afransen
Senior Member
Keith:
"Expressways can't compete on time but they do compete on price...cheaper for the government to build and free for the public to use"
We had a very long debate over this earlier. I believe when you say 'free', some people around here might object and say 'prepaid'.
"I'd support that. Except I don't think VIA would be able to pay it off."
Via operates on a subsidy basis anyway. The federal government provides the loan guarantee and either promises explicitly to cover the interest and capital costs over 25 years, or if that is somehow prohibited, make it implicit. Political considerations would make it difficult to cut Via's subsidy without negative service implications.
As far as spending the money now and recognizing the expense over a longer period of time, I am under the impression that the government is doing that now but in reverse with the recently concluded spectrum auction, which has the ~$4 billion in income spread over 10 years of revenue (AFAIK).
I guess I'll clarify and say that the amortization is only an accounting trick. Rather than run a deficit to pay for the infrastructure, borrow the funds and lend it to Via (no change in net debt position), Via spends the money (increases assets and liabilities), and recognizes the loss slowly over time through amortization, with the federal government covering that loss through increased annual subsidies.
Therefore, government gets the ribbon-cutting without the black mark of a deficit.
unimaginative:
"The problem is that its really hard to sell a 12 billion dollar project to the rest of Canada, that only benefits Ontario and Quebec. 2-3 billion for small upgrades is much easier....."
Simultaneously propose something for Calgary-Edmonton. Then the project will be serving 65% of Canada's population. Maybe long-term it'd make sense to extend the line from Quebec into Moncton/Halifax, but that probably wouldn't be justified.
"Expressways can't compete on time but they do compete on price...cheaper for the government to build and free for the public to use"
We had a very long debate over this earlier. I believe when you say 'free', some people around here might object and say 'prepaid'.
"I'd support that. Except I don't think VIA would be able to pay it off."
Via operates on a subsidy basis anyway. The federal government provides the loan guarantee and either promises explicitly to cover the interest and capital costs over 25 years, or if that is somehow prohibited, make it implicit. Political considerations would make it difficult to cut Via's subsidy without negative service implications.
As far as spending the money now and recognizing the expense over a longer period of time, I am under the impression that the government is doing that now but in reverse with the recently concluded spectrum auction, which has the ~$4 billion in income spread over 10 years of revenue (AFAIK).
I guess I'll clarify and say that the amortization is only an accounting trick. Rather than run a deficit to pay for the infrastructure, borrow the funds and lend it to Via (no change in net debt position), Via spends the money (increases assets and liabilities), and recognizes the loss slowly over time through amortization, with the federal government covering that loss through increased annual subsidies.
Therefore, government gets the ribbon-cutting without the black mark of a deficit.
unimaginative:
"The problem is that its really hard to sell a 12 billion dollar project to the rest of Canada, that only benefits Ontario and Quebec. 2-3 billion for small upgrades is much easier....."
Simultaneously propose something for Calgary-Edmonton. Then the project will be serving 65% of Canada's population. Maybe long-term it'd make sense to extend the line from Quebec into Moncton/Halifax, but that probably wouldn't be justified.