What Did Finance Minister Flaherty Really Say About DRIC

Do you think it was done deliberately? It was US Thanksgiving yesterday and Canada's Economic Statement was issued at around 4 p.m., just before many Americans would be sitting down to their Thanksgiving meal.

Do you really think that the Canadian Government wanted to ruin the Bridge Company Owner’s Thanksgiving Day dinner and give him indigestion by telling him that they were going to build the DRIC bridge. Hardly. The Finance Minister really just gave him an early Christmas present.

There is no doubt about it at all anymore. Minister of Finance Jim Flaherty put the knife into the heart of the DRIC project today in his Economic Statement.

Here is exactly what he said:

• Accelerating Infrastructure Investments
  
  “Canadians need to continue building a modern and reliable infrastructure.
  
  Investing in a 21st century infrastructure will create a competitive advantage that pulls business and jobs into a vibrant national economy and brings our skills and goods onto the world stage efficiently. It will also stimulate the economy and put people to work.
  
  The Government is significantly boosting its support for provincial, territorial and municipal infrastructure. Next year’s increase will be the largest and will push the total amount available in that year to about $6 billion.
  
  Given current economic circumstances, the Government is actively looking at ways to accelerate the roll-out of anticipated infrastructure projects. At their November 10th meeting, First Ministers agreed to work together to speed up infrastructure projects. The Government will work with provinces and territories to identify, by January 2009, specific projects in each jurisdiction that would contribute to stimulating the economy in the next two years. Further, it will work with the provinces and territories to tackle regulatory and administrative barriers to moving these specific projets forward.
  
  The Government is also pursuing public-private partnership opportunities in order to lever private capital and expertise to help meet our infrastructure needs. This will be accomplished through PPP Canada Inc., a new Crown corporation which will be fully operational in the new year.
  
  Further, the Government is working with its partners to build a new Windsor-Detroit border crossing as soon as possible, ensuring businesses have secure and timely access to U.S. markets and suppliers.”

What’s that you say? How can I possibly say that the DRIC is dead when the language of the Finance Minister plainly said that the new Windsor/Detroit border crossing would be built as soon as possible?

I believe that the Minister has been sufficiently chastised and did not want to testify in court that he was the one responsible for creating the reasonable apprehension of bias such that the DRIC project would have to be set aside. He’s leaving that to Ministers Pupatello and Duncan to be responsible and take the blame.

He did not say anything about a DRIC bridge. He talked about working with partners but he did not identify who they were. And he said that a new crossing would be built. He did not use the magic DRIC words that the bridge would be completed by 2013 either. It could mean the Enhancement Project bridge couldn't it!

He is hedging his bets. If the Finance Minister meant the DRIC Bridge, why didn't he just come out and say it. He already has a partnership with the Ambassador Bridge that has lasted for almost 80 years. He knows, as the President of the Bridge Company stated, that the Company does have a legal right to build its bridge. He is not going to go out on a limb especially when he wants to be the Premier of Ontario and that the bridge is necessary if Ontario is to prosper.

Sure, sure, sure you say skeptically. More wishful thinking on my part.

Oh dear, when will I ever convince you that I really do know what I’m talking about. Seriously, didn’t you read the weasel words that were used by the Minister: “as soon as possible.”

ASAP could mean forever in Government time. Remember the Windsor jail. In 2004, the Ontario Government said:

• “Building a new Windsor Jail is a "top priority," Ontario Minister of Community Safety and Correctional Services Monte Kwinter said Wednesday.”

I would hate to see the timing of a low priority project. It is now 2009 and look at the mess that we are in with respect to the jail. Remember that it was said that

• “MPP Sandra Pupatello who has been working for 10 years to land Windsor a new building to replace the overcrowded old jail in the west end.”

That is what the Government means by “priority.” It is the same type of "plain language" that every Government official has used with respect to the importance of the border crossing for years here. And nothing significant has been done.

Let me try and give you the reasons why are we are looking at a very long time frame for “as soon as possible”:

• 1) There is no Government money for the project. While the Finance Minister likes to throw around big numbers such as his $33 billion Building Canada Fund, “Canada’s municipal infrastructure deficit is now $123 billion.” Urban transit requires $23 billion alone. 10 years ago the National Highway System required $17 billion. “Provinces and territories have identified the need for approximately $97 billion in capital investment in transportation priorities.” And that does not include other spending for other modes of transportation.
  
  Do you really believe that anyone will allow this area to receive $5 billion for a new road and bridge? $6 billion total for next year across the country---a drop in the bucket considering all of the projects across Canada. Expect the Province to support in 2009 an at-grade or below grade "cheap solution" and an upgrade of the E C Row Expressway to provide access to the Ambassador Bridge in the end. Thousands of jobs will still be created, enough to win votes.
  
  
• 2) The Minister attended at the P3 conference recently and is well aware of the difficulty that P3 companies are going to have in raising money for projects. In fact they are actually looking at Governments to help finance the project which begs the question why the private investors are needed at all.
  
  If you read the financial pages, then you know that the $50 billion plus Bell Canada leveraged buyout is in trouble because “a preliminary report by the auditor KPMG found that “given current market conditions,” it would not remain solvent once it took on the $33 billion in debt needed to take it private.
  
  If the Ambassador Bridge is not put out of business by the Governments, then no one can issue a solvency report for the new bridge which means it’ll never get built using the money of private investors "given current market conditions." How can it be solvent if it is so expensive that a $200 toll might be required for car to cross the bridge unless there is a huge Government subsidy every year. Oooops, Governments have no money for subsidies and guarantees.
  
  Do not forget, the only money that the Federal Government has put forward is $400 million which is to be used to pay 50% of the eligible capital costs for the DRIC road. They were never going to put in any money for the new bridge and plaza. That was to be financed by the P3 investor.
  
  
• 3) Unless something changes drastically, it is highly unlikely that the Michigan Legislature will pass legislation to permit P3’s to be utilized. They are not legal there yet. That means that Canada will only be able to build half a bridge. I do not need to remind you about the financial position of Michigan and the have-not Province of Ontario either.
  
  
• 4) An investment grade traffic study was supposed to have been prepared presumably to bolster the Governments’ case that there is sufficient traffic so that an investor would make a return on its investment. As everybody, except the DRIC seems to realize, traffic at the border has dropped significantly and with the economic difficulties in the automobile industry especially, the likelihood of traffic recovering quickly is very low. Accordingly, since I do not believe that this study has been released one has to ask the obvious question, why not?
  
  
• 5) There will be lawsuits if there is no agreement that will last at least a decade or longer. That may well be the Governments’ objective since clearly they cannot build the DRIC project today. They may well hope that there is a lawsuit to stall off everything until they can try again to justify the unjustifiable.
  
  The DRIC team has been accused of some terrible actions that has prejudiced the process. Eddie is doing his part by trying to egg on the Bridge Company with his foolishness. However, he has also put himself out on a limb with his DRIC road opposition such that he may have to sue to prove that he is not all talk and no action. The Federal Government believes that the International Bridges and Tunnels Act will give rise to a lawsuit one-day. The Province and its Ministers are doing their best to create the element of bias in the process. The Bridge Company is sitting there trying to figure out which of the parties they should sue first even while they are moving forward on their Ambassador Gateway.
  
  
• 6) So far, no one has been able to figure out how to get rid of the Ambassador Bridge Company. The Globe and Mail 2 1/2 page spread destroyed the assumptions that were made that the Bridge Company was going to sell out by caving in to the pressure of the Governments. With them around, not only will the DRIC bridge not be built but the plan to P3 the Blue Water Bridge is probably dead as well. In fact, it may well be that Governments need the Bridge Company to save their bacon in Buffalo/Fort Erie since the Peace Bridge is having all kinds of problems with their project these days.
  
  Wouldn't it be hilarious if the Governments finally figured out that the Bridge Company ought to be running all the crossings in this part of Ontario with Michigan and New York State, including the Tunnel.
  
  
• 7) When the Americans finally wake up and figure out what Canada has been trying to do to them with their Corridors and Gateways policy, do you think that they will be pleased? Will the new President carry a grudge against a Canadian Government that tried to make sure with NAFTA-gate that he would not be the President and threatened the Americans with respect to oil and Hydro energy? Do you really believe that an American Administration will help Canada put an American private enterprise operator out of business? Do you really believe that the US will allow Canada to control its border crossings, especially if the shared border management concept is brought back?


• 8) When the real story of this border file is finally revealed, when its real purpose is finally disclosed and after heads have rolled, you will be shocked at what you learn. You will truly not believe that this is the way that two democracies are run in the interests of its citizens. It will all seem like a nightmare with a waste of taxpayer money that is beyond belief.

I could go on with more reasons but I think that is enough for my purposes. Call it what you will, call it wishful thinking for all I care, but as far as I am concerned there is no longer any stomach on the part of the Governments to move this file any further. They can hope and they can they bury their heads in the sand thinking that everything will turn out the way that they had planned. That is why they are bureaucrats and not entrepreneurs.

While they can talk about it and they can make threatening statements, they also have to know that they have an opponent who is not intimidated by them and who in fact has sued them in the past and won.

One needs to read very carefully what is said by Governments. The words used have many different meanings. What you think a statement says may not be what it really means on its face. You will find with government, as I learned very early on in the border file, that what they say may well be accurate but it is very narrow as well.

Remember that the MDOT Director has said that a new bridge may not be needed until 2035. If that is the case, then why would a bridge be built 20 years ahead of time? ASAP in Government time and in dealing with this file means no DRIC bridge for a very long time.

That is what the Finance Minister said yesterday.

Let us be real, there is another Provincial and Federal election in a couple of years. Politicians can still be elected promising us all kinds of border goodies while, ironically, the Bridge Company makes it easy for them to attack them by running the best border crossing in North America.