For profit government

by Aaron Wherry

Wading into a discussion about rail service between Quebec City and Windsor, Conservative MP Jeff Watson ventures an interesting stance on government spending.

On Wednesday I asked Essex MP Jeff Watson, who sits on the federal transportation committee, why Canada couldn’t do something similar on the Quebec City-Windsor line – say, invest $100 million per year in the corridor to gradually boost speeds. ”Why?” Watson shot back. “Rail is not profitable. Why would we invest $100 million a year in something that’s not profitable?”

The difficulty here would be applying this standard to spending on health care, the military or policing and law enforcement. With the exception of collecting taxes, is there much of anything a government does that turns a profit?




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For profit government

  1. LOL stupid comment….of course rail isn’t profitable.  It’s slow, out of date and expensive.

    So few people use it.

    But it could be made profitable.

    • Rail is not “out of date” & it depends on how you define “slow”.  I live in Mississauga.  Three years ago, I spent 9 months working in Ottawa.  I flew home twice & took the train 2 or 3 times.  When you factor in the time spent getting to/from the airport, going thru security & then waiting 1/2 hour or more for the flight to board – well guess what – the train trips used up roughly the same amount of time.  As for expensive, if you do your research & plan ahead VIA has some excellent pricing.  Just like air travel, if you book last-minute you pay higher prices.  I’m not suggesting that rail is an option everywhere in the country, but in my opinion it’s the best option for travel in the Windsor-QC corridor.

      • Rail isn’t out of date…..what WE have is.

        Since trains now do over 350k ours is dead slow.

        • There’s no one more supportive of high speed rail than me, and I don’t want to get in to this with you again Emily, but can you point to a single operational train system, that carries passengers, ANYWHERE IN THE WORLD that hits 350km/h???

          • Thank you for that last one. I’d never seen that one before. This round to Emily.

            That said, while the first one is carrying “passengers” they’re not paying customers, they’re people riding the train on a test track. I’m not sure the second one has passengers at all (besides engineers). However,I’ve totally got to give you that last one.

          • @Lord_Kitcheners_Own:disqus 

            Well I can only use what they have online, and the media usually only covers something ‘new’….but all 3 countries are famous for their high-speed trains.

        • Well thanks for clarifying – your point was lost on me in your original comment

  2. Honestly, if the government is turning a profit in something, it should get the hell out of it and leave it for private enterprise.

    • Well, it should sell it to private enterprise at fair market value (and not give it away at a song to close personal friends, as has been the case from 1876-present).

  3. Thank God somebody is doing a business case on that kind of money.

    Later in the same article:

    Upgrading to raise speeds has already been tried with little obvious payback.
    Three years ago Ottawa agreed to pour $900 million into the Toronto-Montreal run to shave 30 minutes off that trip.

    Has that upgrade been worth it? Has it driven ridership high enough to be worth the investment? Will the resulting economic benefit be worth the $900M investment? If not, then it shouldn’t have been done, and I’m glad somebody is learning from the $900M mistake that was already made. We have rail service between all these points already that gets the job done. Spending billions to make it better when no-one will take advantage of the improvements is foolishness. Sometimes the best is the enemy of the good enough.

  4. Here is one:
     
    “The Mint posted a profit of $33.8-million in 2010 on revenue of $2.2-billion. Bullion sales accounted for roughly half its revenue.
     
    The Royal Canadian Mint is capitalizing on the gold rush by offering a new bullion investment that is raising questions among some who staked their claims first.
     
    Best known for its coins and bullion, the Mint is tapping into the growing popularity of bullion by delving into the crowded market for exchange-traded gold with a $250-million issue of gold receipts that will trade on the Toronto Stock Exchange.”
     
    http://www.theglobeandmail.com/globe-investor/canadian-mint-forges-a-new-path-to-cash-in-on-gold-fever/article2220400/

    • And what did we do to the guy that put it on a paying basis?

  5. Indeed. Why should the government invest millions in unprofitable industries when it can invest billions instead. 

    Globe/Mail Nov 2011:
    The federal government is quietly assessing how much damage a double-dip recession would do to Canada’s recovering auto assembly industry, a move that could pave the way for more government assistance.

  6. The big problem for high speed rail is that the Airline industry has better lobbyists on the payroll and it is quite aware of the reality that if you offered a 1 -> 1.5 hour rail trip Toronto to Montreal on a reasonable schedule where people didn’t have to show up 2 hours ahead of time and go through screening they’d be in rough shape on that route. 

    • ‘Open skies’

  7. Adam Smith, (that darling of the market utopians ensconced in Harper-heaven), argued transportation was a an essential public good to be provided by governments.  Not that market utopians under Harper’s cloud-pablums would have a evidenced-based clue about what Smith actually advocated.

    In Brown and Jacobs, The Private Abuse of the Public Interest… Smith’s agenda:  “National defense, a legal system, education and transportation, and other goods and services are  ” in the highest degree advantageous to a great society [but] … the profit could never repay the expence[sic] to any individual or small number of individuals,” who therefore could not be expected to develop them. Services that are “laid for the general benefit of the whole society” must and should be “defrayed by the general contribution of the whole society’ (Smith 1920. bk. V, p 214)–that is, financed by taxes and user fees..

    • I wouldn’t disagree. But there isn’t a lack of transportation options to get from QC to Windsor, those are already there. The government could run a highspeed rail line from Nunavut to Winnipeg, but should it? Obviously when the government’s spending billions of dollars, it should have tangible benefit. There’s no evidence this rail line would benefit anybody, or that it would even be used.

      • I have driven the 401 from London to Toronto, and I have driven it from Toronto to Cornwall (and onward on the 20 to Quebec City).  Certainly the traffic snarls I encountered indicate that more capacity is needed on that route.  Whether that means more lanes on the 401/20, more private flights, or a high-speed train alternative is a question that could benefit from a serious analysis.  All of these options cost money, and some may be more effecient than others.  I’ll say right now that I don’t know which method (trains/expanded roads/flights) is most effecient, but the need exists.

  8. The Deutche Bahn (German passenger rail system) is not profitable.  However, its passenger system creates an environment to move people around Germany more efficiently and reduces vehicle traffic jams on German roads, thereby improving economic productivity.

    Canada’s provincial education systems are not profitable in themselves.  However, they help create knowledgeble young citizens who will help improve Canada’s economic productivity in the future.

    Yes, a high-speed rail system between Windsor and Quebec City may never become profitable.  However, more people off the roads means that more goods and people can move more efficiently overall thereby improving Canada’s economy (and environment).

  9. Since when is government spending on transportation infrastructure suppose to turn a profit?  Should we stop building roads because they don’t generate profit?  I think those comments go a long to demonstrate why it is that this particular MP has been in the house for several terms and as yet not even garnered himself a junior cabinet position.

  10. Hell, all transit systems in all cities are unprofitable.  I ask my Conservative friends: should we dismantle all of those systems?

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