Monday, January 23, 2017

Should Collingwood Sell It's Remaining Stake in Collus?

  Like many of you I have been following the ongoing efforts of the Town of Collingwood to sell their remaining 50% interest in Collus.  According to a recent article online by, Collingwood Council voted 7 to 2 in favour of continuing talks with one potential buyer in the hopes of securing an agreement.  The Town of Wasaga Beach is similarly engaged in the same process, looking to divest themselves of Wasaga Distribution.  It is such a heated topic with Wasaga Beach residents that a referendum may be called.

  It's easy for any of us to get emotional about the potential sale of Collus or Wasaga Distribution most of which I believe is driven by fear.  Ontario's soaring hydro rates are front and centre on a daily basis with the media seizing every opportunity to point out that Ontario allegedly has the highest electrical rates in North America.  Selling off either of these distribution entities is seen by most as a threat that will potentially increase monthly hydro bills even further in the future.  In reality there are a lot of other factors that need to be considered here not the least of which is future changes in technology.

 When I ran for Collingwood Council in the last municipal election, the ink had just dried on the 50% sale of Collus by the Town of Collingwood to Powerstream.  It was a touchy issue in the public eye at the time one in which I thought would surely come up during the election campaign.  To that end I met with then Chair of Collus, David McFadden to gain further insight and to better understand the reason behind the sale and how it would benefit our community.

  According to online records, at this moment there are 78 public utility/electrical distribution companies (PUC's) scattered across the Province whose mandate is to distribute electricity throughout their respective service areas.  Areas not served by these 78 smaller entities typically falls to Hydro One.  Like Hydro One, these 78 smaller companies are responsible for maintaining their respective electrical grids both above and below ground.  In addition, these smaller PUC's maintain administrative support for billing customers, collecting money owed etc. and this often includes water and sewer services as well.  Performing all of these functions entails a lot of people and a lot of equipment making this a very capital intensive business.  I suspect that many of the smaller PUC's across the Province may be marginally profitable and as such they may not have the financial resources to re-invest in their business, for better systems, employee training, reducing costs or for upgrades to improve the level of services they provide.  There is no doubt in my mind that improvements to efficiencies and systems resulting in lower costs of operation and better service for consumers would be attained if there was a consolidation in the number of PUC's across the Province.  Collus' partner Powerstream, has just merged with three other public utility providers to operate under the new name "Alectra."  In a press release issued on January 16th one of the proposed benefits stated as a result of this merger was " Residential customers will save an average $40 per year on bills as merger efficiencies are achieved over the next 10 years."

  A further case in point is with respect water and sewer services.  Following the 50% sale of Collus to PowerstreamCollingwood has since removed water and wastewater services from Collus and moved it in house under the Public Works Department.  This change was estimated to generate about $750,000 in annual savings. Since implementation, the estimated savings as reported at a Council meeting were in reality even greater so it's not hard to see how a fundamental change in business practice can yield improved efficiency and less cost.  Consolidation of the 78 PUC's in Ontario may well generate significant savings by eliminating redundancy and costs while potentially improving services to both residential and commercial customers.

  The other issue that must be considered is technological changes.  According to the reports I receive from Collus, my electrical usage is well below the average for similar homes in my neighbourhood.  Yes I am a single guy so unlike a family my hydro usage will be less but I have also taken steps to reduce my energy use as well.  Most of the lights in the high use areas of my house such as the kitchen, dining and living rooms are LED's.  If I am not in a room the lights are off.  I just installed a high efficiency gas furnace which saves me money on both gas and hydro.  In addition I installed a WiFi thermostat that allows me to control my heating and cooling using my smartphone regardless of where I am.  By using less I am in essence "less" of a customer for Enbridge and Collus as the revenue they generate from me is diminished.

  With respect to energy generation and use, I believe that we have just scratched the surface regarding technology.  Solar panels are springing up across our region both on farms and on individual residential homes roof tops.  Battery technology whether for vehicular use or in homes is improving dramatically and will continue to do so for years to come.  Tesla's Powerwall 2 can power an average two bedroom home for a day and Tesla's cars are becoming quite common even in our area.  Further, Tesla and other companies have developed what are essentially solar panel shingles.  How long will it be before technology exists whereby you will generate your own power, store it and use it in both your home and car?  The fact is you can now albeit it is still limited and expensive but in the future costs will come down and energy self sufficiency will be much more mainstream than it is today.

  What with consumers like myself using less and with emerging
technologies that will change the way we generate and consume
electricity it begs the question what does the future look like for traditional power distribution companies (PUC's) such as Collus and is now a good time to sell?  PUC's like Collus and Wasaga Distribution will no doubt always be around but just like other industries that were confronted by changes in consumer habits with traditional business' disrupted by technology they are going to have to adapt and change in order to survive.  That takes money and lots of it.  Is the Town wise to exit this business now by selling their remaining 50% stake in Collus?  I think so and I hope those on Council that are involved in making the appropriate decision(s) are considering what the future holds and how it will impact what is essentially a decades old business that until now has held a monopoly.  It won't happen overnight, but that monopoly is about to change and we will all be better off.

Wednesday, January 4, 2017

Area MLS Real Estate Sales Exceed $1 Billion in 2016.

The sales numbers for 2016 are in and the Southern Georgian Bay region has reached a new milestone in sales activity with MLS® sales exceeding $1 billion for the year.

  MLS® dollar sales as reported by the Southern Georgian Bay Association of REALTORS® (SGBAR) for the municipalities clustered around the bottom of Georgian Bay topped $1.037 billion for the year which represents a 29% increase over 2015.  To put that into perspective, area MLS® real estate sales in terms of dollars have almost doubled since 2010 when sales totalled $544 million for the year.  It is also important to note that MLS® sales for the most part, do not include the significant number of new homes under construction in the various subdivisions scattered around the area.  

  Unit MLS® sales for the year hit 2,750 individual transactions an increase of 15% over 2015 when 2,386 MLS® sales were reported.  We have continued to see strong market activity for single family homes in the mid to upper price ranges which is why the increase in MLS® sales dollars far exceeds the MLS® unit sales increase.  As prices for single family homes in the area continue to increase, sales below $350,000 get less and less with each passing year as fewer and fewer properties can be bought for under that price point. Conversely, sales between $350,000 and $499,999 were up 43% for the year while sales between $500,000 to $799,999 and $800,000 to $999,999 increased by 55% respectively.  Lastly sales over $1 million totalled 82 units an increase of 71% over the prior year.

  MLS® single family home sales in 2016 totalled 1,773 properties, an increase of 7% over 2015 when 1,655 homes changed hands. The municipalities of Clearview, Grey Highlands and Meaford posted the largest gains in MLS® single family home sales, single family home sales in Clearview totalled 209 units, an increase of 32% over 2015.  MLS® single family home sales in the Municipality of Meaford were up 19% in 2016 with 166 units sold while Grey Highlands saw a resurgence in MLS® sales activity after several years of lacklustre demand with 71 properties changing hands representing an 18% increase over the prior year.   Single family home sales in Wasaga Beach were up 13% in 2016 while MLS® sales of single family homes in Collingwood and the Blue Mountains had modest increases of 6% and 3% respectively.  

During 2016 we saw a strong resurgence in vacant land sales particularly in the Blue Mountains where new subdivisions such as Phase 3 of Nipissing Ridge continued to come on stream.  MLS® vacant lot sales in 2016 totalled 285 properties compared to just 200 in the prior year, an increase of 42%, Vacant land sales during 2016 in the Blue Mountains of 105 properties represents a 46% increase over last year.  Vacant land sales in this municipality represent 37% of the market total which helps to explain why existing sales of single family home sales in the municipality were the weakest of all other areas.

  In my next post I will review the area's condominium sales activity in 2016, a segment of the market which continues to grow and showed the largest gain in terms of a unit sales increase for 2016.  The amount of available housing inventory continues to remain well below market demand which is creating market dynamics unlike anything we have seen in recent years.  This too I will cover in more detail in a future post.

  Happy New Year and as always, should you have any questions about the market information provided herein or would like to discuss you particular real estate situation, please do not hesitate to Contact Me.


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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4


Direct: 705-443-1037

Office: 705-445-5520 ext 230


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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.