:-) Wouldn't surprise me if that was mentioned in the negotiation. Just hinting of doing that en masse (Canada, Europe) is what stopped the Greenland Invasion last December.
But since you mention it, many countries have been slow-trickle selling US debt to "finance" various national projects (think of it as a way to get up-front cash for our new Sovereign Wealth Fund). So, using it to finance an economic investment like the Bridge would make rational sense.
Some of this is still vague -- I don't think we've heard all the details yet (or maybe I'm just hoping we haven't). The "50% split" happens "after costs to operate". Now, in government-speak, that usually means the routine daily type of things -- snowploughing, pothole fixing, painting, insurance, blah, blah, blah. But there COULD be a clause in here that's akin to "loan payment" or some such, that does give Canada a significant portion towards the capital cost, before they do the 50/50 bit on "whatever is left over."
And I'm seeing contradictions as to who controls that "economic development fund".
Put to your main contention: YES, even if this is a mafia-style shakedown, we do need the bridge open for all of the trade matters you point out.
And I agree with your basic question: What happens when ones "deal" gets renegotiated (at gunpoint, of sorts) by the other side?
My answer: This gets noted. And Canadians have long memories (well, most of the time). So if there ever is some other joint capital project, then we will be VERY wary about doing some similar arrangement. Or better yet, have something in our back pocket for "leverage" that would prevent this (if we had a monopoly on avocados, we would have the Americans grovelling at our feet! Hmm, once our herds are bigger, maybe we can dangle beef at them . . . .)
The usa has lost the trust of potential investors. They cannot be trusted to honour their signed agreements. Countries all over the world have seen that trump is a gangster and his fascist regime are unreliable, corrupt and not to be trusted in any agreement. Canada got screwed with this bridge debacle but we Canadians won’t forget what trump and his regime have done. Their empire is falling, the crooks will be held accountable, trump will hang or get assasinated by disgruntled citizens,the sooner the better.
Admittedly I was someone who had to take a breath and think about this one logically for a second because as much as I didn’t like that we had to open the bridge under these terms, it still was necessary that it open regardless of personal feelings
The one thing I hope is that there’s room to renegotiate more directly with Michigan when this is all said and done because to me Trump getting more directly involved just turned this whole thing into a farce
🇨🇦💙 Not quite. Carney’s still a banker. The net profits (not the gross profits) are split after all expenses have been deducted. Payroll, security and safety, utilities and toll $ systems, structural engineering specialists, IT specialists, legal fees, Insurance, administration, road maintenance, improvements, infrastructure costs among many others line items. The Gordie Howe Bridge can now hire the top talent for all its needs as payroll and contract costs will be deducted.
Roxy, you're thinking similar to me in the post I just did (while you were posting yours). I'm not quite sure if/how we can wrangle a "bridge loan payment to Canada" into the "costs" (Before the 50/50 split), but I would suspect they might have arranged something.
But to your "Carney is a banker" (more importantly, a central banker, thinking of things at macroeconomic level of countries) and to Fred's assertion "there's all kinds of economic reasons why the bridge needs to open, even if it opens under shitty (my word) terms for Canada", I DO suspect he's blessed this because the overall benefit is a WIN for us at this time - even if it's not a direct win with the bridge itself in isolation.
Looking forward to Carney/LeBlanc/Joly commenting further, with more official details.
Carney did say net. There are GROSS profits but that’s before expenses, like loan interest, loan payment, maintenance, payroll, equipment, machinery consultants etc.
So it is to our advantage to buy the best snow removal trucks, hire the best consultants to get our expenses so high, once deducted to reach NET Profits thy’ll be under $100,000.
🇨🇦💙 Carney wears many hats. Steering Canada through the US asset- backed mortgage crisis that almost bankrupted Iceland and steering Britain through Brexit, Carney understands pattern recognition and has perfected crisis-tested nerve under Trump’s ambiguity. Both central bank jobs were excellent teachers.
“The loan/financing repayment isn’t part of the split at all — it’s deducted before the profit-split calculation even starts. Net profit = toll revenue − Operating and maintenance costs − outstanding capital/financing costs.” (Globe and Mail)
The WDBA (Windsor Detroit Bridge Association) has confirmed Canada and the US will split NET toll revenue (after operating expenses) over a 15-year period. The US will direct its share into a “regional economic development fund”
This alludes to why purchasing the full allotment of F-35s is folly. Canada has just been provided with another case in point why deals with the USA are not reliable.
Recovery of the portion of the (after cost) 50%, now only meaning 25% for Canadian recovery, also makes any bridge revenue for the USA dependent on.... (drum roll.....), cross border trade. Canadians have the mission now. Dial it in on shopping Canadian, or from favored trading partners.
Need a lot more information to determine if this was a good deal for Canada. I suspect that the toll schedule will be significantly higher than was initially planned. The tolls on the Ambassador bridge were almost twice what was proposed by the new Gordie Howe bridge. The US veto over toll amounts and a requirement that the toll be reasonable in relation to the competitive market meaning the Ambassador bridge protects Maroun from losing on both volume and price. So now that the toll rate is higher becsuse Trump magic he gets his share of the increase. I firmly believe this flawed logic is behind this deal. Let us know when the actual details of the deal are available.
Has anyone requested a structural assessment of the old bridge. Maybe it’s not stable enough to be in service any more. Since the bridge was built by Canada there should be no reason to do a slimey trump shake down It will only come back on the U S at a later time
When someone builds a newer, bigger bridge right beside the old one and then fights to keep the old one open, it does make people wonder what the real argument is about.
We need to call this for what it is! EXTORTION plain and simple. However, according to articles I've read, Canada in fact hasn't been shafted as some would have us believe. It's true that we'll be sharing the profits, but they'll be net profits, after all expenses, upkeep, repairs, etc. Our PM thankfully is a master negotiator! We'll be giving up some profits, but so will the US. Trump isn't a master dealmaker like he thinks he is, and hopefully the midterms in November will restore sanity, while relegating him as a true lame duck POTUS.
Going forward, isn't it high time that tolls were instituted for all US traffic through Canada on their way to Alaska? And I like Rhonda's suggestion to sell at least $7B of US debt.
We need more official detail (all of this so far is just leaked stuff). We might have "caved" on the bridge, but obtained bigger economic winfall by getting it opened. As Fred pointed out, every day it remained closed, economic hardship ensued.
The Orange One knows this kind of stuff, and that while USA also needs this bridge opened, he probably calculated that Canada needs it more (at least right now). So he leveraged.
But if so, we will remember -- and maybe we reduce our F35 orders by a few squadrons. <evil grin>
The problem with negotiating ANYTHING with that loose cannon, is that he will make a decision now, then spend hours on social media denying any such deal. It's like expecting a toddler to do office work without knowing what an office is!!!
We know (I think) a bit more crucial information -- there's still gaps, and the information below hasn't appear from Carney or the chief Ministers (so until one of them says such, it could still be incorrect):
- this 50/50 bit is on the amount in EXCESS of costs! And as I mentioned in earlier postings yesterday, it seems very likely that the "capital cost of the bridge" is one expense that is taken into account before the "profit split." So with such capital cost elements tending to be the highest in the earlier years of a capital project, there's a very strong chance that it takes the form somewhat like this:
Both sides get their general operating costs covered (which makes sense -- snowploughing, repairs, maintenance, insurance, security, toll booths, etc.)
Canada gets "interest" on the money invested in the bridge
Canada gets it's monthly/annual "payment" towards recovering invested cost
All of this probably will equal something like 99% of the toll revenue.
So the "proceeds" of 1% gets split 50/50 -- so each country then ends up with 0.5% or some such of the remainder.
(if this is the correct interpretation, then all is VERY good!)
- this new "revised" deal only applies for the first 15 years. Then it reverts back to the original deal (presumably).
- US gov only has veto on the toll amount if increases are more than 10% of the current toll in place (once established). Otherwise, the administrative board (comprising of both CAN/USA delegates) gets to determine the amount.
We'll see how much this changes by tomorrow night. ;-)
That interpretation would change the picture considerably, Grant.
If operating costs, financing, and repayment of Canada’s capital investment all come off the top before any remaining proceeds are divided, then “50/50” sounds much more dramatic than the actual financial arrangement.
The 15-year limit and the restriction on vetoing ordinary toll increases matter too.
I’m still cautious until the governments publish the full terms in plain English, but this is exactly the kind of detail missing from the original announcement.
Not much new info changed, but besides USA having veto over toll increases >10%, they also have a veto if the toll DECREASES below "average regional levels".
What I interpret this last bit to mean is that if the Windsor-Detroit-Bridge Authority (I'm sure I've got that name wrong) decides to "undercut" (presumably unfairly) any other bridge's tolls in the area, that would be viewed as "uncompetitive practice" -- translate that to mean if they charge less than the Ambassador Bridge, USA could veto.
Mitigator to THAT, would likely mean that the Blue Water Bridge (Sarnia, ON, to Port Huron, MI). So, it would be an average between all three bridges, I guess - and Gordie Howe can't go lower than that average, without USA approving.
We can then argue that Blue Water will always be the cheapest (by current rates (about $6/axle on average), and Ambassador will be the most expensive (est $23/axle -- their prices are in USD (US$ 17.50) so exchange rate will apply), so by default, Gordie will be somewhere in the middle (currently published toll is about $11/axle. But I guess we find out in a week if that rate increases per the "new deal").
Guess we'll see -- until somebody officially gives the details, this could all be gibberish.
All this tells us is that for, however, long Trump or the Republicans are in office in the United States. We should not be negotiating anything with this country. They are liars, cheats and bullies who don’t stand behind their own word and behave like the mafia does. Canada and the rest of the world as far as I’m concerned, should cease negotiating with the United States on virtually everything! They need to be excluded from the rest of society!
I think our PM should sell $7B of US debt to recoup our costs. That'll work.
:-) Wouldn't surprise me if that was mentioned in the negotiation. Just hinting of doing that en masse (Canada, Europe) is what stopped the Greenland Invasion last December.
But since you mention it, many countries have been slow-trickle selling US debt to "finance" various national projects (think of it as a way to get up-front cash for our new Sovereign Wealth Fund). So, using it to finance an economic investment like the Bridge would make rational sense.
Some of this is still vague -- I don't think we've heard all the details yet (or maybe I'm just hoping we haven't). The "50% split" happens "after costs to operate". Now, in government-speak, that usually means the routine daily type of things -- snowploughing, pothole fixing, painting, insurance, blah, blah, blah. But there COULD be a clause in here that's akin to "loan payment" or some such, that does give Canada a significant portion towards the capital cost, before they do the 50/50 bit on "whatever is left over."
And I'm seeing contradictions as to who controls that "economic development fund".
Put to your main contention: YES, even if this is a mafia-style shakedown, we do need the bridge open for all of the trade matters you point out.
And I agree with your basic question: What happens when ones "deal" gets renegotiated (at gunpoint, of sorts) by the other side?
My answer: This gets noted. And Canadians have long memories (well, most of the time). So if there ever is some other joint capital project, then we will be VERY wary about doing some similar arrangement. Or better yet, have something in our back pocket for "leverage" that would prevent this (if we had a monopoly on avocados, we would have the Americans grovelling at our feet! Hmm, once our herds are bigger, maybe we can dangle beef at them . . . .)
The usa has lost the trust of potential investors. They cannot be trusted to honour their signed agreements. Countries all over the world have seen that trump is a gangster and his fascist regime are unreliable, corrupt and not to be trusted in any agreement. Canada got screwed with this bridge debacle but we Canadians won’t forget what trump and his regime have done. Their empire is falling, the crooks will be held accountable, trump will hang or get assasinated by disgruntled citizens,the sooner the better.
Admittedly I was someone who had to take a breath and think about this one logically for a second because as much as I didn’t like that we had to open the bridge under these terms, it still was necessary that it open regardless of personal feelings
The one thing I hope is that there’s room to renegotiate more directly with Michigan when this is all said and done because to me Trump getting more directly involved just turned this whole thing into a farce
Absolutely awesome idea!!!
🇨🇦💙 Not quite. Carney’s still a banker. The net profits (not the gross profits) are split after all expenses have been deducted. Payroll, security and safety, utilities and toll $ systems, structural engineering specialists, IT specialists, legal fees, Insurance, administration, road maintenance, improvements, infrastructure costs among many others line items. The Gordie Howe Bridge can now hire the top talent for all its needs as payroll and contract costs will be deducted.
Roxy, you're thinking similar to me in the post I just did (while you were posting yours). I'm not quite sure if/how we can wrangle a "bridge loan payment to Canada" into the "costs" (Before the 50/50 split), but I would suspect they might have arranged something.
But to your "Carney is a banker" (more importantly, a central banker, thinking of things at macroeconomic level of countries) and to Fred's assertion "there's all kinds of economic reasons why the bridge needs to open, even if it opens under shitty (my word) terms for Canada", I DO suspect he's blessed this because the overall benefit is a WIN for us at this time - even if it's not a direct win with the bridge itself in isolation.
Looking forward to Carney/LeBlanc/Joly commenting further, with more official details.
I heard Carney say, "Net" in his news conference while in Calgary! I hope it means what I think!
Carney did say net. There are GROSS profits but that’s before expenses, like loan interest, loan payment, maintenance, payroll, equipment, machinery consultants etc.
So it is to our advantage to buy the best snow removal trucks, hire the best consultants to get our expenses so high, once deducted to reach NET Profits thy’ll be under $100,000.
🇨🇦💙 Carney wears many hats. Steering Canada through the US asset- backed mortgage crisis that almost bankrupted Iceland and steering Britain through Brexit, Carney understands pattern recognition and has perfected crisis-tested nerve under Trump’s ambiguity. Both central bank jobs were excellent teachers.
“The loan/financing repayment isn’t part of the split at all — it’s deducted before the profit-split calculation even starts. Net profit = toll revenue − Operating and maintenance costs − outstanding capital/financing costs.” (Globe and Mail)
The WDBA (Windsor Detroit Bridge Association) has confirmed Canada and the US will split NET toll revenue (after operating expenses) over a 15-year period. The US will direct its share into a “regional economic development fund”
This alludes to why purchasing the full allotment of F-35s is folly. Canada has just been provided with another case in point why deals with the USA are not reliable.
You ARE correct!!!
Recovery of the portion of the (after cost) 50%, now only meaning 25% for Canadian recovery, also makes any bridge revenue for the USA dependent on.... (drum roll.....), cross border trade. Canadians have the mission now. Dial it in on shopping Canadian, or from favored trading partners.
Need a lot more information to determine if this was a good deal for Canada. I suspect that the toll schedule will be significantly higher than was initially planned. The tolls on the Ambassador bridge were almost twice what was proposed by the new Gordie Howe bridge. The US veto over toll amounts and a requirement that the toll be reasonable in relation to the competitive market meaning the Ambassador bridge protects Maroun from losing on both volume and price. So now that the toll rate is higher becsuse Trump magic he gets his share of the increase. I firmly believe this flawed logic is behind this deal. Let us know when the actual details of the deal are available.
What we really need to know is when an adult is actually gonna be present in the whitehouse!
Has anyone requested a structural assessment of the old bridge. Maybe it’s not stable enough to be in service any more. Since the bridge was built by Canada there should be no reason to do a slimey trump shake down It will only come back on the U S at a later time
Fair question, Jeanie.
When someone builds a newer, bigger bridge right beside the old one and then fights to keep the old one open, it does make people wonder what the real argument is about.
We need to call this for what it is! EXTORTION plain and simple. However, according to articles I've read, Canada in fact hasn't been shafted as some would have us believe. It's true that we'll be sharing the profits, but they'll be net profits, after all expenses, upkeep, repairs, etc. Our PM thankfully is a master negotiator! We'll be giving up some profits, but so will the US. Trump isn't a master dealmaker like he thinks he is, and hopefully the midterms in November will restore sanity, while relegating him as a true lame duck POTUS.
Going forward, isn't it high time that tolls were instituted for all US traffic through Canada on their way to Alaska? And I like Rhonda's suggestion to sell at least $7B of US debt.
The USA should hang its head in shame
They have all taken the worst elements of Trumpism and vilified their own country
Both sides must have agreed to a renegotiate the agreement. So we caved again.
We need more official detail (all of this so far is just leaked stuff). We might have "caved" on the bridge, but obtained bigger economic winfall by getting it opened. As Fred pointed out, every day it remained closed, economic hardship ensued.
The Orange One knows this kind of stuff, and that while USA also needs this bridge opened, he probably calculated that Canada needs it more (at least right now). So he leveraged.
But if so, we will remember -- and maybe we reduce our F35 orders by a few squadrons. <evil grin>
The problem with negotiating ANYTHING with that loose cannon, is that he will make a decision now, then spend hours on social media denying any such deal. It's like expecting a toddler to do office work without knowing what an office is!!!
8pm CST Monday July 13.
We know (I think) a bit more crucial information -- there's still gaps, and the information below hasn't appear from Carney or the chief Ministers (so until one of them says such, it could still be incorrect):
- this 50/50 bit is on the amount in EXCESS of costs! And as I mentioned in earlier postings yesterday, it seems very likely that the "capital cost of the bridge" is one expense that is taken into account before the "profit split." So with such capital cost elements tending to be the highest in the earlier years of a capital project, there's a very strong chance that it takes the form somewhat like this:
Both sides get their general operating costs covered (which makes sense -- snowploughing, repairs, maintenance, insurance, security, toll booths, etc.)
Canada gets "interest" on the money invested in the bridge
Canada gets it's monthly/annual "payment" towards recovering invested cost
All of this probably will equal something like 99% of the toll revenue.
So the "proceeds" of 1% gets split 50/50 -- so each country then ends up with 0.5% or some such of the remainder.
(if this is the correct interpretation, then all is VERY good!)
- this new "revised" deal only applies for the first 15 years. Then it reverts back to the original deal (presumably).
- US gov only has veto on the toll amount if increases are more than 10% of the current toll in place (once established). Otherwise, the administrative board (comprising of both CAN/USA delegates) gets to determine the amount.
We'll see how much this changes by tomorrow night. ;-)
That interpretation would change the picture considerably, Grant.
If operating costs, financing, and repayment of Canada’s capital investment all come off the top before any remaining proceeds are divided, then “50/50” sounds much more dramatic than the actual financial arrangement.
The 15-year limit and the restriction on vetoing ordinary toll increases matter too.
I’m still cautious until the governments publish the full terms in plain English, but this is exactly the kind of detail missing from the original announcement.
Thanks for continuing to dig into it.
8:53 pm CST Tuesday July 14
Not much new info changed, but besides USA having veto over toll increases >10%, they also have a veto if the toll DECREASES below "average regional levels".
What I interpret this last bit to mean is that if the Windsor-Detroit-Bridge Authority (I'm sure I've got that name wrong) decides to "undercut" (presumably unfairly) any other bridge's tolls in the area, that would be viewed as "uncompetitive practice" -- translate that to mean if they charge less than the Ambassador Bridge, USA could veto.
Mitigator to THAT, would likely mean that the Blue Water Bridge (Sarnia, ON, to Port Huron, MI). So, it would be an average between all three bridges, I guess - and Gordie Howe can't go lower than that average, without USA approving.
We can then argue that Blue Water will always be the cheapest (by current rates (about $6/axle on average), and Ambassador will be the most expensive (est $23/axle -- their prices are in USD (US$ 17.50) so exchange rate will apply), so by default, Gordie will be somewhere in the middle (currently published toll is about $11/axle. But I guess we find out in a week if that rate increases per the "new deal").
Guess we'll see -- until somebody officially gives the details, this could all be gibberish.
All this tells us is that for, however, long Trump or the Republicans are in office in the United States. We should not be negotiating anything with this country. They are liars, cheats and bullies who don’t stand behind their own word and behave like the mafia does. Canada and the rest of the world as far as I’m concerned, should cease negotiating with the United States on virtually everything! They need to be excluded from the rest of society!