Thoughts and Opinions On Today's Important Issues

Wednesday, May 05, 2010

Where's The Budget For Canada's $550M DRIC Funding

I saw this interesting comment about Canada's Economic Action Plan, the so-called basis of Canada helping out Michigan, a State in foreign country. If we consider our border crossing, what an indictment respecting our Federal Government's desire to force the Ambassador Bridge Company owner to sell out cheaply rather than let him build his Enhancement Project Bridge at his risk and his expense:

  • "Indeed, close to $18-billion of the $40.5-billion deficit didn't have to be there at all. The number represents the government's "stimulus" package, which, as a study by the Fraser Institute revealed last month, actually did squat to stimulate the economy. The study found that "government spending and infrastructure investment contributed only 0.2 percentage points to the change in GDP growth between the second and third quarter of 2009 and nothing between the third and fourth quarter. Private-sector investment and increased exports were the driving forces behind the change in GDP growth." Even the vaunted Home Renovation Tax Credit was found to have had no impact on the country's economic fortunes.

    Of course, Mr. Flaherty went out of his way to repudiate the Fraser Institute's results, but they were based on the government's own numbers: Statistics Canada data, to be precise. The conclusions bear out what many economists have been saying all along: so-called stimulus plans don't generate economic recovery. They simply divert money from the private sector to government projects, and since infrastructure projects in particular take time to get "shovel-ready," most of the spending tends to occur when the recovery is already underway."

It's probably not a big deal but where in the Budget has Canada set aside money for the DRIC bridge, especially the UP TO $550M part. I know that there was a 2-page letter that even Minister had to laugh over that allowed House Democrats to vote for a P3 Bill. But I am still trying to find the place where that cash was set aside back in March 4, 2010 when the 2010 Budget was presented to Parliament.

I cannot be sure that what I am saying is 100% correct. Budget documents spelling out Canads's Economic Action Plan are several hundred pages long. I have done the best I can but I cannot find any reference to the UP TO $550M financing that Transport Minister John Baird talked about. Perhaps he could point out the section where it is mentioned

What we know is that the money should be there somewhere. After all, it was discussed long before the 2010 Budget came out and even more than just financing DRIC but buying the Ambassador Bridge:

  • Baird was given the mandate by the PM 16 months ago to "make it happen," whatever "it" is

  • 8-9 months ago "The idea to loan Michigan money for the bridge project “came out of many discussions over the past 8 or 9 months,” he said.

    Talks became more detailed five or six weeks ago, he said, and Granholm become involved about 10 days ago. The deal was announced by her during her surprise appearance at a House Transportation Committee hearing Thursday morning.

  • Around Xmas time, 2009, Harper issued a secret mandate letter to buy the Ambassador Bridge

  • Detroit News told us on Feb 1o, 2010:

    "A frustrated Canadian government decided last summer to end its wrestling match with Manuel "Matty" Moroun by offering to buy the Ambassador Bridge from the billionaire, a former Michigan governor said Tuesday.

    But talks ultimately broke down when Moroun's asking price of $3 billion, plus incentives, proved to be too high, the former governor, James Blanchard, said. According to Blanchard, no new initiatives on the possible sale have been pushed forward since July.

    "If the Canadians could buy it, I'm sure they would. But I don't think Moroun's price and proposal was taken seriously," he added."

    "One insider said the government has approached Moroun in the past and been told the asking price is $3 billion — roughly twice the government's evaluation."

  • Now, Canada has offered Michigan UP TO $550M to pass P3 legislation errrr:

    "Canada has offered to contribute up to $550 million US to help the cash-strapped state of Michigan pay for a new bridge crossing the Detroit River between Windsor, Ont., and Detroit...

    "This is good news," said Baird.

    "But we're still waiting for the full Michigan house and full Michigan senate to vote, which is scheduled to occur in the coming weeks."

    Michigan will only receive Canadian funding when the Michigan state legislature fully adopts the DRIC project, a decision which is expected to happen by June 1.

    Baird said discussions between Canada's ambassador to the U.S. Gary Doer and Michigan's governor indicated the only way the legislation would pass through the house was for Canada to help out financially.

    "If you wanted to make this thing happen, this was the only way we could do it," Baird said."

In passing, here is something I do not quite understand. It seems contradictory. If Harper really wants to build the DRIC Bridge then why would he want to buy the Ambassador Bridge. It's too much money just to get rid of a competitor. Or could it be he really only wants the Ambassador Bridge and that is where the second bridge is really going to go.

In any event, apparently, the Minister tells us that this UP TO $550 project will be financed under Canada's Economic Action Plan. I tried to find a reference to it in Budget 2009 when the Economic Action Plan was first announced. But there was not even a mention of this area in that document except in the context of a Quebec-Windsor rail corridor and upgrading our VIA Rail station

For the border, I saw this:

  • "Providing up to $14.5 million for two bridges at two of the busiest U.S–Canada border crossings: the Blue Water Bridge in Sarnia and the Peace Bridge in Fort Erie."

  • "Providing funding to modernize and expand border service facilities at Prescott, Ontario; and at Huntingdon, Kingsgate, and the Pacific Highway in British Columbia."

Maybe it was here except the idea had not been dreamed up in 2009 and it was only 2 year funding:

  • "Immediate Action to Build Infrastructure. Accelerating and expanding recent historic investments in infrastructure with almost $12 billion in new infrastructure funding over two years for the construction and repair of roads, bridges, small craft harbours, broadband internet access, electronic health records, laboratories and border crossings across the country. This will support economic growth and employment this year and next, while also bolstering Canada’s long-run productive capacity."

So I looked in Budget 2010 and here is what I saw:

  • "Windsor-Detroit

    The Windsor-Detroit border is the busiest commercial crossing in North America, through which over one-quarter of our merchandise trade with the U.S. passes. In 2007, the Government of Canada set out a strategy to advance the construction of a new crossing in the Windsor-Detroit corridor. Canada has worked in concert with the State of Michigan and its U.S. partners, with the U.S. federal administration, with the Province of Ontario and with the City of Windsor to move this project forward. Since 2007, the project has reached key milestones, culminating earlier this year in the issuance of a Request for Proposal of Interest for the development of the Detroit River International Crossing Project under a public-private partnership arrangement.

    Budget 2010 provides $10 million over three years to Transport Canada to support the legal, financial and technical work required to advance this project."

Oooo, $10M is a far cry from UP TO $550M

  • "Budget 2010 invests $87 million over two years to ensure the Canada Border Services Agency can continue to deliver efficient and secure border services. Funds will be used to invest in state-of-the-art equipment, such as vehicle and cargo scanning equipment, as well as upgraded information systems that underpin effective border operations."

Nope, no DRIC money there; that's for Customs

  • "Public private partnerships (P3s)

    PPP Canada Inc. successfully completed its first call for project applications to the P3 Fund in October 2009. Twenty applications were received from provincial and territorial governments as well as Indian and Northern Affairs Canada. Six applications were for municipal projects. Projects ranged in size from $45 million to $500 million in capital costs and represented eight different infrastructure sectors.

    PPP Canada Inc. will commit over $100 million in 2010 to projects that demonstrate leadership in P3 procurement. The first project announcement will take place in the coming weeks. Further announcements based on Round 1 applications are expected later this spring. PPP Canada Inc. will launch its second call for project applications in mid-2010."

Not there either since no federal projects were involved other than from Indian Affairs and "over $100M" is nowhere close to $550M.

  • "Funding to Upgrade and Modernize Federal Infrastructure---

    Federal infrastructure projects, including faster and more reliable passenger rail services, safer bridges and highways, refurbished harbours for small crafts and more efficient border crossings, are now underway, creating jobs across the country."

Close but the Ambassador Bridge is NOT a federal infrastructure but private and the projects that were listed did NOT include DRIC.

Looking at the numbers:

  • only $45M was committed to border facilities and over 2 years.

  • $16B for Building Infrastructure to Create Jobs and none allocated for this border

  • $99M for Federal bridges

Then in the 5th Report on the Plan, I saw this:

  • "Building Infrastructure to Create Jobs

    Canada's Economic Action Plan provides approximately $16 billion over two years to modernize a broad range of infrastructure including our roads, bridges, public transit, parks and water treatment facilities, and to support home ownership, help stimulate the housing sector and improve housing across Canada...

    Investments in federal infrastructure projects $750M

Too many federal projects to have $550M just for DRIC and limited to Canada anyway.

  • "Funding to Upgrade and Modernize Federal Infrastructure

    Federal infrastructure projects, including faster and more reliable passenger rail services, safer bridges and highways, refurbished harbours for small crafts and more efficient border crossings, are now underway, creating jobs across the country."

That's more along the lines of repairs than providing a credit facility and DRIC is NOT mentioned in the projects.

Nothing under "Creating the Economy of Tomorrow" or "Improving Access to Financing"

So Mr. Minister, where's the money allocated? I know you had to "bring this game to a close" Was the offer just part of a game, a game designed to fool everyone to get P3 legislation passed in Michigan?

Just watch Baird's face for the answer.


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