Thoughts and Opinions On Today's Important Issues

Friday, June 06, 2008

Seven More US Customs Booths Open At Ambassador Bridge

Did you miss it? A new border crossing across the river just opened up in Windsor/Detroit and it did not cost taxpayers a penny!

Isn't that the effect of the new Customs booths that the Ambassador Bridge Company built on both sides of the river. There are almost as many new Customs booths available as are in place at the Tunnel! And the cost was in the millions, not the billions!

If 4 new US Customs booths at the Ambassador Bridge virtually ended truck backups into the United States, will the opening of 7 new US Customs booths at the Ambassador Bridge virtually end car backups into the United States as well?

Once the Ambassador Gateway project opens in about a year from now, that project alone, without a new bridge, will be able to handle about twice the volume of trucks that pass through the border point today. The US DRIC consultant previously estimated that the new Ambassador Gateway Crossing can handle 5.4 million trucks, a volume substantially in excess of the 3 million plus that cross the border today.

How can anyone truly justify now the building of a new DRIC Bridge when there is no need for one today!

A new one may not be needed now for a decade or two as the MDOT Director has conceded. Imagine the difficulty that Senator Fortier will have trying to convince anyone to invest in a P3 DRIC Bridge in Windsor. To do so the Governments will have to take actions that make it absolutely clear that they are trying to eliminate the Ambassador Bridge as a competitor and that means a decades long lawsuit at the least.

Imagine the fun that Senator Cropsey will now have at his hearings when MDOT tries to justify the spending of billions of taxpayer dollars for an entire new DRIC project when the Ambassador Bridge is prepared to spend private dollars for its Enhancement Project. The key element will be that with the Bridge Company project, Michigan receives about $2 billion in federal matching funds that it can use for its road system.

It should be very interesting to see what the impact is of the opening of seven new US Customs booths at the Ambassador Bridge to be used during peak periods. What is very interesting as well is the commitment by US Customs to staff those booths.

Compare and contrast this attitude with that of Canada Customs where six new booths have been built by the Bridge Company but they are not being used even though Minister Prentice wants booths to be expanded across Canada to ease entry into this country and money has been set aside in the Budget to pay for this.

What this also shows is how the failure of our Mayor to act as a businessperson hurts this City. The expansion of seven booths almost equates to the number of booths that exist at the Tunnel today on the American side. It will be interesting to see if border crossers decide to move from the Tunnel to the Bridge in order to get across the border more quickly even with the Ambassador Gateway project being undertaken.

If that happens, then the attractiveness of the Tunnel as an investment has decreased significantly and one has to question whether the US side of the Tunnel will be still worth $75 million, if it ever was worth that much in the first place.

Delay, delay, delay seems to be the mantra of this Mayor. Now our friends in Detroit can understand first-hand what we on our side experience with this Mayor with his deal-making skills. He seems incapable of executing a business transaction in a timely fashion. He must be terrified that if his deal falls apart then he will be blamed. What he has not understood is that unfortunately the world does not wait for him to complete a business deal. It is about a year now and the Tunnel deal was supposed to have been completed last June. It now looks like Detroit Council will not go along with the transaction at all.

If that deal ever made sense, and it might have several years ago when the Mayor claimed that the Windsor-owned part of the Tunnel was worth up to $300 million, it certainly does not look like it makes any sense now. Our Council should insist that the Mayor back off immediately, assuming that they have the guts to tell the Mayor anything.

Since it would be difficult for the Tunnel to expand on the US side, the Tunnel is in deep doo-doo! I am sure you remember how 4 new truck booths ended truck line-ups. Will 7 new car booths do the same? What will this do to Tunnel volumes now and dividends in the future?

What Eddie has still not figured out as Mayor of Windsor is that he should be instructing Eddie as Chair of the Tunnel Commission to work with the Bridge Company to make the border work better for the benefit of the City.

Sure there is a need for competition but there is also a need for cooperation. If the two border operators can figure out a system to make the border less troublesome for tourists then the number of tourists would increase to the advantage of both crossings. They can still fight to get the vehicle and its toll revenue but they would be cooperating to get more vehicles so both would prosper. As I have already Blogged, border volumes are down in Windsor horrifically

Unfortunately however, Eddie has not been able to figure that out yet. How can he, when he calls the Bridge Co. the "enemy?"

Perhaps if he focused more on the border as Mayor and not as a border operator, the tourist business in Windsor would start prospering again! It is time that Council told Eddie to act as a Mayor and not as an entrepreneur.

Assuming there will be the same success for cars as there was for trucks, then one has to question the need for billions of taxpayer dollars to be spent on a new border crossing on both sides of the river.

What is needed is NOT new lanes across the River since vehicle volume is decreasing but more Customs booths operating efficiently by being open and being properly staffed. What the DRIC people have failed to understand since they are not border operators is that there are ways and means to increase throughput without adding lanes. Remember this:
  • "on 17 December 2004, Secretary Ridge and Canadian Deputy Prime Minister Anne McLellan met in Detroit and announced the “25% Challenge.” Its goal was to make quantifiable improvements in the transit times and reduce traffic congestion by leveraging the resources and leadership of the bridge, tunnel, and ferry owners in southeastern Michigan—specifically, to reduce transit times by 25% within one year...

    The private-sector stakeholders quickly came up with suggestions that could alleviate border congestion without requiring additional lanes or infrastructure...

    By the summer of 2005, nine months after Secretary Ridge and Canadian Deputy Prime Minister McLellan issued the 25% Challenge, the results were greater than skeptics had believed possible...

    Without the leadership and entrepreneurial energy that came directly from the private sector, it is highly unlikely that any meaningful improvements would have resulted. In fact, long-serving career government officials never thought it would be possible to achieve any significant reduction without massive new government spending."

Doesn't this sound eerily familiar. The goal can be accomplished without building a new bridge as Governments want to do. The 4 booths cost the Bridge Company a few million dollars and the 7 booths cost them a few million dollars more. The total cost of the 11 booths, and even throwing in the 6 booths in Canada, is nowhere near the billions that a new DRIC project would cost. It is nowhere near what Gridlock Sam's useless Horseshoe Road would have cost either.

There is a disconnect somewhere. Perhaps Senator Cropsey's hearings will discover where it is and then we on the Canadian side can find out if it is the same over here. Perhaps that might be a job for the Auditor General.

There is no doubt that new techniques and technologies will be created to speed vehicles through the border to make it virtually seamless in the future. If that is the case, again there is no justification for a new bridge.

I found a very interesting article dealing with the impact of one Customs booths at the Tunnel. It was based on a "SIMULATION IN INTERNATIONAL SERVICE – ANALYSIS OF WINDSOR-DETROIT TUNNEL TRAFFIC" undertaken by the University of Michigan. It "provided suggestions for ameliorating, severe delays at a publicly accessible transportation facility, the tunnel between Windsor, Ontario, Canada; and Detroit, Michigan, United States."

Here are the results:

  • "Multiple replications of the model were run and compared under two scenarios typical at the time of the study: (1) five tollbooths open in Windsor and five customs booths open in Detroit; (2) five tollbooths open in Windsor and six customs booths open in Detroit. The two most significant performance measures of the tunnel are time-insystem and the percentage of time that access to the tunnel must be prohibited to vehicles wishing to enter it from Windsor to obey the prohibition against vehicles queuing within the tunnel itself. During the first half of the morning period (5AM - 7AM), scenario 1 was adequate. During the second half of the morning period (7AM - 9AM), scenario 2 quickly became dramatically superior to scenario 1...

    Hence, the closure of just one booth on the Detroit side nearly doubles the average time-insystem and multiplies by more than seven the probability that the tunnel will be closed to entry from the Windsor side at any given moment of time. Tunnel management quickly began to use these results in negotiations with the United States government relative to reassigning, at least temporarily, some military personnel from their regular duties to border patrol and customs duties to prevent severe increases in queuing times...

    the results of this study were a significantly contributing factor to the United States government's decision to add 97 customs officers to Michigan's border crossings vis-à-vis
Imagine therefore what the opening of seven car booths will accomplish!

If you personally want to understand the significance of opening seven new booths at the Ambassador Bridge and want to conduct your own experiment, I suggest that you go to a busy supermarket on a weekend afternoon and see what happens when a new cashier's check-out lane is opened up. They do not build a whole new store to move customers quickly.

How The County Politicians Beat The DRIC City Slickers

The slide above from a PowerPoint presentation made by Sam Schwartz during his first presentation in Windsor will prove to be the key document if there is going to be a lawsuit over the border crossing.

Let there be no doubt about it. The three Canadian Governments--Windsor, Ontario and Federal--may bicker amongst themselves like children dividing up the spoils. However, they are united in trying to force the Ambassador Bridge Company to sell their crossing as cheaply as possible so that any new bridge will be built beside the existing bridge as was done in Sarnia and as is being proposed at the Peace Bridge in Fort Erie.

It has always made the most sense to do that in Windsor going back as early as the position put forward by the Binational Partnership, the predecessor to DRIC. Even DRIC said that the Ambassador Bridge location was the best site on the US side for a new bridge.

I'll come back to this later in this BLOG. Let me first talk about the County Council meeting last night. I must admit that I did not time the DRIC attendance in front of County Council but it was around the 60 minute mark I would guess rather than the four hours plus at Windsor Council. There were some zingers directed towards DRIC so it was not all pleasant but it was not done in a harsh fashion that would gather headlines for the particular politician involved.

I probably learned more listening to DRIC at this session than I did listening to the entire debate at Windsor Council. I learned that DRIC did do their homework respecting the waste known as Greenlink and at least believe that they have a defensible position with respect to the Environmental Assessment.

I also learned that the DRIC process with respect to the border crossing itself can be easily attacked by an experienced environmental lawyer which frankly may mean starting the whole process all over again. When push comes to shove, in my opinion, it was clear last night that DRIC did not do their job.

It is interesting how much information one can gather from a civilized conversation between adults rather than a pseudo-cross-examination session by wanna-be lawyers. The questioning I thought was direct and to the point with each of the various County politicians only being allowed to ask a few questions at a time and in rotation so that each of them had the opportunity to ask what was important to that person. By the end of several go-arounds, most of the key questions had been asked and answered.

It fell to the County Engineer who was asked a question by the Mayor of LaSalle to put a stake in the heart of Greenlink and end it as a viable alternative as far as I was concerned. And he did all within five to 10 minutes of comment.

Let me give a very brief summary of what was said as it came out last night:
  • Dave Wake stated that one of the purpose of the DRIC was to provide new capacity for the border crossing

  • with respect to roadway redundancy, Mayor McNamara asked about connections to the Ambassador Bridge, especially the last two to 3 km from EC Row north to that Bridge. It was his view that if the DRIC road was connected to the Bridge it would improve on redundancy. The answer given was that the Parkway would provide a choice to use the Parkway or to exit at EC Row to follow Huron Church for the last few kilometres to the Ambassador Bridge. Dave Wake said that DRIC always assumed that the Ambassador Bridge would stay in place and serve as an important role in the border crossings. He stated that there was no plan to undertake additional work in the City's portion of the roadway beyond E C Row. [Note: It means no connections for the Bridge Co. to the DRIC road].

  • Mayor McNamara, helping out the City, said that he is concerned with the removal of trucks from city streets and he believed that the City, the Province and the Ambassador Bridge must deal with that

  • it was stated that all alternatives including tunneling and below grade have mitigation measures in place that would reduce noise levels

  • the amount of pollution is the same regardless of the solution and that the air quality of each solution is the same with the same amount of emissions into the atmosphere. The effects of the roadway diminishes after 50 m from the road. It is important to remember that 80% of the pollutants come from sources other than the roadway

  • long tunnels have concentrated pollution at the portals. There is no scrubbing technology that will work and the effect of vegetation is limited

  • Deputy Mayor Burton suggested that if there was a municipal funding component, there would have been a solution by now after three years of study (ie easy for the City to demand entitlement when it has to pay nothing in other words)

  • there was disappointment that the DRIC project does not address immediate traffic problems moving traffic to the Ambassador Bridge. It was confirmed that Windsor has not asked for study about how to do so or that an extension to the Ambassador Bridge be built.

  • Dave Wake said that DRIC was charged with finding a new river crossing, new plazas in both countries and connections to freeways in both countries

  • Wake stated that improving access to the Ambassador Bridge would be accomplished by moving traffic from the Parkway to EC Row. At EC Row and Huron Church, the Parkway then shifts to the west thereby providing a direct access to the new crossing and providing also a high-quality access to Huron Church for the last few kilometres to the Bridge. DRIC therefore has gone a long way to improve access to the Ambassador Bridge because of this split in traffic

  • expropriation costs are to be paid by the Province only and is not part of the eligible capital costs required to be paid by the Federal Government [NOTE: The Provincial share will be over 50% of the total DRIC project cost.]

  • refinements include possible realignment of pedestrian overpasses that may need improvement, putting back some overpasses, looking exactly at where tunnels should be and what parks could look like

  • I did not get the impression that refinements included lengthening tunnels or linking tunnels together. [NOTE: Here is a fundamental difference between the City and DRIC.]. DRIC views tunnels merely as linkage for communities across the corridor; it does not view tunnels as a tool for mitigation for air quality. Air quality improvements are due to eliminating traffic signals, eliminating idling plus the change in fuel standards and emission controls on trucks

  • as far as DRIC was concerned they believe that they followed the requirements of the Environmental Assessment process in a diligent, thorough, and careful way as they moved forward

  • again, a concern was expressed that DRIC did not involve looking at the Ambassador Bridge or study on how to improve the corridor to the Bridge

  • it was to be expected that the new bridge would remove the traffic from Huron Church. It was estimated that there would be a diversion of 40 to 60% of international traffic using the new crossing. Accordingly, it was believed that Huron Church would operate well during the peak hour conditions in the time period up to 2035

  • there was a clear indication that the County was not interested in paying for maintenance of their share of the DRIC greenspace because it would be a very expensive in the future. That issue is still subject to discussion by the Province.

Then the County Engineer finished off Greenlink. He stated the following:

  • the DRIC process went from being just a Transportation focus to looking at more factors by listening to Community inputs
  • he has no major points of concern or issues with the Parkway and believes that it appropriately presents solutions
  • with respect to Greenlink, he said both roads addressed the same core problems: transportation issues, environmental issues and social issues
  • both solutions solve the problems with respect to transportation and capacity to the border
  • all the alternatives improve air quality with Greenlink being equal to the Parkway
  • he said that in the end it all comes down to social impacts which are hard to measure with respect to costs and benefits
  • he effectively put the knife to Greenlink by saying that the social benefits of Greenlink come at a significant cost. What he said also was that he could not quantify the benefits to justify the cost.

So that is what was said in about an hour in a calm and civilized manner of questions and answers rather than grandstanding. It was a treat to watch.

Effectively, the County Engineer saw no advantage of Greenlink over the Parkway and probably thought there were better things that could be done rather than wasting an extra billion dollars to pretend that Eddie Francis achieved something. From the perspective of DRIC doing their job in the EA process, he provides a very good witness for DRIC.

But it was with DRIC itself, that astonished me. As far as I'm concerned, what I got out of this session was that DRIC was told that their job was to find a new crossing. That obviously biased their work since one of the alternatives that is looking more and more attractive these days with reduced traffic volumes is a "no build" solution. The fact that we know from the City meeting that DRIC did not look at a reasonable alternative that everybody knows about, the Enhancement Project, also seems to me to cause major problems for DRIC and the process.

It was the answer with respect to the two to 3 km to the Ambassador Bridge that concerns me the most. Unless that issue is addressed and dealt with properly, we are going to have litigation that will last for a decade costing not only hundreds of millions of dollars in legal fees but also potentially causing massive disruption to the economies of this region and of Canada and the United States!

Look at the Schwartz drawing again. What does it show? Two lanes of traffic on Huron Church Road not the three lanes that exist today. That drawing was done deliberately as a pressure point to tell the Ambassador Bridge Company to sell out or their traffic would be squeezed. Here is part of what I wrote before in a BLOG that I wrote:

  • "Forced Congestion As A Buy-Out Tool

    There's something about Greenlink that just bothers me...

    I can't really figure out why Sam stopped at the expressway and why he didn't go further with the road right to the bridge...

    What I think is a connection north of EC Row is designed to be the last-ditch effort to put the Ambassador Bridge out of business. The road to the border is being done a step at a time and my belief is that it is an effort by all of the three governments combined, Federal, Provincial and Municipal...

    The object is to build a variation of the DRIC road to the new bridge to remove as many trucks from going north on Huron Church Road as possible. Even the million or so local international trucks will be encouraged not to use that road. If that happens, or it seems to be happening, won't that put a squeeze on the Ambassador Bridge company that might force them to sell out?

    How will that be done? Very simply.

    If you remember the drawing that was shown in Sam's first presentation of "Huron Church “Boulevard” – The Champs Elysèes of Canada," the road in that drawing only showed two lanes north and south and not three. It showed a nice bicycling lane and a walkway for pedestrians that must have taken over one lane of traffic. If that doesn't show the City's perspective, then nothing does. Now perhaps the reason why the City is opposed, and has been opposed for the last five years, to any plan on Huron Church road is becoming clearer...

    Ontario Minister Cansfield has has made her contribution to the road issue:

    "People on Huron Church don’t want to mingle with heavy trucks.

    The Government's stated objective was to separate long-haul traffic from local traffic

    They want to have Huron Church as a viable business section again and to maintain economic viability ie have it as a commercial route for tourists, attractions, dinner

    The avoidance of large vehicles on that route is a huge and legitimate issue

    People have had difficult times along that stretch of highway

    Preferred route is a freeway with NO driveways off of it."

    Transport Minister Cannon on Melanie Deveau's show just had to come back and talk about the road during his interview when he said:

    "And of course the Government of Ontario is a partner as well as the Town of Windsor and so we have to be able to, I think, be open minded, listen to everything that has to be said and at the end of the day of course, we are going to make the decisions with the Government of Ontario on the specific design and the architecture of the road. But as I was mentioning this morning in the press conference, you know, I am a former town councillor and so I am always more sensitive to concerns that are brought up by people living in this area. The Ambassador Bridge, I come back to that Melanie just for a second, it is an important issue because you know there is the environmental assessment that they want to do, but at the end of the day there is also the fact that this access road will be going directly through the city of Windsor and I am not, I am not necessarily convinced that that is the right way and the right approach to take."

Effectively, that is what DRIC repeated at County Council. They have not looked at any connection to the Ambassador Bridge other than providing an exit that international traffic can use at the intersection of E C Row and Huron Church. Windsor has not looked at a way of connecting to the Bridge and it is not within DRIC's mandate to do so.

And then when the City closes down one lane in each direction on Huron Church Road as is shown in the drawing which otherwise makes no sense which trucker would ever use that road to go to the Bridge.

There was a bit of sneaky talk at the session as well that those who are uninformed would not understand. In answer to the question of diversion of traffic, the comment made was that 40 to 60% of the traffic would be diverted. That is very consistent with the approach taken by DRIC in the past that the traffic would be split 50-50.

However what they did not say is that most of the traffic to be diverted will probably be truck traffic. After all, if they exit at Huron Church, they will be forced still to deal with all the traffic lights. One only needs to look at the US DRIC numbers to understand that. In other words the most profitable part of the traffic will be diverted away from the Ambassador Bridge.

If that does not spell lawsuit, then I do not know what does. How that is consistent with what Transport Canada said in front of the Senate is beyond me. I guess it is their problem to try to rationalize all this not mine.

But let us assume that the diversion is 50-50 of all traffic, car and truck. Is that a good result for Windsor? Absolutely not! Again if we take DRIC at its word and its traffic projections as gospel, by 2035 traffic will have doubled in this area. What that means is that 50% of the 2035 traffic will still go on Huron Church and be the equivalent of all of the traffic that is on that road today.

If Huron Church cannot handle that traffic today, how can it handle it in 2035?


DRIC has not achieved one of our key objective of removing trucks from City streets and has not built a solution that makes sense for international traffic. It means, in my opinion, that they need to go back to the drawing boards and start over again. What will that achieve other than more costs and more delays and more economic difficulties for Ontario and Michigan.

Senator Cropsey should be fuming, this time at Canadian DRIC!

DRIC is caught in this bind because it has not looked at this issue objectively but rather has written reports to achieve a goal that was predetermined in my opinion. If their job was to build a new crossing, then of course they would not look at the Ambassador Bridge since that helps out the competition and would scare away an investor for a P3 bridge.

DRIC did not openly say that before since the Bridge Company could have immediately sued. They play with numbers and talk about 40 to 60% diversion of traffic without mentioning its doubling (even though traffic volumes are actually declining) and forget to discuss the taking away of the real source of money on the crossings, the trucks.

No matter what DRIC does... their reasons for a new crossing have disappeared and all that they do is keep compounding their difficulties. The civilized County Meeting has done more damage to the DRIC cause than four hours of pretend lawyering at City Council.

No wonder they were instructed to be quiet in Windsor. Someone should have told them to be silent in the County as well!

The road is the last way that the Canadian Governments can try to squeeze the Bridge Company. While not unexpected, now that this is known publicly, it will be interesting to see how the Bridge Company reacts.

I do hope that the Globe and Mail writer was correct. Perhaps the Canadian Government will finally understand the importance of the Windsor/Detroit crossing to our economy, especially considering that the Harper Government is screwing up our NAFTA relationship with the United States:

  • "Ottawa is starting to get serious about the things within its control. Public Works Minister Michael Fortier, for example, is spearheading Canadian efforts to replace the aging Ambassador Bridge, which links Windsor, Ont., and Detroit, Mich., along with approach roads and customs infrastructure. The $3-billion-plus project would go a long way to easing congestion at the busiest trade gateway to the United States."

If this is truly his job, I trust that Senator Fortier can understand that replacing does not necessarily mean building "new" today when it is not justified but can mean "enhancing" as well. If he cannot understand this subtle difference and figure out a solution to it, all that will happen is that a bunch of lawyers will have a very nice profitable and comfortable retirement in the future.

Construction Association Finally Goes Public

It's nice to see the Windsor Construction Association getting involved in border file finally and so publicly. After all, their members and employees will be the prime beneficiaries of a lot of the jobs that will be created when the road to the border is finally started. And if you add in the jobs that will be created with the Enhancement Project, this City will be able to tide itself over for a number of years until we are able to diversify our economy.

I saw their ad in the Saturday Star and frankly am surprised that it appears that the media has not picked up on this yet. It seems that the Association still might be a little bit shy in letting people know that they are taking such a strong public position.

Are you surprised that they are taking the side of DRIC rather than that of the City and its Greenlink project? Given their relatively weak position with respect to the East End Arena I am surprised but I give them credit for finally understanding that things aren't getting any better in this City and they had better do something quickly. At least they are realistic and have not bought into the stall dream of the Mayor and Council.

It will be interesting to see what other groups come out in favor of DRIC and what impact it will have on the Councillors. Note that I referred to Councillors only. Until they decide to put the Mayor in his place or until the Senior Levels say that they have had enough, nothing will get done.

Thursday, June 05, 2008

Matters Of Import

Let me keep you advised respecting some fascinating new stories that I have found for your interest


It looks like our friends at the Blue Water Bridge do like to spend money. I wonder what Brian Masse, the big supporter of a Public Authority for a bridge here, would have to say on this question that was asked by one of his NDP colleagues in the House of Commons. The question was how much money did
  • "Federal government departments and Crown corporations [spend last year] on discretionary items such as iPods, golf balls, flowers and Tim Hortons coupons."

Apparently, close to $600,000 was spent. Of this amount,

  • "The tiny Blue Water Bridge Authority, which manages a federal bridge connecting Sarnia, Ont., with the U.S., alone spent $4,508 on floral arrangements.

    "Some of it is funerals, some of it is birthdays," said David Joy, chief financial officer for the corporation. "It could be poinsettias for Christmas dinner dance and decorations, that kind of thing."

My question for them to answer is how much money, if any, was spent by them on boutonnières for their consulting firm who billed them $7.5 million as the Auditor General disclosed.

  • "to promote the Authority's interests to US and Canadian government officials and politicians, and to provide various consulting services"

After all, they did have to look nice when meeting such important people.


With the 9-0 vote to override Detroit Mayor Kilpatrick's veto, it looks like Detroit Council has decided not to sell/lease/otherwise dispose of the Tunnel in a deal with Windsor. Instead, they are going to go out and borrow money to deal with their budget deficit

In any event a deal does not seem possible by June 30 since the Province of Ontario has not yet determined whether they will make a loan to the Windsor Corporation to provide money to Detroit.

I would frankly be shocked if the Province did so at this time of fiscal restraint for an about to become have-not province.

Does this mean that the Tunnel deal is dead? It should be. However, unless we are told that the Sutts law firm is no longer working around the clock on this transaction, then something must still be cooking. What could it be?

Let's make an assumption, a pretty good one I believe based on the Globe story, that the Minister who visited with our Mayor was Senator Fortier. He obviously would have come down here to talk about Brighton Beach but, since Eddie is such good friends with the Federal Government these days, let's also assume that they also talked about the Tunnel. You see, Senator Fortier is a money boy who worked in high finance and does Eddie ever need financing today.

I also believe that it is necessary, if the DRIC bridge is to be built, for the investor in that bridge to have a monopoly over the crossings in southwest Ontario or at least to know that another crossing cannot undercut it with respect to tolls. After all, with competition, that investor could go broke if tolls are kept low.

Being the cynic that I am, when the Bridge Company tried to do the deal with Detroit to manage the Tunnel, my belief now is that the Federal Government people came down here to talk with the Detroit Mayor to oppose the transaction because it is absolutely essential that for them to control the Tunnel and its tolls.

Let's also assume that the Province will not provide a loan for this transaction. How then would Eddie get financing since the Feds have already turned him down?

Here's what could happen, and I hope for Windsor taxpayer's sake that it does not IF we are at risk for paying back a loan or for guaranteeing the loan of the Windsor Tunnel Company or if the City could lose the Tunnel in a default.

Do remember that our Mayor invited President Cockrel to attend one of his State of the City speeches so they must have some kind of a friendship. President Cockrel is not opposed to a Tunnel deal if it makes sense. Politically, he would be the Mayor if Kwame was removed and may run for Mayor in any event. Remember also that our Mayor committed a faux pas when Hendrix was running for mayor against Kwame that might have cost Kwame the election so there may be no love lost between him and the Detroit Mayor.

It could well be that the Canadian Federal Government will now finance the Tunnel transaction but of course in an amount substantially less than the $75 million discussed. Mind you, the amount talked about in Detroit is now down to $58 million. Of course, if our Government financed the transaction, then the amount payable as fees to outsiders in Detroit would be significantly reduced as well.

What kind of the transaction it would be, I have no idea. Hopefully, it is not a loan but how it would be structured... I'm sure the decision will be political rather than financial if I am correct about the need for controlling the Tunnel and its tolls.

Eddie, on behalf of the Federal Government, may well try and end-run Kwame believing that his ability to conclude any kind of deal is severely limited. Instead, he will deal with President Cockrel to do the deal. Of course, I'm not certain that this can be done legally in Detroit given their form of government but let's assume that it can be.

I am not that far off the mark either. Here is part of a Detroit News Editorial:

  • "Detroit won't be able to borrow its way to prosperity. Now that the City Council has overridden the mayor's budget vetoes, it will have to come up with a responsible way to balance the city budget.

    Papering over a deficit with notes or bonds rather than making tough decisions on spending won't work...

    It's only natural that the council would defend its prerogatives and override this veto. But the key to keeping the budget in balance was Kilpatrick's veto of the council's decision to borrow $78 million to fill a gap in revenues.

    The borrowing is needed because the council rejected the mayor's plan to sell the Detroit/Windsor tunnel.

    Council members said they were not satisfied by the documentation submitted by the mayor to support the sale and the revenue that would flow from it.

    Fair enough. But in opting to borrow to make up the shortfall, council members keep the city on a dangerous financial course that has already drawn unfavorable attention from Wall Street...

    If the council doesn't want to sign off on the sale of Detroit's rights to the Detroit/Windsor tunnel, its members will have to come up with cuts to balance the budget -- not try to hide it with so-called "budget stability" bonds."

There is the perfect opening for a deal with Detroit Council!

Would it be a tough sell for President Cockrel to his Council? Of course it would be since the amount of money would be less than before. Nevertheless, he can structure the transaction by saying that the money would be used to pay down the bonds that would have been issued by Detroit to finance their deficit and which may have cost them a reduction in their bond rating. It would be justified to pay off the debt so that the rating could be increased.

Moreover, I could see it being structured so that it is not a loan and so that that Detroit would not do have to pay back any of the money. Again, that could be the justification for accepting a lower amount. Don't forget, that the Canadian Government seem to like P3 deals.

Given the strained relationship between the Detroit Mayor and his Council, I could see President Cockrel using that animosity to his advantage to demonstrate that Council is ensuring that the City is running properly while the Mayor is involved in his trial activities.

Of course, saving the day for Detroit by completing the Tunnel deal would not hurt President Cockrel either if he decided to run for mayor, especially if Kwame was acquitted and decided to run again or even if President Cockrel ran against other Councillors or others who might want to be Mayor.

Canada gets what it wants without offending the Americans by getting control of the Tunnel by using Windsor as their front and Eddie gets his reward from Senator Fortier, whatever that may ultimately be. At the least, the new Tunnel Company would get $100 million to pay off the IOU to the City I am sure.

And that is how everyone lives happily ever after.


In case you missed it, here is a copy of the letter sent by John Middleton's lawyer, Claudio Martini, to the City of Windsor.

The question now is whether the City will back off and reinstate Middleton, or at least give him the opportunity to hear the charges against him and to try to rebut them, or will dare him to sue.

I wonder which day in court John will get to set out his side of the story. In front of Council or in front of a real judge.

  • The City of Windsor
    Chief Administrative Office
    350 City Hall Square West, Suite 201
    P.O. Box 1607
    Windsor, Ontario
    N9A 6S1

    Attention: Mr. John Skorobohacz, Chief Administrative Officer

    Dear Sir:


    We have been retained as legal counsel to John Middleton.

    Mr. Middleton has served as a volunteer member of the Windsor Citizens Crime Prevention Committee for nearly five (5) years. Most recently, Mr. Middleton served as Chairman of that Committee.

    By correspondence dated April 22, 2008, Mr. Middleton was advised that he was being removed forthwith both as Chair and as a member of the Crime Prevention Committee.

    Mr. Middleton has since that time requested particulars of the allegations made against him resulting in his removal, evidence in support of those allegations; and an opportunity to respond to those allegations. Unfortunately, these requests have been denied.

    The principles of natural justice and due process require an individual to be provided with particulars of allegations of misconduct and further be provided with an opportunity to defend himself prior to the imposition of sanctions. In this case, the City of Windsor has seen fit to impose sanctions without providing any particulars or evidence whatsoever and without providing Mr. Middleton an opportunity to respond to the allegations. This is inappropriate and unlawful.

    This wrongful conduct on the part of the City of Windsor has resulted in a diminution and tarnishing of Mr. Middleton’s reputation within the community.

    On behalf of Mr. Middleton, we hereby request his removal as Chair and member of the Crime Prevention Committee be immediately revoked. If the City of Windsor is intent on proceeding with the allegations of alleged misconduct by Mr. Middleton, we hereby demand full particulars of those allegations so that Mr. Middleton can review the allegations and the supporting evidence and be allowed the opportunity to properly respond and defend himself.

    Please also treat this correspondence as notice on the part of Mr. Middleton of an intention to claim damages sustained by him to his reputation in the community as a consequence of the wrongful acts noted above.

    We do require your immediate response.

    Yours very truly,



Why DRIC Was Silent At Council

It was all very strange don't you think. The performance by the City's outside counsel demolishing the DRIC proposal by showing how they violated the law. The brilliant cross-examination by our City's Perry Mason, our lawyer/Mayor. The incisive and trenchant questioning by Councillors.

And then the DRIC representatives... the high-priced, out-of-town experts who seemingly failed in the most obvious and simplest of tasks. They did not look exhaustively at the Greenlink Road proposed by the City and then failed to explain satisfactorily why they did not do so. They sat there stuttering as they were being demolished over a period of several hours.

Why, if you read the Letters to the Editor selected by the Editorial page Editor of the Star, one ought to be strapping on a "W" and cheering the efforts of this Mayor and Council to stand up for the quality of life in Windsor in the face of impossible odds.

Of course now we can be pretty certain that there was something going on behind the scenes. Exactly what, who knows! This whole border file is becoming more and more convoluted as time passes.

However, it is clear after the Star article "County less hostile to DRIC border plan" that the DRIC reps were instructed to keep their mouths shut and allow the City to dump on them. They had an answer to all the questions that were being asked at the Monday Council meeting but chose not to give them clearly and straight out. I watched their attendance at County Council on Cogeco and they did not have any problems answering questions. I'll talk more about that in another BLOG.

Oh well, when the DRIC road is killed and we get an upgraded and uploaded EC Row then we will understand why. Speaking of the expressway, several people have commented to me that it appears as if a third lane is being added to the roadway at least in the area of the construction. Perhaps someone can explain what is actually going on there.

Back to the Star article. Here are the relevant parts:
  • "Baxter said he's still trying to figure out what additional benefits are in GreenLink to justify almost $1 billion more in capital cost...

    While many elements of GreenLink and the parkway as now designed are similar, Wake said DRIC's analysis didn't find significant environmental benefits warranting almost $1 billion in additional cost in the city's GreenLink plan.

    The parkway proposal has 11 tunnels with a combined length of about 1.9 kilometres, but none exceeding 240 metres.

    GreenLink has six tunnels, but with a combined length of about 3.8 kilometres.

    Wake said the critical factor for tunnelling is the need for ventilation systems when length exceeds 240 metres. However, the air quality improvements from the additional tunnelling are minimal, Wake said. The main benefits of tunnelling are the improved local connections of roads, more parkland and trails, he said.

    Most of the air quality improvements for either GreenLink or the parkway come from eliminating stop-and-go truck movements and idling now common along Huron Church Road, Wake said.

    Even an end-to-end tunnel creates relatively little additional benefit in air quality for almost $4 billion in capital cost, Wake said."

As far as significant changes go, there can be "refinements" to the DRIC plan that would be allowed, and this may be Eddie's face-saving way out:

  • "Changes to the parkway plan to improve connections between neighbourhoods, to add parkland or extend trails can be made if justified, Wake said."

It really was very easy to knock out Greenlink. It was the same tactic used with respect to DRTP and the Ambassador Bridge but now applied to the City's proposal. DRIC determines the criteria and then disqualifies a proposal if it does not meet its criteria. It's really as simple as that.

With respect to DRTP, DRIC wanted six lanes of traffic while DRTP could only provide a maximum of four. The elimination of the Ambassador Bridge proposal was a bit more subtle... DRIC decided what they thought the proposal should be with respect to a new bridge at the existing site (which bore no relationship to what the Bridge Company proposed) and then eliminated it because it was going to destroy a good part of Sandwich.

In the case of Greenlink, DRIC determined that no tunnel should be longer than 240 m. Since several of Greenlink's tunnels were longer than that, then Greenlink was disqualified--poof, gone!.

Moreover, and I think that this is the real key to ignoring Greenlink, the reality according to DRIC is that a full tunnelled solution does not offer much improvement over what they are proposing at a cost of several billion dollars more than the DRIC road. I know that the Mayor does not like to talk costs but unfortunately we poor taxpayers do.

Just keep watching. We will learn soon I am certain why Sandra and Dwight did not want to go after Eddie at this stage. I do hope that Eddie remembers, if he chooses to litigate, that one day he could be answering questions fired at him by lawyers who actually have been in practice for a good number of years.

It is certainly not as much fun as doing the questioning when you are sitting in the Chair at the head of the Chambers and being called Your Worship.

Wednesday, June 04, 2008

Windsor's New Radio Stations

Who will really be wearing the "W" in Windsor media in the future in a real and positive sense? Which media group has a negative view of this City and its future and which one has a positive view? Which media group is prepared to put in big bucks into Windsor and to provide another voice for this community.

Gee, if I play it right, which media group might want to hire me to do on-air, editorial-type commentaries about the City of Windsor. [Hint, hint!] After all, I can let my eyebrows grow as long as those of Andy Rooney.

I'll let you, dear reader, decide that for yourself after reading below a transcript of the CRTC hearings with respect to licensing of new radio stations in Windsor.

In May, the CRTC ruled:
  • "Licensing of new radio stations to serve Windsor, Ontario

    The Commission approves the application by Blackburn Radio Inc. for a broadcasting licence to operate a new FM radio station to serve Windsor. The Commission also approves the applicant’s request for an exemption from the regulatory requirement regarding the level of hit material that may be broadcast.

    The Commission approves in part the application by Neeti P. Ray, on behalf of a corporation to be incorporated, for a broadcasting licence to operate a new FM ethnic radio station to serve Windsor. Within 90 days of the date of this decision, the applicant must submit an amendment to the application proposing the use of an FM frequency other than 95.9 MHz (channel 240B1) that is acceptable both to the Commission and the Department of Industry."

In doing so the Commission stated:

  • "Although the Commission recognizes that incumbent Windsor radio services would experience some negative economic impact from the licensing of new stations, it is satisfied, based on the evidence set out above, that the Windsor radio market could support the licensing of one new commercial radio station and one niche radio station (one not directed to a mainstream audience) without becoming unprofitable."
It pointed out as well what Blackburn was prepared to offer
  • "The Commission considers that Blackburn’s proposal for a local country music station represents a viable business opportunity that would add diversity to the Windsor radio market and that could repatriate Windsor area residents who tune in to Detroit area stations. Further, the Commission notes that Blackburn’s proposal would introduce a new Canadian news voice to the Windsor radio market, and considers that the applicant’s proposed levels of spoken word and news programming would ensure an additional source of Canadian radio programming in Windsor. In addition, the Commission considers that Blackburn’s regional presence would allow for economies of scale in the highly competitive Windsor radio market dominated by CTV. Finally, Blackburn committed to devote, over and above the basic annual contribution to CCD [Canadian content development], a total of $1,001,000 to CCD over seven consecutive broadcast years."

The Blackburn station I believe is going to be known as "WOLF" and will be country music. it will be on 95.9 FM with their website probably being

  • "The proposed station would offer a New Country music format targeting listeners between 35 and 64 years of age, with a core audience 35 to 44 years of age, skewed slightly towards women."

However, the interesting thing to me about the Application by Blackburn was the action of CTVglobemedia to oppose it.

In case you did not know it

  • "CTVglobemedia Inc. is Canada's premier multimedia company with ownership of CTV, Canada’s #1 television network, and The Globe and Mail, Canada’s #1 national newspaper. CTV Inc. owns and operates 27 conventional stations across the country, with interests in 35 specialty channels, including Canada’s #1 specialty channel, TSN. CTVglobemedia also owns the CHUM Radio Division, which operates 35 radio stations throughout Canada."

As of today, in our area, it owns the following media outlets:

  • CTV Southwestern Ontario (Kitchener/London, ON - CKCO)
  • A-Channel Windsor

Now I know why CKLW advocated for a strap-on "W." That commentary about Bloggers that I found offensive personally was probably a subconscious message directed to the management of CTVglobemedia!

Talk about negative whiners and naysayers about Windsor...We Bloggers are mere amateurs compared with the Doom and Gloomsters from CTVglobemedia.

I'm going to set out what was said at the CRTC hearings by the CTVglobemedia people. Compare and contrast what Blackburn media is prepared to do for this area, including the number of new jobs that will be created.


2595 MR. ROMAN: And thank you. Good afternoon, Madam Chair, members of the Commission and Commission staff.

2596 My name is Duff Roman, Vice‑President, Industry Affairs for CHUM Radio.

2597 I am joined on my right, your left, by Eric Proksh our Vice‑President and General Manager of our Windsor radio stations. With his 19 years of experience in this market he has become intimately familiar with the challenges of the Windsor radio market.

2598 On my left, your right; is Carrie French, our Vice‑President Business Analysis. Carrie will answer any questions on our market and economic research.

2599 We will now begin our presentation.

2600 CHUM Radio's reasons for opposing the Windsor radio applications are clearly outlined in our written intervention. We are here today appearing as intervenors because, just like the Windsor market itself, these are unique circumstances. We do not believe that the economic conditions within the Windsor radio market can support any new radio stations.

2601 Operating radio stations in the Windsor‑Detroit market has always been a delicate balance. By the late seventies Radio Windsor, then owners of today's CKWW and CIMX FM and Russwood Broadcasting, which owns CKOW and CIDR FM, were losing significant amounts of money.

2602 The Detroit operators of some of the largest U.S. radio players seized every business opportunity, duplicating any Windsor format that showed promise and outspending the Windsor stations on talent, marketing and promotion.

2603 By July 1984 the Commission initiated a special hearing with the Windsor operators, representatives of local business, the Ontario government and the Canadian music industry all figuring prominently. We had spent half the day discussing Windsor as though it was any market in Canada. I vividly recall the hearing being recessed so that all participants could walk out to the parking lot of the Holiday Inn on the banks of the Detroit River where they could all see the looming presence of the Renaissance Centre a scant 1,000 metres away. It was a revelation.

2604 The result was the Windsor Radio Review in which the Commission acknowledged that the environment within which Windsor's stations operate offers special circumstances and that a flexible approach is desirable.

2605 Thus, with some optimism CHUM entered the Windsor market in September 1985 with the purchase of the CKWW and CIMX radio stations. However, even with the unique regulatory approach adopted by the Commission, the de facto small market of Windsor with upwards of 80 percent of tuning going out of market and out of country left both CHUM and Amicus Communications who had acquired Russwood Broadcasting in the interim during the same year, remaining unprofitable.

2606 It was clear that the market could not support two corporate groups and it made sense to consolidate the four radio stations. Consequently, in 1993 CHUM applied to the CRTC for approval to purchase CKLW and CIDR FM.

2607 In a public hearing that was informed by the new directions of the Windsor Radio Review and the stark characteristics of the Windsor radio environment, CHUM was granted an exception to the ownership policy with the approval to operate two FM and two AM stations in the same market. At the hearing CHUM undertook to operate the four stations in four diverse formats.

2608 Today, we operate an All Talk station, an Oldies station, a Triple A station and an Alternative Rock station. It took many years and lots of hard work and innovation but we were able to achieve financial success as an integrated whole.

2609 However, as the Commission can verify, not all of our stations have been able to turn the corner. The success we have had in this market is due to the ability of our stronger stations to support the struggling stations and, in no small way, the flexibility provided by the Commission. This is a delicate balance that could easily crumble with the addition of any new radio stations.

2610 MR. PROKSH: The environment that Windsor radio stations operate in today is much more competitive than it was at the time of the Windsor Radio Review. Now, over 58 U.S. radio signals penetrate the Windsor area. Large and well known U.S. broadcasters such as Clear Channel have seven radio stations in Detroit and approximately 800 across the U.S. and CBS has six radio stations in Detroit and approximately 150 stations countrywide.

2611 A simple statistic demonstrates the unique channels of the Windsor market. Canada‑wide only 3 percent of total tuning is to U.S. stations. In Windsor this number increases to 50 percent, whether we like it or not the practical reality of operating a radio station in Windsor means competing against large, well‑financed and unregulated Detroit radio stations.

2612 We are operating in a radio environment comprised of 64 radio stations of which only six are regulated by the CRTC. And it remains the case today, as it was in the 1970s, that Detroit stations will duplicate a Windsor format that shows promise and use their resources to outspend our stations on talent, marketing and promotion.

2613 The realities of the Windsor market have meant that if we are to be competitive and attract as many Windsor listeners as possible, we have needed to take a different approach for this market than the other local communities which we serve. Windsor and Detroit are homogeneous markets and to be competitive we need to recognize the impact that Detroit stations have on the Windsor stations. There is no border on the radio dial. If the listeners like the programming, no matter where it originates, they will listen to it.

2614 The truth has long been recognized by the Commission, first, in the Windsor radio review and in the Commission's subsequent decisions relating to the Windsor market. Moreover, our experience in Windsor has shown that it is the only way to succeed and be competitive in a radio environment that is inundated with 58 American radio signals.

2615 MS FRENCH: I want to turn now to Blackburn's analysis that the impact on the incumbent stations in the market would be minimal if the Commission were to licence their proposed station.

2616 First, the revenue of the Windsor radio market has been considerably over estimated. And starting with over‑estimated numbers for the market has lead to over‑estimated revenue projections for the proposed station.

2617 Second, if as Blackburn says in one part of their application, the minimal impact on CKLW will be two share points, that equates to half a million dollars. We don't regard that impact as minimal.

2618 Third, referencing the BIA Report for the Detroit market Blackburn states that Detroit is a much more robust radio market than Windsor. However, the report actually says:

"The Detroit radio market will have seen a decline in revenue of about 16 per cent from 2004 to 2009." (As Read)

2619 This does not meet the definition of robust.

2620 MR. ROMAN: While Windsor and Detroit's highly integrated media market is one reality of operating radio stations in Windsor, the other reality that must be heeded is Windsor's economic dependency on Detroit. This fact is demonstrated by the automotive industry, an industry that is shared by both Windsor and Detroit.

2621 Windsor, known as the automotive capital of Canada, is home to the headquarters of Chrysler Canada. Chrysler stopped producing the Pacifica in late November. The Ford engine plant closed its doors in the same week. The GM plant operates with minimal staff and may not be open much longer. The trickle‑down effect of these closures will have a negative impact on the tool and dye shops and automotive parts manufacturers located in Windsor.

2622 Windsor's reliance on the automotive industry as a major employer means that any downturns in this sector have a tremendous effect on the city's economic health.

2623 Recent news headlines have highlighted the troubles in the automotive sector. The big three automakers slashed their North American output by roughly 1.9 million vehicles over the last three years. And right here in Ontario, according to Ward's Automotive Reports, output is expected to slide by a further 600,000 vehicles over the next five years.

2624 In addition, almost 6,000 jobs have disappeared in the first seven months of this year alone. Last week, the front page of the Windsor Star carried the headline "City's Outlook Called Bleak." The CIBC World Markets report ranked Windsor as having the worst economic outlook of Canada's two‑dozen largest cities, citing downturns in the local manufacturing sector and a weakening U.S. economy. Windsor is facing major challenges.

2625 This economic reality must be taken into account in determining whether the Windsor radio market can absorb the impact of a new station. We recognize that the Commission has recently licensed stations in markets that were less than robust. But when it did so, the potential future growth of those markets played a major role in those decisions.

2626 And what works in other Canadian markets does not work in Windsor. Other Canadian markets do not consist of 64 radio stations where 58 are out of country competing for the same audience that our stations serve. The Commission has long understood that reality and reflected in their Windsor‑related decisions.

2627 In conclusion, we believe that the Commission should deny the applications before you for the following reasons. First, the highly integrated radio market of Windsor and Detroit which had been recognized and accommodated by the Commission must be taken into account in assessing whether the market can absorb the impact of any new radio stations.

2628 And, second, the applicants' overestimation of the Windsor radio market revenues has lead them to overestimate projected revenues for their proposed stations. The facts don't support their projections.

2629 Third, the Windsor radio market is economically challenged, Michigan's economy is in a slide, Michigan has one of the highest levels of unemployment in the United States and, as the largest city in Michigan, Detroit is also suffering.

2630 All these factors lead to the inescapable conclusion that the current conditions are not right to licence any new radio stations.

2631 So we would like to thank the Commission for the opportunity to appear before you today and we welcome any questions you might have.

2632 THE CHAIRPERSON: Thank you, Mr. Roman, and to your colleagues.

2633 So if I hear you correctly, what you are telling us to do is to continue to look at Windsor in a unique way, to not look at Windsor as simply a market where one broadcast group owns four radio stations, period, but rather to look at it as a market where one broadcast group owns four radio stations and competes with 58 stations across the border. Which, I do have to concede, as a radio listener, is unimaginable to me that I would have a choice of that many radio stations.

2634 But that is essentially your position, correct?

2635 MR. ROMAN: (nodding)

2636 THE CHAIRPERSON: Okay. You did say in your oral presentation that we have taken a unique regulatory approach to the Windsor market and we should continue to do so. CTV has been able to take full advantage of that unique regulatory approach in the conditions of licence of your radio stations in this market.

2637 You also say that in your written intervention, you certainly repeated it today, that if we were to grant Blackburn their request it would not be in compliance with our common ownership policy.

2638 Why shouldn't we take a unique regulatory approach to the common ownership policy in Blackburn's case as well?

2639 MR. ROMAN: Well, first of all, I think that the history and the trail that has lead from those early days in Windsor‑Detroit to the Windsor radio review onto the groundbreaking decision that allowed CHUM at that time, now CTVglobemedia, to own four stations is a lesson that really isn't that remote. We do a very delicate dance.

2640 We promised to undertake that we would operate four stations. The discussions those days would be close the unprofitable ones, for instance, CKWW. And there was some other discussions that were undertaken and we took a solemn position, not a condition of licence, but an expectation that we would maintain four diverse services.

2641 Today, we have one essentially break‑even FM, we have an AM that has continued to lose money, we have an AM and an FM that are essentially carrying the freight. Our suggestion to you is that now is not the time to upset that delicate balance, the economic conditions are right. And considering an exception to the rule, we think that the timeliness is not there. That what you have constructed ‑‑ and this is a great success story in my opinion ‑‑ is still very fragile.

2642 And, if I may, we don't operate in a market with infinite horizons. We are in a situation where we have to operate in niches, it is like Whac‑a‑mole. The minute we raise our heads above sea level a competitor in Detroit will duplicate the format and take it away.

2643 And I think I could have Eric maybe even discuss some of those situations that we have had to deal with where we get to a 4 or 5 per cent share and someone comes in unregulated and simply takes it away. That is a reality that won't go away. We can't keep growing the market, we can only take it to a certain finite level and then that 58‑station competitive factor kicks in very big time.

2644 THE CHAIRPERSON: But before we do that and just so I don't lose this track, you said the economic conditions, currently, do not grant the conditions necessary for an exception ‑‑

2645 MR. ROMAN: Yes.

2646 THE CHAIRPERSON: ‑‑ to the common ownership policy. We have heard from the Blackburn applicant that it is a blip and that Windsor goes through this all the time, it is cyclical, the economy in Windsor can be buoyant.

2647 Are you, therefore, suggesting that if the Windsor economy does improve then that would be the time at which we could look at an exception to the common ownership policy?

2648 MR. ROMAN: Depending on the depth of improvement, I would suggest to you that that would be the appropriate time for re‑examination of allowing a new entrant into the Windsor market, yes.

2649 THE CHAIRPERSON: I mean, CTVglobemedia is a big enough company that it can adjust or it can react to the kind of economic conditions that we are talking about as well as the changes in format from the U.S. stations. Is that too big of an assumption for us to make?

2650 MR. ROMAN: Well, I think that we look at all of our markets as, hopefully, being able to pay their own way and carry the freight and, certainly, Windsor is no exception. And, for us, the fact that we are able to maintain four discreet services is because we have the strong stations supporting the weak stations.

2651 So are we big enough? How long would we want to carryon with that? I mean, these are questions I think we grapple with every quarter of every fiscal year in terms of what we ourselves are going to do with this economic downturn in Windsor‑Detroit. It is a real issue for us and it is just really starting to kick in now. And the probabilities don't look good on the horizon that it is going to be a short‑term thing.

2652 I mean, plant closures are different than layoffs. And with the automotive industry under attack and heavy pressure, these are sea changes that are going through a major fundamental backbone industry to the Windsor economy. So I think both the regulator and the licensees are going to have to look very carefully at how they deal with this situation as it evolves.

2653 THE CHAIRPERSON: Now, you consider the Blackburn station out of Chatham to be a Windsor station essentially.

2654 MR. ROMAN: For all intents and purposes, yes.

2655 THE CHAIRPERSON: For all intents and purposes. And you have the same view of their Leamington station? I know that their Leamington station does come into the Windsor market, but it does not have the same conditions of licence as their Chatham station does.

2656 MR. ROMAN: Well, I would ask either Carrie or Eric to respond in terms of how Leamington impacts us in Windsor.

2657 MS FRENCH: Well I think, Madam Chair, it has been a recent development that the programming on Cheer has been directed towards Windsor. They do sell within the market, they do advertise for listeners within the market and they sell as a Blackburn combination of two stations in the market.

2658 So it is an everyday reality that we deal with, both with our audience and with our advertisers. So I think an illustration of the fact that it is being considered a Windsor station is in the software that most sales people in Canada use for radio is called air ware, both Blackburn stations are included in the Windsor market. And when you are not an originating station, you have to pay extra to be included.

2659 THE CHAIRPERSON: So obviously, what you are saying it is important enough for them to be included, that they pay to be included?

2660 MS FRENCH: Absolutely.

2661 THE CHAIRPERSON: Okay, thank you.

2662 Do my colleagues have any questions?

2663 Commissioner Menzies.

2664 COMMISSIONER MENZIES: You used the adjective unregulated when you referred to the Detroit stations and their stealing of formats and that sort of stuff. Is it the regulation that keeps you from competing in the Windsor‑Detroit market?

2665 MR. ROMAN: Well actually, it is the CRTC's flexible regulation that does allow us to compete in the Detroit market. We operate at 20 per cent Canadian content, we have a realistic spoken word requirement, and it allows us to operate in niches. So we can take a certain format to a particular level I think by very intelligent programming.

2666 But as it reaches a certain share point of say 4 or 5 per cent, it is then that the American stations take notice of us and they simply say, well, there is something that is showing some success, why don't we go after them by playing anything that we choose to play rather than having to make sure that you accommodate 20 per cent or 35 per cent Canadian content.

2667 It is a war of attrition. It won't show up in the first day or the first week, but certainly there has been a monumental change in the way Windsor's radio history was shaped with The Big Eight when it was incorporated into the Canadian content regulations. And that was the beginning of the corporate difficulties we had when the stations in the U.S. realized at that time these relatively unknown records, it was a very fragile music industry at the time, were occupying 30 per cent of their play list. It took them about 18 months, but they basically pushed them right out of that niche.

2668 COMMISSIONER MENZIES: Thank you for that. But what I am trying to get at a little bit is if you didn't even have the 20 per cent would you be able to compete or would it still not be manageable?

2669 MR. ROMAN: Well, if we had the same level playing field as the Americans, we would put ourselves up against any of them, yes, absolutely. I mean, essentially, there are things that would characterize us as a Windsor station, our local service to Windsor. But in areas of being able to present what is required in terms of our play list, its assembly, where we go with it, I think that it probably would always have a very very significant amount of Canadian talent because the music industry has matured and is providing some really great records.

2670 But the difficulty, and I don't know if you want to go there Mr. Menzies, but is that we have to do this week in and week out. Some weeks there are all kinds of new Canadian releases, but then we will have weeks where there are none. But the quota system requires you to always play, whether it is 20 per cent in Windsor, 35 or 40 per cent in the rest of the country, and those are the challenges.

2671 And what happens is if you dropped in on an unregulated player or 58 unregulated players, then you get a situation where they can gang up on you or they can target you directly, and it doesn't happen overnight, but eventually it does have its effect.

2672 COMMISSIONER MENZIES: Okay. And I am just trying to get my head around ‑‑ Blackburn is comfortable with 35. And I have got information from you that says 20, especially the way it is done on a weekly basis, is a bit of a tight collar. How do you suggest I view that difference in perspective?

2673 MR. ROMAN: Well, I think that I will ask either of my colleagues to address here. But what we think will happen is that the Windsor market, as I say, has finite limitations, it can't grow above a certain level. Because what happens when you get to a certain level is that you attract the attention of major competition, is that we will all be winding up eating from the same table, we will all be winding up in a situation where we will have to take the advertising wherever we can take it.

2674 And whether it is 35 per cent with a station with low overhead coming into the marketplace and filling a perceived niche, we will windup going after, I think, a lot of the same advertisers.

2675 And I would ask Eric to comment on that.

2676 MR. PROKSH: I don't have much more to add, but I think the same is true, we will probably end up cannibalizing the Canadian advertising in Windsor. As Duff pointed out, not all of our stations are profitable at this time. And to have a new player in the market, it is hard for me to realize that that wouldn't happen.

2677 COMMISSIONER MENZIES: But you sell advertising in Detroit, right?

2678 MR. PROKSH: Yes, we do.

2679 COMMISSIONER MENZIES: And I am sure it is here someplace, but just remind me what percentage of your revenue that is?

2680 MR. PROKSH: It varies by each station, but our total revenue would be approximately 40 per cent in the U.S. But we do have separate rate cards. The U.S. is a much more expensive market, being in the top 12 or 13 largest markets in the U.S. The cost per point in that market is substantially higher than in Windsor and we have a much lower rate card for Windsor.

2681 COMMISSIONER MENZIES: So U.S. advertisers are subsidizing Canadian advertisers more or less on your station?

2682 MR. PROKSH: If you want to put it that way. They pay the market cost that is relative to the Detroit market in Detroit.

2683 COMMISSIONER MENZIES: Okay. Thank you.

2684 MR. PROKSH: Thank you.

2685 THE CHAIRPERSON: Thank you, Mr. Roman, and to your colleagues, thank you for your intervention here today.

2686 MR. ROMAN: Thank you for your time.

2687 THE CHAIRPERSON: Madam Secretary.

2688 THE SECRETARY: Thank you, Madam Chair.

2689 This concludes Phase 3.

2690 We will now proceed to Phase 4 in which applicants can reply to all interventions submitted on their applications. Applicants appear in reverse order.

2691 We would then invite Blackburn Radio Inc. to come forward to the presentation table if they wish to participate in Phase 4.


2692 MR. COSTLEY‑WHITE: Good afternoon, Madam Chair, members of the Commission and Commission staff.

2693 My name is Richard Costley‑White. I am here with the colleagues I introduced in Phase 1, they are Terry Regier, Walter Ploegman, Sue Storr, Rod Martens, Lori Baldassi, Jason Ploegman, Carl Veroba, Debra McLaughlin and Mark Kassof. We are here present our reply to the interventions to our application.

2694 The supporting interventions, the research studies we presented, our experience in Windsor and recent announcements by public officials present a much different view of the market than does Canada's largest private broadcaster.

2695 MR. REGIER: Much has been made of the recent economic difficulties in Windsor, including the Windsor Star report on CIBC's rating of this market. This news is a matter of concern to all of us Winsorites.

2696 Every Wednesday, The Rock invites the Mayor of Windsor on air to talk about the city. Last week our host asked him about the CIBC article and here is a part of his reply:

"So, yes, we are going through a perfect storm, we've been through storms before, absolutely. Will we come out of this one? Absolutely. We have strengths that we did not have before. We have a well‑developed, skilled workforce, we have a very important and critical tourism facility that is being built right now and that's the convention centre on the new Caesars property. So we have the best location, we have the tools and we have the strengths and we'll be positioned to come out of this stronger. But it's going to be hard for the next little while and that's something that everybody in Windsor I believe, and in this county ‑‑ it's not just Windsor, but it's in the entire region, it's something that everybody in this region I believe understands and is going through right now." (As Stated in Audio Presentation)

2697 MR. REGIER: We have provided you with a CD of the complete interview. The Mayor agreed that we have been through some tough times, but notes the difference with past economic downturns.

2698 Windsor has put in place structures to diversify our economy. CTVglobemedia stated in their written intervention, at paragraph 32, they believe and I quote:

"It is strategically necessary to treat Windsor and Detroit as a homogenous market." (As Read)

2699 They obviously don't agree with the 72 per cent of those who think Windsor is a unique market. Windsor and Detroit are different cities with different demographic, economic, social and cultural make‑ups.

2700 CTV provided a series of band news clippings to support their thesis. What they ignored is a diversification that happened over the years and some of the recent good news. Windsor's bond rating was raised from AA minus to AA, as reported in the Winsor Star on November 20.

2701 Data from the Canada employment office demonstrates that each job lost in the downturn is replaced by at least one new job. Per household income has increased at the same rate as the rest of Canada from 2004 to 2007 according to FP Markets.

2702 The CMI report filed by CTV notes that the Conference Board predicts growth for 2006 and 2007, minimal growth, but growth nonetheless. And the projections for the years 2008 and later are for more significant growth.

2703 I would like to ask Debra McLaughlin to add further comments here.

2704 MS McLAUGHLIN: Much of the focus of the discussions on the economics around this process has been on where Windsor has been. I think the focus is properly placed in the future.

2705 According to the Conference Board winter 2008 data from second quarter 2008 and onward GDP is projected to be positive. Despite the downturn in the automotive sector, growth in personal income in 2007 is expected to be positive, evidence of diversification.

2706 Further, growth in income is to rise to 4.2 per cent in 2008 and by 2009 be 3 per cent. This growth feeds the positive retail sales we discussed earlier. A balanced look at Windsor's economics would reveal a difficult current situation, but a future that is characterized by growth and not prolonged decline.

2707 Rod.

2708 MR. MARTENS: CTV suggests in its written intervention that the situation today is worse than it was in 1984, more U.S. stations with a "detrimental impact on the amount of tuning and revenues that Windsor stations garner." This is a misread of the actual situation.

2709 In 1984, Detroit radio stations dominated tuning and all four of the radio stations in Windsor were losing money. At that time the commercial Windsor stations received a total of 20 percent of hours tuned.

2710 In the fall 2007 BBM ratings, Canadian private radio stations received 37 percent of all hours tuned.

2711 In Decision 2003‑603, the Commission stated that the four then CHUM‑owned stations had been growing in revenues and profitability since 1999 and that their PBIT margins had exceeded the national averages for each of the previous three years.

2712 CTVglobemedia states that national advertisers do not want to buy Windsor stations since there is not enough reach by Canadian stations to justify this.

2713 Commissioner Menzies noted Windsor is hard to buy due to all the stations but Canadian advertisers cannot buy most of these stations since Detroit rates are four times that of Windsor.

2714 CTV's prescription is not to license more players in the market but we would suggest a market‑driven strategy: License more Canadian stations, aggregating Windsor audiences, and we will reach the required critical mass.

2715 Our own experience would seem to indicate that this kind of strategy works.

2716 In the spring of 2004, before The Rock provided a reliable signal in the market, private commercial Windsor stations received a 35.9 percent of all hours tuned 12+.

2717 A year later, in spring 2005, after the launch of The Rock in the market, the total hours tuned 12+ grew to 39.3 percent.

2718 The difference was above and beyond The Rock's share. In other words, the entry of a new station meant growth in total tuning to Canadian stations.

2719 MR. REGIER: CTV also makes a number of contradictory arguments.

2720 At one point in their written intervention they indicate that Blackburn has no experience in the challenging Windsor market and only they know what it takes but elsewhere they claim that our part‑time Windsor repeater CKUE and our out‑of‑market Leamington station CHYR have had an impact on their business.

2721 Put differently, we don't know what we are doing but somehow we are hurting them. In act, we have operated successfully in markets with multiple U.S. signals and know the trick to winning: local service and attention to your home market.

2722 We are not hurting them in Windsor. As demonstrated in our written reply, the only reason their four stations' combined share is down is that they switched from an AC format in Windsor to go triple A because of low ratings in Detroit.

2723 CTV indicates that their fear is that we will fail in the country format and then switch formats to come after one of their stations. We are very confident that we will succeed in the country station in Windsor.

2724 The Kassof research is clear. We have the potential to draw 7 percent of hours tuned in the market with a country station. Our decision was to be cautious and so we built our business plan and we built it on a modest 3 percent of tuning in our first year of operation and only reaching 8 percent by the seventh year.

2725 The U.S. country stations drew 9.6 percent of hours tuned in the spring of 2007 and we are confident we can repatriate a significant portion of these hours.

2726 We have done this before in Windsor. Before The Rock launched in 2004, U.S. mainstream rock stations drew 12 percent of hours tuned in Windsor. In the fall of 2007, The Rock drew 4.8 percent of hours tuned in Windsor and was the highest‑rated mainstream rock station in the market. Detroit rock stations drew a 5 share in points, less than in the spring of 2004.

2727 But even if we did stumble, why would we chase after their formats? The Kassof research shows that there are a number of format opportunities in the market, mainstream AC, the format abandoned by CIDR, despite shares as high as 8 percent of 12+ tuning in the Windsor market.

2728 At one point in their written intervention CTVglobemedia indicates that there should be concern because the Detroit radio market is in decline and Windsor stations will likely see less revenue from the Detroit advertisers.

2729 The implication seems to be that Canadian listeners in Windsor should have fewer local radio choices because CTV might not be able to draw as much money from Detroit as in the past.

2730 Madam Chair, members of the Commission, Canada's largest broadcaster, with four radio stations in the Windsor market, two regional television stations and an impressive stable of specialty services, came to you asking to continue to be sheltered not from the Detroit giant but from Blackburn Radio Inc., one of the decreasing number of regional broadcasters.

2731 MR. COSTLEY‑WHITE: I would like to thank the interveners who wrote in support of our proposal. They include musicians who spoke to the support our Windsor Rock station provides and the need for a local country station. Community service groups spoke of the support that The Rock has brought to them and advertisers spoke of the need for new advertising choices.

2732 I would particularly like to note the comments from intervener Pat Lewis of the Windsor Department of Parks and Recreation who noted our involvement in the city's regional economic assembly to review new initiatives for the local economy.

2733 Madam Chair, we have argued strongly that the market can sustain a new station now and that the growth in the market will ensure viability for all stations in the future but let us consider for a moment what will happen if we are wrong.

2734 Either Blackburn will lose money and/or CTVglobemedia will feel a certain amount of impact.

2735 We are entering this market with our eyes wide open. We are willing to risk a substantial investment and we are not asking you to protect us from this risk.

2736 If CTVglobemedia takes some impact, which we doubt, Canada's largest broadcaster is well positioned with four local radio stations, two regional television stations, the most successful private conventional television network in Canada and a stable of very profitable specialty stations, they are well positioned to weather any storm.

2737 Among the consequences of denying this application are no new programming choices for Windsorites, no new editorial voice in the city, no exposure for Canadian country artists in this major market and the loss of over $1 million in CCD to the system. We think this would be a shame.

2738 We feel that a key to helping a community undergoing difficult financial times to recover is to invest in it. Blackburn Radio wants to make a large investment in Windsor's recovery.

Welcome Senator Fortier

A big Windsor welcome to Senator Michael Fortier! It looks like the distinguished Senator is the newest Federal politician to be involved in the border file. I wonder how long he will last before he is chewed up by this file as well. It seems to be a career ender for politicians at all levels and on both sides of the border.

Barrie McKenna, the Globe and Mail's correspondent and columnist in Washington who covers Canada-U.S. relations, business, trade, economics and politics wrote a variation of the border thickening theme that Canada is using ad nauseum these days:

  • "Border paranoia: The cost is real and hits Canada the hardest

    If Canadian businesses feel like they're no longer enjoying the full benefits of free trade with the United States, it's because they aren't. "The benefits Canada derived from the [free-trade agreement and the North American free-trade agreement], have been substantially eroded," Mr. Grady concluded.

    At a time when exporters are already suffering from the stronger Canadian dollar and the U.S. economic slump, Canada can ill afford to lose its export base.

    The tragedy, however, is that these exports may be lost forever.

    Companies that do business in the U.S. are gradually restructuring the way they operate to avoid the border. Inevitably, that means shifting production inside the U.S. security wall.

    This is, of course, the antithesis of free trade. Security has trumped prosperity.

    The cost is borne by both countries, but the burden falls disproportionably on Canada because it's more dependent on trade with the United States than vice versa.

    Ottawa is starting to get serious about the things within its control. Public Works Minister Michael Fortier, for example, is spearheading Canadian efforts to replace the aging Ambassador Bridge, which links Windsor, Ont., and Detroit, Mich., along with approach roads and customs infrastructure. The $3-billion-plus project would go a long way to easing congestion at the busiest trade gateway to the United States. But completion of the bridge, which also requires U.S. funding, is still years away.

    Changing the U.S. security mindset could prove even more intractable.

    With the looming U.S. elections, Canada has a rare chance to reframe the border debate, and to begin a new conversation with a new U.S. administration."

It looks like I was not that far off the mark when I speculated about Senator Fortier in my BLOG May 13, 2008 "Naming The Unnamed Cabinet Minister:

  • "Accordingly, by a process of deductive reasoning, I believe it is elementary, dear reader Watson, that the person whom I believe is the one responsible for what could turn out to be a disastrous situation for Canada is Senator and Minister of Public Works and Government Services, Michael Fortier!"

Just to give you a bit of background about the Senator, he is one of the few Cabinet Ministers in Canadian history who is not a member of the House of Commons but a member of the Senate. Accordingly, he can never participate in Question Period in the House. From the Prime Minister's website, we learn that Mr. Fortier worked in the legal and banking fields. More importantly, he co-chaired Stephen Harper’s national leadership campaign in 2004 when Mr. Harper became leader of the Conservative Party of Canada. He also co chaired the Conservative Party’s national campaigns during the 2004 and 2006 elections.

Obviously, Fortier is a close confidant of the Prime Minister and must obviously have his trust, especially if the Globe states that he is now involved in the border file. One of the oddest remarks in the Globe story is the following which I also emphasized above:

  • "Ottawa is starting to get serious about the things within its control."

Do the Conservatives mean to say that up until this time Ottawa really had no interest in the border file no matter what they said? Over five years of do-nothing efforts and wasting taxpayer money?

It means then that Transport Canada Minister Lawrence Cannon was completely irrelevant and nothing that he said should be taken seriously. It means that Ambassador Michael Wilson who seemed to appear and then disappear in a cloud of smoke will definitely be put out to pasture at the appropriate time since his credibility is completely shot now.

All of his time and effort wasted when in fact we should have been sitting around waiting for the Senator to appear on the scene and then we might get some action done.

I hardly think that a man with the Senator's credentials would be interested in environmental assessments. That is for the plebes to work on. He has to be involved in more important things like wheeling and dealing with all of the players on the border file and the financial big boys.

Again as I speculated before, and I believe correctly,

  • "Another hint. Whoever the person is has to be well versed in finance because he was talking with our Mayor about the purchase of Brighton Beach. He would not have come down here just for one single purchase transaction but rather he would have to be down here for the financing of the entire project, a public-private partnership that the Government is trying to force down the throats of taxpayers.

    He is probably also down here as I said before to talk about the Tunnel. The Federal Government expects to scoop it up at a very low price because there's no one else interested in taking it off the hands of the Cities of Detroit and Windsor. He will use the City of Windsor as his front so that the American Government will not get upset about Canada controlling the Tunnel and probably the new bridge crossing as well.

    Accordingly, he would also have to be someone who is very experienced in the Government in contracting and would be knowledgeable in P3's.

    Another clue. Which Government department "buys more goods and services than any other public organization in the country — buying everything from the flu vaccine to security systems to aircraft. "

I would expect that Senator Fortier will find out very quickly that the DRIC assumptions are invalid and what was told to the Senate by Transport Canada cannot be believed especially after the US DEIS. I expect that if he is truly coming down here to understand the situation then he needs to speak to everyone involved.

He either has to become fully informed or there will be litigation at some point that will last for a decade or longer.

The border file is such a mess and such a disaster that it will in fact jeopardize Canada's relationship with United States. It has become a big deal in the border war for some Canadian politicians and bureaucrats who have their own agenda that they wish to fulfill no matter what it does to our relationship with United States. Those people need to be told the facts of life by someone who has the trust of the Prime Minister. It will be interesting to see if that ever happens. Or is Fortier their front as well?

The comment made that

  • "Canada has a rare chance to reframe the border debate, and to begin a new conversation with a new U.S. administration"

is so far from the truth that it is laughable now.

With interference in the US primaries over NAFTA, trying to pressure the US President, end running the Democrats, insulting John McCain, leaking incorrect information thereby making it seem as if the United States has acted illegally, threatening the United States with our oil and trying to make the Americans spend billions of dollars that are not required, our only hope is that the situation can be salvaged at all.

We'll be watching you Senator. Carefully