There is no drug as powerful for a politician as the photo op that accompanies handing out public money in support of a hypothetical investment with overly-optimistic job numbers at an undetermined time in the future.
To be fair, Ms. Wynne's latest foray into the grey, murky world of job creation attempts to put some hooks into the cash infusion. At least the Cisco deal has some sort of link to the duration of the jobs, although how that failed to be included in the Novartis arrangement is mindboggling and should be reviewed.
Those who disagree with direct government intervention in boardroom decisions also face some questions with regard to their claim that lowering corporate business taxes will automatically translate to increased economic activity. Although Canada and Ontario have lowered their tax rates to be among the lowest in the many countries surveyed by KPMG, the resulting job boom has failed to materialize, although corporate cash accounts are doing extremely well.
With that being the case, one would think that there would be a strong demand for performance measurement in the case of corporate subsidies, but sadly that does not seem to be the case. The Fraser Institute does tally up the amounts over the years, but leaves the assessment of value to a mere identification of the recipients. It also only deals with Industry Canada, but the provincial government hands out incentives also, and it could be argued the entire Ministry of Economic Development is an investment, as is the tourism portion of the Ministry of Tourism.
The structures governments use to try and stimulate economic development is complex and there should be more science behind the process. One common theme among business executives that make site decisions is the availability and skill level of the labour pool. One such case is the Hitachi plant in Guelph, which competes with Caterpillar and, unlike the funding recipient who hightailed it back to the States, does so in Canada.
If one accepts that labour skill is one of the critical factors in locating a business, it would make sense for the government to invest in a collaborative effort with universities and colleges. One of the investments that could be made in Northern Ontario would be a railway training facility within Canadore College. ONTC already partners with Canadore, Northern College and Algoma to provide apprenticeships in electrical, railway carmen, machinist and metal fabricator trades, it would be a natural step to build on that relationship.
The major roads are moving away from hump yards in favour of flat switching yards due to the high cost of maintaining the automated system. ONTC operates one of the best flat-switching yards in Ontario in North Bay and in its current underutilized state, could be used to train Conductors in the best flat-switching techniques. Other rail colleges utilize short line railways which are limited in the facilities they can provide for training purposes. If the Northlander was re-instated, it could further give access to trainees to the CTC system used on the south portion of the CN connection to Union Station. Those trainees would be far more valuable to the major carriers and VIA than what the current college system produces.
Building an educational system that focuses on the needs of industry may not allow for photo ops with impressive numbers tied to them, but it may actually produce more economic development in the long run.
NORTHERN ONTARIO - POLITICAL ISSUES An opinion on the issues affecting the province and primarily Northern Ontario
Tuesday 17 December 2013
Friday 13 December 2013
Culture Change Needed to Open Government
Kathleen Wynne has set the stage for one of the most important changes in politics for Ontario. The "Open Government" program, announced on Oct 21st, was criticized for being a "gimmick" and a way to distract attention from the gas plant scandal, but it has the potential to radically change the way people view the political process.
The Premier's letter posted on the Open Government website speaks of the innovative discoveries that will become possible by opening up government datasets to the public. While that is true and reason enough to open up government information, it is not the greatest potential of the policy change.
The sentence in the letter that carries the most impact is
In the case of newspaper reporters, bureaucrats may be trying to protect themselves or their superiors from potentially embarrassing situations. Where individuals seek access to information, they may just not want to add to their workload by having to consider, or respond to, public input.
I had my own experience when I tried to access information about the Intermodal studies being conducted by MTO, but the process of extracting information is so dragged out, only the panel on Open Government is likely to be interested.
In order to get any information one must have persistence and be willing to challenge the legitimacy of all the roadblocks that get thrown in your way. Unfortunately, most people simply give up and join the ranks of the cynics and apathetic non-voters instead of contributing their input. A disengaged public has become our biggest liability in politics and spawned numerous challenges for leaders to overcome.
In order to change the "Culture of Secrecy" referred to, by Kevin Donovan, Ms. Wynne will need the support of her entire cabinet. The benefits of the change will have to be consistently explained to the bureaucracy and those who do not buy in, will have to be convinced or replaced.
If Ms. Wynne truly wants to create the meaningful change she speaks of in her letter, she will first have to change the culture of government.
The Premier's letter posted on the Open Government website speaks of the innovative discoveries that will become possible by opening up government datasets to the public. While that is true and reason enough to open up government information, it is not the greatest potential of the policy change.
The sentence in the letter that carries the most impact is
I believe that government data belongs to the people of Ontario and so we will make government data open by default, limiting access only to safeguard privacy, security and confidentiality.The idea that government data is open by default has died a slow death since the enacting of the Freedom of Information and Protection of Privacy act in 1988. The intent of the act was to guarantee access to government records for individuals, but its existence seemed to provide an easy way for bureaucrats to block the release of information instead. This Toronto Star article speaks to the attitude of bureaucrats who now seek to act as gatekeepers to the public information previously available without barriers.
In the case of newspaper reporters, bureaucrats may be trying to protect themselves or their superiors from potentially embarrassing situations. Where individuals seek access to information, they may just not want to add to their workload by having to consider, or respond to, public input.
I had my own experience when I tried to access information about the Intermodal studies being conducted by MTO, but the process of extracting information is so dragged out, only the panel on Open Government is likely to be interested.
In order to get any information one must have persistence and be willing to challenge the legitimacy of all the roadblocks that get thrown in your way. Unfortunately, most people simply give up and join the ranks of the cynics and apathetic non-voters instead of contributing their input. A disengaged public has become our biggest liability in politics and spawned numerous challenges for leaders to overcome.
In order to change the "Culture of Secrecy" referred to, by Kevin Donovan, Ms. Wynne will need the support of her entire cabinet. The benefits of the change will have to be consistently explained to the bureaucracy and those who do not buy in, will have to be convinced or replaced.
If Ms. Wynne truly wants to create the meaningful change she speaks of in her letter, she will first have to change the culture of government.
Saturday 23 November 2013
Igniting the Ring of Fire
The recent decision by Cliffs Natural Resources to suspend it's Ring of Fire operations has many up at arms against the Liberal Government. There is no doubt the government has bungled the file, but that happened under Mr McGuinty and Mr. Bartolucci's watch and that is why they are no longer there. Now the important point to consider is, what changes are needed to ensure government gets it right?
The opposition would have you believe, all that is necessary is to vote them into power, (with a majority, no less) and they have the plan to bring prosperity to our fair province. I remain skeptical of any plan that guts the public sector and says we do not need government getting in the way of business. In this age of competing interests and multi-national companies dictating where jobs will be located, we need an effective government standing squarely in the way of business and ensuring residents and the environment are treated fairly.
That phrase "effective government" is turning into an oxymoron though...and that is where we need to focus our attention. An effective government would not have negotiated with Cliffs and swayed them from their original opinion that rail is the preferred option for hauling huge volumes of ore out of the James Bay wetlands.
When Rick Bartolucci recently stated “I worked very, very hard to make sure the ferrochrome processing facility was located (in Capreol).” it is important to note he did not state he worked hard to make sure it was located where it made the most sense. When you combine that attitude with his stated responsibility for the divestiture of ONTC, a decision that was made by him alone and without consultation, you begin to get the sense that he may have been influenced by a desire to leave a legacy. Getting rid of the provincial railroad would make his road a little more sensible with it's toll structure, instead of collecting rail revenue with an existing company.
At the same time one cannot help but remember the passion with which he fought to get Hwy 69 four-laned, only to be sideswiped by a Premier who decided Hwy 11 would be four-laned first. I would be interested to see the traffic volume studies that indicate either one of them needed the huge expense of four-laning rather than numerous passing lanes, but such is politics.
And that brings me back to my original topic which is effective government. If our government is going to be effective and be able to resist calls for its demolition, as currently espoused by Mr. Hudak, it needs a massive overhaul.
Government needs more discipline in its reporting and adherence to standards enforced in the private sector. The days of pandering to ridings where votes can be bought must end and decisions should be based on open data that everyone can either agree to, or at least see where their opinion was overruled.
In the case of the Ring of Fire, that means transparency in the factors that determine the location of any smelter, and a commitment to getting the most value out of any company seeking to extract our resources. It also means access and protection of the environment for the people who live there, jobs for as many people, as close to the resources as possible and fair participation by both governments and industry.
If Ms. Wynne can pull that off, the spark may finally hit the mark.
The opposition would have you believe, all that is necessary is to vote them into power, (with a majority, no less) and they have the plan to bring prosperity to our fair province. I remain skeptical of any plan that guts the public sector and says we do not need government getting in the way of business. In this age of competing interests and multi-national companies dictating where jobs will be located, we need an effective government standing squarely in the way of business and ensuring residents and the environment are treated fairly.
That phrase "effective government" is turning into an oxymoron though...and that is where we need to focus our attention. An effective government would not have negotiated with Cliffs and swayed them from their original opinion that rail is the preferred option for hauling huge volumes of ore out of the James Bay wetlands.
When Rick Bartolucci recently stated “I worked very, very hard to make sure the ferrochrome processing facility was located (in Capreol).” it is important to note he did not state he worked hard to make sure it was located where it made the most sense. When you combine that attitude with his stated responsibility for the divestiture of ONTC, a decision that was made by him alone and without consultation, you begin to get the sense that he may have been influenced by a desire to leave a legacy. Getting rid of the provincial railroad would make his road a little more sensible with it's toll structure, instead of collecting rail revenue with an existing company.
At the same time one cannot help but remember the passion with which he fought to get Hwy 69 four-laned, only to be sideswiped by a Premier who decided Hwy 11 would be four-laned first. I would be interested to see the traffic volume studies that indicate either one of them needed the huge expense of four-laning rather than numerous passing lanes, but such is politics.
And that brings me back to my original topic which is effective government. If our government is going to be effective and be able to resist calls for its demolition, as currently espoused by Mr. Hudak, it needs a massive overhaul.
Government needs more discipline in its reporting and adherence to standards enforced in the private sector. The days of pandering to ridings where votes can be bought must end and decisions should be based on open data that everyone can either agree to, or at least see where their opinion was overruled.
In the case of the Ring of Fire, that means transparency in the factors that determine the location of any smelter, and a commitment to getting the most value out of any company seeking to extract our resources. It also means access and protection of the environment for the people who live there, jobs for as many people, as close to the resources as possible and fair participation by both governments and industry.
If Ms. Wynne can pull that off, the spark may finally hit the mark.
Monday 11 November 2013
The Fedeli Factor
It looks like our MPP may have inadvertently helped ONTC far more than he, or his public sector bashing boss, Tim Hudak may have ever considered. The divestment of ONTC originally put forward by Rick Bartolucci, under Dalton McGuinty has stalled out, amid hints of alternatives being preferred by Michael Gravelle under the "new" government of Kathleen Wynne.
Mr. Fedeli has been instrumental in driving the gas plant scandal to the front pages of the provinces newspapers and keeping it there well beyond the point where Dalton McGuinty's resignation could drag it into obscurity. The resulting spillover effect to Ms. Wynne has not been well received by the Liberal party and as a result, Mr. Fedeli is seen as a major bump in the road to renewal.
If the Liberals were to roll out the plan for ONTC now and get the ball rolling, the political benefits in this riding would be almost invisible by the next election. However, if the Liberals delay the decision to support ONTC until the campaign starts, they could very well sway many fringe votes with a promise to keep the company in public hands and even enhance it if they can bring themselves to utilize it for the Ring of Fire.
Given that Mr. Fedeli's performance has landed him squarely in the sights of the Liberal political strategists, a win in this riding could be seen as a particularly sweet one and the cost to the provincial treasury would be barely noticeable in the overall picture. In fact, the $75M hastily dumped into ONTC by the fall economic statement did not even fully drain a contingency fund meant to provide a buffer against incidental variances from the original 2013 budget.
The riding has a solid core of both Liberal and Conservative supporters and it seems the ONTC issue can swing enough of the fringe votes to make a difference in the election results. This is due to the multiplier effect of the business dealings of the company which makes it an issue for far more residents than just the employees. Many business people are aware of the effect on their bottom line if purchasing power for the corporation were to be moved from this region to the head office of any railroad or telecommunications company taking over.
The fact that the company has operated for over 110 years in the region has resulted in many area families having relatives that work for, or draw a pension from, the company. The large number of people affected by the incomes of those who rely on the company gives it a far greater effect in the voting patterns than the size of the workforce would imply.
If the Liberal party is able to convince the voters that they have found a new purpose for ONTC and will fund it properly to maximize the economic development potential of the company, the Conservatives will have to scramble from their current platform. Luckily, none of the white papers put forward so far, are binding in any fashion, so the PC strategists would be free to modify their current position.
A well funded and overall supported Liberal plan would be seen as far superior to the shell of a commitment currently contemplated by Mr. Hudak et al. The PC pledge to keep ONTC Rail Freight in public hands, still enables the privatization of the rail operations, in addition to the rest of the corporation. Mr. Hudak seems determined this right wing agenda is the one to bring him a majority government, but I sense there are a lot of Nipissing residents still wondering why the Common Sense Revolution failed to protect service levels time after time.
If Mr. Fedeli cannot rebuild his platform to correct the right wing slant designed by Mr. Hudak, and shore it up with solid ONTC planks, the Liberals could regain this riding under a suitable candidate. Mr. Hudak would be guilty of the same crime perpetrated by Mr. Tory when his misstep on school funding cost Bill Vrebosch, the East Ferris Mayor, his chance at provincial politics in the 2007 election which he lost by less than 400 votes to Monique Smith.
The PC party had better watch the pending battle closely, because Mr. Hudak may not only cost them a riding, he may drag down a potential successor also.
Mr. Fedeli has been instrumental in driving the gas plant scandal to the front pages of the provinces newspapers and keeping it there well beyond the point where Dalton McGuinty's resignation could drag it into obscurity. The resulting spillover effect to Ms. Wynne has not been well received by the Liberal party and as a result, Mr. Fedeli is seen as a major bump in the road to renewal.
If the Liberals were to roll out the plan for ONTC now and get the ball rolling, the political benefits in this riding would be almost invisible by the next election. However, if the Liberals delay the decision to support ONTC until the campaign starts, they could very well sway many fringe votes with a promise to keep the company in public hands and even enhance it if they can bring themselves to utilize it for the Ring of Fire.
Given that Mr. Fedeli's performance has landed him squarely in the sights of the Liberal political strategists, a win in this riding could be seen as a particularly sweet one and the cost to the provincial treasury would be barely noticeable in the overall picture. In fact, the $75M hastily dumped into ONTC by the fall economic statement did not even fully drain a contingency fund meant to provide a buffer against incidental variances from the original 2013 budget.
The riding has a solid core of both Liberal and Conservative supporters and it seems the ONTC issue can swing enough of the fringe votes to make a difference in the election results. This is due to the multiplier effect of the business dealings of the company which makes it an issue for far more residents than just the employees. Many business people are aware of the effect on their bottom line if purchasing power for the corporation were to be moved from this region to the head office of any railroad or telecommunications company taking over.
The fact that the company has operated for over 110 years in the region has resulted in many area families having relatives that work for, or draw a pension from, the company. The large number of people affected by the incomes of those who rely on the company gives it a far greater effect in the voting patterns than the size of the workforce would imply.
If the Liberal party is able to convince the voters that they have found a new purpose for ONTC and will fund it properly to maximize the economic development potential of the company, the Conservatives will have to scramble from their current platform. Luckily, none of the white papers put forward so far, are binding in any fashion, so the PC strategists would be free to modify their current position.
A well funded and overall supported Liberal plan would be seen as far superior to the shell of a commitment currently contemplated by Mr. Hudak et al. The PC pledge to keep ONTC Rail Freight in public hands, still enables the privatization of the rail operations, in addition to the rest of the corporation. Mr. Hudak seems determined this right wing agenda is the one to bring him a majority government, but I sense there are a lot of Nipissing residents still wondering why the Common Sense Revolution failed to protect service levels time after time.
If Mr. Fedeli cannot rebuild his platform to correct the right wing slant designed by Mr. Hudak, and shore it up with solid ONTC planks, the Liberals could regain this riding under a suitable candidate. Mr. Hudak would be guilty of the same crime perpetrated by Mr. Tory when his misstep on school funding cost Bill Vrebosch, the East Ferris Mayor, his chance at provincial politics in the 2007 election which he lost by less than 400 votes to Monique Smith.
The PC party had better watch the pending battle closely, because Mr. Hudak may not only cost them a riding, he may drag down a potential successor also.
Tuesday 21 May 2013
Remote Community Access - Federal responsibility met by ONTC
In my last post, I touched on the need for the provincial and federal government to work together in advancing passenger rail transportation. The dysfunction of a provincial government operating a railroad under federal jurisdiction goes back to the days when the Nipissing Central Railway operated as a subsidiary of the T&NO (forerunner of ONTC) to get around the problem of a local railway extending over provincial boundaries. Up until that point in time, the T&NO operated exclusively in Ontario, meaning that it did not constitutionally fall under the federal government. The disinterest of the federal government continued as the use of the Nipissing Central Railway faded over time. There was little distinction between that line and the rest of the company except when legalities were involved.
The confusion about jurisdiction simmered for years until the unions pushed for clarification on which Health and Safety legislation was applicable, the federal Canada Labour Code or the provincial Employment Standards Act. As is the case in most complex legal issues, there was no definitive answer, so the provincial government agreed to abide by the Canada Labour Code to ensure there was some sort of oversight for their employees.
The fact that Ontario Northland operates in a jurisdictional grey area, contributes to very little co-ordination between the two levels of government. To illustrate the point, one only needs to look at the Regional and Remote Passenger Rail Services Class Contribution Program which is included in the Rail Passenger Stewardship and Support program.
These programs, together with stewardship of VIA Rail, make up the bulk of Canada's commitment to rail passenger service. That commitment is declining in financial and real terms, in sole opposition to the rest of the G8 countries who are busy expanding their rail services. If you read between the lines in the Evaluation of Rail Passenger Stewardship and Support it becomes clear the Federal government is looking to decrease their support even further.
Even before the provincial government axed the Northlander, it was being questioned as to the need for any federal support at all. The federal government ignores the passenger service between North Bay and Moosonee due to the fact it is operated by a provincial government. While I understand the need to clearly define jurisdictions, it seems to me that the Ontario government has been fulfilling a federal mandate since 1932.
When one examines the criteria for defining remote community, it is clear that Moosonee and the James Bay coast communities fully meet that requirement. As such, it is also clear the federal government has the responsibility to ensure those communities are connected to the national transportation system.
In the past, the federal government through VIA, shared the expenses of providing passenger service from Toronto to Cochrane, but never contributed to the operation of the line between Cochrane and Moosonee, even though that would more likely be their responsibility. When VIA pulled out from the Toronto Cochrane service, the feds left a $2.5M subsidy with the provincial government but stipulated it only applied to the Toronto to North Bay portion of the run.
The only program they could do this under was the Remote access one, so for decades the frozen funding was applied to a portion of the line that was in no way remote, nor disconnected from the national transportation system. It had gone on for so long that bureaucrats were starting to question its existence and were trying to find ways to abolish it.
No one ever took into account that the federal government had never lived up to their obligation to the remote communities on the James Bay. In spite of increasing costs, the amount of money available to the funded services is declining as this government bails on support for rail passenger service.
The importance of remote communities to the overall economy of Canada has been recognized by GE Canada and the Chamber of Commerce and the Conference Board of Canada, yet they continue to struggle as Ottawa looks the other way.
The Ring of Fire has caught the attention of the federal government and they have authorized Tony Clement to head up a "whole government" approach to the situation. If the province is telling the truth about wanting to consider all options to the divestiture of ONTC, they need to put a high profile individual in the same sort of all-inclusive position, not some mid-level MNDM bureaucrat with a fancy title like Ring of Fire Secretariat. MNDM has proven they do not care about ONTC services and would not be able to protect Ontario's interests.
First Nations, the Federal Government and the business community are all looking for a solution to development in the remote northern area. The provincial government needs to press that interest in developing an overall solution to protecting remote communities and advancing passenger rail service.
The confusion about jurisdiction simmered for years until the unions pushed for clarification on which Health and Safety legislation was applicable, the federal Canada Labour Code or the provincial Employment Standards Act. As is the case in most complex legal issues, there was no definitive answer, so the provincial government agreed to abide by the Canada Labour Code to ensure there was some sort of oversight for their employees.
The fact that Ontario Northland operates in a jurisdictional grey area, contributes to very little co-ordination between the two levels of government. To illustrate the point, one only needs to look at the Regional and Remote Passenger Rail Services Class Contribution Program which is included in the Rail Passenger Stewardship and Support program.
These programs, together with stewardship of VIA Rail, make up the bulk of Canada's commitment to rail passenger service. That commitment is declining in financial and real terms, in sole opposition to the rest of the G8 countries who are busy expanding their rail services. If you read between the lines in the Evaluation of Rail Passenger Stewardship and Support it becomes clear the Federal government is looking to decrease their support even further.
Even before the provincial government axed the Northlander, it was being questioned as to the need for any federal support at all. The federal government ignores the passenger service between North Bay and Moosonee due to the fact it is operated by a provincial government. While I understand the need to clearly define jurisdictions, it seems to me that the Ontario government has been fulfilling a federal mandate since 1932.
When one examines the criteria for defining remote community, it is clear that Moosonee and the James Bay coast communities fully meet that requirement. As such, it is also clear the federal government has the responsibility to ensure those communities are connected to the national transportation system.
In the past, the federal government through VIA, shared the expenses of providing passenger service from Toronto to Cochrane, but never contributed to the operation of the line between Cochrane and Moosonee, even though that would more likely be their responsibility. When VIA pulled out from the Toronto Cochrane service, the feds left a $2.5M subsidy with the provincial government but stipulated it only applied to the Toronto to North Bay portion of the run.
The only program they could do this under was the Remote access one, so for decades the frozen funding was applied to a portion of the line that was in no way remote, nor disconnected from the national transportation system. It had gone on for so long that bureaucrats were starting to question its existence and were trying to find ways to abolish it.
No one ever took into account that the federal government had never lived up to their obligation to the remote communities on the James Bay. In spite of increasing costs, the amount of money available to the funded services is declining as this government bails on support for rail passenger service.
The importance of remote communities to the overall economy of Canada has been recognized by GE Canada and the Chamber of Commerce and the Conference Board of Canada, yet they continue to struggle as Ottawa looks the other way.
The Ring of Fire has caught the attention of the federal government and they have authorized Tony Clement to head up a "whole government" approach to the situation. If the province is telling the truth about wanting to consider all options to the divestiture of ONTC, they need to put a high profile individual in the same sort of all-inclusive position, not some mid-level MNDM bureaucrat with a fancy title like Ring of Fire Secretariat. MNDM has proven they do not care about ONTC services and would not be able to protect Ontario's interests.
First Nations, the Federal Government and the business community are all looking for a solution to development in the remote northern area. The provincial government needs to press that interest in developing an overall solution to protecting remote communities and advancing passenger rail service.
Sunday 19 May 2013
Passenger Rail - Federal Responsibility but Provincial Consequences
Railroads may have been the link that brought this country together but the federal government turned their back on them years ago. In 1995 Canadian National railway was privatized and the government abdicated their original responsibility for rail transportation to the private sector. That move has been judged a success by some because of the record profits and growth the company was subsequently able to achieve.
Whether or not that profitability was due solely to the ownership of the company or partly influenced by the changing regulatory environment occurring at the same time is subject to some debate. The fact that only a fraction of the millions of dollars of assets and the millions of dollars invested in the Crown corporation in the decades prior were returned to the Canadian taxpayer does not appear to be disputed.
Aside from a poor ROI for the Canadian taxpayer, the other issue that gets little mention is the lack of control the government now has over rail transportation, even though that service is recognized as being critical to the Canadian economy. VIA was created in 1978 as the crown agency responsible for rail passenger operations and when CN was privatized in 1995, VIA became dependent on a private sector owner to deliver their operational obligations.
The federal government had legislative jurisdiction over railroads from the beginning and maintained that role with regard to safety, freight rates and environmental issues after privatization.
VIA has been the victim of numerous major funding cuts over their lifetime and the system has been shrunk to the bare minimum needed to provide cross country service. Many regional routes have been cast off along the way as a number of different governments sought to make VIA pay for non performance stemming from their lack of control and systemic funding inequalities with other transportation modes.
Against this backdrop the Ontario government launched its Crown agency in 1902 which operated a number of marginal business endeavors, but primarily a railroad, in the sparsely populated Northeast. The T&NO, later ONTC, operated at a profit for most of its 110 year history and provided rail passenger service with minimal support from the federal government in spite of their jurisdictional responsibility.
When the province's railway started to encounter financial difficulties due to the same systemic imbalances in financial support, the federal government was not inclined to increase their share. In fact federal support had been frozen for over a decade and inflation had chewed the real funding down by $1M. The dysfunction between different levels of government was only exacerbated by the fact a province was operating a railroad that had never been endorsed or supported by the national government.
The fact that Ontario was the only province left with its own railway, (BC sold off its provincial railway, BC Rail in 2003 in a scandal plagued firesale) added to the disinterest of the federal government. Ontario and Quebec have the most to lose, as VIA sheds any service outside of the Montreal-Windsor corridor. They either need to push Ottawa into living up to their National Transportation Policy or take on more responsibility in the rail sector. While the latter may have increased cost tied to it, it also brings greater control and that may bring an answer to the transportation issues that are beginning to plague this province.
One of the key elements in the above extract from the Canada Transportation Act is the plurality of the word government in Item (e). The fact that other governments, aside from the federal one, are directed to work together with the private sector, is the answer to improving rail transportation's role in public policy.
Passenger rail service can survive in lower population density areas also, but they need freight service operating on the same line, to cross subsidize the massive capital expenditures necessary to maintain the roadbed. Highways have the luxury of general tax revenue to subsidize their capital expense, but railways are expected to make it on their own, even though the CTA prohibits reducing the inherent advantages of any particular mode of transportation. Passenger rail services need the expertise of competent individuals who understand both the rail freight system and passenger operations and can pressure governments to live up to their obligations.
Passenger rail has proven in Europe that it can provide quick, efficient, and well used transportation for the general population so it is obviously the policy differences in Canada that prevent it from doing the same here. We are in desperate need of policies that can be supported by all levels of government, and permit railways to operate with clear mandates. They will require stable long-term funding arrangements with the goal of working toward self sufficiency but a recognition that passenger transportation is about moving the maximum number of people with the minimum cost, not making profits.
Whether or not that profitability was due solely to the ownership of the company or partly influenced by the changing regulatory environment occurring at the same time is subject to some debate. The fact that only a fraction of the millions of dollars of assets and the millions of dollars invested in the Crown corporation in the decades prior were returned to the Canadian taxpayer does not appear to be disputed.
Aside from a poor ROI for the Canadian taxpayer, the other issue that gets little mention is the lack of control the government now has over rail transportation, even though that service is recognized as being critical to the Canadian economy. VIA was created in 1978 as the crown agency responsible for rail passenger operations and when CN was privatized in 1995, VIA became dependent on a private sector owner to deliver their operational obligations.
The federal government had legislative jurisdiction over railroads from the beginning and maintained that role with regard to safety, freight rates and environmental issues after privatization.
VIA has been the victim of numerous major funding cuts over their lifetime and the system has been shrunk to the bare minimum needed to provide cross country service. Many regional routes have been cast off along the way as a number of different governments sought to make VIA pay for non performance stemming from their lack of control and systemic funding inequalities with other transportation modes.
Against this backdrop the Ontario government launched its Crown agency in 1902 which operated a number of marginal business endeavors, but primarily a railroad, in the sparsely populated Northeast. The T&NO, later ONTC, operated at a profit for most of its 110 year history and provided rail passenger service with minimal support from the federal government in spite of their jurisdictional responsibility.
When the province's railway started to encounter financial difficulties due to the same systemic imbalances in financial support, the federal government was not inclined to increase their share. In fact federal support had been frozen for over a decade and inflation had chewed the real funding down by $1M. The dysfunction between different levels of government was only exacerbated by the fact a province was operating a railroad that had never been endorsed or supported by the national government.
The fact that Ontario was the only province left with its own railway, (BC sold off its provincial railway, BC Rail in 2003 in a scandal plagued firesale) added to the disinterest of the federal government. Ontario and Quebec have the most to lose, as VIA sheds any service outside of the Montreal-Windsor corridor. They either need to push Ottawa into living up to their National Transportation Policy or take on more responsibility in the rail sector. While the latter may have increased cost tied to it, it also brings greater control and that may bring an answer to the transportation issues that are beginning to plague this province.
NATIONAL TRANSPORTATION POLICY
Declaration
5. It is declared that a competitive, economic and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians and enable competitiveness and economic growth in both urban and rural areas throughout Canada. Those objectives are most likely to be achieved when
- (a) competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services;
- (b) regulation and strategic public intervention are used to achieve economic, safety, security, environmental or social outcomes that cannot be achieved satisfactorily by competition and market forces and do not unduly favour, or reduce the inherent advantages of, any particular mode of transportation;
- (c) rates and conditions do not constitute an undue obstacle to the movement of traffic within Canada or to the export of goods from Canada;
- (d) the transportation system is accessible without undue obstacle to the mobility of persons, including persons with disabilities; and
- (e) governments and the private sector work together for an integrated transportation system.
One of the key elements in the above extract from the Canada Transportation Act is the plurality of the word government in Item (e). The fact that other governments, aside from the federal one, are directed to work together with the private sector, is the answer to improving rail transportation's role in public policy.
Passenger rail service can survive in lower population density areas also, but they need freight service operating on the same line, to cross subsidize the massive capital expenditures necessary to maintain the roadbed. Highways have the luxury of general tax revenue to subsidize their capital expense, but railways are expected to make it on their own, even though the CTA prohibits reducing the inherent advantages of any particular mode of transportation. Passenger rail services need the expertise of competent individuals who understand both the rail freight system and passenger operations and can pressure governments to live up to their obligations.
Passenger rail has proven in Europe that it can provide quick, efficient, and well used transportation for the general population so it is obviously the policy differences in Canada that prevent it from doing the same here. We are in desperate need of policies that can be supported by all levels of government, and permit railways to operate with clear mandates. They will require stable long-term funding arrangements with the goal of working toward self sufficiency but a recognition that passenger transportation is about moving the maximum number of people with the minimum cost, not making profits.
Monday 13 May 2013
ONTC Divestiture - Not the Only Option.
On Friday May 10th, Min. Gravelle indicated a change in the government's direction when he told the FONOM group that divestiture is not the only option. This was welcome news for the group, and others, who have been advocating to stop the selloff and take a good look at the options. It seems that anyone who knows anything about Ontario Northland recognizes that the status quo will not suffice, but we have been at this point before.
One of the options that is the most developed as an alternative to the current structure of Ontario Northland is the "New Deal" as proposed by the GCA, the umbrella group of the ONTC unions. While that proposal is far superior to the divestment option, which was the only previous choice, it is not clear if it is the best one, given that all options may now be on the table.
The perceived unsustainability of ONTC is what set the divestiture wheels in motion, albeit probably with an initial push by MNDM, who have never been able to figure out how to utilize the corporation. After more than a decade of that lack of leadership, the company was only able to achieve a fraction of its true potential. Further evidence of how MNDM is not geared toward transportation can be seen by the struggles of the Owen Sound Transportation Company as they were almost forced to delay the operation of the Chi-Cheemaun due to MNDM failure to deal with low water levels.
If the reporting structure of Ontario Northland was changed to the MTO, alongside Metrolinx, it may have two beneficial effects. For one thing, it would remove the barriers to innovation and expansion that have been firmly planted by MNDM. The other benefit could be the introduction of an inter-city rail mindset into the MTO mandate. It would have to be supported at the highest levels of government to prevent being overtaken by the former Department of Highways.
Currently there are a number of groups fighting to preserve or enhance their access to rail passenger service and/or rail service providers experiencing financial difficulty. In addition to leading the ROF development, ONTC could be involved in the following
CAPT - Sault Ste Marie
CAPT has long been advocating for improvements to passenger rail service on the Algoma Central Railway, where communities and businesses are totally dependent on CN for access because there are no roads . They have since expanded their vision to include all of Northern Ontario in the provision of rail services.
Transport Pontiac Renfrew
Transport Pontiac-Renfrew is engaged in a spirited process to acquire from CN the rail line known as “The Beachburg Subdivision” thus ensuring its survival for generations to come! Extending from Pembroke to Ottawa running through both Ontario and Quebec, the Beachburg Sub is one of the oldest rail corridors in Eastern Ontario and Western Quebec. Its very existence allows local resource-based industry to ship to world markets efficiently and cost-effectively.
Removal of Rail between Smiths Falls & Mattawa
When the CPR diverted its trains from this line to its main traffic lines through Toronto, Rail America the contracted operator, ceased operations beyond Mattawa to Smith Falls.
Shining Waters Railway
When this organization gets up and running they will be looking for an experienced rail services operator to manage freight and passenger services between Toronto and Peterborough.
VIA cuts London to Sarnia
VIA responded to declining ridership by cutting the route, but the Mayor of London says VIA contributed to the decline by poor marketing, lack of cars and turning away some passengers.
Committee Promoting Muskoka Rail Travel
This group was looking to increase rail passenger service between Muskoka and Toronto and use the Northlander as a commuter service.
All of the above groups or situations could benefit from a strong provincial rail service provider. Ontario Northland already has all the administrative support, car repair facilities, car refurbishment facilities, track maintenance gangs, and marketing people necessary in these situations. They have experienced railroaders who could work with provincial negotiators on behalf of Ontario residents when it comes to pressing the federal government to live up to VIA's mandate.
Ontario Northland should be involved in all these areas to see what economic impact could be generated if the provincial government were to participate in the solutions. Rail transportation needs a much higher priority in this province and Ontario Northland is ideally suited to work with Metrolinx and expand the benefits of rail travel to all parts of the province.
One of the options that is the most developed as an alternative to the current structure of Ontario Northland is the "New Deal" as proposed by the GCA, the umbrella group of the ONTC unions. While that proposal is far superior to the divestment option, which was the only previous choice, it is not clear if it is the best one, given that all options may now be on the table.
The perceived unsustainability of ONTC is what set the divestiture wheels in motion, albeit probably with an initial push by MNDM, who have never been able to figure out how to utilize the corporation. After more than a decade of that lack of leadership, the company was only able to achieve a fraction of its true potential. Further evidence of how MNDM is not geared toward transportation can be seen by the struggles of the Owen Sound Transportation Company as they were almost forced to delay the operation of the Chi-Cheemaun due to MNDM failure to deal with low water levels.
If the reporting structure of Ontario Northland was changed to the MTO, alongside Metrolinx, it may have two beneficial effects. For one thing, it would remove the barriers to innovation and expansion that have been firmly planted by MNDM. The other benefit could be the introduction of an inter-city rail mindset into the MTO mandate. It would have to be supported at the highest levels of government to prevent being overtaken by the former Department of Highways.
Currently there are a number of groups fighting to preserve or enhance their access to rail passenger service and/or rail service providers experiencing financial difficulty. In addition to leading the ROF development, ONTC could be involved in the following
CAPT - Sault Ste Marie
CAPT has long been advocating for improvements to passenger rail service on the Algoma Central Railway, where communities and businesses are totally dependent on CN for access because there are no roads . They have since expanded their vision to include all of Northern Ontario in the provision of rail services.
In 2009, the Huron Central Railway was to the point where they were prepared to wind down their entire operation between Sault Ste Marie and Sudbury, which would have sever negative effects on two major employers in the region, Essar Steel and Domtar.
Transport Pontiac Renfrew
Transport Pontiac-Renfrew is engaged in a spirited process to acquire from CN the rail line known as “The Beachburg Subdivision” thus ensuring its survival for generations to come! Extending from Pembroke to Ottawa running through both Ontario and Quebec, the Beachburg Sub is one of the oldest rail corridors in Eastern Ontario and Western Quebec. Its very existence allows local resource-based industry to ship to world markets efficiently and cost-effectively.
Removal of Rail between Smiths Falls & Mattawa
When the CPR diverted its trains from this line to its main traffic lines through Toronto, Rail America the contracted operator, ceased operations beyond Mattawa to Smith Falls.
Shining Waters Railway
When this organization gets up and running they will be looking for an experienced rail services operator to manage freight and passenger services between Toronto and Peterborough.
VIA cuts London to Sarnia
VIA responded to declining ridership by cutting the route, but the Mayor of London says VIA contributed to the decline by poor marketing, lack of cars and turning away some passengers.
Committee Promoting Muskoka Rail Travel
This group was looking to increase rail passenger service between Muskoka and Toronto and use the Northlander as a commuter service.
All of the above groups or situations could benefit from a strong provincial rail service provider. Ontario Northland already has all the administrative support, car repair facilities, car refurbishment facilities, track maintenance gangs, and marketing people necessary in these situations. They have experienced railroaders who could work with provincial negotiators on behalf of Ontario residents when it comes to pressing the federal government to live up to VIA's mandate.
Ontario Northland should be involved in all these areas to see what economic impact could be generated if the provincial government were to participate in the solutions. Rail transportation needs a much higher priority in this province and Ontario Northland is ideally suited to work with Metrolinx and expand the benefits of rail travel to all parts of the province.
Monday 6 May 2013
Government Accountability - We Need a Champion
Government accountability is such a big issue and affects us so fundamentally it is difficult to figure out where to begin. From both a federal and provincial standpoint, trust in politicians and bureaucrats is one of the cornerstones of our society, yet 95% of us don't trust our elected leaders.
And buried within that statistic is the fact that bureaucrats are supposed to be accountable to their elected leaders. As Kevin Page tells us, the lack of transparency has now moved to the bureaucracy. This attitude is not restricted to the federal level, but is evident in provincial politics also.
In the case of ONTC, the response to MPP Fedeli's request for information, indicates two very alarming trends.
One, is the bureaucratic response to an elected representative's request for information. Regardless of the perceived motives for that request, Mr. Fedeli is the elected representative of the people of Nipissing and, like all of us, is entitled to public information. To determine that of 700 pages, 689 of them are too sensitive to be released and then to black out the 11 that are released, goes against reason.
Two, is the time period of the communications between ONTC and the Min of Finance. The fact that 700 pages exist regarding Min. of Finance, ONTC and divestment during the runup to the last election, yet there was not a hint of it in the campaign is disturbing to say the least. Either the Liberals were running on a platform of deception or they lacked the ability to control what the bureaucracy was up to.
The trend toward secrecy has been documented by Star reporter Kevin Donovan and Edward Greenspon is not restricted to any one level or ministry. Groups like Democracy Watch and Canadian Journalists for Free Expression are just the tip of the iceberg. Remember that 95% number. There is a need to restore the faith of the public in the political process and Justin Trudeau may well be the first champion of that cause.
On the provincial level, Mr. Hudak has taken a step towards accountability, with Path 10 in his New Deal for the Public Sector. However, given his overall objective of gutting the public service first, it rings a little hollow. I wonder if Ms. Wynne or Ms. Horvath would like to take up the banner? There is a chance to connect with a large percentage of the voters for either one.
And buried within that statistic is the fact that bureaucrats are supposed to be accountable to their elected leaders. As Kevin Page tells us, the lack of transparency has now moved to the bureaucracy. This attitude is not restricted to the federal level, but is evident in provincial politics also.
In the case of ONTC, the response to MPP Fedeli's request for information, indicates two very alarming trends.
One, is the bureaucratic response to an elected representative's request for information. Regardless of the perceived motives for that request, Mr. Fedeli is the elected representative of the people of Nipissing and, like all of us, is entitled to public information. To determine that of 700 pages, 689 of them are too sensitive to be released and then to black out the 11 that are released, goes against reason.
Two, is the time period of the communications between ONTC and the Min of Finance. The fact that 700 pages exist regarding Min. of Finance, ONTC and divestment during the runup to the last election, yet there was not a hint of it in the campaign is disturbing to say the least. Either the Liberals were running on a platform of deception or they lacked the ability to control what the bureaucracy was up to.
The trend toward secrecy has been documented by Star reporter Kevin Donovan and Edward Greenspon is not restricted to any one level or ministry. Groups like Democracy Watch and Canadian Journalists for Free Expression are just the tip of the iceberg. Remember that 95% number. There is a need to restore the faith of the public in the political process and Justin Trudeau may well be the first champion of that cause.
On the provincial level, Mr. Hudak has taken a step towards accountability, with Path 10 in his New Deal for the Public Sector. However, given his overall objective of gutting the public service first, it rings a little hollow. I wonder if Ms. Wynne or Ms. Horvath would like to take up the banner? There is a chance to connect with a large percentage of the voters for either one.
Friday 3 May 2013
Ontario Budget 2013 - Ontario Northland Transportation Commission
Opposition MPP's have already written off the 2013 Liberal budget because they say it has little for the north. While I admit the budget is pretty vague with regard to the details regarding the way forward for ONTC, I think it is important to note the changes from the last budget, and in what is NOT being said now.
There is no longer any reference to the act of divesting ONTC, nor is there any financial provision for cost avoidance. There is a reference to the Advisory committee, who along with the Mayors of the five largest cities in Northern Ontario, have expressed support for ONTC and called for a halt to the divestiture process.
As painfully slow as the process is, it is important to note other areas where the provincial government has some issues. In order to develop the Ring of Fire, it will be necessary for industry, the Federal Government and First Nations to all work together and support a common direction so the benefits can be fairly distributed.
The province is also seeking resolution to a number of First Nation land claims and developing a relationship that works for both parties. Industrial investment, as a percent of real GDP, in this province has been at levels below that of the US, in spite of a significant reduction in corporate income tax levels
There are a number of issues in the Federal Provincial relationship that need to be addressed and Stephen Harper is not exactly the model of a fair, open-minded, negotiator.
If one includes all these factors in the preparation of a budget, not to mention the further demands likely by the NDP, this version is probably as good as ONTC proponents could of hoped for, at this point in time.
One thing the government has learned from the gas plant cancellations, is that laying out your political agenda, before an organization such as the OPA negotiates what you are promising, sure puts a crimp in your bargaining power.
In this case there are many bargaining tables in many different arenas where the province wants to see some commitments from the others before making any of their own.
It is good to see the lessons from the gas plant cancellations have at least been learned, given the expense of them.
BUDGET 2013
There is no longer any reference to the act of divesting ONTC, nor is there any financial provision for cost avoidance. There is a reference to the Advisory committee, who along with the Mayors of the five largest cities in Northern Ontario, have expressed support for ONTC and called for a halt to the divestiture process.
As painfully slow as the process is, it is important to note other areas where the provincial government has some issues. In order to develop the Ring of Fire, it will be necessary for industry, the Federal Government and First Nations to all work together and support a common direction so the benefits can be fairly distributed.
The province is also seeking resolution to a number of First Nation land claims and developing a relationship that works for both parties. Industrial investment, as a percent of real GDP, in this province has been at levels below that of the US, in spite of a significant reduction in corporate income tax levels
There are a number of issues in the Federal Provincial relationship that need to be addressed and Stephen Harper is not exactly the model of a fair, open-minded, negotiator.
If one includes all these factors in the preparation of a budget, not to mention the further demands likely by the NDP, this version is probably as good as ONTC proponents could of hoped for, at this point in time.
One thing the government has learned from the gas plant cancellations, is that laying out your political agenda, before an organization such as the OPA negotiates what you are promising, sure puts a crimp in your bargaining power.
In this case there are many bargaining tables in many different arenas where the province wants to see some commitments from the others before making any of their own.
It is good to see the lessons from the gas plant cancellations have at least been learned, given the expense of them.
BUDGET 2013
Ontario
The Province currently owns and operates the
Ontario Northland Transportation Commission (ONTC), which provides
transportation services to northern Ontario
The Province remains committed to ensuring
that northern communities and industries benefit from viable, efficient and
sustainable transportation and communications systems. As part of the process
of addressing ONTC's
ongoing shortfalls, while recognizing the transportation and communications
needs of the north, the government has already:
·
ensured that every community served by the former Northlander
train service continues to be served by ONTC motor-coach service;
·
moved forward on transferring the Niska I ferry, which runs
between Moosonee and Moose
Factory Island
·
maintained the Polar Bear Express service; and
·
received submissions responding to a Request for Proposals for the
Ontera telecommunication assets.
The government continues to transform the ONTC.
The government will ensure that the voices of northern municipalities,
Aboriginal communities, and key industry stakeholders are heard. In March 2013,
the Minister of Northern Development and Mines established the ONTC
Advisory Committee, which provides a collaborative opportunity for the exchange
of ideas so that any decisions made will recognize the economic development
value of transportation services in the north.
The
government also recognizes the need to have a pan-northern transportation
strategy and the path forward for ONTC will be considered as part of a
broader review being conducted by the Ministry of Transportation on a Northern
Ontario Multimodal Transportation Strategy.
BUDGET
2012
Ontario
The Province created and currently runs the
Ontario Northland Transportation Commission (ONTC), which provides
transportation services to northern Ontario Toronto
The ONTC has historically operated at a
deficit, spending more money on operations and capital repairs than it makes in
revenue. For example, ridership on the Northlander passenger rail is not
commercially viable. The cost to the ONTC per passenger has been approximately
$400 beyond the ticket price paid by passengers. Taxpayers can no longer
maintain this subsidy, and the total funding provided to the ONTC has increased
from $28 million in 2003–04 to $103 million in 2011–12 due to mounting
operating and capital pressures.
As a result, the government will:
·
maintain the Polar Bear Express service;
·
divest commercially valuable assets such as rail freight, rail
refurbishment operations and Ontera telecommunications;
·
tender bus services for other operators to service existing bus
routes;
·
terminate the unsustainable Northlander passenger rail service;
and
·
consolidate the ferry service between Moosonee and Moose Factory
with other provincial ferry services.
Once implemented, this will result in annual
savings and avoid costs of approximately $250 million over three years.
The
government is committed to maintaining vital public services the ONTC delivers,
particularly for isolated communities where no alternatives exist.
Wednesday 1 May 2013
MNDM - Mines maybe, Development? Not.
The Ministry of Northern Development and Mines, in its original form, was created to give northerners better access to government services and to bring the northern priorities into focus for the provincial government. If you read the short history on Northern Ontario on the MNDM website, you will see how Ontario Northland has not been favoured in bureaucratic eyes, since the beginning. In spite of the fact that Ontario Northland and its forerunner the T&NO, played a huge role in the development of the northeastern part of our province, it does not even rate a mention in a historical account of the region.
This failure to recognize the value and potential of ONTC has carried through to the present day. When reviewing the statement about the division of MNDM that works with ONTC, one would not think the company has multi-million dollar revenues and a huge economic impact in the region. In fact the passenger services provided by Ontario Northland do not appear to be very substantial at all, as opposed to the characterization of the huge financial strain attributed to them, in the budget.
The Transportation and Infrastructure Unit recommends policies and programs designed to address Northern needs and circumstances; evaluates existing and proposed initiatives, e.g., transportation; communicates special northern circumstances to other ministries; and identifies and addresses emerging northern issues. The Transportation Program is undertaken in cooperation with the Ontario Ministries of Transportation and Natural Resources, the Ontario Northland Transportation Commission (ONTC) and the Owen Sound Transportation Company (OSTC). The Transportation Program includes a variety of programs directed towards the provision of capital infrastructure and passenger services.
With this mindset about the value of Ontario Northland, one wonders how motivated MNDM has been, toward promoting the northern company and ensuring it gets proper funding from, and utilization by, the provincial government. In fact, outside of mining, there is very little hard evidence for the ROI on any developmental activities by the Ministry.
The Ministry of Tourism, through the Ontario Tourism Marketing Partnership, hosts an interactive map of Ontario, identifying many of the province's cities and towns. If one zooms in, it can be seen that virtually all of the buttons for Southern Ontario centers have further links available, while almost none of the Northern Ontario centers have additional detail. If the MNDM is meant to bring focus to Northern Ontario, it is not evident in this website.
Back in 2009, well before Minister Bartolucci decided he could not sustain Ontario Northland, and the company still had economic development as part of its mandate, the Ministry of Tourism was trying to overcome declining tourism numbers in the province.
At that time, at least of couple of reports were commissioned, Ontario Tourism Infrastructure Research Study and Discovering Ontario, A Report on the Future of Tourism.
The following statements are pulled from those reports, which both list Ministry of Northern Development and Mines personnel as participants.
"INVEST IN TRANSPORTATION INFRASTRUCTURE: Ontario should improve access to existing attractions focusing on the links that make it easier to get from one region to another. Tourism transportation funding should focus on movement in and out of key gateways or high-draw areas."
"Ontario should identify provincially owned assets within destinations that could be catalysts for future development"
"Rejuvenation of the rail network, like upgrading Northern Ontario’s highway
system, is an expensive and long-term solution to tourist travel. However,
improving rail service could provide economic returns and tourism sector
growth and investment. In the 2000 Travel Activities and Motivations Survey22 Americans travellers stated they were more likely to be motivated to take a trip to Ontario for nature-oriented attractions such as an overnight train tour through natural terrain."
"Intra- and inter-regional movement of tourists could also be accomplished by
developing people mover systems such as short line rail like the Orangeville
Brampton Railway (OBRY) and the Waterloo St. Jacobs Railway (WSJR) and
regularly scheduled air flights to popular tourist destinations like Muskoka and
Collingwood."
"The generalized cost of travel in and between Ontario’s tourism regions is an
important policy lever that can be used to aid tourism development in Ontario.
The Government of Ontario can aid tourism development by reducing the cost
of travel through enabling more, faster or easier access. A more thorough
assessment of Ontario’s access (transportation) infrastructure is contained in
the Appendix E."
Why would these statements not provoke a response from MNDM something like this?
You know, we already operate a passenger rail service out of Union Station in downtown Toronto, through Muskoka and North Bay, enroute to Cochrane where our tour train, the Polar Bear Express operates out of. Why don't we advertise in any of the free daily newspapers read by thousands of commuters who already have chosen our provincial rail system? Maybe we could partner with other tourism providers and put together packages along the way that are affordable and exciting.
So what was the input from the MNDM?
"The passenger rail service provided by Ontario Northland Rail does not provide full coverage inter-city transportation service between major tourist areas in the Northern Ontario."
Wonderful....thanks so much for promoting the North and bringing focus to our assets. Maybe we should get the Auditor General to report on the whole ministry, not just the savings claimed from the ONTC Divestiture.
Monday 29 April 2013
ONTC - A business model built to last over a century
On Mar 23, 2011 when Min. of Northern Development & Mines Rick Bartolucci announced the divestiture of Ontario Northland, he stated "while the business is good, the model is not" As is the case in "spin" politics, when you are trying to justify what should not be done, the truth can be very inconvenient. In this case, it was necessary to twist the truth 180 degrees to justify a sale that would not achieve what it was purported to do. The business model of the crown corporation has enabled it to last for 110 years, from its formation as the very first provincial agency until the business was ripped away by the same government that abandoned it.
The sale of ONTC would not bring $265M into the provincial coffers, as Minister Bartolucci claimed, nor was the normal annual cost of $25M a debilitating strain on the provincial treasury, especially when one considers the value of the services provided. The annual cost had risen dramatically over the past year, based on some one-off costs and some revenue cuts that had not yet been responded to, but it is the average annual cost that must be evaluated.
The model was, and is, still good. Ontario Northland is an operational enterprise agency under the Ministry of Northern Development and Mines providing commercial and non-commercial services in Northern Ontario.
The commercial services are rail freight, telecommunications, refurbishment and bus services, while non-commercial services are rail passenger, the entire line between Cochrane and Moosonee, and the Moosonee barge (freight service between Moosonee and Moose Factory)
In theory, the commercial operations are supposed to be profitable and able to generate sufficient profit to "subsidize" the non-commercial ones. In practice this has not proven to be the case and additional funds were required from the provincial treasury to balance the books. The reasons for the inability of Ontario Northland to "break even" are varied and in most cases, as clear as mud.
It is important to note that all of Ontario Northland's business activities were started without any competition. The private sector did not go into northern Ontario initially, it was only after the crown corporation started development that others began to compete. The mandate of the ONTC was "to provide efficient transportation and telecommunications services in Northern Ontario as directed by the Government of Ontario through the Minister". The highlights are my own and reflect the main problem with the mandate.
Within the commercial operations of ONTC are hidden requirements and roadblocks to provide economic development to Northern Ontario. For instance, within Motor Coach services, which receives no subsidy, there is the need to provide service to all the small communities within reach of their routes. This means the higher volume passengers from major centres must make the sidetrips into all the small communities between Timmins and Toronto, thereby lengthening their trip and making the automobile or airplane more attractive. A private sector operator would institute express runs and bypass the low ridership in the smaller centres. It is vital to the region that Ontario Northland DOES provide service to these small communities and it must continue, but the idea that commercial operations are required to subsidize their own division, plus contribute to a profit margin needs to be reconsidered.
Charter service was started as a way to improve the utilization rates of buses needed to meet service demand peaks. There is great opportunity for charter business in southern Ontario, but ONTC is held back from competing in those markets because it has been deemed unfair to the private sector operators there and in fact, may be held back from all charter work now to protect Northlander weekend loads.
There are many other examples, Ontera's operation of small local telephone exchanges, rail freight service levels, and refurbishment's limited ability to secure contracts, all facets of their business that may be restrictive or may not be cost effective, but under direction of the Minister, are deemed essential to the provision of service. That service needs to be protected, enhanced and reviewed to find ways of documenting the value of them, at the same time benchmarking the process to ensure efficiency. Once the government is assured of good value from their investment, it becomes possible to expand the operation westward and take in all of northern Ontario.
If Ontario Northland were truly free to enter into whatever businesses would generate additional revenue, they would have developed an intermodal service that would prove to be of exceptional value to the forestry industry now. If those companies are going to expand their market, ONTC would be perfectly situated to assist with intermodal services from their door. The fact that no private sector operator has seen fit to start one up is further evidence that Ontario Northland needs to be kept intact, with all revenue streams from its marginal business operations feeding an efficient, central administration.
If ONTC, or any of its divisions were to be sold off, the administrative burden on what is left would become more onerous and require more government financial support. Ontario Northland, as it exists today, has been abandoned as an instrument of public policy in the economic region in which it operates. It should be used as a means to bring new technologies and innovation into the economy of Northern Ontario, instead of constantly being attacked for consuming public money.
The private sector may want some of the business that ONTC conducts, but they will not take the responsibilities that go with it. The model was not broken, but the relationship between the Minister and the company was, now we need to see the will to repair it, or transfer the assets and let the federal government develop the New Deal.
The sale of ONTC would not bring $265M into the provincial coffers, as Minister Bartolucci claimed, nor was the normal annual cost of $25M a debilitating strain on the provincial treasury, especially when one considers the value of the services provided. The annual cost had risen dramatically over the past year, based on some one-off costs and some revenue cuts that had not yet been responded to, but it is the average annual cost that must be evaluated.
The model was, and is, still good. Ontario Northland is an operational enterprise agency under the Ministry of Northern Development and Mines providing commercial and non-commercial services in Northern Ontario.
The commercial services are rail freight, telecommunications, refurbishment and bus services, while non-commercial services are rail passenger, the entire line between Cochrane and Moosonee, and the Moosonee barge (freight service between Moosonee and Moose Factory)
In theory, the commercial operations are supposed to be profitable and able to generate sufficient profit to "subsidize" the non-commercial ones. In practice this has not proven to be the case and additional funds were required from the provincial treasury to balance the books. The reasons for the inability of Ontario Northland to "break even" are varied and in most cases, as clear as mud.
It is important to note that all of Ontario Northland's business activities were started without any competition. The private sector did not go into northern Ontario initially, it was only after the crown corporation started development that others began to compete. The mandate of the ONTC was "to provide efficient transportation and telecommunications services in Northern Ontario as directed by the Government of Ontario through the Minister". The highlights are my own and reflect the main problem with the mandate.
Within the commercial operations of ONTC are hidden requirements and roadblocks to provide economic development to Northern Ontario. For instance, within Motor Coach services, which receives no subsidy, there is the need to provide service to all the small communities within reach of their routes. This means the higher volume passengers from major centres must make the sidetrips into all the small communities between Timmins and Toronto, thereby lengthening their trip and making the automobile or airplane more attractive. A private sector operator would institute express runs and bypass the low ridership in the smaller centres. It is vital to the region that Ontario Northland DOES provide service to these small communities and it must continue, but the idea that commercial operations are required to subsidize their own division, plus contribute to a profit margin needs to be reconsidered.
Charter service was started as a way to improve the utilization rates of buses needed to meet service demand peaks. There is great opportunity for charter business in southern Ontario, but ONTC is held back from competing in those markets because it has been deemed unfair to the private sector operators there and in fact, may be held back from all charter work now to protect Northlander weekend loads.
There are many other examples, Ontera's operation of small local telephone exchanges, rail freight service levels, and refurbishment's limited ability to secure contracts, all facets of their business that may be restrictive or may not be cost effective, but under direction of the Minister, are deemed essential to the provision of service. That service needs to be protected, enhanced and reviewed to find ways of documenting the value of them, at the same time benchmarking the process to ensure efficiency. Once the government is assured of good value from their investment, it becomes possible to expand the operation westward and take in all of northern Ontario.
If Ontario Northland were truly free to enter into whatever businesses would generate additional revenue, they would have developed an intermodal service that would prove to be of exceptional value to the forestry industry now. If those companies are going to expand their market, ONTC would be perfectly situated to assist with intermodal services from their door. The fact that no private sector operator has seen fit to start one up is further evidence that Ontario Northland needs to be kept intact, with all revenue streams from its marginal business operations feeding an efficient, central administration.
If ONTC, or any of its divisions were to be sold off, the administrative burden on what is left would become more onerous and require more government financial support. Ontario Northland, as it exists today, has been abandoned as an instrument of public policy in the economic region in which it operates. It should be used as a means to bring new technologies and innovation into the economy of Northern Ontario, instead of constantly being attacked for consuming public money.
The private sector may want some of the business that ONTC conducts, but they will not take the responsibilities that go with it. The model was not broken, but the relationship between the Minister and the company was, now we need to see the will to repair it, or transfer the assets and let the federal government develop the New Deal.
Wednesday 24 April 2013
Economic Development in Northern Ontario
Employment in Northern Ontario - 2003 372,700
2011 360,900
11,800 Less jobs in Northern Ontario
Source - MNDM - Northern Ontario - A Profile
NOHFC Mandate under MNDM
Established June 1, 1988, The Northern Ontario Heritage Fund Corporation (NOHFC) is a crown corporation and development agency of the Ontario government that invests in northern businesses and municipalities through conditional contributions, forgivable performance loans, incentive term loans and loan guarantees.
Between 2003 and 2010 the Northern Ontario Heritage Fund Corporation claims to have created (or maintained) 13,300 jobs at a cost of $523M or almost $40,000 per job.
That amount does not include annual administration costs which were $5.2M in 2010 (up $1M from 2009) nor the pension cost for the administrative employees which is recorded separately. NOHFC Annual Report 2009-2010
Ministry of Economic Development and Innovation
Budget of $983.9M for 2012 and their mandate, although Ontario wide, is
The Ministry of Economic Development, Trade and Employment supports a strong, innovative economy that can provide jobs, opportunities and prosperity for all Ontarians.
Budget of $768.6M for 2012
Ministry of Tourism, Culture and Sport
Budget of $1,200M for 2012
This ministry works closely with the tourism sector to help stimulate economic growth and investment and create an environment that allows Ontario to compete successfully in the rapidly changing world of travel and leisure. Among our activities to strengthen Ontario as an internationally-recognized tourist destination:
The budget amounts listed above are not totally devoted to "Economic Development" but they are all expenditures of the Provincial Government. There is more money spent on economic development by the federal and municipal governments also.
Now I understand that it takes money to make money, but I would really like to see an independent review and analysis of all the government money spent on "Economic Development" and what the return on investment is. Or better yet, why not take a portion of this money and invest it in something that will return hundreds of jobs and create new industry in the North...the New Deal.
2011 360,900
11,800 Less jobs in Northern Ontario
Source - MNDM - Northern Ontario - A Profile
NOHFC Mandate under MNDM
Established June 1, 1988, The Northern Ontario Heritage Fund Corporation (NOHFC) is a crown corporation and development agency of the Ontario government that invests in northern businesses and municipalities through conditional contributions, forgivable performance loans, incentive term loans and loan guarantees.
Between 2003 and 2010 the Northern Ontario Heritage Fund Corporation claims to have created (or maintained) 13,300 jobs at a cost of $523M or almost $40,000 per job.
That amount does not include annual administration costs which were $5.2M in 2010 (up $1M from 2009) nor the pension cost for the administrative employees which is recorded separately. NOHFC Annual Report 2009-2010
Ministry of Economic Development and Innovation
Budget of $983.9M for 2012 and their mandate, although Ontario wide, is
The Ministry of Economic Development, Trade and Employment supports a strong, innovative economy that can provide jobs, opportunities and prosperity for all Ontarians.
The ministry delivers a range of programs, services and tools to help businesses innovate and compete in today’s fast-changing global economy, including business support and youth entrepreneurship programs, strategic investments and international trade and export expertise.
Through the government’s Open for Business initiative, the ministry helps make investing in Ontario more attractive for businesses, while protecting the public interest.
Through the Accessibility Directorate of Ontario, the ministry works with the disability, private and public sectors in the interest of promoting accessibility for all.
Ministry of Northern Development and MinesBudget of $768.6M for 2012
Northern Development
By providing a northern perspective, the Northern Development Division helps northerners build stronger, more prosperous economies and sustainable communities while addressing the unique regional circumstances of our vast, resource-rich land.
- We deliver Ontario government programs, services and information across the North.
- We promote economic growth, infrastructure enhancements and investment in Northern Ontario. We also market the North on the global stage to attract investment dollars and open new export opportunities for northern businesses.
- We ensure that government policies and programs reflect a northern perspective by gathering input from northern citizens and providing a voice for them in government decision-making.
Ministry of Tourism, Culture and Sport
Budget of $1,200M for 2012
This ministry works closely with the tourism sector to help stimulate economic growth and investment and create an environment that allows Ontario to compete successfully in the rapidly changing world of travel and leisure. Among our activities to strengthen Ontario as an internationally-recognized tourist destination:
- We undertake vital market research in the areas of marketing, product development, and investment to aid business decisions by both governments and industry.
- We encourage private sector investment and new product development to expand Ontario's tourism sector and promote regional tourism economic development.
- We support and facilitate the development of new experiences and destinations.
- We market Ontario as a tourist destination.
- We invest in Ontario's tourism agencies.
- We work with industry and organizations to support the maintenance and growth of the tourism's economic contribution.
The budget amounts listed above are not totally devoted to "Economic Development" but they are all expenditures of the Provincial Government. There is more money spent on economic development by the federal and municipal governments also.
Now I understand that it takes money to make money, but I would really like to see an independent review and analysis of all the government money spent on "Economic Development" and what the return on investment is. Or better yet, why not take a portion of this money and invest it in something that will return hundreds of jobs and create new industry in the North...the New Deal.
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