Thoughts and Opinions On Today's Important Issues

Tuesday, May 11, 2010

More Border Stories

The border stories never stop.


  • "It's the latest act in a saga that has seen costs triple, original designs discarded mid-project, contractors replaced and territorial officials hastening to Ottawa for a deal to allow the N.W.T. to increase its borrowing power.

    "It didn't all flow according to plan," concedes the territory's deputy premier and finance minister, Michael Miltenberger.

    Yellowknife MLA Dave Ramsay, a persistent critic of the project, puts it a bit more directly: "We were fooling ourselves and it came back and bit us pretty hard."

  • "The estimated $50-million cost would be paid through a $6 per tonne toll on commercial traffic...By 2008, the price-tag had grown to $150 million."

  • "Banks backstopping the project were growing nervous and demanded to see a detailed redesign by last Jan. 29. When they weren't satisfied, they declared a default, bringing the structure of the project crashing down."

  • "And now the territorial government is being forced to do what critics had warned about all along -- take over the project and assume the entire $165-million debt."


I still cannot figure out why we need P3s. It is almost as if Government people will do anything to make P3 operators piles of money. If I was a cynical person, I might say...follow the money.

Here is what I read from PPP Canada SUMMARY CORPORATE PLAN 2009-2014. That's Canada's P3 company--"PPP Canada was established in 2008 as a Crown Corporation with an independent Board of Directors reporting through the Minister of Finance to Parliament."

  • "Financial Crisis

    The impact of the financial crisis has been a dominant issue. It has reduced the number of players financing P3 projects – both equity and debt. This has been particularly pronounced with respect to debt, especially long-term debt. A number of European financial institutions that have been active in the Canadian P3 market have exited and others have reduced the lending caps to individual projects. This has created difficult challenges for closing projects, especially projects that were caught in mid-procurement during the financial crisis.

    PPP Canada consulted closely with provincial counterparts, Export Development Canada (EDC), Finance Canada and the private sector to understand the dimension of the issue and explore possible responses. At the federal level, the January 2009 Budget established the Extraordinary Financing Framework (EFF) and broadened EDC’s authorities for two years to include domestic projects. This enables both surety and financing support to P3 transactions. At the same time, provinces have pursued alternative financing models including British Columbia’s "wide-equity" approach, involving increased equity requirements but with the province providing the debt for projects.

    Financial market conditions have improved recently in terms of both liquidity and spreads but they have not and likely will not return to the credit conditions that existed pre-financial crisis. PPP Canada will continue to monitor and assess needs.


Silly me. I thought that Bill was all about P3s and whether Michigan should have them or not.

I am wrong. According to MDOT's Mohammed Alghurabi, Senior Project Manager

  • "As you know, we are currently awaiting a decision by the Legislature by June 1st on whether the DRIC project will get the go-ahead to proceed. HB 4961 is the bill that will allow the DRIC Project to move forward, and currently rests in the House and Senate Transportation Committees."

Oh yes, I forgot. If that Bill is passed, MDOT never needs to talk to the Legislature again over DRIC or any other one since there is no Legislative oversight on P3s.


We must mustn't we since we are prepared to loan $550M to the have-not State. Hardly:

    Canada’s Land Border Crossings are Key to Canada’s Security and Prosperity.
    Why the Lack of Urgency to Fix Them?
    What Will Happen If We Don’t?
    An Interim Report by the Senate Committee on National Security and Defence

    B. The Dirty Little Secret

    American leaders are very good at saying the right things in public...

    But when Committee members pressed a number of Michigan congressmen in Washington, D.C., they were candid in saying that, while they were being pressured by Canadians to reduce border uncertainty, they were not receiving any pressure from Americans.

    And Americans, of course, vote for them. Canadians don’t.

    Border uncertainty could well prove to be a cancer for the Canadian economy. The U.S. economy would also suffer from the shutdown of any major crossing – the figures on Page 48 show that. But there is a dirty little secret behind some U.S. politicians’ lack of interest in rushing to make Canada-U.S. land border crossings more secure, and it is this:

    Border uncertainty serves the interest of certain businesses and some local politicians in Michigan by making Canada a less attractive place to invest capital.

    If industry perceives the border crossings at Windsor-Detroit to be unreliable, then in time Canada will see negative impacts such as less investment, and even disinvestment. As Gerald Fedchun, President of the Automotive Parts Manufacturers' Association, said, “We don't think that perception is there just yet, but others can use the uncertainty against us.”

    The American mantra since 9/11 has been that national security trumps trade. But to some American communities that would like to see investment in Canada move south of the border, this may amount to patriotic talk that disguises where they would actually like to walk...

    This may well be in the interests of some American politicians whose constituencies are trying to attract outside investment that might otherwise go to Canada, or simply trying to protect their neighborhoods."

Wait a minute, I got it. MDOT does NOT want the border fixed up. They allowed the dumbest possible Bill to be introduced into the Michigan Legislature to allow P3s. They KNOW it has to be defeated and that would put the DRIC behind for ages thereby hurting Canadian trade.

Wow, Minister Baird, and Prime Minister Harper got played for suckers!


An interesting article in

  • Was Granholm appearance "orchestrated?"

    Was it all orchestrated?

    Did Michigan Governor Jennifer Granholm make it seem as if a shiny new offer from Canada’s government to build the DRIC border project was a last minute effort that could save Michigan financially just in the nick of time?

    That’s how Michigan state representative and Republican Marty Knollenberg sees it...

    He said the governor interrupted the presentation by the state’s transportation director and “within a couple of minutes she was gone.”

    But, he said, in the very same presentation, “they had reference to the fact that the Canadian authorities were going to commit to $550 million.”

    He called Granholm’s appearance “contrived” and “orchestrated to create a buzz” with the aim of putting pressure on those state legislators, sceptical of the deal, to vote in favour of DRIC."

Here is the slide referred to:


Thanks to MDOT spokesperson Bill Shreck, investigative journalists in Michigan need to find out:

  • "Governors and premiers and others aren’t just sitting around their office doing nothing.”

Here is a hint about what the Michigan Governor does:

  • "The latest overseas trip was Granholm's 10th since taking office in 2003. It won't necessarily be her last, said Granholm, who leaves office at the end of the year. She has traveled to Austria, Belgium, Germany, Israel, Japan, Jordan and Sweden."

I think she is checking out fares and hotels on and comparing itineraries with our globe-trotter, Minister Sandra Pupatello. I wonder if her hubby is asking his client, Windsor's Mayor Francis, to give him some tips given all the trips he has taken overseas.



  • "The Saint John Harbour Bridge Authority has awarded a contract for $32.6 million in repairs over the next two years.

    The outstanding issue of the bridge's debt and how its structural integrity will be maintained must still be addressed...

    At face value, this is a reasonable offer; but developments elsewhere in Canada have added weight to the provincial government's contention that Ottawa can do better.

    Provincial officials argue that the federal government has invested more than $400 million in the past four years on similar bridges in Quebec. In February, it emerged that Ottawa was negotiating to buy the Ambassador Bridge between Windsor, Ontario and Detroit, Michigan. And just last week, federal Transportation Minister John Baird offered a $550-million loan to the state of Michigan, to pay its share of the cost of a new international bridge."


Nice attempt by MDOT to try and sneak through a horrific P3 Bill by mixing DRIC up into it. That will turn out to be a huge blunder.

If you want to understand what some of the the issues around the P3 are all about, read this from Michigan Represntative Opsommer:


Coming in at #11 was the Ambassador Bridge Enhancement Project in the TRIP list of "Projects Vital to Michigan’s Economic Recovery."

Good thing it was not in the Top Ten considering that the meeting to announce the List was held at the Detroit Chamber's offices. They might have been upset given their DRIC support.

Lots of MDOT P3s are on the TRIP top 10 list too. Pure co-incidence no doubt.