This whole matter involving the Prime Minister's secret mandate letter to buy the Ambassador Bridge and now the campaign to get Matty to take a low price by smearing him and trying to convince him to get out now while the getting out is good is fascinating don't you think.
Yet, what a big surprise that Canada has knuckled under so publicly and so quickly. Thanks to Derek Burney's Canwest newspaper that spilled the beans, we know the Government is in big trouble. Such irony.
You have to admit that you have been wondering as have I about what is really going on. After all it's the Government with which Matty Moroun has his dispute. What chance does he have you might think?
We know, if you are a faithful BLOG reader, that Canada has wanted to take over the bridge for 50 years. Why haven't they? What is the reason? Surely they could have bought it before but did not? Why not? Why do they want to buy it now all of a sudden?
The Government must have known that there would be litigation. There was a decade of it with the FIRA litigation. Why didn't Canada offer to buy it then? Why now?
Oh sure there is the politics of it. Does Prime Minister Stephen Harper want to make Canada the Cuba or Venezuela of the North by taking over the Bridge by forcing out an American owner who has done nothing but build up the crossing to make it #1? Our economy could not withstand the after-effects if he even thought about doing that. Hopefully he learned his lesson after trying to threaten the US with a possible energy and oil cutbacks!
Surely, Stephen knows about the Dubai Ports mess and does not want another similar situation that will impact him.
The FIRA settlement really came about because of Free Trade. And now, NAFTA is at risk again after a few Congressmen introduced legislation about it. Does Stephen want to rattle the sabres since Obama will still be President after the next Congressional election and the Unions who supported Obama are not too pleased with NAFTA:
- "Stupak urges Congress to repeal NAFTA
A Great Lakes Bay Region congressman has introduced legislation to repeal the North American Free Trade Agreement.
U.S. Rep. Bart Stupak, D-Menominee, whose sprawling district includes part of Bay County, has joined with two Democrats and a Republican to overturn the controversial pact that eliminated tariffs between the United States, Canada and Mexico.
Because of the deep national recession, Stupak sees an opportunity to strike now, although he admits the bill faces an uphill fight.
“Tell me somewhere NAFTA created a job,” he said. “You’re not going to find very many. Tell me where people have lost jobs because of NAFTA, and you’ll find thousands of them.”
Proponents say the agreement has created new markets for U.S. exports and meant cheaper goods for consumers, among other benefits.
President Barack Obama, as a candidate in 2008, pledged to “fix” NAFTA if he won the White House, but his administration hasn’t changed the pact many blame for the loss of hundreds of thousands of American jobs.
“We’re well aware of what he said during the campaign, and we want the things reviewed and looked at,” said Stupak, noting Michigan’s 14.3 percent unemployment rate."
Why is Canada haggling over price for heaven's sake? What's a billion here or there to a Government that has built up such a huge deficit in such a short period of time even though our financial system was so secure we are told, the model for the world. No one seems concerned about a high dollar either that impacts manufacturing jobs. Oh I forgot, we have lost a bunch of them already so who cares.
Do not forget, a good part of whatever is paid out comes right back to the Government in taxes anyway. So what's the big deal to have to trot out a Star story to signal the start of a new campaign.
Expropriation...not likely. They haven't done it before and I doubt they have grounds for it now. I know that it can be challenged too. My only Supreme Court of Canada appearance was on behalf of a party challenging a Government taking. Another decade of litigation.
Litigate and then settle....that might have worked but for the bad faith dealing by Canada AFTER the FIRA settlement.
So what are we down too? There has to be a reason why Canada has not acted and why it wants to BUY the Bridge.
Just in passing, the Feds are being rather stupid about the sums they are offering. The only real money set aside in the Government Budget, unless it is hidden somewhere else, is the $400M for the DRIC road. But why would the money be used for that purpose if the DRIC Road was going to be a P3? The private investor would be putting in all of the money upfront. Nothing would be required from the Feds other than annual payments.
Obviously, the $400M was the amount that the Feds set aside initially to buy the bridge. That was before the Globe and Mail article too. Just like an insurance company that reserves a claim. Now the amount reserved is much higher--consider the billions of dollars being thrown around as to the cost of the DRIC project. That is the kind of money that Canada believes it would need if Moroun was going to sell. Taxpayers are being set up to accept that fact. Why else would the Star repeat:
- "Chase estimated the value of the bridge and plaza properties at between US$750 million and $1 billion.
That's far less than the $3 billion Moroun had reportedly sought in negotiations with the Canadian government."
Why doesn't the Government just build the DRIC Bridge and ignore Moroun completely. Why are they even considering buying it? Forget the fact that no P3 operator would get involved if there were no guarantees since they could not compete otherwise.
The simple answer is that there is some huge legal impediment that prevents Canada from doing so. What that is I have no idea. The only people who do are Stephen Harper, Matty Moroun and their closest advisors. It has to be significant however or else Canada would have acted by now.
Is it all on Canada's side? I doubt it. The US President through the State Department is not a big fan of DRIC as I have already Blogged before. As you will recall
- "The State Deparment refused to give its "concurrence in the conclusion that the [DRIC]centrally-located alternatives are the only practical alternatives for a new Detroit River International crossing.”
So Matty sits and waits as the bureaucrats plot. His can afford to wait. The Feds and MDOT just keep on increasing his Bridge's value by their stupidity.
Will he sell? The real question is why would he? He is the only show in town for years to come.
In the end, what we will see is a public/private partnership for the new Bridge and for the Blue Water Bridge as well. But the structure of that P3 will NOT be what the bureaucrats expected when they started the process. They underestimated the Moroun family.
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