Feeds:
Posts
Comments

Archive for the ‘Manitoba Issues’ Category

“I must follow the people. Am I not their leader?”
– 19th century British statesman and Winnipeg freeway namesake Benjamin Disraeli.

A few bloggers (Graham the rabblerouser and the ever-mysterious Black Rod) have mentioned that some citizens, including myself, had brought plans forward regarding the Disraeli Bridges Project.  My plan, based on conversations with literally hundreds of Winnipeggers, was to twin the Louise Bridge with a temporary span before any Disraeli closure was to take place.

However, the plan was not perfect: it required leasing of private property (a shed and equipment yard) and would have increased traffic on Higgins Avenue, which did not please some Point Douglas residents.  But I did feel that it was the best option considering the limitations that had we had been told existed.

Of course, most of Winnipeg found out in January of 2010, after four years of talk, that the bridge did not need to be closed at all.  Is that good news?  Yes and no.

It’s good news because the closure of Disraeli was unthinkable without increasing the capacity of other bridges.

It’s bad news because it shows that the city was completely wrong about the limitations of the project, and misinformed the 100,000 affected Winnipeggers for FOUR YEARS.   Not only did this cause undue worry, it also caused several businesses on Henderson to move to another part of the city.  In addition, there is still no plan for the Louise Bridge.

The options the city presented were either a) $250-300 million six-lane bridge still using the old piers and adding some new ones, or b) $125 million bridge refurbishment with 16 months of closure.  Now, the city is saying that a brand new four-lane bridge can be built for $195 million without any closure.

How can a third option come out of nowhere when the city made it abundantly clear that there were only two options?  There are two possibilities for this:

1. The city did not research the project thoroughly before deciding on what they found to be the easiest solution (particularly because they didn’t rely on the bridge to get to work each day).

2. The current project estimates are far too low, meaning that the $195 million price tag will be inflated significantly once construction has begun.

As a public-private partnership, the second option may not be a bad thing, depending on the specifics of the contract.  The city is borrowing $75 million up front, while the private consortium, Plenary Roads Winnipeg, will finance the remaining $120 million.  It is not clear from the information I have seen if cost overruns will be the responsibility of the private group or of the city, or if both will share the extra expense.

At this point, all that is clear is that the city did not think the closure was a big issue until the provincial government finally woke up and decided that it was an issue during a by-election campaign.

So in the end, is the new Disraeli plan a triumph?  No.  It’s a solution that should have been inevitable, but one which the city spent four years decrying as impossible.  The city and province both showed a serious lack of leadership on this issue.  At a time when we are all watching with curious dismay as the US House and Senate whittle away any chance of health care reform due to shortsightedness, partisanship, and selfishness, we see our own governments spending four years avoiding an issue that should have been resolved in four months.

I’m not sad that the city didn’t choose my fancy Disraeli plan, or that the city didn’t bother to consider it on any level; that’s the way government works around here, so it’s like being sad that pigs don’t fly.  But what I am sad about is that the leadership in this city and province has not even considered the damage that this four-year stunt has caused to the Elmwood residents and businesses at the foot of the bridge.

Read Full Post »

George Costanza was a visionary, despite being a fictional character based on Larry David.  Well, in truth, I just wanted a name to describe a concept, and most names are taken.  Even The Human Fund is taken, by an organization in Cleveland.  But that didn’t stop me…

So here’s the pitch: many of us who frequent blogs are idealists who hope for a better society, whether our focus is on local issues or on global affairs.  Some of us donate money to various causes, while others feel as though charities are simply “in the business of charity”, worrying that the administration and salaries might be taking too much of the donation money.

As an East Kildonan Lion, I know first-hand that there are charities that are truly working to help the communities they work in; Lions, for instance, do not spend any proceeds on administration costs, which means that all of the money from fundraising and donations goes directly to worthy causes, and not to salaries or awards dinners.  I’ve also seen the work that groups like the United Way and Siloam Mission are doing in Winnipeg, and they are worthy causes.

But there are other projects that I feel would benefit Winnipeg, and they don’t always fall under the auspices of charity in the traditional sense.  Some of these projects are on a line between charity and angel investing, because they are near a break-even point economically, so may not be considered viable enough for standard capital or not-for-profit enough for donations.

One of these projects is the Grassroots Apartments Project I talked about in an earlier post.  Another idea that I might write about in future is Youth Cafés.  Either of these projects, if they could be given a solid business plan, could receive capital from a rag-tag assortment of Winnipeggers who want to see some of their spare change used to enhance the build environment of our city.  This same concept could be extended to provincial, federal, or worldwide issues, whether it’s money for a prorotype of an algae biofuel plant or a little bit of cash to research the effect of Martian gravity on the development of embryos in mammals in anticipation of building a settlement on Mars.

If any of these projects sound good, great; if any of these projects sound incredibly stupid, that’s good too.  Because I believe that there is room for a fund that allows its investors (or sometimes more accurately, its benefactors) to pick and choose which projects to invest in.  This would be handled through a website that lists all projects once approved by a volunteer committee.  The benefactors would be able to choose the projects to invest their funds in, based on the type of project and its apparent viability.

Some benefactors may choose to automate their investment choices, while others would choose manually on a project-by-project basis.  Some projects could be donations to other charities, while others could be microloans to local entrepreneurs.  It would possible for one benefactor to treat the fund solely as a place to donate money, while another benefactor would use the fund as a way to earn back a small income from projects they deem worthy and viable.

This type of project could be started immediately with the creation of a website and a not-for-profit organization.  Rather than making donations in an official sense, participants would be purchasing virtual goods.  These virtual goods would be traded to various projects, where the executives of that project would borrow money from the organization using the virtual goods as collateral (often along with other guarantees), or they would sell the goods to the organization outright (in the case of a donation); it would also be possible for the organization to enable shared ownership of a portion of a for-profit project by a project’s benefactors, similar to buying shares.
If a project executive failed to repay a loan, the organization would use conventional means of collection to retrieve the funds.  All funds recovered would be distributed back to benefactors, and all dividends from shared ownership would be distributed as well.  All benefactors would be able to withdraw their funds at any time when their funds are not committed to a project.

So is this a worthy endeavour?  Is it something that could be made to work, avoiding both fraud and over-complexity?  Does anyone have any thoughts on this?

Recommend this Post on Progressive Bloggers

Read Full Post »

Rapid transit is a hot topic in Winnipeg these days (these days having begun in the 1990s and continued ad nauseum up to now).  But personally, I worry that we’re not investing in rapid transit for the right reasons.

Transportation is based on the idea that a person needs to get from one place to another, and the biggest reason that there are so many different forms of transportation is because there are many different places that people need to go.  If you’re heading to Mars, you won’t be taking a bicycle, and it would be silly to build a rocket to get to the local park.  And if you live in East St. Paul, you generally expect to use a car for at least one leg of each trip into Winnipeg.

Some Winnipeggers work in industrial parks or at out-of-the-way workplaces in the suburbs, including schools or in other people’s homes.  In such cases, it’s expected that public transit to those places will be less convenient than to those places that receive a large number of workers, such as shopping malls, universities, or downtown Winnipeg.  So any rapid transit solution will logically exclude most industrial parks and thinly-populated suburbs, and focus on major routes and work centres.

In order to know where rapid transit is needed, it’s important to know how “not rapid” existing transit is.  Here is a quick sample of transit times to downtown from neighbourhoods that are fortunate enough to have direct bus routes:

1.    East side of Transcona to Downtown (Portage and Main)
Morning (rush hour): 40-43 minutes
Mid-day (after lunch and before rush hour): 45-48 minutes
Evening (around 10pm): 41-44 minutes

2.    Charleswood  to Downtown (Portage and Main)
Morning (rush hour): 49-56 minutes
Mid-day (after lunch and before rush hour): 48-54 minutes
Evening (around 10pm): 47-56  minutes

3.    Westwood to Downtown (Portage and Main)
Morning (rush hour): 42-48 minutes
Mid-day (after lunch and before rush hour): 51-58 minutes
Evening (around 10pm): 50-57 minutes

4.    North Kildonan to Downtown (Portage and Main)
Morning (rush hour): 33-37 minutes
Mid-day (after lunch and before rush hour): 38 minutes
Evening (around 10pm): 30-36 minutes

These times can increase significantly when your point of origin is off the main routes; this is the last mile problem, as it becomes far less efficient to bring buses out to the far points of the suburbs to access the last houses at the edge of the neighbourhood.  Assuming that these last mile people will be expected to either be very exact in their timing for a commute on the rare feeder bus or drive their care for the first leg of their trip, we focus on main routes for rapid transit.

The biggest problem with rapid transit is that once it’s built, there’s no guarantee that the level of use will justify the expense of construction.  This is a possible problem with our current rapid transit project.  The rapid transit corridor from downtown to the University of Manitoba may cut travel times by ten minutes each way; assuming a base time of 35 minutes from Downtown to U of M by bus, we can estimate a 25 minute trip to the university using bus rapid transit.  For the average student in Transcona, Charleswood, or Westwood, the trip could be brought down from 70 minutes to an hour.  Will that be enough for a significant number of students to abandon their cars and parking passes in exchange for a bus pass?  I don’t think it will.  So is the investment worthwhile?

In the other direction, there will be people from South Winnipeg who will be able to use the busway  to get downtown.  From St. Norbert to downtown is around 40-45 minutes by bus, so this could be reduced to 30-35 minutes.  However, this assumes that the commuter lives right on the bus route; the last mile could add 10-15 minutes of walking time to this trip, instead of a couple of minutes by car.  Again, it’s hard to believe that a faster bus with fewer stops will increase ridership by enough to justify the expense.

So if we can’t guarantee that rapid transit will increase ridership, why are we building it?  Is it simply because we want to hop on the bandwagon?  Is this a way to fill the void from when the Jets left?

The truth is, rapid transit does not remove the reliance on cars that exists in the single-family homes of suburban areas; even people who take the bus to work, such as myself, still use cars for other trips within or between suburbs.  When I need to buy groceries in East Kildonan, I either walk to the Sobeys or I drive to Superstore.  Taking the bus doesn’t even enter into my mind, even though if I time it right I can leave at 9:00pm and get to Superstore by 9:15.   That’s my window, and as long as I’m willing to wait until 10:20pm to catch the bus back home, it can work. That’s because I live right next to Henderson Hwy and McLeod Ave, which are both bus routes.  If I’m too lazy to look up bus times to get to Superstore and to wait for the return bus (and miss the Daily Show at 10pm), how can I expect someone who lives further away from bus routes to give up their car?

I do not believe that we will see a large reduction in the number of cars in Winnipeg over the next fifty years; what I do envision is far more efficient cars, including plug-in hybrids that may never see a gas station, along with flex fuel and electric cars.  If downtown populations rebound, we may see a higher percentage of Winnipeggers who live downtown and choose not to keep a car, but that won’t mean that suburbanites are going to send their cars to the auto wrecker.

If the success of rapid transit is based on seeing significant numbers of residents from Winnipeg suburbs (as they are today) abandon their cars in favour of public transportation, it will not do the job.  Either rapid transit is a bad idea at this time, or the goal of rapid transit needs to be something other than simply getting single-family home suburbanites out of their cars and onto the bus.

So let’s look for positive ways of making rapid transit work:

Increase density along rapid transit routes

This is part of the city’s plan for rapid transit, including a future Ikea spur along Sterling Lyon that passes through the home of the Parker Avenue land swap.  The idea is that greenspace and brownfields will be converted to mixed-use developments, including apartments and condos.  The residents of these buildings will have a real choice of whether or not they want to own a car, because they could take the busways to work (assuming they work in a serviced area, such as downtown), and they could buy their essentials at stores in and around the new development.  The University of Manitoba will also be building their own developments on the former Southwood golf course, which will be located close to the second stage of the busway currently under construction.  In theory, a good rapid transit system will result in higher density along the route(s), and this does happen in other cities, so it could happen in Winnipeg if the municipal and provincial governments actually work towards that goal; the province has a history of working against a denser Winnipeg, with initiatives such as Waverley West and their most recent plan to replace industry in Point Douglas with parkland rather than an expanded residential community.

This idea is better for the tax base and the environment than more sprawl, but is not as good as downtown residential development.  It makes little sense to build all of our new residential towers in far-flung suburbs when there are acres upon acres of space within our core area.  I would like to see more effort put into expanding residential development downtown before we see transit spurs out to empty fields.

Develop a downtown transit system

Actually, Winnipeg already has a downtown transit system called the Winnipeg Walkway System or Winnipeg Skywalk.  It’s for walking only, so it can be a long trip from one end to the other with groceries or library books.  The walkway connects from The Bay along Memorial Blvd all the way to the Grain Exchange Building in the Exchange District.  There are also two shorter Skywalk systems along St. Mary Ave that are not joined to the main system.  It would take approximately 25 minutes to walk from the Exchange District to The Bay, and the entire trip would be indoors.  This walkway system could be expanded to reach the Convention Centre, Union Station, the Manitoba Legislature, and even City Hall and the Centennial Centre underground.

In addition, the walkway system could be enhanced by the addition of a lightweight automated transit system.  This system could be low-fare like Detroit, or completely free as in downtown Miami.  A single line bidirectional guideway with loops at either end could run from Fort Street, along Graham Mall/Avenue to The Bay, and then south to the Legislature and the Osborne Street bridge.  The guideway and rolling stock would cost around $100 million.  A downtown loop, also reaching Centennial Centre, Union Station, and the University of Winnipeg, would cost around $150 million.  It would then be possible to create an Osborne route extending to the busway under development or to replace the busway with a uniform system.  (The Osborne-University route would cost an additional $200 million.)  None of these estimates include property acquisition, which could add from $10 to $50 million to each concept, but mostly for loading platforms, as the guideways themselves would fit over existing sidewalks and streets.

This automated transit system would consist of rubber wheels on a concrete guideway, which would reduce noise and would be cleared of snow and other obstructions by a specially-equipped sweeper/plow car.  This transit system would be elevated for the most part, but would have much smaller pillars than would be required for a light rail system.  This is an important consideration, because Winnipeg’s architecture would not be blocked by large elevated platforms.  The loading platforms would be built into the existing walkway system where possible, sometimes floating above the street with ample clearance for trucks.  The walkway and transitway would complement each other, which would give both systems better coverage of downtown.

If fare is collected, it would be done through smartcards, with cards being available for purchase through vending machines throughout the walkway system.  This would mean that the loading platforms would require a minimal amount of space, reducing property acquisition/leasing costs.

Park and ride, kiss and ride

Park and ride areas in Winnipeg usually consist of parking spaces leased from shopping centres and other businesses, including Garden City, McPhillips Street Station Casino, Kildonan Place, and the Whyte Ridge Shopping Centre.  A new park and ride is the Taylor Park & Ride, which includes electrical outlets and costs $3/day or $32/month; it also has its own bus route to downtown, the 39 Taylor Park & Ride.  This concept was designed in part to encourage workers from Manitoba Hydro to take the bus from their former workplace on Taylor, rather than driving downtown.

Park and ride stations with guaranteed parking and electrical outlets are a good way to tempt suburban commuters, but the 80 available stalls at Taylor Avenue won’t be enough to make a big difference in ridership.  By looking at the traffic flow map of Winnipeg, we can deduce good locations for serviced park and ride.

It looks as though many of the existing park and ride locations are well-placed, and could support expansion of park and ride facilities.  Stalls with electrical outlets could be developed for paid parking, and improved heated shelters could be constructed, perhaps with vending machines and a lounge area.  Basically, any shelter at a park and ride bus stop should be able to pass the book test: a good shelter should be comfortable enough that a passenger with a book will be happy to pull it out and start reading.  This means a well-heated and well-lit shelter with comfortable seating; as part of a pad site leasing agreement, shopping centre security could monitor the shelter if available, or Transit could hire a separate security monitoring service.  In addition, the shelter would be equipped with security cameras and a panic button.

Better incentives in transit fares

The majority of city council seems to be opposed to reducing bus fare, favouring the idea of subsidies for lower income users.  For me, high bus fares are a big part of why I don’t take the bus more often.  As part of my lifestyle and family situation, we have chosen to have a car; because this decision has been made, we already pay significant transportation expenses, including a lease payment, car insurance, and licenses for two drivers.  On Fridays, my wife and daughter sometimes pick me up from work so that we can go out together; at other times, appointments may result in me being picked up instead of taking the bus.  Because of this, I find that every week I use between 7 and 9 bus tickets, which means that I spend less money on tickets than I would on a bus pass.  I could decide to buy the monthly pass, but that would require 36 trips to break even.  This December, I probably won’t even reach 25 trips due to Christmas vacation, while in summer I try to ride my bike at least some of the time.

Winnipeg Transit is planning to move to Smart Cards in the next year or so; if this happens, it’s a great opportunity to reward transit usage with dynamic fare reductions based on frequency.  Here’s how such a system could work: I sign up for a smart card, and either hook it up to a credit card, or choose to load a balance onto the card up front (with the ability to load additional funds).  The first number of trips would cost approximately the full cost of a ticket, while subsequent trips would gradually reduce that fare until it reached the monthly pass level, at which point the trips would be free or at a minimum floor price.  (Transfers would be automatic within a time frame; after a certain lapse time, the transfer would expire, and a new fare would be charged.)

Here is one such breakdown based on 2010 fares:

Trips 1 – 10: $2.25    10 trips/month: $22.50
Trips 10-20: $2.00    20 trips/month: $42.50
Trips 20-30: $1.75    30 trips/month: $60.00
Trips 30-40: $1.50    40 trips/month: $75.00
Trips 40+: FREE

This fare breakdown gives commuters an incentive to use the bus for other trips, but does not penalize commuters who don’t take the bus every day.  Serviced park and ride access could be handled the same way.  For bus users who don’t want to worry about loading funds or using a credit card, they would be able to bring their card to a participating merchant at the start of the month to pay their $75 monthly bus pass fee, and can be pleasantly surprised once in a while to see that they have a small credit from the month before.

There are other benefits that smart cards can bring, including different fares for different routes and different times of day; express routes could cost more than regular routes, and evening bus travel could cost less than daytime in an attempt at putting more riders on the bus during off-peak times.

Transit improvements for the right reasons

Diamond lanes have not been popular with many Winnipeg drivers, and there are valid arguments that there isn’t enough benefit to buses to justify the increased road congestion on some routes.  In addition, while the updated transit signs and improved shelters are nice to have, they are not likely to change hardwired commuter patterns.

Priority in transit improvements should go to items that have the best chance of increasing ridership as long as basic updates for maintaining existing ridership aren’t neglected.  Transit should continue its pursuit of SmartCards, and should continue to expand and improve Park and Ride.  The City of Winnipeg should spend more effort on transit-oriented development, with more emphasis placed on downtown instead of suburban areas.

These efforts will give us more transit riders, even if we still have plenty of cars on the road; if we’re lucky, we’ll see less cars per person as our city grows.

There’s plenty of work to be done to make that happen.  For one thing, lazy people like me should really start to think about using the bus a few more times a month, or at least fixing our flat bike tires in time for spring.

Winnipeg’s Public TransportationRapid transit is a hot topic in Winnipeg these days (these days having begun in the 1990s and continued ad nauseum until today.  But there is a secret to Winnipeg’s current transit system that isn’t mentioned often enough: our transit is already pretty quick for a significant number of Winnipeggers.

Transportation is based on the idea that a person needs to get from one place to another, and the biggest reason that there are so many different forms of transportation is because there are many different places that people need to go.  If you’re heading to Mars, you won’t be taking a bicycle, and it would be silly to build a rocket to get to the local park.  If you live in East St. Paul, you generally expect to use a car for at least one leg of each trip into Winnipeg.

Some Winnipeggers work in industrial parks or at out-of-the-way workplaces in the suburbs, including schools or in other people’s homes.  In such cases, it’s expected that public transit to those places will be less convenient than to those places that receive a large number of workers, such as shopping malls, universities, or downtown Winnipeg.  So any rapid transit solution will logically exclude industrial parks and thinly-populated suburbs, and focus on major routes and work centres.

Here is a quick sample of transit times to downtown from neighbourhoods that are fortunate enough to have direct bus routes:

1.    East side of Transcona to Downtown (Portage and Main)
Morning (rush hour): 40-43 minutes
Mid-day (after lunch and before rush hour): 45-48 minutes
Evening (around 10pm): 41-44 minutes

2.    Charleswood  to Downtown (Portage and Main)
Morning (rush hour): 49-56 minutes
Mid-day (after lunch and before rush hour): 48-54 minutes
Evening (around 10pm): 47-56  minutes

3.    Westwood to Downtown (Portage and Main)
Morning (rush hour): 42-48 minutes
Mid-day (after lunch and before rush hour): 51-58 minutes
Evening (around 10pm): 50-57 minutes

4.    North Kildonan to Downtown (Portage and Main)
Morning (rush hour): 33-37 minutes
Mid-day (after lunch and before rush hour): 38 minutes
Evening (around 10pm): 30-36 minutes

These times can increase significantly when your point of origin is off the main routes; this is the last mile problem, as it becomes far less efficient to bring buses out to the far points of the suburbs.  Assuming that these last mile people will be expected to either time their commute well or drive their care for the first leg of their trip, we would concentrate on routes such as these for rapid transit.

The biggest problem with rapid transit is that once it’s built, there’s no guarantee that the level of use will justify the expense of construction.  The rapid transit corridor from downtown to the University of Manitoba may cut travel times by ten minutes each way.  Assuming a base time of 35 minutes from Downtown to U of M by bus, we can estimate a 25 minute trip to the university using bus rapid transit

So for the average student in Transcona, Charleswood, or Westwood, the trip could be brought down from 70 minutes to an hour.  Will that be enough for a significant number of students to abandon their cars and parking passes in exchange for a bus pass?  I don’t think it will.

In the other direction, there will be people from South Winnipeg who will be able to use the busway  to get downtown.  From St. Norbert to downtown is around 40-45 minutes by bus, so this could be reduced to 30-35 minutes.  However, this assumes that the commuter lives right on the bus route; the last mile could add 10-15 minutes of walking time to this trip, instead of a couple of minutes by car.  Again, it’s hard to believe that a faster bus with fewer stops will increase ridership by enough to justify the expense.

So if we can’t guarantee that rapid transit will increase ridership, why are we building it?  Is it simply because we want to hop on the bandwagon?  Is this a way to fill the void from when the Jets left?

The truth is, rapid transit does not remove the reliance on cars that exists in suburban areas; even people who take the bus to work, such as myself, still use cars for other trips in the suburbs.  When I need to buy groceries in East Kildonan, I either walk to the Sobeys or I drive to Superstore.  Taking the bus doesn’t even enter into my mind, even though if I time it right I can leave at 9:00pm and get to Superstore by 9:15.   That’s my window, and as long as I’m willing to wait until 10:20 to catch the bus back home, it can work. That’s because I live right next to Henderson Hwy and McLeod Ave, which are both bus routes.  If I’m too lazy to look up bus times to get to Superstore and to wait for the return bus (and miss the Daily Show at 10pm), how can I expect someone who lives away from any bus routes to give up their car?

I do not believe that we will see a large reduction in the number of cars in Winnipeg over the next fifty years; what I do envision is far more efficient cars, including plug-in hybrids that may never see a gas station along with flex fuel and electric cars.  If urban populations rebound, we may see a higher percentage of Winnipeggers who live downtown and choose not to keep a car, but that won’t mean that suburbanites are going to send their cars to the wrecker.

If the success of rapid transit is based on seeing significant numbers of residents from Winnipeg suburbs abandon their cars in favour of public transportation, it will not succeed.  Either rapid transit is a bad idea at this time, or the goal of rapid transit needs to be something other than increasing overall suburban ridership.

So let’s leave the concept of failure for a while, and look for positive ways of making rapid transit work:

Increase density along rapid transit routes

This is part of the city’s plan for rapid transit, including the Ikea spur along Sterling Lyon that passes through the home of the Parker Avenue land swap.  The idea is that greenspace and brownfields will be converted to mixed-use developments, including apartments and condos.  The residents of these buildings will have a real choice of whether or not they want to own a car, because they would take the busways to work (assuming they work in a serviced area, such as downtown), and they would buy their essentials at stores in and around the new development.  The University of Manitoba will also be building their own transit-oriented developments on the former Southwood golf course, which will be located close to the second stage of the busway currently under construction.

This idea is better for the tax base and the environment than more sprawl, but is not as good as downtown residential development.  I would like to see more effort put into expanding residential development downtown before we see spurs out to empty fields.

Develop a downtown transit system

Actually, Winnipeg already has a downtown transit system called the Winnipeg Walkway System or Winnipeg Skywalk.  It’s for walking only, so it can be a long trip from one end to the other with groceries or library books.  The walkway connects from The Bay along Memorial Blvd all the way to the Grain Exchange Building in the Exchange District.  There are also two shorter Skywalk systems along St. Mary Ave that are not joined to the main system.  It would take approximately 25 minutes to walk from the Exchange District to The Bay, and the entire trip would be indoors.  This walkway system could be expanded to reach the Convention Centre, Union Station, the Manitoba Legislature, and even City Hall and the Centennial Centre underground.

http://en.wikipedia.org/wiki/Winnipeg_Walkway
http://www.mtscentre.ca/location/directions.php

In addition, the walkway system could be enhanced by the addition of a lightweight automated transit system.  This system could be low-fare like Detroit, or completely free as in downtown Miami.  A single line bidirectional guideway with loops at either end could run from Fort St, along Graham Mall/Avenue to The Bay, and then south to the Legislature and Osborne Street bridge.  The guideway and rolling stock would cost around $100 million.  A downtown loop, also reaching Centennial Centre, Union Station, and the University of Winnipeg, would cost around $150 million.  It would then be possible to create an Osborne route extending to the busway under development or to replace the busway with a uniform system.  (The Osborne-University route would cost an additional $200 million.)  None of these estimates include property acquisition, which could add up to $50 million to each concept, but only for loading platforms, as the guideways themselves would fit over existing sidewalks and streets.

This automated transit system would consist of rubber wheels on a concrete guideway, which would reduce noise and which could be cleared of snow and other obstructions by a specially-equipped sweeper/plow car.  This transit system would be elevated for the most part, but would have much smaller pillars than would be required for a light rail system.  This is an important consideration, because Winnipeg’s architecture is too important to be blocked by large elevated platforms.  The loading platforms would be built into the existing walkway system where possible, sometimes floating above the street with ample clearance for trucks.  The walkway and transitway would complement each other, which would give both systems far better coverage of downtown.

If fare is collected, it would be done through smartcards, with cards being available for purchase through vending machines throughout the walkway system.  This would mean that the loading platforms would require a minimal amount of space, reducing property acquisition/leasing costs.

Park and ride, kiss and ride

Park and ride areas in Winnipeg usually consist of parking spaces leased from shopping centres and other businesses, including Garden City, McPhillips Street Station Casino, Kildonan Place, and the Whyte Ridge Shopping Centre.  A new park and ride is the Taylor Park & Ride, which includes electrical outlets and costs $3/day or $32/month; it also has its own bus route to downtown, the 39 Taylor Park & Ride.  This concept was designed in part to encourage workers from Manitoba Hydro to take the bus from their former workplace on Taylor, rather than driving downtown.

http://myride.winnipegtransit.com/assets/153/PandR-map-oct2009.pdf
http://myride.winnipegtransit.com/public_content/pdfs/Service_Changes/Nov2008/39_Taylor.pdf

Park and ride stations with guaranteed parking and electrical outlets are a good way to tempt suburban commuters, but the 80 available stalls at Taylor Avenue won’t be enough to make a big difference in ridership.  By looking at the traffic flow map of Winnipeg, we can deduce good locations for serviced park and ride.
http://www.winnipeg.ca/PublicWorks/Transportation/pdf/2008TrafficFlow.pdf

It looks as though many of the existing park and ride locations are well-placed, and could support expansion of park and ride facilities.  Stalls with electrical outlets could be developed for paid parking, and improved heated shelters could be constructed, perhaps with vending machines and a lounge area.  Basically, any shelter at a park and ride bus stop should be able to pass the book test: a good shelter should be comfortable enough that a passenger with a book will be happy to pull it out and start reading.  This means a well-heated and well-lit shelter with comfortable seating; as part of a pad site leasing agreement, shopping centre security could monitor the shelter if available, or Transit could hire a separate security monitoring service.  In addition, the shelter would be equipped with security cameras and a panic button.

Better incentives in transit fares

The majority of city council seems to be opposed to reducing bus fare, favouring the idea of subsidies for lower income users.  For me, high bus fares are a big part of why I don’t take the bus more often.  As part of my lifestyle and family situation, we have chosen to have a car; because this decision has been made, we already pay significant transportation expenses, including a lease payment, car insurance, and licenses for two drivers.  On Fridays, my wife and daughter sometimes pick me up from work so that we can go out together; at other times, appointments may result in me being picked up instead of taking the bus.  Because of this, I find that every week I use between 7 and 9 bus tickets, which means that I spend less money on tickets than I would on a bus pass.  I could decide to buy the monthly pass, but that would require 36 trips to break even.  This December, I probably won’t even reach 25 trips due to Christmas vacation, while in summer I try to ride my bike at least some of the time.

Winnipeg Transit is planning to move to Smart Cards in the next year or so; if this happens, it’s a great opportunity to reward transit usage with dynamic fare reductions based on frequency.  Here’s how such a system could work: I sign up for a smart card, and either hook it up to a credit card, or choose to load a balance onto the card up front (with the ability to load additional funds).  The first number of trips would cost the full cost of a ticket, while subsequent trips would gradually reduce that fare until it reached the monthly pass level, at which point the trips would be free or at a minimum floor price.  (Transfers would be automatic within a time frame; after a certain lapse time, the transfer would expire, and a new fare would be charged.)

Here is one such breakdown based on 2010 fares:

Trips 1 – 10: $2.25    10 trips/month: $22.50
Trips 10-20: $2.00      20 trips/month: $42.50
Trips 20-30: $1.75    30 trips/month: $60.00
Trips 30-40: $1.50    40 trips/month: $75.00
Trips 40+: FREE

This fare breakdown gives commuters an incentive to use the bus for other trips, but does not penalize commuters who don’t take the bus every day.  Serviced park and ride access could be handled the same way.  For bus users who don’t want to worry about loading funds or using a credit card, they would be able to bring their card to a participating merchant at the start of the month to pay their $75 monthly bus pass fee, and can be pleasantly surprised one in a while to see that they have a small credit from the month before.

There are other benefits that smart cards can bring, including different fares for different routes and different times of day; express routes could cost more than regular routes, and evening bus travel could cost less than daytime in an attempt at putting more riders on the bus during off-peak times.

Transit improvements for the right reasons

Diamond lanes have not been popular with many Winnipeg drivers, and there are valid arguments that there isn’t enough benefit to buses to justify the increased road congestion on some routes.  In addition, while the updated transit signs and improved shelters are nice to have, they are not likely to change hardwired commuter patterns.

Priority in transit improvements should go to items that have the best chance of increasing ridership as long as basic updates for maintaining existing ridership aren’t neglected.  Transit should continue its pursuit of SmartCards, and should continue to expand and improve Park and Ride.  The City of Winnipeg should spend more effort on transit-oriented development, with more emphasis placed on downtown instead of suburban areas.  And lazy people like me should really start to think about using the bus a few more times a month, or at least fixing our flat bike tires in time for spring.

Read Full Post »

Q: What do pet adoption rates tell us about our economy?

A: It tells us quite a bit more than we get from stats on consumer spending or consumer confidence.

If I were to buy a TV or even a car, it could be for one of two reasons:
a.    I need a TV/Car
b.    Wouldn’t it be cool to have the latest/fanciest TV/Car?  I’m going to buy one!

You could argue that people who NEED an item would not be buying the newest or best example of that item, but that’s not always true.  When we needed a car because the last one was attacked by a falling tree, we didn’t buy the cheapest used one available; we found a more expensive one, because it had the features that we had been without with the last car.  Yes, we have to pay every month for it, but we decided that we wanted a safe car to take our daughter places that aren’t particularly bus-accessible (or for when we have a case of the lazies).  So we would have bought some kind of new or almost-new car, and we didn’t feel that economic circumstances could bring us to a different result.

When we finally buy a new TV (we’ve lost three in the past year, and have been taking other people’s TVs to our palliative care facility), it won’t be the cheapest; it’ll be the one that best fits in our living room (probably 32 or 36 inches).   And with the TV, we’ll buy it once, and that’ll be it.  We won’t be financing it or leasing it, so we don’t need to worry if we’ll have money to make payments in three months.

Pet adoption is a different story.  Adopting a pet is a commitment to take responsibility for another life.  If money is tight, or a family is worried about keeping their jobs, adopting a pet will seem like a luxury they can’t afford.  At least that’s my assumption, since pet shelters are overflowing with animals, and adoptions are nowhere near keeping pace.

When I read in the paper that consumer confidence is up or that Christmas retail sales are at a good level, it doesn’t say nearly as much as when I hear that many pet shelters can’t take any new animals and that foster families are maxed out.  That information, coupled with the personal stories of bankruptcy that are becoming far more common, tells me that we’re still in the middle of this economic downturn.  And Manitoba has not escaped the effects; we’re just seeing them happen in slow motion compared to our friends in other provinces, and as transfer payments are slashed, it’ll take us longer than our neighbours to recover.

And following that uplifting anecdote…

Q: Why is downtown parking becoming the polarizing debate of our time?

A: People seem to have deluded themselves into thinking that parking is the core issue of downtown revitalization.

I know that parking is an important part of the character of our downtown, and I don’t like staring at surface parking lots or the WRHA’s tribute to urban decline on Main Street.  But realistically, I know that the city will continue to worship parking, just as I do between Christmas and Easter, and fighting downtown parking is like chaining yourself to the McDonalds at the Louvre to protest the lack of McRibs while museum staff is busy painting a bra onto the Venus de Milo.

There are two issues in downtown that turn parking into a boneless pork patty: historic preservation and residential growth.  I agree that surface lots don’t disappear when parkades are built, particularly when surface lots are left intact while adjacent historic buildings are torn down to make space for new parking; I know many people who will gladly exchange a bus pass for a parking spot if supply outstrips demand and prices start to drop.  Personally, I like the idea of incentives for surface lot redemption, to be followed after several years by a surface parking levy to finance further incentives.  In addition, it should be made impossible for ANY structurally sound building to be replaced with a parking structure or surface lot as long as there are existing surface lots on the same block.

But that doesn’t mean that parkades should be banned, or that all surface lot owners should have to pay five times the taxes because “there ought to be a building there”.  If they want to put a parkade in the East Exchange, I wouldn’t stand in their way if:
a.    No existing buildings are demolished
b.    Street-level commercial space is incorporated into the parkade
c.    The architectural design of the parkade is deemed acceptable by city council

Obviously, in a perfect world, I would put far stricter requirements on the construction of parkades in the Exchange District; one item I’d love to add is that construction materials for the building façade should come from reclaimed brick, but I don’t think that’s realistic in our current political environment.  As with everything else, city council will not back the Exchange District 100% until they are utterly convinced of just how valuable the area is.  I find it strange that the East Side of Lake Winnipeg is considered UNESCO-worthy by the province, but the Exchange District is left to be demolished one building at a time.

Why is it that a provincial park around Fisher Bay is touted as being worth $38 million, while the Exchange District, a national historic site, is completely ignored?  Do our governments have no concept of how much that neighbourhood is worth, or how much potential it has?  In the words of Councillor O’Shaughnessy: “The debate is getting lower and lower and lower. Please don’t compare this building or even our whole exchange district with the walled city of Quebec.”   Because the Exchange District will have no historical value no matter how old it gets,  we should replace it with parkades while financing is cheap.

And lastly…

Q: Why do NDP apologists feel the need to defend every action by every member of the Manitoba government?

A: Because it seems to work?  Does it?

I understand the idea of supporting your party; I even launched an incredibly successful fundraising campaign for the Manitoba Liberals: Help Block Out PC Websites! (as of today, only 6% behind the Progressive Conservative Fundraising Campaign!)

But sometimes, the men and women of your political party make mistakes.  I won’t list any Liberal mistakes, but I will admit (shockingly) that mistakes have been made.  If bloggers such as Never Eat Yellow Snow and Just Damn Stupid were to focus on defending more defensible actions on the part of the NDP, wouldn’t people be more convinced that their points of view have merit?

Note: I do apologize if any of my past actions mixed with this post now warrant a BlockReganHypocrisy.ca.

Read Full Post »

A strange fundraising campaign has been launched by the Manitoba PC Party.  They are asking people to donate $10 for a “virtual cell phone” that will cover up part of a photo from Nov 2008 (a year ago) of Deputy Premier Rosann Wowchuk using her cell phone while driving, a shocking and rather stale example of NDP hypocrisy.

So of course, I needed to get a piece of that action.  I’ll get into that later…

I just don’t understand how these antics demonstrate that the Progressive Conservatives are ready to assume leadership of this province.  Their Chicken Wing Party of Manitoba of 2008 still has a Facebook page, and one can only hope that during its active phase it had more than the 30 members it has today.

Curtis has an unusual response to the latest PC campaign, while Cherenkov says what I think most of us are thinking.  So what would I have done better?  That’s a difficult question.  I can certainly understand the frustration that the PC party is feeling; as a Liberal, I’m frustrated, too.  The NDP have been responsible for some very serious scandals over the past decade, including mistakes that have cost lives, as well as an ongoing matter with Manitoba Hydro that could result in billions of dollars being lost.  But at the end of the day, many Manitobans are still supporting the NDP party.

I have a few ideas I’m working on for how to get Manitobans to start listening to alternatives, and I may try some of them out on this very blog.  But for the time being, I’ll just leave it at this: for anyone who donates a minimum of ten dollars to the Manitoba Liberal Party, and who e-mails or posts a comment to let me know (we can use the honour system and clever pseudonyms, since I won’t bother checking), I will add one package of Beef Jerky to cover up this banner for the PC Victory Fund.

Exhibit A: The Beef Jerky of Liberal Justice

Exhibit B: The Victory Fund Banner (until the takedown notice arrives).

Note: As this brilliant campaign took 10 minutes to develop, I won’t be too upset if I don’t get my 30 fans.

Read Full Post »

So I asked myself: can you put your money where your mouth is, or – one of my favourite lines — is your mouth writing cheques your butt can’t cash?

Winnipeg has a very low apartment vacancy rate; meanwhile, the majority of downtown residential construction is for condos, which generally sell for over $200,000.  This is certainly a welcome increase in residential population for downtown, but there is a risk that future condo projects could outpace demand.  Apartments, as the hardest type of residence to find in Winnipeg, are our best bet for greatly increasing the population in the heart of the city.

Related story: A deal for developers, by Murray McNeill (Winnipeg Free Press)

For many years (ever since I spent some time in Brandon), I’ve been thinking about a new kind of grassroots, socially-responsible real estate investment trust for apartment construction.  Well, actually, at first I called it “let’s knock down the eyesores beside my house and put in a nice apartment block.”

As a layperson who knows little about financial instruments and the laws regarding investing, I’ve never understood why regular people don’t band together to create for-profit organizations to create new development in existing neighbourhoods.

Maybe it’s the concept of profit; so many Neighbourhood Renewal Corporations are built on the premise that they are not-for-profit corporations, working primarily to improve a community.  And obviously, a not-for-profit creates a friendlier atmosphere to receive public money.  This could work well in older communities, such as the Spence neighbourhood, or in Elmwood (believe me, I’ve thought about that quite a bit).  But I’m not sure it could work somewhere like the Exchange District, which does have residents, but where the vast majority of resources and well-wishers are outsiders to the existing  residential community.

Now, like most Internet blowhards, I don’t have a large pile of money under my bed (usually all I find are ripped up diapers under there, thanks to my dog), but I might be able to convince my daughter to part with $500-1000 of “Elmo money” for a lofty goal.  Is it possible that there may be other Winnipeggers who not only share a soft spot for the Exchange District, but who could also put a small amount of money into a worthy project?

I can envision two separate concepts that could work for improving the Exchange District with smaller contributions of progressive Winnipeggers (I said progressive, so now Graham is obligated to send money for this stuff):

1.    A baby Real Estate Investment Trust

Now it may not actually be possible to have an REIT with such a small amount of capitalization, but the methodology is similar.  A possible mechanism is a reverse microlending plan, with contracts stipulating an interest-only mortgage for a fixed period.  This trust could be governed similarly to regular REITs, and would pay annual dividends (and/or interest).

The idea is contingent on finding around 320 people who are willing to risk some money (between $500-1500 per person) on the idea of creating new rental housing in the Exchange District, either by retrofitting an old structure or by new construction on a surface lot.

Under the minimum scenario of 320 donors, using 70% mortgage financing and estimated grants of $20,000 per unit (assuming conservative city and provincial tax-increment financing grants), a 10-unit apartment building could be built or renovated in the Exchange District.  The total project cost would need to be kept under $1.6 million including property acquisition, and total grants of $200,000 would be required (more grant money may be possible).  With anticipated annual revenues of $135,000 (based on 95% occupancy rate with estimated current market rental rates), this project would be able to generate a modest profit.  The original investment would take around a decade to recoup, with investors receiving slightly more than 10% every year.

If more investors could be found, or their contributions increased, it’s possible to expand the scope of the project to cover 20 or 30 units.  2000 investors contributing between $200-1,200 could finance a 26-unit apartment building.  Of course, finding 2000 investors for an unproven idea is much less realistic than berating 320 people to take part.

2.    An online donation and microlending aggregation website

This is an idea that is not only for the construction of apartments, but it could include those types of plans.  The website would be a place where anyone could create a donation/lending account using PayPal or other financing methods.  Each registered user (or benefactor) would have the option of making manual payments, or setting up an automated debit.  Their payments would go into a personal online account.  Not-for-profit corporations, community groups, businesses, and private citizens will be given the ability to register to make requests for donations or loans for their project (as petitioners).  Their project would first be reviewed by a board of volunteers to ensure legitimacy and appropriateness, and would then be categorized on the type of request.  Examples of possible categories are:

  • Community improvements (community centres, faith-based organizations, renewal corporations, schools)
  • Environmental initiatives (riverbank and park improvement groups, specialized recycling programs)
  • Commercial endeavours (microlending for home-based businesses, ambitious apartment-building campaigns)

Benefactors would have the ability to pre-screen which requests they are sent by category or geographical area, but would also be able to view any other requests on the website.  There would also be an automatic feature which (if desired by the benefactor) would contribute a given amount to each worthy cause that fits their criteria.  They would then have a specific amount of time to reverse their automatic contribution.

At first, the system would expect registered charities to provide receipts for donations independently of the website, but the website organization could itself become a registered charity in time.  Some benefactors would choose to only donate to charities (perhaps only registered charities), while others may choose to only loan money.

The whole idea is to enable groups of ordinary citizens to influence their community in a positive way, seeing results in smaller specific projects as opposed to a blanket donation to an agency.  The system is not meant to replace organizations like the United Way, but to supplement them with a tool that would be considered fun to use (at least, I think it would be fun).  In addition, there would be no reason why the United Way or Siloam Mission couldn’t submit their own specific projects to the website.

…………………………

Both of these ideas involve some serious legal work to make sure that risk and misuse is minimized as much as possible; there may also be problems with creating what could be unregulated financial tools (this is beyond my level of investment knowledge).

Do either of these ideas make any sense?  Do either have merit?  I don’t know if they do.  I think that someone out there has enough knowledge and experience to make something similar happen.  If that’s the case, it would certainly be a good thing for Winnipeg.

Read Full Post »

On a personal note: I have been away from this blog and from many other activities over the past few months due to a family situation; I’m not back full time to my “extracurriculars”, but the comments on the CBC story compelled me to do some of my own research.

Most Manitobans aren’t aware of the high-stakes plan that Manitoba Hydro is planning over the next fifteen years.  Starting from its current debt load of $7 billion, Hydro plans to build new generating stations and transmission lines that would add $18 billion or more in capital costs to its debt load.  This could bring its total debt load to $25 billion.

This debt load isn’t necessarily a dangerous increase as long as Hydro can increase its revenues by around 300% to manage this debt at the targeted 75:25 equity to debt ratio.  Hydro plans to rely on export to other provinces or to US states for the additional revenue, and its forecasts, like most forecasts, are based on estimated values for many variables.

For instance, the Hydro forecast has to assume an US exchange rate for any exports to the United States.  According to the Public Utilities Board (PUB), Hydro’s forecast is for a Canadian dollar at around US$0.85.

In addition, Hydro forecasts a continuation of low interest rates to finance construction, as well as US carbon taxes and/or increased fuel costs to increase the export price of Hydro’s power to 12¢/kW.h from the current price of around 5.5¢/kW.h.  As well, the PUB has shown concern that Hydro’s forecasts do not adequately include construction inflation and increased commodity costs from the past few years.

If any of their predictions are incorrect, Hydro may be left with more debt than it can adequately manage.  This situation often leads to bankruptcy in private corporations, but in the case of Manitoba Hydro would most likely result in a bailout from the Province of Manitoba.

Considering that the Province of Manitoba did not use the past decade of financial prosperity to pay down debt (despite using Hydro as a source of revenue), and considering the very real possibility of a reduction in the $2 billion in federal transfer payments, the province does not have the resources or the “rainy-day fund” to handle the size of bailout that could be necessary if Hydro goes bust.

Supply and Demand

In addition to the financial risk, there is also a risk that demand (both domestic and export) will exceed supply.  Even if no power was exported, Hydro would still need to increase supply in order to meet the expected increase in domestic demand.  With exports included, the demand will increase from a current level of 28,735 GW.h to an estimated peak of 37,223 GW.h in 2024/2025.  Without conservation or alternative sources of power, this increased demand will require the construction of Wuskwatim, Keeyask and Conawapa generating stations, as well as the Bipole III transmission line long the West side of Lakes Winnipegosis and Manitoba.  While Wuskwatim and Conawapa could meet the increase without Keeyask, Conawapa is not expected to be operational until 2024/2025, so Keeyask would handle the demand overrun that would otherwise occur in 2018.

If any economic, political, technical or environmental delays occur in the construction of any of these three generating stations, Manitoba Hydro will be forced to either import more power or throttle domestic consumption (generally through brownouts), and it’s possible that both solutions would need to be used together (along with a very large rate increase for Manitobans).

Rate Hikes

Currently, Hydro subsidizes the price of domestic electricity with its export revenues.  As domestic demand (which is significantly larger than export demand) increases, export revenues must increase in order to keep domestic rates at the same level.  If Hydro’s forecasts prove to be inaccurate and export revenues decrease, the domestic rate subsidies will have to end.  In addition, the possibility of export prices dropping below the increasing cost of generation and administration (due to higher debt and the new construction projects) could result in domestic customers being forced to subsidize exports.  This would result in an even larger increase in domestic hydro rates.

Domestic hydro rates differ based on usage.  Residential rates are currently set at  6.25¢/kW.h.  Non-residential rates actually include a better rate for a larger volume of electricity (one average figure provided by the PUB is 3.2¢/kW.h), but also have demand charges, which charge for higher demand at a given moment than the more steady requirements of residential customers.  Manitoba Hydro has a higher-than-average demand charge rate, while having probably the lowest electricity rates in Canada.  This means that the pressure on Hydro will most likely be to increase the general rates as opposed to the demand charges.  It is possible that Hydro could apply for higher rates for non-residential customers, but with residential rates as low as they are, there’s a very strong chance that residential rates would be raised at the same or a similar percentage as non-residential rates (this has been the trend in the past).

Hydro has previously estimated its generation and transmission costs at 7.0¢/kW.h, so it’s clear that an end to subsidies from export revenue would result in a shortfall of 0.25¢/kW.h for residential customers, and larger shortfalls for non-residential customers that vary based on usage and demand.

The current generation and transmission costs are estimated (according to the PUB) to increase to as much as 12¢/kW.h by 2025.  Manitoba Hydro is banking on export prices rising to 12¢/kW.h in the same timeframe.  If both the PUB and Hydro are correct in their respective estimates, the profit on exports will be minimal, and there could even be a slight loss on exports.  If PUB is correct while Hydro’s forecasts are too optimistic, the low profit or slight loss could become a large deficit.  Manitoba Hydro’s domestic customers will be left to subsidize energy for the people of Minnesota and Wisconsin.

Let’s assume that over the next 15 years the exports are revenue neutral, and generation and transmission costs reach a conservative estimate of 10.0¢/kW.h (megaprojects such as Conawapa and Bipole III will definitely increase costs during this timeframe).  In that case, residential rates will need to rise to at around 11.0¢/kW.h barring much larger increases to non-residential rates or demand charges.  That is not only an increase of 75% from today’s rates, it’s an increase of almost 100% from 2004.  In essence, Manitoba Hydro will have doubled hydro rates in the space of twenty years.

Of course, any failure or delay in the construction of the new generating stations (assuming no alternative solutions) or Bipole III could result in larger energy imports, while a higher Canadian dollar or a lack of energy pressures in the United States could further cause massive deficits from the export deals.  The worst-case scenario for rates could see up to a tripling of hydro rates.

Plan of action

Because the export deals are already signed, and because we do want to share our energy with other jurisdictions for economic and environmental reasons, we need to find ways of minimizing the risk.

The first step to minimizing risk is to have a clear accounting of just how much risk is involved.  The Manitoba government should ask for clarification from Hydro on its upcoming projects (just as the Public Utilities Board has asked), to ensure that the construction costs for the generating stations and for Bipole III are estimates that take construction inflation and overruns into consideration.  It should not be difficult for Premier Selinger, who worked as the minister in charge of Manitoba Hydro for ten years, to find out the exact export and construction forecasts.

Because the vast majority of the increased demand will come from domestic growth in consumption, there are ways for the provincial government to achieve gains through conservation.  There is also the possibility of allowing competition from private entities in the production of alternative power.  Manitoba Hydro includes an increase in wind power as part of its forecasts, even though its largest wind project is currently in jeopardy due to the financial difficulties of Babcock and Brown.  It is possible that new partnerships could emerge to compensate with new wind, solar, or biomass energy production.  If enough conservation and alternatives can be put in place, it may be possible to postpone the construction of Conawapa until more favourable export prices can be assured.  Postponing Conawapa would save approximately $6.3 billion.

There are some cost-cutting measures that are available, such as a reconsideration of the route of Bipole III (around half a billion in savings) or administrative efficiencies (probably less than $10-20 million per year).  Conversely, as it was government interference that led to the extra expense for Bipole III as well as the new Hydro headquarters, the government should be expected to contribute the cost difference from general revenues for the transmission megaproject if it believes that the endeavour is worthwhile.  In addition, the Manitoba government could suspend its yearly water rental and assessment fees that it is charging Hydro, which amount to $123 million for 2009 and could save close to $2 billion for Hydro over the next fifteen years.

If these solutions are implemented successfully, Hydro could see its $18 billion increase in capital costs reduced by one third, along with additional operating funds that could be used to pay down long-term debt.

As the PUB states, it is not reasonable for Hydro to embark on $18 billion in construction without generating some up-front capital, and the same can be said for $12 billion.  As Hydro rates have been kept artificially low for several decades, further rate increases are necessary.  Slight increases now can greatly reduce financing costs and could mean the difference between a competitive utility and a sinkhole.

Rate increases will adversely affect residents on fixed incomes, but it is the job of the government to deal with this issue, as opposed to Manitoba Hydro.  It is not fair to expect a utility company to subsidize lower income customers; subsidies should come from general government revenue.

I believe that our current crisis with Manitoba Hydro is due in no small part to pressures from the Manitoba government (and not just the current NDP government) to force a crown corporation to lose money on something that is the government’s responsibility.  This is seen not only in the subsidized electricity rates, but also in the government mandate that Hydro spend an extra half-billion dollars on a different route for Bipole III.  It is not at all appropriate for the NDP government to make expensive demands of Hydro without providing some of the funding.

I strongly hope that government action will prevent a tripling of hydro rates or a future bailout of a bankrupt Hydro, but in a way it’s the natural consequence of a government that has been using Hydro as a source of revenue at a time when the utility should have been building up capital for its expansion projects.

If someone had asked me even two years ago if I thought that brownouts and bankruptcy were possibilities for Manitoba Hydro, I would have laughed.  I guess I hadn’t taken the time to really look at the numbers.  Now that I have, I’m concerned not just for the future of Hydro but for the future of our province.  Just as a railroad construction almost bankrupted Prince Edward Island colony in 1872 (and through confederation gave our country the idyllic West Point Beach), construction for our once strong Hydro utility is in danger of destroying Manitoba’s future.  Premier Selinger had better take action soon on this crisis.

Read Full Post »

« Newer Posts - Older Posts »