I
have to admit it. I am really quite intrigued with the weather that
we were experiencing these days.
I
know, I know, I know...I'm not supposed to talk very much about the
weather when I do these columns. However, the weather always
intrigues me. So please excuse me when I do.
As
I am sure you know by now, I was so busy performing different
functions for so many years that I really did not spend all that much
time thinking about the weather as I do now. I have the time and am
fascinated by what I am experiencing around me. What I found so
interesting recently is how high the temperature rose in the autumn,
even though it was quite cloudy, and then how quickly it fell,
accompanied by rain. Obviously, it was not the first time that it
happened in the last few weeks.
Anyway,
that is all that I am going to discuss now about weather matters.
There
are a number of interesting issues that I would like to discuss. Here
they are now.
MORE
NEWSPAPER LOSSES
I
just find it amazing how much money newspapers seem to be losing.
Even the ones that seemed
to be so special in the past, and therefore so successful, are
suffering today. Clearly, they have to make all kinds of changes to
the way they run their operations these days to try and protect
themselves.
I
saw these numbers recently and was shocked because one of Canada's
largest newspapers is losing a lot of money:
"Torstar
Corp. reported a loss of $18.8 million in its third quarter as its
revenue fell by 13 per cent.
The
publisher of the Toronto Star newspaper says the loss amounted to 23
cents per share for the quarter ended Sept. 30.
The
result compared with a loss of $6.6 million or eight cents per share
in the same quarter last year.
I
do not have the faintest idea about what will happen in this
industry. As I am sure that you know, the Windsor Star's parent
company is also in a difficult financial position. I have no idea
what will happen to so many newspapers in our country given the
losses that they are experiencing now.
ANOTHER
BORDER STORY
Please
forgive me for posting the story, but I think that you will enjoy
reading it. I'll make it very short and sweet so you can understand
what I'm saying and why very quickly.
Try
and find a copy of the Ambassador Bridge Company paid paper on the
ridiculousness of building a Government bridge at the border for you
to read. It was prepared by Eric Miller of the Woodrow Wilson
International Center for Scholars in Washington, DC. Yes, I know who
paid
for it but take a look at it and see the calculations for building
the Government bridge in comparison to building the "private"
bridge.
The
reality of the paper is that when one looks at the revenues to be
generated compared with the cost to build that Government bridge:
"Canadian taxpayers will be saddled with significant liabilities
related to the project for decades to come."
Three
different examples are given from a financial perspective. The
reality produced in an article back in 2007 by Price Waterhouse for
the Michigan Department of Transport is that "
"real tolls will
not raise sufficient funds to build the project and therefore some
kind of a public subsidy... will be required."
What
makes this even worse from a financial perspective is that traffic at
the Ambassador Bridge has fallen 44% between 2000 and 2017. Car
traffic has dropped by half, while truck traffic has dropped slightly
over a quarter.
Apparently,
"there is little hope in the
foreseeable future of returning anywhere close to pre-9/11 levels."
As
you may know, dear reader, Canada is stuck with the construction
costs. They are pretty close to $5 billion now and probably will be a
lot higher by the time the Government bridge is completed. Who knows
what the real amount will be!
When
looking at the three examples in the paper, it is assumed that each
of the bridges, the Government bridge and the new Ambassador bridge,
will split the border traffic 50% each. Assuming that is true and
without outlining to you all the details of how the calculations are
determined, here's what should be interesting to you:
Example
1: even with an operating profit of $15 million being made, the
Government bridge would require a Canadian taxpayer subsidy of $184
million per year!
Example
2: in this case, tolls are doubled while costs are to remain the same
so income increases and yet the Government bridge would still require
a subsidy from taxpayers of $144 million per year!
Example
3: tripling the tolls means now that the Government subsidy still is
in the amount of $104 million per year! Of course, that assumes that
people will still cross the bridge and pay such high tolls.
Can
you imagine how much more the losses would be for the Government if
the Bridge Company did not match the Government crossing rate and the
Government had to reduce its toll price or it would lose more volume.
Just remember that the Government cost has to be higher because its
construction cost is so many times higher than what the Bridge
Company will have to pay for its construction crossing costs.
How
long will it take the Government to pay off its debt? The author
suggested many decades if it ever could be paid off at all. It is
suggested that under the best alternative it might take Canada at
least 61 years to pay off the debt.
Frankly,
this whole paper that was prepared is just another example of the
stupidity that is going on with respect to the border crossing. None
of this makes any proper financial reasoning for the Government
Canada to spend all this money to build a bridge that may go
financially broke in any event.
My
own view of all of this nonsense is that the parties on both sides
are waiting until the Canadian election is over. Canada is not going
to do anything before the election that would cost it votes to do a deal
with the Ambassador Bridge Company and might prevent it from gaining
extra seats in this area. In my opinion, that is why Canada still
talks about building a new Government bridge.
Yet,
what is also very interesting now is that
the
time period for building that Government bridge has increased by
couple of years. Why? The answer is easy. The Government needs the
extra number of years because of the election that is coming up next
year. Once the election is completed, assuming that the Liberals are
re-elected, the parties will do a deal quickly in my opinion whatever
that deal might look like.
Oh,
don't worry. All the engineering work that is being done now will be
used to build that new bridge!