Flaherty's Windsor Budget: Skating On Thin Ice

Here is what the Budget said about the border crossing situation in Windsor.

It appears that the Feds have decided in their budget on the governance of the new crossing although the Group that was supposed to deal with that matter has never made any public comments as far as I know. I wonder if the Americans know about this and are onside. Did Flaherty pull a Granholm now?

The reason for asking is the emphasis on "The Government of Canada will be responsible for the Canadian half of the new international bridge, including the Canadian plaza. You'd have thought they would have brought the Americans in already. What can Canada do with half a bridge if the Americans won't go along? Remember the letter from the Department of State re the Presidential Permit for a new bridge...REJECTED!

Who knows, perhaps it is all part of "creating the possibility of a new crossing" that he and ex-Minister Rock talked about recently and which was the Tenth Point of the Nine-Point Plan.

If $400M has been set aside by the Feds for the road to the border, that means that the Province will set aside that much too. That means NO TUNNEL unless more money will be available in subsequent budget years since a tunnel requires billions! And you, dear reader, thought that the border road was an engineering issue. It looks like the political decision has already been made as to what we get. So much for DRIC's words that no decisions have been made yet.

It is not clear if the BIF money is gone but it looks like whatever is left will be rolled up into this $400M since this fund is for the road to the border. Too bad Construction Association. I warned you about teh short-term BIF disappearing. You can thank our Mayor for that one. He must take full responsibility since it was his file to lose. And he did! It could be years before any work is done on roadbuilding.

I suspect that the folks at Borealis, Macquarie and even Alinda have to be happy with the Budget. The Feds are just begging them for their cash. I expect however, their money ultimately will not be used in Windsor although they are hoping.

Legally though, especially on the US side, I do not know how you acquire the property of one private party and give it to another. As for P3s and private investors, do you really think that is going to happen here without a massive lawsuit!

Are the Governments playing poker with the Bridge Co.? Is this all a bluff or is it real? If the Bridge Co. fought that long over FIRA that impacted their ownership of the Bridge, do you expect them to do less now? Oh well, another 10-15 years of writing BLOGs {sigh}.

Here is part of the Budget papers dealing with Windsor:

Infrastructure Advantage

Highlights

Budget 2007 makes a historic investment of more than $16 billion over seven years in infrastructure...This historic investment will be dedicated to things that matter such as roads and highways, public transit, bridges, sewer and water systems, and green energy...

Initiatives in Budget 2007 to create an Infrastructure Advantage include:

---Allocating $6 billion in new funding to the new Building Canada Fund, investments in gateways and border crossings, and the national fund for public-private partnerships, which will leverage private capital to maximize the impact of the Government’s investments.

---Establishing a new federal office to identify and implement opportunities for public-private partnerships in infrastructure.

---Renewing the Government’s commitment to construct a new border crossing at Windsor-Detroit including:

• Taking the necessary steps to acquire the appropriate lands once the precise locations for the bridge and plaza have been determined.


• Exploring public-private partnerships to design, build, finance and operate the new bridge.


• Covering 50 per cent of the eligible capital cost of building the access road from the new crossing to Highway 401.


• Providing $10 million over three years to Transport Canada to support its efforts to implement this important project.

---Establish a federal P3 office.

---Further efforts to build a new Windsor-Detroit crossing, including a financing strategy to be outlined in Budget 2007...

---$2.1 billion for the national fund for gateways and border crossings. Part of this amount will be used to make a contribution towards the cost of a new access road that will link a new crossing at Windsor-Detroit with Highway 401 (see Windsor-Detroit below).

---$1.26 billion for the national fund for public-private partnerships.

Public-Private Partnerships

Canada aspires to be a leader in public-private partnerships. Substantial investment is required in our country’s infrastructure to achieve growth in our productivity and standard of living. Public-private partnerships can be beneficial in building infrastructure projects faster and at a lower cost to taxpayers. Private capital and expertise can make a significant contribution. For example, pension fund managers have said that they are seeking to invest in infrastructure opportunities in Canada. The private sector is also better placed to manage many of the risks associated with the construction, financing and operation of infrastructure projects. The United Kingdom and Australia are often held up as world leaders in promoting and engaging public-private partnerships. In the United Kingdom, experience suggests that public-private partnerships can provide greater cost certainty and result in a more timely delivery of infrastructure. Australia, a country of almost 20.8 million people, enjoys one of the most developed P3 markets worldwide, in 2005 worth an estimated $20 billion in prospective and ongoing projects. Canada has an opportunity to take advantage of this tool on behalf of Canadians.

The national fund for public-private partnerships, which is a key part of the long-term plan for infrastructure, will encourage the development of the P3 market in Canada. In the case of large projects seeking funding from the Building Canada Fund and the national fund for gateways and border crossings, proponents will also be required to demonstrate that the option of undertaking the project as a public-private partnership has been fully considered.

Budget 2007 provides $25 million over the next five years for a new federal office that will help execute public-private partnership projects. The office’s mandate will have two main objectives:

----Identifying opportunities and executing public-private partnerships at the federal level.

----Overseeing the assessment of public-private partnership options for projects seeking funding from federal infrastructure initiatives.

The Minister of Finance and the Minister of Transport, Infrastructure and Communities will work in collaboration to set up and manage the office.

Windsor-Detroit

The Windsor-Detroit Corridor is our most important artery of trade, accounting for 28 per cent of Canada-U.S. merchandise trade. Many regions in Canada depend on the efficient movement of goods and people through this corridor. This includes not only Ontario, but also Quebec (in 2004, an estimated $5.7 billion of Quebec’s merchandise exports to the U.S. transited through this corridor). Both long-term planning studies and stakeholders have confirmed the need for a new crossing. Canada’s New Government recognizes that ensuring sufficient border capacity between Windsor and Detroit is an issue of national importance.

A binational planning process, already well advanced, will recommend a location for the new crossing by mid-2007. The International Bridges and Tunnels Act, which recently received Royal Assent, establishes a legislative framework to protect the national interest for safety, security, and the efficient movement of goods and people, and to promote competition. This law will apply to the new crossing for the Windsor-Detroit Corridor.

As promised in Advantage Canada, Budget 2007 sets out a financing strategy for a new crossing at Windsor-Detroit:

• The Government of Canada will be responsible for the Canadian half of the new international bridge, including the Canadian plaza. Once the precise locations for the bridge and plaza have been determined, the Government will proceed swiftly with the necessary property acquisition. The Government will also create a new public entity that will own this key component of the new crossing. In concert with Michigan and its U.S. partners, Canada is exploring partnering with the private sector to design, build, finance and operate the bridge. The new public entity should help in realizing this public-private partnership.


• Responsibility for the access road that will link the bridge with Highway 401 rests with the Province of Ontario. To help support this important component of the new crossing, Canada's New Government will make a contribution to cover 50 per cent of the eligible capital cost of building the access road. This contribution will come from the new national fund for gateways and border crossings. Budget 2007 sets aside $400 million from this new national fund for this important project.

Budget 2007 provides $10 million over three years to Transport Canada to help support its legal, financial and technical work to implement this important project.

At least some people are happy with all of this. The bureaucrats who are creating this mess are keeping their jobs!