The Meddling Public Sector

While governments at every level and of every political stripe spend our money like it’s theirs, threatening to send all us hardworking taxpayers to the proverbial poorhouse, it is the private sector, the merchants of free enterprise, muckingupthewordswho keep the ship of state upright, generating the wealth which floats all our boats. With a laser-like approach to finding efficiencies, customer service and competitive pricing, the profit motive greases the wheels of a functioning society, pretty much as God and Milton Friedman proclaimed. “In this present crisis, government is not the solution to our problem,” actor-turned-politician Ronald Reagan crowed, “government is the problem.”

Allow me to introduce exhibit A.

Right now in Toronto, City Hall sits guilty of stifling not one, but two heroic businesses, trying their best to make this city a better place to live for all of us. lucyBack in 2009, city council demanded to pay Bombardier nearly a billion dollars in return for 204 new streetcars. Clearly, it was an unreasonable 10 year delivery timeline with 37 of the vehicles expected on the road by the end of 2014, 60 by the time 2016 rolled around. To date, only 8 are up and running along the streets of Toronto.

Obviously the only reasonable explanation for such a delay and overwhelming under-performance on the part of Bombardier is the intrusion of government into the sphere of the private sector. The company has also been forced to delay orders of new subway cars to New York City and Montreal. What’s the common factor in that equation? (Aside from the delays, that is.) Ethrowingmoneyaroundxactly. Cities, and government.

Where the hell are all these public pension bloated fat cats with their hands out full of money, offering to buy planes from Bombardier? Because of this stingy, public transit-oriented attitude of municipal officials, the company’s aviation arm has been hindered in its honest pursuit of an honest day’s capitalism. Reduced to near ‘penny-stock status’, according to the Globe and Mail, Bombardier sits helplessly on its stock of beautiful C-series flying technology, waiting for somebody, anybody, from the public sector to step up and perform as it was meant to do. Write big fat cheques to private companies with as few strings attached as possible.

Here’s the kicker.

Rather than sit around complaining about how Bombardier isn’t living up to its streetcar contract, Toronto city council could be channeling that negative energy into something positive. greasethewheelsSuch as, for example, bulldozing ahead with approval of the island airport expansion. This would allow another valiant private company, Porter Airlines, now obstructed by a pernicious officialdom, bureaucratically hung up on ‘proper environmental assessments’, ‘public input’, ‘people oriented waterfront development’ and other make-work, nonsensical jargon, to green light its order of Bombardier CS-100 whisper jets and expand its reach and, fingers crossed, bottom line.

In turn, flush with cash, Bombardier could ramp up its street and subway car assembly lines, delivering to the politicians what they’re really in the business of: vote getting. That’s what they call, out here in the real world, a win-win-win for everyone. Government keeps spending money in order for the private sector to make money. Wealth is then spread accordingly in the immutable law of Economics 101. lenderoflastresortAs it should be.

We elect our representatives to pay up, step back and observe the miracle of commerce. Nothing more. Until we learn to do that, and that only, we will continue to hinder the real engine of our well-being, leaving us empty-handed with fingers pointed in blame at the wrong people for delays, cost overruns, contract breaches and an underwater tunnel taking too few people to too few places.

If that comes to pass, who will be left holding the bag? In the end, somebody’s got to pay. That’s just the way of the world. Governments need to accept that responsibility, their responsibility, and fall into line, knowing it is always better to be the payer of first resort than it is the lender of last resort.

matter-of-factly submitted by Cityslikr

Air Wars

From the swirl of traffic that engulfed our post last week about the Toronto Port Authority and Porter Air came this little gem from a blog in Friday’s National Post. Apparently, Air Canada has filed suit against Porter and the TPA in its ongoing battle to resume flying out of the island airport. Blogger Peter Armstrong tsk tsks these strong arm tactics by AC.

To suggest it laughable in the extreme that anyone would portray Porter Air as the ‘David’ in a David and Goliath battle is, in itself, more than laughable in the extreme. Laughable to the infinity only begins to hint at the absolute absurdity of the comparison. The only way that the litigiously prone Porter Air’s Robert Deluce with his friends in high places could be perceived as the ‘David’ in a David and Goliath struggle would be in a struggle with an actual Goliath. And then only if his first name was David rather than Robert.

This story would be exceedingly funny to island airport opponents, drenched in life affirming irony as it is, if not for the ominous implications of the lawsuit. Clearly, Air Canada wants back at the table to fly out of the airport again. The fact that its regional partner, Jazz Air, agreed to buy 15 Bombardier Q400 airplanes in mid-February – Porter Air’s turboprop aircraft of choice – lends credence to AC’s designs. Once a second company is flying out of the island airport how far behind will a 3rd be? Come on down, WestJet!

With that, the dream of shutting down the airport at best or keeping it small, local and for medical emergencies at worst will be dead for those fervent Goliaths who’ve been waging war against the diminutive Davids of Porter Air and the TPA for over a decade now. Airport expansion will take root and there’ll be no turning back. Unless of course, flying out of the airport turns out to be as economically unfeasible as it was for the likes of City Express, Air Ontario and Air Canada Jazz when they all previously operated from the airport.

This whole tale is a head scratching curiosity when considering the state of the airline business in the rest of the world. Europe has been wracked recently with strikes by pilots and air traffic controllers who are battling austerity measures being introduced in the face of continued recessionary pressures throughout Europe and billions of dollars in losses for the airline industry over the last couple years. An uptick in business for the U.S. for airline industry is not causing an outpouring of optimism there.

Yet here in Toronto, it is all systems go with a $50 million dollar expansion in the works on the island and airlines clamoring for space to start servicing it. Should we take this as a sign of a strong economy recovery in the works for us here? Or is it just a corporate pissing match whose only loser is bound to be local democracy?

curiously submitted by Urban Sophisticat