Atlantic Insight, by southeast New Brunswick's W.E.(Bill) Belliveau who analyzes and comments on matters of public policy and the social and economic decisions taken, by all levels of government from local to global. Atlantic Insight Blog is a commentary on current affairs and changes in the marketplaces and/or in the business world. The impact of policy, decisions and changes are explored for their impact on the citizens of Atlantic Canada. You are invited to add your comments.
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Thursday, August 26, 1999
Re: Editorial: "Airline Merger Aug, 26-1999
As a regular contributor to the letters section in local newspapers, on matters of community interest and public policy, I have observed a continuing interest with the subject matter referenced by some of the letters. They are re-published here as a public service.
Following is an article first published in 1999 and re-published here to serve as a reference on the issue.
The Editor, Saint John Telegraph Journal
Three competing airports in a province with a shrinking population of approximately 825,000 is the reason New Brunswick has poor air-service and high airfares.
The proposed Onex purchase/merger of Air Canada and Canadian will have no impact on this fact, regardless of which way it goes.
Twenty some years ago, the Hon. Jean Marchand, then Minister of Transport and one of Quebec's infamous three wisemen postulated that Sussex should host the construction of a major airport that would be connected by high-speed rail to Moncton, Saint John and Fredericton.
Parochial attitudes in the three cities quashed that notion in big hurry.
Given the cost of replicating the project today, one could assume it's lost to New Brunswick forever.
How does one explain the stupidity of New Brunswick's Neanderthal reaction to a common-sense air-service solution that might have made a Sussex airport the Maritime airline hub instead of Halifax?
There is not enough critical mass in New Brunswick to support improved air-service. This is a region that whines about highway tolls but continues to kill citizens and visitors alike on single-lane high-speed highways. Could we ever expect it would support the notion of a world-class airport if people had to drive 50 miles to use it?
Is there a pattern here;
- fishermen who refuse to leave the fishery because their parents and grandparents were fishermen;
- fish plant workers who refuse work because they would have to travel an hour and a half to to get to the plant;
- steel workers and coal miners who can't see the sunset;
- shipbuilders who remember the glories of the nineteenth century, even as we head into the twenty first;
- governments that want to dismantle lotteries and other cooperative ventures, etc. etc.
Is there some deep-rooted, head-in-the-sand belief in Atlantic Canada that the world owes us a living or that the world owes us the same level of air-service as a population centre with millions of people?
Wake up folks. Things will never get better unless we can come together as a province and as a region to make things happen.
Sincerely, W.E. (Bill) BelliveauShediac, NB
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Friday, August 13, 1999
Commentary on NB Toll Highway Deal
As a regular contributor to the letters section in local newspapers, on matters of community interest and public policy, I have observed a continuing interest with the subject matter referenced by some of the letters. They are re-published here as a public service.
Following is an article first published in 1999 and re-published here to serve as a reference on the issue.
The Editor, Saint John Telegraph Journal,
Michael Tutton is right on the money with his "budget buster" article in today's TJ(August 13, 1999).
There is no instant solution to the removal of tolls on the (under construction) Moncton to Fredericton four lane highway. Any alternative to the toll-based debt and/or removal of the tolls will cost money. That means fewer dollars for healthcare, education and/or other government programs or higher taxes.
Here are some of the considerations:
1. The provincial government could pay the tolls. That would cost the Treasury about $22 million a year for thirty years (i.e. $666 million) and create either an annual deficit or a program funding-cut.
2. The provincial government could cancel its contract with MRDC. That would cost it $250 million in penalties plus the $600 million dollar construction costs.
3. The provincial government could assume the toll-based debt of $150 million at a cost of about $351 million (including payment of principle and interest at 7%) over 30 years.
4. The Provincial Government could renegotiate its highway contract with MRDC but the only winner would be MRDC. Their winning bid was approximately $70 million below cost.
If they open the contract, they'll want that $70 million back either in cash or in reduced deliverables. If MRDC is asked to finance the toll-based debt, it would probably cost the Government (at 9% interest) about $430 million over 30 years.
The bottom line is that there is no cost-free solution to the government's promise to remove tolls.
The question that must be asked is this: Are New Brunswickers really willing to accept a cut in healthcare, education or other services to fund highway tolls, just to satisfy the complaints of a few residents in Salisbury and Petticodiac and allow the Government to deliver on an ill-considered election promise?
Sincerely
W.E. (Bill) Belliveau, Shediac, NB
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Wednesday, August 04, 1999
For Whom The Highway Tolls Take A Toll
As a regular contributor to the letters section in local newspapers, on matters of community interest and public policy, I have observed a continuing interest with the subject matter referenced by some of the letters. They are re-published here as a public service.
Following is an article first published in 1999 and re-published here to serve as a reference on the issues.
The Editor, Moncton Times & Transcript,
I was disappointed by Don Richardson's instant solution (as provided by a "former public servant") to the removal of tolls on the (under construction) Moncton to Fredericton four lane highway.
First principle: any alternative to the existing and future tolls will cost the new government money. That means fewer dollars for healthcare, education and/or other government programs.
Here are some of the considerations:
1. The provincial government could pay the tolls. That would cost the Treasury about $22 million a year and create either a deficit or a program funding-cut in a non-highway portfolio.
2. The provincial government could cancel its contract with MRDC. That would cost it the $250 million in penalties plus the $600 million dollar construction costs mentioned by Mr. Richardson.
3. The provincial government could assume the toll-based debt of $150 million at a cost of about $351 million (including payment of principle and interest) over 30 years.
4. The provincial government could use the remaining $183 million from the Federal HST compensation fund, as proposed by Mr. Richardson, and invest it in a Toll Payment Investment Fund .
If the fund could earn, net of federal income taxes, as much as 5% a year, that would leave the provincial government with a net cost of approximately $49.1 million over 30 years. However, there's a catch.
The $183 million that would be used to capitalize the Toll Payment Investment Fund is already committed to the Department of Health in next year's planning budget.
To execute Mr. Richardson's plan (as provided by a "former public servant"), the government would have to cut healthcare expenditures by $183 million or create a deficit of $183 million to fund the removal of tolls. The deficit option would require a legislative reversal of existing law which prohibits deficit financing.
5. The final option for the provincial government is to renegotiate the highway contract with MRDC. The only winner in a renegotiated agreement would be MRDC.
Their winning bid was approximately $70 million below cost. If they open the contract, they'll want that $70 million back. If MRDC is asked to absorb the toll costs, that would cost the provincial government another $660 million over 30 years.
The bottom line is that there is no cost-free solution to the government's promise to remove tolls.
The question that must be asked is this:
Are New Brunswickers really willing to accept a cut in healthcare, education or other services to fund highway tolls, just to satisfy the complaints of a few residents in Salisbury and Petticodiac and deliver on an ill-considered election promise?
Sincerely, W.E. (Bill) Belliveau
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