (the year Trudeau’s father left office) until 1993.

In every election since then, the Conservatives have trailed behind the Liberals, NDP, and Bloc Quebecois in Quebec. This is not a trivial fact: Quebec is home to 23 percent of Canada’s population, and tends to vote for home-grown politicians. Given that Quebec has tended to be anti-Conservative, and western Canada pro-Conservative, Scheer’s victory over Bernier could mean that the next national election in Canada will be decided in Ontario. This fact could influence Trudeau and the Liberals during NAFTA negotiations, given that Ontario depends far more on trade with the United States than do any of the other Canadian provinces (apart from New Brunswick).

The month of May also saw a shakeup in Canadian politics at the provincial level. In British Columbia, the third largest of Canada’s ten provinces, the incumbent Liberal government failed by just one seat to hold on to a majority government. The NDP and Green parties have now announced that they plan to form a minority government in BC instead. This announcement has already had consequences for Trudeau, as the new provincial government is not expected to support the planned expansion of Kinder Morgan’s Trans Mountain pipeline from Alberta to BC’s coast.

Indeed the BC election, which was held on May 9, just a few weeks before Kinder Morgan held what it had expected to be the fourth largest IPO in Toronto Stock Exchange history, caused Kinder Morgan’s stock to plunge. If Alberta cannot export its fossil fuels to world markets via BC, then it will probably remain more dependent on sending them to refineries in the United States. Obviously this would be likely to reduce Canada’s leverage in any trade negotiations with the US.

If and when these negotiations do occur, it is difficult to know what the details of any new NAFTA agreement will be. Canada is obviously at a disadvantage relative to the US when it comes to trade negotiations. Not only is the Canadian economy much smaller than that of the US, and more dependent on trade with the US than the US is dependent on trade with Canada, but Canadian politics are also—contrary to popular wisdom—more internally divided than those of the US.

To give only one relevant example of this, there is the division between Canada’s provinces in to the extent to which they depend on US trade. The value of Ontario’s trade with the US is equal to an estimated 49 percent of Ontario’s GDP. In contrast, in Canada’s other major provinces — Quebec, BC, and Alberta — trade with the US accounts for just 23, 16, and 31 percent of GDP.

With these figures varying so widely, it could be difficult for Trudeau to present a unified front during negotiations. On the other hand, the political interests of the US are global in scope, so the US cannot afford to spend as much of its political capital haggling with Canada as Canada can afford to devote to haggling with the US. Thus it is always difficult to know which country holds the more leverage in the Canadian-American relationship.

What is obvious, though, is the importance of the relationship. Canada may appear small when compared to its southern neighbour, but it is the tenth largest economy in the world, and has growth prospects that out-rival most other wealthy economies. The US and Canada have the second largest trading relationship in the world, trailing only (for now) trade between the US and China.

Now that they are both finally settled into office, it will be fascinating to watch how these two countries’ utterly different leaders, Trudeau and Trump, will steward and steer this relationship going forward.

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North America

It’s Finally Time For A Toronto Ziggurat

It’s true that pyramids have fallen out fashion in recent millennia. All of the pyramids that have been constructed  in modern times are shorter than the Great Pyramid of Giza, which was built four and a half thousand years ago.

The two largest of these are the Memphis Pyramid (Memphis, Tennessee, that is), where the Grizzlies NBA team played from 2001-2004, but which has since been turned into a giant Bass Pro Sports Shop; and Las Vegas’ Luxor Hotel and Casino, the most vice-ridden pyramid this side of Pyongyang.

At 98 and 107 metres, the tips of these two American pyramids are both taller than the roof of Toronto’s Skydome (which, for purposes of comparison, is 86 metres tall). But both are still much shorter than Giza’s, which is 139 metres.

The next tallest modern pyramid, which finished construction in 2000 in Khazakstan’s built-from-scratch capital city Astana, is 77  metres tall. Other notable modern pyramids include California’s Walter Pyramid, a 5,000-seat sports arena on the campus of Long Beach State University that is 58 metres tall; the Pyramid of Kazan, the largest recreation facility in Russia at 30 metres tall; and museums like the Nima Sand Museum in Japan or the Louvre Pyramid.

Pyramid Schemes 

Pyramids have three significant advantages over other buildings–but also a key flaw, which has outweighed these advantages.

The advantages of pyramids are that they are durable, climbable , and do not obstruct city skylines to the same extent that a rectangular or dome-shaped building of equivalent height would.

In spite of these advantages, pyramids have a flaw, which has relegated them to serving mainly as a home for the spookily intact remnants of once-great kings (like Tutankhamen, or Vince Carter). Their flaw is simple: most of their indoor space lacks good window access. Windows are sort of a deal-breaker for modern humans. This is why you do not see many pyramid-shaped residential condos, but instead only entertainment facilities or Bass Pro Shops.

You don’t need to be a brain surgeon to know that one thing pyramids and ziggurats could be good at is storing things. A ziggurat could be ideal for this:  it could serve simultaneously as a storage facility (on the inside) and a public gardens (on the outside).

babylon gardens

Hanging Gardens of Babylon (fictional rendering)

This assumes, however, that cities are actually in need of  large new storage facilities. For post-industrial cities like Toronto, this may not be the case. If  Toronto were to build a large ziggurat, what would be stored inside of it?


Robots!

This is where the introduction of autonomous cars could, maybe, make things interesting.

Though we don’t know what the future of rush hour traffic jams or weekend traffic lulls will be, it is plausible that in the future there will at times be an excess capacity of cars in Toronto, numbering in the tens or even hundreds of thousands. Since autonomous cars will be able to drive themselves, this raises the question of where the best place for them to go at such times would be.

One possibility is to keep doing what we do now: leave cars parked all over the place. It is probable, I think, that this is what we will do — and that’s okay. Yet it is also likely that we will seek to do this less and less often, given that any space occupied by parked cars could be better used as a green space, commercial space, residential space, extra lane for driving, etc.  Leaving autonomous cars parked all over the city would not seem to be sensible or necessary.

Another option is to build more underground parking lots. Today less than one percent of the city’s parked cars are in underground lots; it would seem only natural that this number will increase as a result of autonomous cars. Such cars would not mind squeezing themselves down narrowly winding ramps to reach cramped parking spots in the bowels of the earth.

Still, building underground lots is not cheap. As you dig further and further down, construction prices tend to rise sharply, as a result of the need to keep out groundwater, prevent surrounding buildings from being destabilized, and lift earth high and higher to get it out of the hole you’ve dug.

But What About That Ziggurat? 

Thus, we are left with the alternative of having excess autonomous cars drive themselves into vertical parking lots. In some cases, having these buildings be ziggurats could work best, given that they are durable, do not block skylines much, and can double as a Hanging Gardens.

The best place to put a ziggurat in Toronto could be the Exhibition. The Exhibition has enough room for a large building, and would make the ziggurat a part of the Toronto skyline. From the Exhibition Ziggurat’s Hanging Gardens, there would be a clear view of the lake, the revitalized Ontario Place island, and CFL or MLS games being played at BMO field. (Also, concerts being played at Molson Amphitheatre would be audible). It would be accessible by car (as it would itself be a gigantic parking lot) as well as by GO Train from Union.

Escalatortonowhere

Indeed, instead of a crazy escalator to nowhere, Toronto could use the ziggurat to have a highway to nowhere: having the Gardiner Expressway end closer to Exhibition rather than extending all the way to the DVP.

As a massive parking lot for shareable autonomous cars, the Exhibition Ziggurat could help make the removal of the downtown Gardiner a workable possibility, by allowing commuters to drop off their cars at Exhibition Station in order to transfer to the train or bus. Similarly, at times when Union Station is overcrowded, the Ziggurat could help allow commuters to get off the train at Exhibition Station in order to switch to an autonomous car.

 

toronto ziggurat exhibition

Given that there are several marinas next to the Exhibition, it could perhaps become possible even that cars could go to and from the ziggurat by being carried by autonomous boats on Lake Ontario. This way, cars could at certain times be picked up or dropped off at various points along the city’s waterfront, using the lake to avoid downtown traffic. In theory at least, excess cars could even be delivered to St Catharines via boat, using the lake as a shortcut to reduce the distance between Toronto and Niagara from 130 km (via the QEW) to just 50 km.

If you want to get even crazier, you could do as the Egyptians did and built not one pyramid, but several. You could turn Downsview Park into a post-modern Necropolis, full of  hanging gardens and autonomous car parking spaces, with easy access to the University subway line, the 401, the Allen, and Sheppard.

If Egypt is any indication, such an investment could at least pay off in the the very, very long run.

 

 

 

 

 

 

 

 

 

 

 

 

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