Thoughts and Opinions On Today's Important Issues

Friday, March 13, 2009

More BLOGMEISTER Quotations

Some light reading for the weekend. Here are more quotes that should be added to the list:
  • [Former Liberal Cabinet Minister John Manley] "He said Mr. Harper could leverage dearly bought political capital on Afghanistan to push for border infrastructure investments to ease trade: " Then he may have a more willing partner."

    The trick is to use alliances on global concerns to open doors for bilateral ones, Mr. Manley said." [Risk soldiers' lives for DRIC in other words. How disgusting!]

  • [In relation to Canada's $4 billion worth of loans to the car companies] "Windsor, Ont., Mayor Eddie Francis said the car loans will act as a stimulus for the sector. "I think every little bit helps," he said."

  • The Canadian auto industry is in the midst of an "existential crisis" and government, unions and management must work together or the sector will lose its ability to compete, says Industry Minister Tony Clement. [Has he been reading Sartre again?]

  • The NYC Mayor's rationale "On one side was Mr. Bloomberg, who had previously and loudly supported limiting a city official’s tenure to two terms, but changed course as his other opportunities for political advancement faded last year. The mayor, citing the worsening economy, said that he was the best man to lead the city at a time of crisis" [There is your excuse, Eddie, for a third term. That plus the canal]

  • [Ronna Warsh, general manager of the Social and Health Services at the City of Windsor on 1200 people applying for 100 call centre jobs] "The huge turnout "indicates there are a number of people who want to work in this community" [DUH!!!]

  • From Councillor Hatfield "In his view, it's dead wrong to expect city staff to drop what they're doing, be it filling potholes or dealing with flooded basements, in order to respond to information requests that could be frivolous or malicious and provide fodder for "a blog that 20 or 30 people might read." [Does not look like many of then are filling potholes from street conditions]

  • WEAKLING Resolutions: "Council unanimously passed a series of motions that included launching a public information campaign regarding the DRIC health information, a demand for meetings with local MPPs Sandra Pupatello, Dwight Duncan and Premier Dalton McGuinty as well as an invitation to SENES -- the air quality consultant hired by DRIC -- to appear at council."

  • [No lawsuit here either:] "Mayor Eddie Francis, who also attended the meeting, said changes to the parkway plan can still be made even though the DRIC documents are in the hands of Ontario's environment minister."

  • Don Drummond, chief economist at Toronto-Dominion Bank:

    "Infrastructure support should be handled cautiously. Mr. Drummond warned that some of the infrastructure spending the government is expected to include in the budget as a way to stimulate the economy is bound to be "really stupid" because the competition for funding will be determined by how fast a project can be launched.

    "Five years from now, there will be bridges to nowhere, because they were ready to go," he said."

  • The commission is also reluctant to publicly divulge its diversification strategies to neighbouring regions, Mancini added." [If only we had known that there actually is one.]

  • "Palanacki decided not to send plows to side streets on Wednesday after 10 cm of snow fell, which is the threshold the city generally uses as a guide to start side-street plowing.

    "It was on the margin and I made an executive decision not to go," said Palanacki, noting that every time the city's side streets are plowed it costs $250,000. [Dead men do not pump gas OR shovel and plow snow in Windsor]

  • [A "logic bomb" could have destroyed the entirety of the data on all 4,000 of the Fannie Mae mortgage finance company's servers] "To me, this is the tip of the iceberg," said Mandeep Khera, chief marketing officer of security company Cenzic. "If a small percentage of these IT workers are going to the dark side, they could potentially cause a lot of damage." [Not a problem in Windsor. To get FOI info here it is all done by hand at a cost of $300k!]

  • And how did Hank [Henry Paulson, the former US Treasury Secretary] come up with a figure of £700 billion to boost the American banking industry? “It’s not based on any particular data point,” a Treasury spokeswoman told, the US financial website. “We just wanted to choose a really large number.”

  • Then, when Baird and Ontario Infrastructure Minister George Smitherman met to announce $1 billion in infrastructure spending in small-town Ontario, their "show of partnership," as Smitherman put it, was a match for anything Hallmark cooked up for Valentine's Day. "Can you feel the love?" Baird cooed at one point. [A Liberal and a Conservative: Politics makes strange bedfellows]

  • But name calling has nothing on an incident between then-president Lyndon Johnson and Canadian prime minister Lester Pearson in 1965. After Pearson called for a pause in the bombing of Vietnam while speaking in Philadelphia, Johnson was reportedly furious at the Canadian's criticism of U.S. policy.

    When Pearson visited Johnson the next day at Camp David, the 6'3" president grabbed Pearson by the collar and lifted him into the air (or pinned him against a wall, depending on which historian you read) and yelled, "You pissed on my rug!"

  • "They've tainted our entire industry," said Shelly Nutt, executive director of the peanut producers board in Texas, the nation's second largest growing state behind Georgia. "Public perception is killing us."

  • [OMB hearing] The City Solicitor displayed admirable candour when she replied “who can say why politicians do what they do”.

If You Can Find A Better Car Company...

...then Windsor ought to buy it!

Wait a minute. Who does this Tom LaSorda guy think that he is trying to push us around. He may know about baseball. He did a good job managing the Dodgers. However, it is pretty clear that he may not know as much about car companies and Governments these days. He may just have struck out in Ottawa.

Just a joke, dear reader. I was fooling with you. I know they are different people. You don't have to email me.

Seriously, so what if he was born in Windsor and got his education here. Big deal. I guess that was supposed to impress the MPs and MPPs in Ottawa and Toronto. You know, he’s one of us.

When push comes to shove, he’ll do what he is told by his Wall Street bosses. It does not look that they were so smart after all buying into Chrysler and GMAC:
  • “Chrysler LLC, the third-largest U.S. automaker, asked the Canadian government for a $2.3 billion (C$2.96 billion) loan as it also seeks larger wage concessions from union workers.

    The company wants Ontario-based employees represented by the Canadian Auto Workers to provide greater givebacks than those in a recent union agreement with General Motors Corp., Chrysler Vice Chairman Tom LaSorda told Canada’s House of Commons automotive subcommittee in Ottawa yesterday.

    “The current agreement with GM is unacceptable to us, and we have to break the pattern,” LaSorda said. “Chrysler LLC cannot afford to manufacture products in a jurisdiction that is uncompetitive...”

    Chrysler may move operations from Canada to a recently closed minivan plant near St. Louis if needed to be competitive, LaSorda told the House of Commons panel.”

Psshaaaww…we know he does not mean that. If he thought St. Louis was the better plant, Windsor would be closed by now. He’s showing how tough he is to the United Auto Workers so that they will not demand a “pattern agreement.” Better to fight the battle in Canada rather than to take on the Union in the United States where the President might be more sympathetic to the Union. He can use the deal in Canada to try and soften up the UAW.

But I was thinking about this. I don’t think we ought to give Cerberus any money at all. What for? Tomorrow, they are just going to come back again and ask for more. There are no job guarantees either and wages will be cut so workers cannot afford buy a new vehicle anyway.

I have a better idea. I am surprised that our Mayor has not thought of this. After all, he is quite happy in using taxpayer money for all of his other entrepreneurial THINK BIG visions.


The concept is breathtaking. We are entitled to it. I cannot think of another city anywhere in the world that is the owner of a major automobile company. Perhaps this is why Gord Henderson has not been writing very much in the Star so far. I wonder if he has the scoop on all of this already and has been researching the matter so he will be writing a big column about this on Saturday praising the Mayor's farsightedness. No wonder Eddie has not been doing anything for years here for economic diversification. He has been planning this from day one. It will be the newest urban legend created about him.

The first thing that the Governments must do is to ensure that the tooling for the vehicles never leaves the country. That should not be too difficult because with all of their scare stories about border thickening there probably are not any truck drivers who would want to take the parts across the River anyway. It would take forever they would think.

The costs for the Governments to do the nationalization would be miniscule. I assume that the Canadian Governments would pay something because I would not want the Americans to think that we are a "Cuba" on their northern boundary. We already have drones flying over the border.

Perhaps the price might be $1.00, maybe even less. If we have good negotiators, Cerberus might pay us to take the Company off their hands.

Look, if the loans are not given, then Chrysler Canada goes bankrupt anyway. It has no value except for the loans. Even then, there is no guarantee that the company will survive. $1.00 is being generous.

However, if it is owned by the City, then the Company will survive. Our Mayor and Council will ensure that because they will make sure that every municipality and every level of Government across Canada will BUY CANADIAN VEHICLES. They may even force us in Windsor to buy the minivans too as part of our tax payments. We pay for a sewer levy now and a capital levy. Why not a minivan levy!

Moreover, we don’t have to worry about jobs disappearing. When have you ever seen a City employee being terminated or the number of City employees downsized. Their numbers are always increased. There would be a rule though that the minivan workers would have to live in Windsor so that they are taxpayers and we can nail them. Fair is fair after all. We pay them a wage; then they have to pay City taxes.

We get along well right now with the auto unions. I thought Buzz and Ken Senior used to help our Mayor in teaching him how to negotiate. Junior is a member of Council and generally follows what Eddie says so he won't be a problem.

All of the jobs will be unionized although there may be a fight between the CAW and CUPE as to who should be their representative. I would expect, given the number of people who are supposed to get jobs in the CAO’s Office even in this time of economic restraint, that we would soon be adding back the third shift to the Plant if the City took over. Maybe even weekends too.

As far as wages go, we would follow the pattern of the other automobile companies so that we would never have a strike here. Gee, why would taxpayers want to strike their own company anyway. We could accuse them of trying to hurt their neighbours if they did that. That would embarrass them into not taking aggressive labour action.

From a business case perspective, note that I did not say "financial case" just as the Mayor did not say financial in the Tunnel deal, the minivan market will effectively be ours. Oh sure, some imports or new domestics produce a few brands but ours will be the only true North American one in the marketplace. If someone is smart and works out an alliance with the UAW, our vehicles can be added to their list of North American Union–made products so that we can sell into the United States as well.

Think of it also from a manufacturing perspective if we do it properly. We won’t have to change the design every year for competitive reasons. The likelihood is that minivans are not going to be gigantic sellers in the future anyway so our competitors will drop out of the business. There will however be enough minivans sold to generate jobs at one plant in Windsor. Seriously, families with kids still like minivans.

We can have this market all to ourselves as time goes on. Our vehicle can be like the Model T: any colour that you want provided that it is black. I read this note as well:

  • “From 1908-1927, the Model T would endure with little change in its design.”

Around 15 million of those vehicles were built:

  • “the longest run of any single model apart from the Volkswagen Beetle.”

My recollection as well is that the VW car did not change all that much in its early years either. Isn’t that a coincidence that the plant is also building a minivan for Volkswagen! We can third-party build minivans for other car companies or sell them around the world too.

They would just get better and better because we would make minor modifications rather than have to spend millions of dollars for major retoolings every few years.

Remember, that we have to protect dealerships because they employ lots of people as well. They can sell the Minivan for the time being and the City can arrange to be the distribution agent for other car companies that want to sell into the North American market but cannot afford to set up a dealer network here. One of the big advantages of Chrysler Canada is its dealer distribution network that is probably more valuable than the car company itself.

Those dealers will be quite loyal to the City because after all the dealers have sunk a whole bunch of money into their dealerships that will have no value if Chrysler disappears. They need us.

Do not forget, we have some pretty smart people in Industry Canada. I am sure that they can figure a way to keep non-North American competition out of the marketplace. After all, they owe it to us especially if they got us into the automotive business in the first place.

Moreover, we would have on our side the MITI Minister, our own Sandra, who is the world's greatest salesperson. And if we needed a few bucks to tide us over, who better than Spanky, the Minister of Finance! It should not be hard to convince him and the Federal Government to give us all those billions they were going to pay out to the Wall Street Bankers. They were going to spend it anyway. If the business is going to fail, they may as well have it fail in Windsor and keep the money in Canada. Why, if we do it right, we might even have a few dollars left over to build a canal or two.

I have to tell you, in my opinion, Windsor taxpayers will jump on the bandwagon and support this 110%. After all, with all the profits made, dividend distributions would be made to taxpayers that would probably reduce our City taxes to almost nothing. What could be better than this?

Perish the thought that I would start working again full-time but the Blogmeister does have experience in the automobile industry in Canada given my former career. I also know a number of people who would be very interested in working for a Canadian automobile company as well given that a number of them are Windsorites who used to work for Chrysler.

Yes. This is a much better idea than just throwing good money after bad to give to the Wall Street bankers. Let them suffer. Who cares. No one is supportive of them anyway given all the public opinion polls. Our Governments will be praised by everyone across North America.

Heck, the US government won’t care either. They aren’t all that happy with the auto companies. Perhaps the Senator from Tennessee, Bob Corker, can suggest that his State take over Saturn once we have given him the model for doing so. They won’t call this Socialism either because they were prepared to nationalize the Big Banks. Eddie can give a big speech saying that Chrysler is too important for this City and too big such that we cannot allow it to fail. He can sound like the Head of the US Federal Reserve Bank in doing so.

This is the decisive moment in the career of Eddie Francis. He has been doing all of these pipsqueak entrepreneurial deals as practice. It is time for him to enter the Big Leagues. I am sure that he is up to it. He can find lawyers and consultants to pay millions to help him out. But unlike almost everything else that he has done before, he must be decisive this time around and actually execute a transaction.

He has been learning how to run a Board a Directors and not let the citizens know anything at all about what is going on. Being the Chairman of the Board and CEO of an automobile company would be nothing compared with that. Imagine the salary and perks that he would get for being the Head that he would not have to share with his Council Colleagues unless he chose to make them Members of the Board as well. They could again claim that they have not taken a salary increase.

Can you imagine. I would expect that even Councillor Halberstadt would keep quiet too on this deal and the other Councilors would fall in line very quickly. After all, they would probably be given courtesy minivans to test out just as Chrysler executives were given vehicles during their careers. It is the industry norm after all.

I can just imagine Eddie being on television offering us minivans. Why he could sell anything to anyone given what he’s been able to sell so far in this City, Greenlink being the best example I can think of offhand.

Come on Eddie, do what Lee urged:

  • “Lead, follow or get out of the way!”

Thursday, March 12, 2009

Giddy But Engaged

It must be the full moon. I am in one of my silly moods today.

Certain things that I have read in the Windsor Star just seem so weird to me that I thought that I should share them with you.

  • How do you explain this?

In the story “Windsor waiting for infrastructure funding,” I read the following:

  • “It’s a significant list with a significant number of priorities … it’s not going to solve all our problems, but it will help mitigate against this continued economic freefall,” said Mayor Eddie Francis.

    Never too shy in the past to publicly criticize senior governments over perceived slights when it came to funding, Francis is almost giddy over the prospect of Windsor getting a fair share of the multibillion-dollar municipal stimulus package the federal Tories announced in their latest budget.”

Giddy.” What a strange word to use. It hardly seems mayoral to me. It does not give me a lot of confidence that the money will be wisely spent in a well thought-out, planned and organized manner. It sounds more like how one would feel thinking about spending after winning the lottery.

Wait a minute----Eddie would be winning a huge prize in the equivalent of Lotto 6/49 and without buying a ticket. All of this Senior level money falling into his lap merely because the economy is collapsing around him! It's all non-budgetted, found money to be spent giddily! How much will the infrastructure lottery prize be?

In looking back at my BLOGs, I used that word once before in relation to the Mayor since that was the word that someone used with me:

  • “I was told that several months ago the Windsor Mayor sought and was given permission by Windsor Council, again in camera, to approach the Mayor of Detroit to buy Detroit's interest in the Tunnel. I had heard rumours about this some time ago. I was told then that our Mayor was “giddy” with excitement as he talked about the proposed deal.”

Now you can understand why I am concerned: spending about $2M in legal and accounting fees on a project that never made sense to me and that now seems dead!

Can you picture in your mind a “giddy” Eddie Francis running out to his Assistant’s office every day when the mail comes in to see if there is a cheque from Ottawa and Toronto. Can you picture how he will jump up and down with joy once he gets that money! Can you imagine how quickly it will be spent too.

I found this history of giddy on the Internet:

  • “Word History: The word giddy refers to fairly lightweight experiences or situations, but at one time it had to do with profundities. Giddy can be traced back to the same Germanic root *gud- that has given us the word God. The Germanic word *gudigaz formed on this root meant "possessed by a god." Such possession can be a rather unbalancing experience, and so it is not surprising that the Old English descendant of *gudigaz, gidig, meant "mad, possessed by an evil spirit," or that the Middle English development of gidig, gidi, meant the same thing, as well as "foolish; mad (used of an animal); dizzy; uncertain, unstable." Our sense "lighthearted, frivolous" represents the ultimate secularization of giddy.”
  • It seems that one of the priorities for any infrastructure money that we are to receive from the Senior Levels is to use $10 million of it for the Tunnel Plaza Improvements.

Frankly, I do not understand how it could be used for that purpose since that money was supposed to have been set aside years ago by the City for precisely that purpose. In other words, it ought not to be one of our shovel ready projects.

As you know, that project has been on hold for years while the City has been negotiating forever it seems with the Senior Levels as to who is going to pay for the extra costs that have been incurred. We have never been told what those costs are and the amount is although I suspect they are not only construction costs but also the costs for the expropriation of properties that have skyrocketted.

Moreover, if the Tunnel Deal is dead as the Mayor claimed at the recent Tunnel Commission meeting and there do not seem to be too many backups anymore with the decline in traffic, then why do we need to spend the money for that project at all when there are more important issues like the long-neglected and now closed College Street bridge?

I have a better suggestion for that money, something much more important, something that can impact any citizen at any time without notice and which would clearly cost a citizen money given the City’s position:

  • “In Ottawa, the city is experimenting with a mobile machine that can reheat chunks of asphalt to be reused to patch holes.

    Palanacki said he has seen those machines at trade shows but Windsor’s current financial situation doesn’t allow for it.

    “I saw a recent demonstration of that in Toronto, but right now 16.7 per cent of our roads are considered deficient,” said Palanacki.

    “The key is to bolster our road repairs.”

  • “Palanacki said the city does not reimburse drivers for damage unless it can be definitively proven the city was delinquent in fixing the hole.

    We always will deny responsibility because potholes are a natural phenomenon,” said Palanacki.

  • Another word that I absolutely detest is the word “engage.”

What does it really mean? It is such a bureaucratic word that means absolutely nothing as far as I am concerned. Just listen at City Council as Members of Council or Administration tell us how they should be “engaged” with citizens of Windsor. In fact, there is one person who probably holds the world’s record for the use of that word when making a comment.

Consider also in the same story “Windsor waiting for infrastructure funding”

  • “I haven’t seen this level of engagement before. They’ve been very, very, very good to work with us,” said Francis, who held his third meeting with federal Minister of Transportation, Infrastructure and Communities John Baird less than two weeks ago on the day the minister and Ontario Premier Dalton McGuinty handed Amherstburg a $15.6-million cheque for a new sports complex.”

What the heck does that mean? Have they only been dating up until this point?

How about this:

  • “Francis praised the involvement of Baird and Essex MP Jeff Watson in focusing attention on the plight of Windsor, struggling with the implosion of the automotive sector and decimation of its manufacturing base.

    “They’re engaged down here and there’s a desire to see things get done down here,” said Francis.”

I know that politics makes strange bedfellows but do we have to wait until they get married before something gets done?

We all know how much the Mayor and Jeff Watson like each other so it is at least encouraging to note:

  • “Watson, who has been in discussions with the mayor and the minister, said the Tory cabinet is “very sensitive” to Windsor’s economic situation.”

Hmmmm. No engagement here yet. Maybe only a first date. Probably a blind one too.

Yes we are seeing the Tories' feminine side now, their "sensitivity." Just as sensitive as they have been over the years as they have spoken platitudes about the importance of a new border crossing without doing anything about it.

The fact that the Star has not reported anything until now about the Francis/Baird meeting suggests to me that we may not be getting the amount of money we had hoped to get and in a timely manner. Eddie may have to prove first to certain people at the Senior Levels that he can keep his mouth closed with respect to the DRIC project.

Then he can be engaged with them and giddy too!

Time For A WEDC/Tunnel Deal Autopsy

  • “A post–construction audit is a standard procedure upon completion of a major project and is also an industry “best practice.”

I did not make this up. That is what the City Audit Department said in its Executive Summary on the 400 Building audit. It makes sense after all to learn what was done right and what was done wrong so that the next time around improvements can be made and mistakes made can be prevented.

What is so hard to understand about that? I would have thought it is pretty obvious. Or perhaps that might have been the practice when it seemed that the 400 building came in under budget and certain people could get plaudits for it.

If that is "best practice, " I wonder why this practice is not followed in other activities that the City and perhaps also the County are involved in, or at the least, for which they have paid out significant sums of taxpayer money.

Take the Undevelopment Commission. Please. It is effectively dead and gone, to be structured again in some shape at some time in the future. Wouldn’t it be nice to know what went wrong the first time around? I would have thought so. It seems obvious to me.

But our poor Mayor and perhaps also the County Warden as well. Eddie seems to be so intimidated by the words “forensic audit”

  • “If he has information that is credible and leads him to believe a forensic audit is needed, I would urge him to come forward with that information. Otherwise this political attack on the development commission and creating or insinuating there are issues hurts our efforts to attract investors and jobs to our region."

Perhaps if the Tecumseh Mayor had just used the word “audit” then everything would have been all right. Oh yes, nothing is so attractive to investors but to learn that a City or County is afraid to have its books opened up for public oversight.

I certainly would like to know how many trips WEDC members and staff took to Europe. Wouldn’t you? After all, if our Mayor and two Councillors could tell us how much they spent in airfare on their one-day jaunt to Frankfurt, surely we should be able to find that out as well from the WEDC books and records. There is nothing to hide after all.

I’d like to know who if anyone had lunches at the Windsor Club, how often and with whom. Same for breakfasts at the Hilton. How many trips to Toronto were made and why and where did people stay and dine? I certainly would like to know how much was paid out to whom in fees and the basis of the payments. Who approved what and was there a system in place to ensure that expenses were not excessive?

What are the Mayor and Warden so afraid about? Why are they so concerned? Why are they so protective of an organization that no longer exists except in name only? It just makes one suspicious.

There are lots of other questions that I could ask if someone would only ask me but that is enough in the meantime.

Wait, I have a better idea, perhaps we should not call it an audit at all but rather an "autopsy." After all, the organization is effectively dead. The purpose of an autopsy:

  • “is to learn the truth about the person's health during life, and how the person really died.”

Why shouldn’t we learn the truth about the Undevelopment Commission while it was carrying on and why it really died? It makes good sense to me.

And that brings me to the Tunnel Deal. You remember that transaction don’t you? It has cost us almost $2 million in legal and consulting fees and nothing has happened other than seeing the City of Detroit want $25 million more than we have supposedly offered to them. They want $100 million now.

Can you imagine what would have happened had we entered into this transaction. Even the Mayor has finally acknowledged that the Tunnel was probably not even worth $75 million today because of what has happened in the economy. I don’t think that he has acknowledged yet about what the DRIC bridge would do to the Tunnel volumes that make the transaction even more questionable.

He would never be able to live down such a poor deal and would have been blamed for horrific losses that probably would have resulted.

I really am disappointed that none of the members of the Traditional Media saw fit to attend at the recent Tunnel Commission meeting the other day. They must have received the press release about the Tunnel toll rate increase. Were they told that there was no need to attend the meeting because that was all that was going to be discussed? If so, who told him that? Remarkable.

Fortunately, I understand that four members of WeACT were there to protect the public interest. What is unfortunate, is that the Media was not there to listen to some of their comments/questions. It would have been nice to share this with other members of the public. Here are a few of them:

  •  Just what was the approved Infrastructure Ontario’s loan amount for it is known that the full $75M was not an acceptable option?
  •  Under the heading ‘Detroit Matters”. I have used a conversion rate of 1.25 to arrive at a total of $420,158.07. Add the 2007 costs, why was this matter pursued at such a cost in 2008 when it was apparent that the required $75 million financing for the purchase of a management concession was not forthcoming?
  •  Now, the section headed “FOI Matters”. Please confirm that the first item of $43,483.36 is the cost of your defense against a freedom of information claim by concerned citizens. If you do confirm it, then it is clear that a citizen’s legitimate request for information was not only denied but the legal cost of that denial was made with those same citizen’s TAX DOLLARS? How you have the gall to do this is beyond my comprehension. This has to be the ultimate injustice. An insult!
  •  I cannot begin to express the depth of my anger as you and members of council play fast and loose with taxpayer assets. Stop this disgraceful commercialisation of municipal governance and take care of the many priorities that exist on this side of the border.

Apparently, the Mayor had a very interesting attitude. His view was there is no need to reveal how much Infrastructure Ontario offered because the deal was dead. I guess that this the attitude that he and the County Warden are taking as well with WEDC. Who cares if there was a mess before or not, just sweep it under the rug. Ignore it and move on. No one needs to know.

It would be embarrassing, as an example, to the Mayor for the public to learn that Infrastructure Ontario might have offered a very low range for the amount of the loan. If Infrastructure Ontario was the lender of last resort because everyone else in the business had turned down the deal, it could well mean that the Mayor has wasted all this taxpayer money in legal and consulting fees on a deal that could never have been done.

I found it amazing that an outside law firm had to be retained for Municipal Freedom of Information Applications. I thought that we had inside City employees who had responsibility for this and who could do this work. I wonder what the difference in hourly rate would be between an outside lawyer and inside employee doing this work. Would the amount have been $43,000 or substantially less? If it was done on this file, how many others have outside lawyers been involved in and at what cost? It really is quite disturbing to me that so much money was paid out.

I come back to what I said before. The Mayor confirmed that the deal with Detroit was dead. Why would he not want an autopsy taken to find out what was done right and what was done wrong? I don’t see the distinction amongst an audit of the 400 Building and an audit of the WEDC and the Tunnel deal.

I just cannot understand what politicians are so afraid of. Why are they so reluctant to let the members of the public know what is going on? If they had let us in on it early on and kept us advised as they went along, no one would complain if circumstances arose that made a transaction one that ought not to be pursued.

However, all of these deals seem to be so secretive and so lacking in transparency such that it gives rise to questions in the minds of the public. When politicians refuse to answer questions over these deals and effectivley block information from getting out, then it just makes matters worse.

What is also very interesting, and very true, when one looks at Tunnel deals, airport deals, arena deals, Canal visions, new downtowns and so on is that it seems that some of our Politicians decided to be an elected not to run a municipality but rather to become entrepreneurs with taxpayer money.

If such is the case, I would prefer not re-elect Eddie Francis as Mayor. Rather, I would like to see if Warren Buffett is available.

I would like a real entrepreneur of the year involved, not a young one.

Wednesday, March 11, 2009

Does Windsor Need A-Channel

Cow Bridge And US Customs

Finally, someone in authority did it. And it was a US Government person as well. Someone finally gave the reason why there is no need for a DRIC bridge at all, if there ever was one.

Do you remember the above video clip? One of my better BLOGs had to do with the second Cropsey hearings and the description of how the Ambassador Bridge changed over the years from being a bridge that could handle the passage of cows to the one handling the most traffic between Canada and the United States.
  • "there was an off the record discussion about the history of the Ambassador Bridge. During that discussion, Dan Stamper talked about the early tolls on the Bridge. Apparently there was a charge for cows using the Bridge although Stamper did not know how many cows actually crossed over.

    Just think about that and fast-forward 80 years until today. That same Bridge that could be used by cows is now the major border crossing between Canada and the United States carrying by far more traffic than any other bridge and yet is only at about 50% capacity. I have Blogged before about how many studies have said that the Bridge would be jam packed by this date and yet it still can handle millions of vehicles more without any problem.

    What it tells me is that the Ambassador Bridge people know how to run a bridge to handle the volume of traffic that crosses over. They have been able to do it without the need of building another bridge and are only looking at it today because their bridge is getting older and requires rehabilitation and because of the technology that requires another lane in each direction so that pre-approved traffic can flow smoothly."

What has bothered me about the entire DRIC border discussion is the failure to recognize the significance of initiatives like removing Customs Clearance away from the border, pre-processing centres which have reduced the number of trucks going to secondary inspection dramatically, the FAST and NEXUS programs and the use of technology. There also seemed to be a failure to recognize until fairly recently that the issue with respect to the border is customs clearance and not more lanes across the River.

The obvious reason for not having a big discussion about all this is that all if all of these programs were instituted then there would hardly be the need for a new DRIC bridge. There would no longer be a need to build additional capacity even forgetting that the Ambassador Bridge is about 50% to 60% of capacity now. It is probably at the lower end of that range given the meltdown in the economy.

Why listen to me though, what do I know. Why listen to the Bridge Company who actually know how to operate a bridge, since they are obviously an interested party. Let us listen instead to Ron Smith, Michigan's Chief of Customs and Border Protection. Presumably, he ought to know what he is talking about and should be unbiased.

A shortened story was originally posted this way and got me very interested:

  • "Border lineups may soon disappear

    New technology could make long lineups at the Blue Water Bridge history as early as this spring.

    Ron Smith, Michigan's Chief of Customs and Border Protection, delivered that message in an address to the Sarnia-Lambton Golden 'K' Kiwanis Club this morning."

Here is the full version that explains it all that was published subsequently:

  • "Licence plate readers will speed crossings, official says


    New technology could make long lineups at the Blue Water Bridge history, starting as soon as this spring.

    Ron Smith, Michigan's Chief of Customs and Border Protection, delivered that message to a Sarnia audience Tuesday.

    Speaking to the local Golden 'K' Kiwanis Club, Smith said border personnel will soon be able to read licence plates and call up biographical information, complete with a digital photo, on their computer screens before they even talk to a driver.

    "The technology will reduce wait times to nothing," he said.

    In an interview afterward, Smith said, "We are going to have infrastructure upgrades at the Blue Water Bridge this spring that allows for the reading of enhanced driver's licences. It's anticipated new technology will reduce the inspection process per vehicle by seven to 10 seconds. That doesn't sound like a lot, but if you're the 3,000th car crossing the Blue Water Bridge today" it will make a big difference.

    Smith said enhanced driver's licences slated to come into use on both sides of the border will provide travellers with the documentation they need to move between Canada and the United States.

    "It'll be a big benefit to border communities because it allows people to have a document that they already carry. They'll have it in their wallet."

    As recently as a year ago you could get into the U.S. with an oral declaration of citizenship, provided border guards believed you, he said. But now, a birth certificate, citizenship certificate or passport are necessary. And come June 1, a birth certificate won't be enough. You'll need a certificate of citizenship, enhanced driver's licence, passport or Nexus card, he said.

    Smith said lineups at the bridge have caused major headaches.

    "Last summer it was hell on the Blue Water Bridge," he said. The situation was so bad that some days Blue Water Bridge Canada put portable toilets on Highway 402 to assist motorists who were backed up waiting for hours.

    Smith also told his audience the Nexus program has been a big success, with 20,000 people enrolled in the Sarnia-Port Huron area. In the Detroit-Windsor region, the number stands at about 35,000, while in Sault Ste. Marie it's 5,000 to 6,000, he said."

With the new processes for trucks and the new technology for passenger cars and with increased staffing at the border, someone needs to explain why we need to spend billions of dollars by the time this is all finished for a new DRIC border crossing at taxpayer expense. Why do we need to make P3 financiers rich when their business model is collapsing around the world?

This file is out of control! It is a classic MegaProject running amuk.

There is no doubt as well that Prime Minister Harper was just as unsuccessful with President Obama as he was with President Bush in trying to convince the Americans to build the DRIC bridge. Trying to tie it into infrastructure spending did not work with the President as I Blogged before.

Even Former Ambassador Michael Kergin's attempt to set up

  • "a Permanent Joint Border Commission, along the lines of the earlier PJBD.

    The PJBC, co-chaired by cabinet members reporting to the heads of government and including officials from the relevant border, security, foreign and economic departments, would recommend border policy initiatives, as well as co-ordinate the implementation of new measures to streamline our common border”

seemed to have fallen on deaf ears.

Has the Canadian Government finally given up and stop trying to end run the President? Hardly

  • "Officials seek bridge plan

    Ambassadors would help ease crossing

    Times Herald

    A group of Canadian officials is calling for the appointment of special ambassadors on both sides of the border to help deal with what they call the thickening of international crossings.

    The ambassadors would report directly to Prime Minister Stephen Harper and President Barack Obama and would be charged with auditing new rules related to the border and ensuring they are reasonable and necessary.

    The move would lead to more uniform policies, would make crossing the border easier for travelers, and perhaps most importantly, would ease U.S.-Canada trade, something many Canadian officials say has become muddled with red tape and unnecessary restrictions.

    Sarnia resident Ken James, a former member of parliament who now is chairman of Blue Water Bridge Canada, is leading the charge on the proposal. He sent a letter to Harper, the head of Canada's government, in September 2008 outlining the idea. He rolled the plan out to U.S. Rep. Candice Miller, R-Harrison Township, during a Feb. 27 meeting in Sarnia.

    Appointing the ambassadors, James said last week, is the only thing that can fix a problem that could lead to dampening the U.S. and Canadian economies and, ultimately, reversing the effect of the North American Free Trade Agreement.

    "This thickening situation is getting worse," James said. The issue "has to rise to the top of the heap. Economics are a major problem today and free trade between these two countries is a necessity."

Whoever is quarterbacking this file for the Canadian Government ought to be fired. I cannot believe how this person or group is damaging Canadian/US relations. Haven't we learned yet from NAFTA-gate? Do we need the Head of Homeland Security to send more drones over the US/Canada border before we get the message? What other products should the Americans say that they need to protect that will devastate our economy?

Canada needs to step back and figure out that their best friend in the United States right now is the Owner of the Bridge Company. His interest, a smooth running border, is Canada's as well. Moreover, he has not antagonized the highest levels of the American Government the way that Canada has nor is he afraid to sue the American Government if he needs to do so to ensure that the border operates properly.

Thanks to US Customs we now know that there is no capacity issue at the border. If the border fight continues, then we know the real reason why. It is all personal and it is all part of a 50 year old Canadian Government policy that certain people just cannot give up no matter what the consequences are to the economy of our country!

Saving Taxpayers $200 Million

It is so completely unbelievable to me. I just cannot explain the fascination of politicians with P3s, a financing device which fleeces taxpayers! Obviously, the upfront cash is like candy to a baby. However, don't they or their bureaucrats ever consider the consequences to poor, lowly taxpayers?

Here is how much the politician P3 addicts would have cost taxpayers on one transaction alone. The amount of $200 million is the minimum that British Columbia taxpayers will not be forced to pay out on a recent P3 deal that has just collapsed.

If it was not so tragic to taxpayer pocketbooks, the rush to create Public – Private Partnerships in Canada, Ontario and Michigan would be hilarious. We are being convinced to get into this P3 mess as the market is collapsing and as others are getting out of it.

Let me tell you in three sentences why P3s are absurd. This is a report out of British Columbia where the P3 for the Port Mann Bridge completely collapsed because the P3 financing party, Macquarie, could not obtain the financing required and now the Government has to fund the entire project:
  • “Critics have long said P3s bring higher finance costs because corporations must pay more interest than governments to borrow in order to offset the higher risk.

    Partnerships BC CEO Larry Blain said that was a factor in the decision not to proceed.

    He estimated $200 million in financing costs will be saved by switching from private to public borrowing.”

Imagine how much extra the DRIC project will be costing if Governments are allowed to P3 it! I would bet that the so-called amounts for its funding are under-estimated and its value is over-estimated as traffic falls. These are the classic indicia of a Megaproject running amuk. Will we beat the Boston Big Dig costs by the time we are through?

Just think, if the P3 advocates were able to convince government to do 10 of these projects, then that would be an extra $2 billion in costs that taxpayers have to pay. For what? And our Federal Government wants every project over $50 million that has federal funding to consider P3’s. Someone needs to explain to me why Government wants to give private enterprise so much money out of my pocket book.

Want to see how complicated P3 deals are and who some of the beneficiaries can be? Here are some excerpts from an article in the Canadian Corporate Counsel Association magazine.

  •  he had spent untold hours helping to nail down the details of the staggeringly complex deal. [deal to complete Highway 30, in Montreal] The partnership agreement totalled approximately 1,700 pages; 15,000 email messages flew back and forth over the course of the negotiations.

  •  the owner must try to anticipate what issues and circumstances might arise over a 30-plus-year period and ensure they are addressed in the contract — not as they come up

  •  owners need to invest considerable efforts upfront to secure certainty to the greatest extent possible

  •  “These deals have a first-rate contracting partner: the government. In times of uncertainty, that is very significant for bankers and lenders.”

There is no doubt that teams of players are involved to put one of these deals together. And all of these teams add extra costs to the cost of the project. Take the highway deal as an example, if the Government was building a highway the way they normally do why would they need such a complicated transaction? The answer is they would not.

The Transaction is not really a highway deal rather it is a financial deal in which every possible circumstance over a 30 year period has to be considered.

The funny part now is that the P3 companies cannot do these transactions without backing by the Government. Who needs the P3 companies then? What value-add are these companies contributing to justify taxpayers paying out an extra $200 million on financing alone.

In the BC project as an example, the focus was only on financing costs. How much money was the P3 operator going to make over the period of the transaction? Don’t you find it interesting that we never hear that. If taxpayers really understood how much extra it was going to cost them to be involved in such a transaction, there would be a revolution.

Here are excerpts from 2 stories that will make your hair curl. We are fortunate that the economic crisis may kill off P3s. Imagine how much our generations and those to come would be paying out because our politicians are P3 addicts.

One of the stories is a short one about the BC project. The other is a long one but fascinating about the world of high finance that you might want to read to understand P3s and why they may be in trouble now. Please note the kind of fees that can be made too for doing these deals:

  1. Financing falls through for $2.4 billion Port Mann

    The B.C. government has been forced to take over the entire $2.4-billion cost of the Port Mann Bridge project after plans for a partnership with a private consortium fell through.

    Transportation Minister Kevin Falcon says the province was unable to work out a financing deal with the Connect B.C. Development Group, which included the Australian-based Macquarie Group.

    Falcon blames a `challenging capital market' for the failure and says the government will use a fixed-price contract to build the 10-lane span to replace the current five-lane bridge over the Fraser River.

  2. Battered 'n' bruised

    While no one is game enough to predict Macquarie's demise, the global economic downturn is forcing the group to rethink its famed business model, writes Lisa Murray.

    Indiana Governor Mitch Daniels basked in the applause as he entered a room full of state officials and reporters to officially announce the close of the state's $US3.8 billion toll road privatisation.

    It was June 29, 2006, and Daniels had received the final payment from Macquarie Infrastructure Group and its Spanish partner, Cintra, which had taken over a 75-year lease on the Indiana Toll Road, the so-called "Main street of the Midwest".

    Daniels was confident the deal would turn around the state's financial fortunes and he had big plans for the proceeds.

    But he was not the only one celebrating.

    In Sydney, Macquarie Group executives were riding high. Not only did its investment bankers just rake in $US32.6 million in fees but the group had also officially cracked the elusive US infrastructure market. The Indiana transaction followed deals to buy Virginia's Dulles Greenway and the Chicago Skyway, which was the first US road privatisation.

    Together, the three infrastructure plays had netted Macquarie $US74.7 million in advisory and debt arrangement fees and had substantially boosted the assets under management of its biggest fund, MIG. That meant higher management and performance fees for Macquarie.

    The stage was set for more deals to come. Despite a public backlash against selling off state assets, Daniels's counterparts, from New York to Alaska, were lining up to flog their roads and bridges to the highest bidder. What had started with a small motorway in north-western Sydney was working its way across the world's biggest economy. The "Macquarie Model" had arrived in the US.

    It's a well-told story. Macquarie became a global brand buying up toll roads, ports, airports, car parks and water companies around the world, at times paying over a billion dollars more than the next bidder. The assets were piled with debt, often up to 85 per cent of the purchase price, and then rolled into listed and unlisted funds, which paid Macquarie advisory, management and performance fees. Yes, the group still had its traditional trading, funds management and banking businesses but it was the specialist infrastructure funds which put it on the map and drove earnings growth to dizzying levels.

    However, the world changed in September last year, with the collapse of US investment bank Lehman Brothers, which ended any hopes that the subprime mortgage crisis would blow over.

    Funding dried up, asset valuations started plummeting and debt became a dirty word, leaving the "Macquarie Model" all but dead and its management team scrambling to avoid disaster.

    The US roads, a cause of so much celebration 2½ years ago, are struggling to repay their debts and Macquarie's share price, held hostage to a market awash with capital raising rumours, slumped this week to its lowest level since June 1999.

    It is not just day traders and rumour mongers selling the stock; long-term investors, including its biggest US shareholder, Capital Group, have been abandoning ship. The shine has well and truly come off the silver doughnut.

    "The strategy of buying an asset and gearing it up to generate returns - that game is clearly up," says Perpetual Investment's head of equities, John Sevior. Perpetual does not own any shares in Macquarie or its satellite funds. "It's an opaque business and it's very hard to understand the level of gearing. The gearing in the group is above our level of tolerance."

    Copycats Babcock & Brown and Allco have already disappeared under a mountain of debts. While Macquarie's balance sheet is strong - thanks to a government guarantee on wholesale funding for banks, which has allowed it to raise a whopping $12 billion in offshore markets in just over two months - its satellite funds are struggling. Macquarie's Australian-listed infrastructure funds have had more than $12 billion wiped off their market value since the start of last year. The local real estate funds have lost a further $5.6 billion.

    Total losses for shareholders in the funds over the past 12 months range from 52 to 91 per cent, compared to a 37 per cent drop in the market's main index.

    MIG's chairman, Mark Johnson, a former senior executive and deputy chairman of the group, says he "can't understand why prices have been marked down so savagely".

    But he acknowledges the "Macquarie Model" will need to change. "Inevitably it must change quite radically because we are seeing the biggest crisis in credit markets since the 1930s," he told the Herald.

    "Investors want certainty of survival. Anything that has high leverage is seen as risky and not what investors want. The flagship funds are under great pressure to adapt and to convince investors that their survival is assured and they are appropriate investments."

    It was a bad news week for Macquarie. MIG announced that traffic had slumped on the Indiana Toll Road and Dulles Greenway in the US and they were using all available cash to pay back debt. It also wrote down its investment in the San Diego South Bay Expressway from $133 million to $11.6 million.

    Macquarie Airports, meanwhile, was forced to dump a share buyback so that it could tip equity into Sydney Airport for the second time in three months to ease its debt burden and Macquarie's media fund, MMG, wrote down the value of its US community newspaper group, American Consolidated Media, by $127 million. Macquarie CountryWide and Macquarie Office Trust have sold US properties to pay down debts, MIG sold part of its stake in the M7 tollway to prove to the market how much it was worth and shore up its balance sheet and MMG slashed its dividend by more than three-quarters.

    All of this means fewer fees for Macquarie and more write-downs on its stakes in the funds. The group has already announced an estimated $2 billion of total write-downs for the year to March 31 and it expects to report that profit has halved to $900 million. That is not a bad result given that almost no other investment bank in the world is in the black.

    Even so, these debt issues hang over Macquarie as does the March 6 deadline for Australia's short-selling ban, which many believe kept the hedge fund managers at bay at a crucial time for the group. Those same hedge fund managers will no doubt be furiously running the numbers over Macquarie in the coming weeks, ready to pounce on any signs of weakness should the ban be lifted. Even with the ban in place, Macquarie was bruised and battered this week and forced to deny it had any plans for a capital raising.

    But the problem for Macquarie is that varying degrees of disclosure among its many funds make it difficult for the market to understand the businesses and their debt positions and how they relate to the group.

    That allows rumours to run wild. No one really knows how much debt is held across the group, but some analysts estimate it is more than $160 billion.

    Jim Chanos, the president of the US hedge fund Kynikos Associates - who became famous for his early warnings on Enron - has been a vocal critic of the Macquarie Model. He says the model gave the group incentive to overpay for assets because the shareholders in the funds picked up the tab while Macquarie's fees were based on the size of assets under management. The higher the price, the bigger the assets under management, the more lucrative the fees.

    Macquarie funds and their co-investors paid over $1 billion more than the next bidder for both Sydney Airport and the Chicago Skyway. .

    While assets in its funds are struggling with debt payments, there is no doubt Macquarie has always been very good at protecting the bank. Debt is held at the asset level. That means it is non-recourse to the funds, let alone to Macquarie, a clever strategy that essentially ring-fences any problems.

    But it is not that simple. As one insider says, if an asset were to fail, while Macquarie may not be obligated to come to the rescue, the reputation risk would be "enormous". Taking action, on the other hand, could spook investors and affect its credit rating.

    "At some stage, if a significant fund was in major strife, Macquarie might take the view that they need to protect the franchise," says Sharad Jain, a credit analyst at Standard & Poor's. "That would be a change in financial policy and we would need to consider that at the time as it is outside our expectations."

    Macquarie says that will not need to happen as none of its funds is in "major strife". It has already managed $3 billion of refinancing since September. And in terms of its four main listed infrastructure funds, there is no outstanding refinancing for this year and only 12 per cent of debt needs to be refinanced over the next three years. But there are clearly some assets that are stretched.

    MIG said at its results this week that the Indiana Toll Road had a debt service coverage ratio of just 1 times. That means that all of its operating income is being swallowed up by debt payments and is a concern given that traffic on the road, a mostly commercial toll road that runs 253 kilometres across northern Indiana, fell nearly 15 per cent in the last half. The ratio for Virginia's Dulles Greenway is 1.1 times.

    Chicago Skyway's debt service coverage ratio was a more encouraging 2.1 times. However, a look at its 2007 full-year accounts, the latest available, shows the asset had total long-term debt of $US1.55 billion.

    It reported revenues from its toll roads of $US53 million for the year, operating income of $US18 million, while its interest expense was $US95 million.

    MIG argues that the US roads make up just 11 per cent of its portfolio by valuation. And it is important when looking at a single asset to keep it in perspective in terms of the size of the fund and the overall group.

    "A number of these roads either have already, or will shortly, introduce scheduled toll increases which will see continued revenue grow and the debt service coverage position improve," an MIG spokeswoman said.

    Andrew Chambers, from Austock Broking, is less optimistic. But he says the US roads are a small part of MIG's business. "The US assets are clearly struggling and the outlook is not good but you don't own MIG for the US roads, you own it for its toll roads in Canada and France, which are very good assets."

    In the past, sceptics of the "Macquarie Model" said higher interest rates would bring it undone. But the group argued that interest rates typically rose in line with inflation and higher inflation would mean increased tolls on its roads, airport charges and parking fees. As such, the higher revenue would be a natural hedge against rate increases.

    But the current situation is different.

    Debt is more expensive not because of interest rates, which are falling, but because people are placing a higher value on risk. So the margin that lenders are charging on top of the cash rate, to make it worthwhile for them to take on the risk, has increased.

    At the same time, the slump in economic growth means it is harder for Macquarie to raise tolls, water rates and airport charges to offset the increased cost of its debt.

    MIG's Johnson says there are no "life-threatening problems" in the funds or at group level. "Macquarie's balance sheet is very, very sound," he says.

    "The question mark is over the earnings trend for the next two or three years, but I think they are very well placed to benefit from the recovery."

    Macquarie plays down the significance of the specialist funds business. But it still accounted for 20 per cent of Macquarie's income in the year to March 31, 2008, and just over a quarter of total advisory fee income came from work on the funds, according to its results presentation. Some analysts claim that number might be higher, depending on what you include.

    The corporate governance group RiskMetrics calculated that in the three years to 2006, Macquarie's three biggest Australian-listed infrastructure funds - Macquarie Airports, Macquarie Communications Infrastructure Group and Macquarie Infrastructure Group - handed over more than $1.15 billion in fees to the group.

    So there will clearly be earnings pressure as those fees drop and in some cases disappear. Despite these concerns, no one is game enough to predict Macquarie's demise. And in fact some even expect the group will thrive in a market where almost every company in the world will go through a restructure.

    They've done it before.

    Two of the group's business-transforming transactions took place after times of crisis. Macquarie bought its fiercest local competitor, BT Australia, in 1999 after the Russian debt crisis. And in 2004, as Asia was recovering from its financial crisis, it picked up the ING cash equities business in the region.

    "Investors will make a fortune out of the recovery and Macquarie is best positioned to do that," one former executive says.

    "They have lots of capital, they're smart and they still have a very diverse business. They will ride this out."

    While Macquarie's business will change dramatically, Perpetual's Sevior says the bank is unlikely to go the way of its imitators. "They have shown an ability to remake themselves in different cycles in the past but it will be a very difficult environment this time around."

    Rob Patterson, the managing director of Argo Investments, a top 20 shareholder in Macquarie, says the group has "done exceptionally well relative to all of their peers in a very difficult environment".

    He dismissed any comparisons with Babcock & Brown, noting that Macquarie was a more diversified business, with well-established stockbroking, funds management and private banking arms.

    Macquarie's debt is also less concentrated and longer dated (Babcock was mainly relying on one single $3.1 billion debt facility.) And it is widely regarded to have better risk management processes in place.

    "B&B is a one-dimensional fund manager and a very different organisation," says one former executive director. "It's like comparing a pushbike to a Rolls-Royce."

    Another important distinction between the two is that Macquarie owns a bank.

    That means its banking arm is regulated by the Australian Prudential Regulation Authority and it has minimum capital requirements. It also means that the bank has access to funds that other investment houses never had because of the government guarantee scheme introduced in November.

    Basically, the Government is handing out its AAA credit rating to Australian banks in return for a fee, allowing them to raise long-term money offshore. Macquarie has raised $12 billion since mid-December in Japan, the US, New Zealand and Australia.

    "Macquarie has been one of the most active users of that scheme," said S&P's Jain, adding that the raisings had allayed some concerns the agency had about Macquarie, when it slapped a negative outlook on the group's rating last September.

    Macquarie's retail deposits have also benefited from the government guarantee, rising to $18.1 billion at the end of last year, from $13.2 billion at the end of March.

    Macquarie executives, including the chief executive, Nicholas Moore, declined to be interviewed.

    In response to emailed questions, a spokeswoman for the group said it was "well-funded before the guarantee and has continued to improve its funding position".

    She also denied speculation that the group was looking at selling its underperforming property business and talked up potential acquisition opportunities, noting Macquarie's recent acquisition of the US gas trading business Constellation Energy. On the infrastructure side, Macquarie sees more growth in unlisted funds and says governments are likely to turn to the private sector for infrastructure investment in the downturn.

    If Macquarie wants to get retail investors interested in listed infrastructure funds again, they would have to be radically different to the funds of old, with reasonable fee structures and transparent corporate governance guidelines.

    "It's a new era where investors are much more fee conscious and much more cost conscious," says Hugh Giddy, the managing director of the fund manager Cannae Capital Partners.

    "There's a revulsion against greed. The social mood has changed. Investors are saying we need independent directors to say that Macquarie doesn't get to do all of the debt arranging and corporate advice.

    "This is more than a cyclical change; it's a structural change in terms of their ability to run their model."

Tuesday, March 10, 2009

Transparent Government In Windsor

All of you people who have attacked our Mayor and Council as not being transparent, well shame on you. They are very transparent. Oh, you do not understand what I mean. Then read on, dear reader, and learn.

At-grade, below-grade, W-E Parkway, full tunneling, Greenlink, tunnels, Schwunnels, Son of Greenlink, Modified GreenLink…does anyone have a clue where we are by now with respect to the road to the border?

All this time I thought that the City’s position was that it wanted 3.8 km of Schwunnels according to the Greenlink proposal that I believed that the City was pushing as its solution. After all haven't we paid hundreds of thousands of dollars for Sam and Parsons Brinckerhoff to create something under the supervision of our legal weapon of mass destruction?

I think I may be wrong now but I am not sure. I did read in the City’s materials presented with respect to the DRIC Environmental Assessment the following:
  • Modified GreenLink

    In July 2008 City of Windsor staff working with PB developed a Modified GreenLink solution in order to work with DRIC and reach a potentially acceptable solution that will break the impasse. The Modified GreenLink would also assist DRIC appreciating that the Parkway could include long tunnelled sections which would provide significant vehicle noise and emission shielding for communities and protected greenspaces, all for a construction cost that was not substantially higher than the DRIC W-E Parkway construction cost.

    The Modified GreenLink solution was presented by City staff and PB to DRIC and MTO staff in two meetings, one in July 08 in Windsor and the second in August 19, 2008 in New York. The Modified GreenLink maintains the original GreenLink principles and benefits, has the same length as the W-E Parkway (from the current Talbot Road termination of Highway 401 to the new bridge plaza), has construction features similar to the Parkway, including full shoulders, and can be constructed at substantially less costs than the original GreenLink even when costed in future dollars.

    The Modified GreenLink respected the City’s firm view that the access road design must protect and connect the communities it is traversing and present a considerate approach for those residents impacted by the new facility.”

Who knew about a "Modified Greenlink" before this? We suspected that there was a Son of Greenlink but were never given the details were we?

The reason that I think I am wrong is because in the Estrin materials he talks about Greenlink at one time and then the Modified Greenlink. I am not sure which is the one that I am supposed to focus on or support or maybe it is both. This Modified approach:

  • “provides for five tunnels covering 2,830 metres and consisting of three longer tunnels (1020m, 750m, and 700m) and two short tunnels (240m and 120m).”

In other words, a kilometre or so of Schwunnels disappears but somehow this does not impact the community in a very negative fashion, especially the people who thought they were protected by a Schwunnel but now are not. For some reason as well for almost 9 months, the Mayor did not think it was necessary to tell us about any of this. I wonder why not.

Well that is not quite accurate. As Chris Schnurr pointed out in one of his BLOGs in September, EH-News reported on it:

  • “Darryl Newcombe: The revised Greenlink design essentially preserves the kilometre long tunnels near the Oakwood, Mount Carmel and BellewoodEstates neighbourhoods, but leaves room to negotiate other aspects of the design with the DRIC team.

    Mayor Francis: I can tell you that the City of Windsor has proposed to DRIC a different way of building the facility that would perhaps come in line with the budget numbersthat they had set. That we had looked at the Greenlinkproposal and made certain suggestions that in terms of how we could protect residential areas with the longer tunnels and perhaps create better buffer spaces in other areas.”

Again, according to Chris, citizens were supposed to hear about this new proposal very soon thereafter. We also found out that the proposal had already been rejected by September by DRIC:

  • “And don’t worry dear reader, according to the Mayor, you’ll be made privy to what has already been submitted and rejected by the DRIC in the next few weeks:

    Fausto Natarelli: With respect to the most recent discussions, we gave the city’s proposal careful consideration, looked at it from our evaluation criteria, and where we concluded our assessment was for the hundreds of millions of extra dollars that were associated with this proposal it didn’t provide any real benefits above those that, beyond those, that were already provided in the Windsor-Essex Parkway.”

Gord Henderson knew about it as well:

  • “The infuriating thing is that the city is holding out an olive branch. Originally intent on full tunnelling over six kilometres, it compromised with GreenLink, which involved six tunnels with a combined length of 3,800 metres. Now according to my sources, the city has proposed tunnel consolidation and a reduction in their combined length by a thousand metres, down to 2,800 metres, while maintaining the commitment to shelter adjacent neighbourhoods. The two sides, I'm told, are $150 million apart, a fraction of the overall cost.

    Big movement. But the province? Nothing. No give whatsoever. It seems the powers that be will settle for nothing less than seeing Windsor on its knees.”

For all of that long period of time, Windsorites were not let in on the secret. Just a couple of media people who were to spread the message I guess. However, it seems that they did not do a very good job of it.

I admit, I thought our position was 3.8 km worth of Schwunnels. I am not certain what the Mayor talked about in his two hour PowerPoint Presentation in November to area residents at St. Clair College just before the DRIC people came for their Public Information Open House because I was not at the session. I don’t remember seeing anything about a 2.8 km Greenlink however after that session as the City's new position. He had his chance to tell them of his terrific compromise to gain citizen support. Why didn't he do so?

Can you imagine how those people must feel now after finding out that, when they went into battle with DRIC, their guns did not work. They did not have the proper ammunition. It was faulty:

  • “Operating on the principle that forewarned is forearmed, Mayor Eddie Francis and city council provided supporters of their GreenLink border option with ammunition to take to open houses this week presented by the Detroit River International Crossing team.

    "We're here today to arm you with as much information as possible," Francis told a meeting of about 300 residents Saturday at St. Clair College.

    "Go fight for your neighbourhoods and residences....?”

They were left defenseless. They thought they were fighting for 3.8 km of Schwunnels I am sure not 2.8km.

How about Al Teshuba and his friends, the letter-writers. Were they writing about Greenlink or Modified Greenlink? Did they know? The Star article stated:

  • “The city's GreenLink proposal has about 3.8 kilometres of tunnelling compared to 1.9 kilometres of tunnelling in the Detroit River International Crossing study parkway.

    Windsor's environmental lawyer, David Estrin, said residents could still ask the environment ministry to make the full-length tunnel the preferred option.”

Do you see what I mean about confusion? Some of the residents still wanted full tunneling and the City’ lawyer said they could still ask for that!

You are now probably sitting there, dear reader, thinking that I have the answer to all of this. That I will make it clear. That I have the insight, the inside scoop. How right you are.

If you want to understand all of this, just do not get wrapped up in all of these details and conflicting fact situations. Understand that none of this is real anyway. It is all a negotiating position. Full tunneling, Greenlink, Modified Greenlink… it doesn’t matter. They are all tools to get money out of the Senior Levels for Eddie’s Agenda. Whatever that might be.

The Star gave it away. The Star story the other day talked about the $30 million that the City would lose and then, it was rewritten to drop the paragraphs dealing with the $30 million. I think that there was another reason why the story was changed. You will not believe it when you read the following:

  • DRIC’s EAR Fails to Assess the Economic Cost of the W-E Parkway

    DRIC has produced a biased and incomplete cost assessment for the W-E Parkway. While stressing the benefits that will come with increased border efficiency and traffic movement to the province at large, DRIC has failed to account for the economic costs that will be felt by the local community, including displaced workers and businesses, and the affected municipalities and school boards. DRIC has drawn conclusions and made assumptions without any evidence or quantitative support.

    In February 2009, the City of Windsor retained Garry Stamm of Stamm Research Associates to undertake an economic analysis of the WindsorEssex Parkway. Garry Stamm's 2009 report is found in Appendix A to this report.

    In summary, Mr. Stamm concluded that the economic benefits of the W-E Parkway (or any access road built) will be felt by the larger regional, provincial and national economies of scale. In contrast, the economic burden will be borne at the local level.

    The principle of equity dictates that the local community not be sacrificed for the benefit of the province as a whole. In the present case, from an economic impact assessment perspective, the principal flaw is not even that DRIC has failed to allocate the burdens fairly; rather, DRIC has not even assessed the burdens that will fall disproportionately on local shoulders and weighed that impact in the EA process…

    Adding up these costs, which are appropriately and necessarily a part of any economic impact analysis but which DRIC has not counted, recognizing that there are many more economic impacts that DRIC has not attempted to measure but that were not appropriate to estimate, we are left with economic costs to local economy in the range of $230 million.”

$230 million NOT $30 million. The Star was only about $200M out. This quotation came from David Estrin’s “A Cascade of Errors.”

I trust now that you understand what I am talking about. I do not really know which road Eddie is putting forward as the solution nor should you. It does not matter. It started at full tunneling and has now gone to a Modified Greenlink. He could put forward a gondola to be built across the River that would carry trucks inside the cabins for all I care. It is all irrelevant other than to be used as a negotiating tool.

It is nothing more than the approach that David Estrin recommended that Hamilton use when they sued the Federal Government and a whole bunch of bureaucrats for $75 million except without the lawsuit. Eddie would not like to be cross-examined by an experienced trial counsel. He could be blamed. That is why in my opinion he threatens and never does sue notwithstanding the so-called horrors to our health and children that we are told about. As I Blogged before:

  • “I do not think that I'm that far off the mark in what I think about the Mayor's campaign for Greenlink. I happened to recall something that I read about a controversy in Hamilton where that City sued the Federal Government over an Environmental Assessment:

    "the Hamilton municipal government is accusing 65 federal government staff of "deliberately and unlawfully" using their public office to harm the city by participating in an environmental assessment of a controversial city expressway. The city is suing the civil servants and four former federal cabinet ministers for $75 million, charging the public servants illegally used the Canadian Environmental Assessment Act (CEAA) in 1999 to stop or delay the Red Hill Creek Expressway.

    The lawsuit says "the defendants abused their public office by engaging in targeted malice towards the City's completion of the Expressway" and utilized environmental assessment "in an unprecedented, illegal and unconstitutional manner in order to achieve that objective."

    The formal statement of claim filed in court by David Estrin of Gowling Lafleur Henderson also says "the defendants knew, when they determined to use their public office to stop the City completing the Expressway, that the City would be harmed in the result..."

    The city openly admits that its aim is to achieve an out-of-court settlement which would transfer tens of millions of dollars from the federal government to municipal coffers."

    I saw in a news story in March, 2008 that:

    "Councillors have voted to continue a controversial lawsuit against Ottawa involving the building of the Red Hill Valley Parkway.

    It has also removed a cap on legal costs plus decided to keep the costs from public view until the suit's end...

    Councillor Brad Clark, who supported keeping the lawsuit going, called it "the right thing to do" as an effort to keep pressure on Ottawa to settle. He wasn't bothered by removal of the cap or keeping costs from the public until the suit was over. Legal costs have been estimated at $243,000 since 2004."

It is all so tiresome. And so childish. In fact, it is one of the few matters involving this Municipal Government that is transparent. To everyone now.

Is Windsor Being Dominican-ized

Thank goodness that Gord Henderson is back from his holiday and seems to be feeling better. I was getting quite concerned because we had not seen a new column from Gord in his new location on the Saturday Star Editorial page at all.

Presumably, because we have not seen any A3 columns for several days, the Star will now announce shortly who is going to replace him.

To be direct, I have no sympathy for his discomfort. It is his fault that he did not listen to Councillor Lewenza and decided to BUY FOREIGN VACATION. He could have decided to BUY CANADIAN VACATION. He could have traveled to many ski areas across the country. He could have enjoyed the scenery and views, swam in a heated pool and sat in a hot tub drinking Canadian wines. Perhaps he could have waited a few months and enjoyed visiting the beaches in many parts of the country. But oh no, he had to go to the Dominican Republic and risk a parasite in his system.
  • “Given that the majority of travelers succumb to diarrhea after eating contaminated food or drinking dirty water, and because the Dominican Republic is a developing country competing with a climate in which bacteria love to breed, you should take sensible precautions when choosing what to eat and drink. Ironically, street food served fresh and hot is safer than the reheated buffet food found in many of the more expensive restaurants and all-inclusive hotels.”

We Bloggers are very happy that he is back. While they wrote interesting columns, the McArthurs, Pearsons and Macalusos are hardly the challenge that Gord is. Whichever one of them wins the coveted A3 position will take time to grow into the job. We will have to treat them gently at the beginning so as not to intimidate them too much. We do not want to scare them off right away.

Gord is back playing his Sheriff’s role again to the “T.” I do feel sorry for some of the commentators on the Star’s Forum who clearly have no idea what Gord is writing about. They took him at face value, thinking that he is writing about spoiled Westerners.

We know better don’t we, dear reader. We know that we must read deeper into what he has written than what seems obvious on the surface.

Clearly, Gord ‘s column is nothing more than an allegory. It is telling us what Windsor has become under our Mayor and Council. He is telling us that our future is to have even less and that we had better learn to deal with it unless drastic action is taken by the entrepreneurs who made this City great and can still do so. We cannot rely on this Mayor and Council because they have failed us. We have no other choice. Right now, we are becoming Samana!

Consider the following to understand what I mean.

We used to be “obese, pasty-faced” working at the auto plants, for others, with all of the security that we supposedly had when this area was the third richest in per capita income in Canada. [Note: Gord mentioned Canada’s third-place ranking on the United Nations human development index].

Instead, we are going to have to “live by their wits” as we create our own opportunities “to sell, from boat rides to fish dinners, from massages to native jewelry, from horseback rides to embroidery.” In other words, we must change in our City from a manufacturing based economy based on the auto industry to one based on making other products such as for the renewable energy sector, to becoming a services based one like IT and one based on high end auto research as Dennis DesRosiers has argued.

I especially liked the paragraph dealing with the homes in Samana. We will be downsizing just as Gord did when he retired to “the tiny shacks clustered along the coastal highway in Samana.” Some homes obviously will be better than others with: concrete blocks, bars on the windows and exposed rebar.” Those who are being foreclosed will have the “weatherbeaten planks, dirt floors.”

His reference to “Garbage is everywhere” ‘and “Mangy dogs patrol the streets” made fun of Council’s trial balloons on outsourcing garbage pickup and trying to eliminate the rodent program.

There is no doubt that the “the area's lone all-inclusive resort” is meant to be our Casino and Hotel. That is where all of the Investors will be brought in when City Hall tries to bring that back this City from the dead. There will be very few other places for them to go as many of the other establishments will close down as tourism drops. We do need to have one nice place around after all.

Tell me that Gord is not talking about our downtown when he said:

  • “Unlike a lot of Caribbean islands, the area's lone all-inclusive resort is not a gated and guarded community during the day… At night it's a different story, as evidenced by the security guard heading off into the bush with a rifle slung over his shoulder and a Crocodile Dundee-sized knife dangling from his belt.”

Tell me that he was not talking about the four Liberal MPPs session re renewable energy and how our industries are capable of re-inventing ourselves:

  • “They have nothing, and nothing to lose as long as they can still catch a fish, pluck a chicken, chase down a wild horse, clamber up a coconut palm with a razor-sharp machete or figure out a way to extract a bit of cash from tourists. That makes them uniquely equipped for survival in these trying times.”

As for the problems of the world economy mentioned by Gord, we have our own unique ones that are ruining us as our leaders fiddle: the ridiculous opposition to the Enhancement Project and the DRIC road to the Ambassador Bridge and the pie-in-the sky and in-the-water and underground projects like the cargo centre at the airport, the canal vision and trying to buy the Detroit half of the declining Tunnel which all wind up wasting up time and money. We are not fousing on our real needs as our attention is being distracted.

So welcome back Pardner. I missed you. I need your signals to know what is really going on. Don't worry, I will not tell anyone what you are doing!

Monday, March 09, 2009

Council Matters

The interesting stuff you find looking around the Council Civic Corner pages.


Here is another claim for the expropriation out of the Canderel matter.

The Ontario Municipal Board found that the owner of the premises where the video arcade was located should receive an extra $143,000. The City opposed the request for additional revenue at the OMB but lost, tried to have the matter reviewed by the Divisional Court but lost again and then tried to get leave to appeal the issue in the Court of appeal and lost another time.

Above is what it costs you and me as taxpayers to fight the $143,000 claim. You will note that the interest award alone is about $100,000. Legal and appraisal costs for the other side are over $120,000. Presumably, there are costs for the City as well that are additional but the City Report does not set out what they are.

To be direct, I am not sure what the matter of interest was in this matter that justified all of these additional costs that taxpayers now have to pay. Perhaps the Mayor can let us know because after all


With the Undevelopment Commission Board gone, with no CEO and with two politicians in charge who is doing what in this time of economic crisis?

Councillor Marra posed a Council Question at the beginning of February to have Administration prepare within 30 days a process for setting up a Forum on Jobs and Economic Development Strategy.

After all, since he is only a Councillor, he can be been ignored. Accordingly, he has written to the Mayor and his Colleagues asking for action to be started to get this Forum under way.

There is no doubt that he will be ignored again. After all, he will be told that what is being proposed would undercut the new Development Commission. Of course, it will be interesting to see how long it takes to set up a new Commission.

However, I hope that Councillor Marra reminds his colleagues that the new Airport Board was undercut by Council when they allowed the Mayor and two Councillors to fly to Frankfurt to hire a FOREIGN CONSULTANT to do an airport study.


I am not sure if “eternity” is the same length of time as “in perpetuity.” I will leave that for philosophers to decide.

Here are the terms that our Mayor has decided that the Bridge Company must agree to before allowing the Company to submit its plans it seems. Even then, even if the Company agrees to all of this, there is no guarantee that Council will approve anything as the Mayor has stated.

It is the arrogance of it all that disgusts me.

Shhhhhhhhh. Don't remind Council that they already know about the Plans. It's that amnesia disease again.

The Bridge Company did come to Council quite sometime ago along with the Green Corridor people to explain their billion-dollar proposal but that Council only gave them 10 minutes of time to make your presentation and did not have the courtesy to extend it. Compare that with the amount of time that the City's experts have been given to explain they are failed Greenlink project. Not one single Councillor would permit it.

Oh well, Councillor Mom can now write on her BLOG that she is fully supportive of this initiative because her heart went out to all of the residents in the impacted area. And if there is no approval, then it is no longer her fault if the homes do not get torn down. Blame it on her colleagues for not approving this. Or, more likely, blame it on the Bridge Company for not doing something that the Councillors believe is absolutely essential.


Can you imagine… certain residents in the West End at Council last week out of the blue wanted Council to impose an Interim Control Bylaw on lands east of Huron Church Road. As a Council report sets out, the lands west of Huron Church Road are still covered by the existing ICB because of appeals.

If those residents had been successful, a good chunk of Ward 2 could not be developed. One might ask then who would need any Ward Councillors for years if effectively nothing could be built in their Ward!

I raise this issue with you because if anyone thinks that the Bridge Company has a hope of being successful with Council after Eddie’s invitation, then those people are delusional. Look at how this fellow who wants to build a double duplex is going to be stalled off for who knows how long and what reasons are given. And this is just one property too.


I thought the crisis with the Windsor Library was over. Or is their some new and improved agenda designed to destroy the System.

Council is stalling. If there was such an emergency, then one would have thought that the City would act in a very quick manner.

Check out some of these comments in a letter to the City from Councillor Halberstadt who is also the Chair of the Library Board


I cannot believe after that long, very long, very, very long speech by Councillor Hatfield in support of the Windsor Symphony at Council that the Councillor might be against giving money to the Art Gallery:

  • “Coun. Percy Hatfield said the AGW faced a "harder sell" because it had assets it could hawk for operating cash or use to secure a bank loan.

    "The art gallery has lots of art that's been in the vault for 10 years or more that's never seen the light of day," said Hatfield.

    "Maybe it's time to sell off a few pieces instead of coming to the city of Windsor. As sacrilegious as that may be, these are difficult times," he said."

I can just picture Councillor Brister bristling over this suggestion because he talked about it years ago and was rebuffed.

I have to admit that pleading for taxpayer money because they did not invest properly will not go over very well. Who do they think that they are, OMERS!

As for a contribution from the County, here is what a BLOG reader sent me:

  • "Re: Request to Appear Before Essex County Council with Grant Request

    I have been forwarded your request to appear before County Council as part of the budget deliberations for 2008.

    Dating back to 1991, Essex County Council adopted a resolution stating,

    “THAT County Council eliminate the practice of awarding grants from this budget session forward”.

    The Procedure By-law was amended at that time to delete the former section that outlined the process for submitting grant applications. In accordance with that direction, the award of discretionary grants has been eliminated as an element of the annual budget preparation process for the County of Essex.

    The difficulty that confronted County Council was that it received numerous grant requests and the delegations advancing the requests were all worthy causes. County Council deemed that it was not the role of a municipal government to provide operational financial assistance to external organizations and agencies, unless legislatively obligated to do so. While there have been discussions about the ‘no grant policy’ by subsequent Councils, over the years Essex County Council has remained beholden to the principles embodied in that original resolution adopted in 1991, to eliminate the concept of discretionary grants from the County budget process.

    Accordingly, I am obligated to decline your request to appear before County Council during their 2008 budget deliberations."