My Latest News Stories

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.

Revenue totalled $126.4 million, down from $145.9 million." (Canadian Press, Windsor Star, October 31, 2018) 

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!