Your tax dollars at work. More hopes more plans and just plain more dreams. How is it that they are permitted to gamble with tax payers money? Too build empires that can collapse? Iguess its just socialism at work.

Cheers

"The Prince Rupert Port is to open in October of 2007, and the Prince George Airport wants to have a 10,000 foot runway in place to coincide with that opening."

That defines what? when? where? ..... but not why ...

There are several possible reasons. Has the airport authority stated them?

Kimbo says "Iguess it's just socialism at work" It could also be a make work project for a select few "Free Enterprise" contractors just as the 2010 Olympics are. That brings up another interesting thought, are the 2010 Olympics another dream and just socialism at work. I'm sure Gordo wouldn't think so. Regarless if it's free enterprise or socialism, all the money comes out of the same pocket: the taxpayers.

Ok let me get this straight, people are against the expansion of the airport to allow international capable aircraft? Why is this? Surely the price of this is a flyspeck compared to the olympics and the massive expenditures involved with LRT in van. I had heard that PG is an excellent location for refueling stops, etc. I cant see where having a better airport will hurt prince george. It just goes to show the diversity of people and opinions in prince george when half of us dont want the govt to spend money on an airport while others want 10's of millions of dollars to widen bridges to reduce our 'traffic jams'.

'Ok let me get this straight, people are against the expansion of the airport to allow international capable aircraft? Why is this?'

Because of the vantage point of the people making those comments.

It's awfully dark in there, not to mention warm.

When coporation X builds an addition to their building based on bad business decisions, and they go bankrupt, the money they invested can come from a viariety of sources.

No matter what the source, the government will typically have a lost opportunity to collect taxes, thus is partly financing poor business decisions.

The money from NDI is a loan. The article above does not specify whether the money from the province is a loan or a non-repayable grant. We also do not knwo what the conditions will be of money coming from the feds. I would assume that at least part, if not all of it, will be in the form of a repayable grant.

As has been said on many occasions, the feds are still the landlords.

Retail and commercial office landlords, for instance, will pay for tenant improvements in those cases where tenants are hard to find. Thus, in 5 year lease situations, it is not unheard of that tenant improvements up to as much, and even more on occasion, one year's rent will be paid by the landlord.

In poorly written agreements (for the landlord), if the tenant should default after a year, the landlord is out of pocket for the entire amount and if the tenant should default after two years, the landlord has gained nothing other than showing a property which has a smaller percentage vacancy thus making it a more lucrative appearing sale to a neophyte purchaser.

In my mind, the financial activity around the airport expansion plans, and how it is to be funded is nothing out of the ordinary.

The Airport Expansion is driven by the fact that the Airport Authority collects $1,600,000.00 per year in Airport Improvement Fees, from Airline Passengers. The fee (while hidden in the ticket price) is $10.00 every time you board a plane. Under the provisions of the Airport Authority set up by the Federal Government this money has to be used for Airport Improvements and cannot be used for any other reason. If the Airport Authority does not spend it on improvements, then they must reduce or eliminate the Airport Improvement Fees.\

Can you now see that the expansion
(1) Airport Terminal Building
(2) Airport Parking Lot
(3) Airport Runway

are all driven by the need to keep collecting and spending this money. It matters little to the Airport Authority if these facilities are used or not because once they borrow the money, they will be compelled to keep the Airport Improvement Fees in place for the next 50 years to pay for them, and therin lies the problem.

We had 10 Mexican flights last year, and it looks like 10 this year, hardly warrants a new customs building.

Once the Parking lot is completed you will have 300 additional parking spaces and I guarantee that at least 150 will be empty on a continuing basis.

A longer runway will be great if they can attract the business, however at this point in time I am not aware of any Major Airline that has plans to land at Prince George. In may opinion they are building it on the basis of **build it and they will come** hardly a sound business decision

I was under the impression that the funding would be govt. or airport improvement based. If it is indeed a loan, who is on the hook for it? If it is govt or improvement money then it hardly matters if it is a sound business investment. Many of the investments old WAC baennet made up here did not make sense at the time but they built the northern half of the province. Infrastructure cost money and damn it all we need to get some of the benefits up here from all the money we generate! I dont care if the improvements make financial sense on a project by project basis. Overall the developement of PG will ensure living conditions condusive to establishing and maintaining a healthy happy population up here so that the goods (and hence money) can continue to flow down south.
As for the 'if you build it they will come' theory, well i dont know how else one would work it as far as air traffic is concerned. BEsides, there may be possible benefits as far as attracting other business' or industries if we have an international airport in place. Call me an optimist.

I was under the impression that the funding would be govt. or airport improvement based. If it is indeed a loan, who is on the hook for it? If it is govt or improvement money then it hardly matters if it is a sound business investment. Many of the investments old WAC baennet made up here did not make sense at the time but they built the northern half of the province. Infrastructure cost money and damn it all we need to get some of the benefits up here from all the money we generate! I dont care if the improvements make financial sense on a project by project basis. Overall the developement of PG will ensure living conditions condusive to establishing and maintaining a healthy happy population up here so that the goods (and hence money) can continue to flow down south.
As for the 'if you build it they will come' theory, well i dont know how else one would work it as far as air traffic is concerned. BEsides, there may be possible benefits as far as attracting other business' or industries if we have an international airport in place. Call me an optimist.

Mirabel was a bad business decision. Expansion was needed, but not in the wrong place - too far away.

Pickering was going to be as bad, so, the land was assembled, but the expansion then took place at Toronto International and continues to.

YVR is expanding based primarily on the projections of increasing passenger travel from Asia. The international terminal hardly seems overtaxed to me. At certain times it is packed, but at many other times it is ghost town-like.

YXS has made decisions to pre-empt other airports in mid sized cities. Their reasoning, as I understand it, is based not on unfounded "if you build it they will come" wishful thinking, but on "if you have it, we can talk" knowledge. It is sort of a catch 22 situation. After all, the opposite of the saying is "if you do not build it, they will not come". That is true almost 100% of the time, whereas the other saying is not.

Things change in the business world. Someone has to be the first to make a move, especially when things change relatively quickly. All businesses are in the risk reducing business. Reduce the risk and you are more likely to succeed.

Why make an agreement now which you cannot act on till 2 or 3 years down the road when the scene has progressed further with other opportunities emerging? No prudent business person would do that.

At the same time, theoretically, no prudent business person would invest in something if they did not have binding contracts with clients virtually guaranteeing the investment. If that were the case, it would be the easiest thing in the world to be an investor.

So, someone will have to blink or budge first. Someone has to take the bigger risk. The airport has a monopoly. If you want to be in Vancouver in a few hours, you fly. Thus, airports, whether government or corporation operated, have the ability to collect investment monies from each facility user in a non-competitive environment.

So, who is the more capable of taking the higher risk? I think it is the airport, and that is why they are doing it. I also have enough confidence that they are not as frivolous as you make them out to be. I do not believe they are doing this on a whim. I think that they are making a reasonable decision based on information and relationships they have gathered and built over the years.

Are they 100% assured of success? Of course not. Are they 100% assured of some success? Not even that I think, but certainly that scenario is more likely. Will I be surprised if there will be an announcement for a long term contract and facility construction for a fuel stop, and/or a maintenance shop, storage facility, etc. before the runway is completed? Yes. Will I be surprised if there will be such an announcement in the next 3 years? No.

I think that we should firstly acknowledge that Prince George has had an Airport since 1928. In the 1960's it was a very busy Airport and in fact in 1967 regular customs service began. This Airport went through all kinds of expansions, etc; right up to and including 2003, at which time it was turned over the the Airport Authority by the Federal Government.

The people who now run the Airport throught the authority have been at it since 2003, in other words 3 years. Their **Vision** to date has been to improve the Airport Terminal, Increase the space of the parking lot, and extend the runway.

As I said before. Because of the ability to charge an Airport Improvement Fee of $10.00 for every passenger that departs Prince George by air they generate approx $1,600,000.00 per year that has to go into Airport Improvements. This is not necessarily a bad thing, except that it is all paid for by the travelling public through Airport Improvemnt fees. The more you fly the more you pay. ***In other words a user fee***

Draw your own conclusions from this excerpt of the Federal Governments rent policy that applies to Airport Authoritys in Canada including Prince George.

**The results of the review's indicate that the Canadian airport model is unique. The government retains ownership of the airport lands although it transferred control of airport management, operation, development and financing to community-based, non-share, not-for profit, self-financing corporate entities. Airports were transferred by way of a long-term lease rather than by placing them on the open market for bids. At the end of the 60-year leases, all assets revert back to the government unencumbered.**

Unless I am totally stupid I read this to mean that the Airport Authority will make money from Renting the Facilities, Landing and Take off Fees, and last but certainly not least Airport Improvement fees. However since they are non-share, not-for-profit, self-financing, then all the money made will go into Salaries, Rent to the Federal Government, and Airport Improvements.

My point has always been, that there was little or no talk about the Airport Improvements until the Government set up the Authoritys and allowed them to tax airline travellers. Now we have all these big plans to expand, however they only came into being in 2003. Dont you find that a little strange?

Dont you find that a little strange?

nope .... think BCBC ..... think almost 30 years ago ..... no more DPW ... a crown corporation ... "econmic rent" charged .... if a judge wanted a corner office of 400 sf, the ministry responsible for justice had to pay for it at the going rental rate for similar rental properties ..... space was no longer "free"

The thing is, there are no similar rental properties to judges' offices, nor jails .... nor are there similar rental lands improved by 4 foot plus thick steel reinforced concrete runways ...

In my opinion, the more decisions such as that are made locally to meet local needs, rather than in Ottawa in this case, the better it is.

We have people on here clamoring to have a province of northern BC .... well, we are in control of this airport, not the country, not the province, not the northern part of the province .... PG is in control of the airport and we will make it or break it .. we have no one else to blame for mishandling it than us ..

I have been to one of the annual meetings .... the turnout is pathetic ...

Is user pay the problem????? think of cigarettes .... think of the tax on cigarettes and who pays it ... think of the tax on liquor ... on gasoline ....

So Palopu,
I agree with you about the non-profit issue, and the obvious potential for profiteering by management if this thing succeeds (Risk on taxpayer - reward for appointed management).
I disagee with you that an airport runway expansion is not a good investment for the taxpayer.

Maybe terms of the lending agreement should state that all profits, pro rating with a management and employee compensation clause, go towards the debt repayment to government. After the initial debt is paid for another term kicks in that removes airport improvement fees to passanger travelers. Profits after that could then benefit the airport and its employees through a form of profit sharing?

BTW how is the board of directors elected, and who do they consider stakeholders, and how do they weight these stakeholders, and what stakeholders have a direct interest, and how do those stakeholders stand to benefit from the investment into the airport....

go to the link .. start at page 26, to find out director compensation and governance structure ... non elected. All appointed.

Perhaps they should be elected by those who fly ..:-)

http://www.pgairport.ca/Files/YXS/Documents/AnnualReport2005.pdf

....I have been to one of the annual meetings .... the turnout is pathetic ...

Oh, didn't know anything was open! When is the next meeting?

It was held just recently I thought; when they presented the runway expansion proposal drawings.

By dont you think this is strange. I meant that all the hype for the expansions, etc came after the creation the the Airport Authority. In other words prior to 2003 there was virtually no plans for new terminal building, parking improvements, or runway expansion. After 2003 with the ability to tax users to generate revenue all these plans came into being.

My point is. Are the improvements valid based on need, or are they a result of the Airport Authority having to spend AIF money or reduce the fee or eliminate it altogether. If these improvements are merely to ensure that they can continue to apply a head tax and spend the money, then they are being done for the wrong reasons, and as a result will not likely generate any new business. (Or at least that possibility exists)

Since 2003 the Airport Authority has reduced their manning by 20 full time positions. This can hardly be construed as an increase in employment opportunites for the Airport and is a direct loss of over one million dollars per year in salaries, plus whatever spin offs these jobs supported.

The only commercial flights out of Prince George are to Vancouver. For years other flights have been tried and eventualy shut down.. A freind flew from Prince Gerge to Edmonton by private plane in about one hour. It took seven hours to return home by a commercial flight. And now we are going to spend $33,000,000.00 to try and bring in International flights.

Here we have all these great ideas about business plans. The big problem is that under a business plan the airport expantion is not viable. Like I said in the first instant, read my lips its about building an empire on tax dollars.

Cheers

"By dont you think this is strange. I meant that all the hype for the expansions, etc came after the creation the the Airport Authority. In other words prior to 2003 there was virtually no plans for new terminal building, parking improvements, or runway expansion."

GOOD LORD. In one breath people here are saying we generate all this wealth in this part of the province to run the rest of the province singlehandedly; that we want to be be "maitre chez nous", to be master of our own fate rather than that of some distant bueaucrats.

So we have been offered that tool. We did not have to "sign on" as you may recall. It was up to the City to make that decision, and we were the last one to sign on at the last minute as I recall.

Why were there few changes before? You can argue that Ottawa bureaucrats knew exactly how to run an airport in a prudent fashion, that they knew that doing anything to expand the airport would be throwing good money after bad. That would be an interesting argument since my feel is that you would get very few on here and on the streets of this community to buy into that argument.

We have considerable local control now. We have the northern pioneering spirit operating the airport now. Several of the individuals, and I very much count the chair as the key one, come from a background of running financially tightly run organizations and institutions.

Let us look art ticket prices. I have been flying in and out of this community on business as well as pleasure from the day I first arrived here in the early 70's. I came here when the terminal building was a white barrack looking building. I used to pay more then to fly to Vancouver than I do now. There were two so called "competing" airlines using 737s. There were fewer options of when to fly than there are now. I think there were 4 flights a day.

However, we used to be able to fly to Edmonton as well as Whitehorse without going back to Vancouver first. I flew to Ft. St. John and Watson Lake regularly, with the occasional flight to Whitehorse since Watson Lake was fogged in. After Ft. St. John, you could bowl down the aisles without bothering too many. Our expensive flights from PG to Vancouver, were subsidizing uneconomical flights.

Want to fly to Vancouver with one airline and return with another? probably would have cost $800. Now one way flight bookings are common for me so that I have a greater choice of times and fares. Around $250 bucks return is quite doable. Why take a bus now?

So, build away people is what I say. Quit bitchin' and let these people do their job. If they fail, well, we can deal with it then.

Keep in mind, that wherever you fly TO ... you will likely pay an AIF at that end which are not being spent for your benefit but more for that community's benefit. Then again, the same holds for those "foreigners" arriving here for a day or two to take money out of the community with their consulting fees. ;-)

Oh, one more thing. When I fly on business, it brings consulting fees INTO this community. The money which pays for it comes from private businesses which get their money from people who buy services from them. It is not taxpayer money.

from the following site ....
http://www.carlsonwagonlit.com/export/sites/cwt/en/countries/ca/downloads/CWT_Update/02OCT06.pdf

Toronto Pearson Airport
Improvement Fee change
The Greater Toronto Airports Authority (GTAA) has announced an increase to the Airport Improvement Fee (AIF), effective January 1, 2007. The fee will change from $15 per departing passenger to $20 per departing passenger. There will be no change to the $8 AIF charged to connecting passengers.
The fee increase will be used to partially fund capital costs and the airport’s associated debt and will be timed to coincide with the opening of the new international pier early in 2007. This will complete the Airport Development Program, which saw the creation of Terminal 1, improvements to runways, taxiways, roads, bridges, IT systems and utilities for the entire airport."

Here is another one which simply points out that there are different ways of paying for the service of operating an airport. In the end, it all gets added to the price of the ticket. And we all know who pays for the price of the ticket, either directly or indirectly ...... altogether now!! ... WE THE PEOPLE!!

;-)

oops ... forgot this

http://www.businesstraveleurope.com/features.php?typ=an&id=82

Owl. Give anyone in this City the right to tax people to get money to build projects and they could do it. This does not take a lot of vision, or business acumen. The bottom line is just because they build a few buildings, expand a parking lot, and extend a runway doesnt make it a viable operation. None of these guys would invest a penny of their own money in this project, and you know it. Nor would anyone else in this City.

This whole scheme of Airport Authoritys is nothing more that an abdication of the Federal Governments responsibilities, while they continue to receive tax dollars for services they no longer provide.

The price of a Airline Ticket to-day or the price in the 70's has nothing to do with the Airport Authority.

I notice as usual you choose to ignore the loss of 20 full time jobs since the Airport Authority was established.

Its time people woke up and smelled the roses. The 4 levels of Government in this Province are robbing taxpayers blind. We can run this Province quite well without all this Government interference. Its time to downsize Government and return the money to the pockets of the citizens.

Why would the Government change the name of the Workers Compensation Board, to Worksafe BC. Or why would they change Unemployment Insurance to Employment Insurance.

Workers Compensation implies that you will be compensated. (Better get rid of that)

Unemployment Insurance implies that if you are unemployed you will receive payment. (Better get rid of that)

My point is that we should not assume that the Government is always working for the best interests of its Citizens. (That would be naive)

Paul Martin transferred 40 Billion dollars from the EI Fund to General Revenue and balanced the budget and preened and told us what a great finance minister he was, when in fact he basically stole the money from the unemployed, and employed, and employers.

The list goes on, but the bottom line is that with very few exceptions Government funded projects are rarely successful, and are usually done to try and get votes and get re-elected.

If we werent taxed to the hilt, the Government wouldnt have all this money to waste, and we would be a much better country as a result.

I dont like being taxed any more than the rest of the world. HOWEVER, i know better than to bitch when a few tax dollars aqre sent to my community for a change. Taxes are a fact, face it. Reducing taxation is a worhty political goal in the view of many Canadians. However, shooting down airport expansion because it isnt a good business investment will not result in a reduction of our taxes, even in the area of airport user fees. Lobby your govt reps to cut taxes.
Now, not to ignore the 20 lost jobs but...I really dont think that the airport will ever be worth a damn if it is run as a strictly for profit enterprise. Even in good times it isnt going to be a big money maker. In bad times we will get no services at all. That goes for the rest of the services we get up here. Even the distribution of our forest resources is done with keeping our communities up here alive at the expense of profitability. I want to live up here even if we dont have the tax base to pay for our own roads, schools, CANCER CLINICS and so on. The province needs us up here, we deserve the same benefits as the rest of the province. Fix my roads and bridges, give me access to cancer care, man my ambulance stations, and if you must decide on govt spending based on financial viability, look at the olympics for a while.
PS> get to work on twinning the damn highway, i have to fix my fence and i am tired af waiting to find out where it should go.

"I notice as usual you choose to ignore the loss of 20 full time jobs since the Airport Authority was established."

Okay ... I thought I just did not wish to ask you the question of what were these twenty full time positions doing?

Be careful in responding to that, since you set the parameter that the price of tickets has nothing to do with the airport authority. (which is in error since the airport authority is in charge of setting rental rates and landing fees to airlines, which in turn are in charge of establishing ticket prices). Therefore, those twenty jobs cannot be jobs which were provided by the airlines.

Go for it.

Owl Palopu is correct. Most of the laid off workers at the Airport were maintenance workers and firemen. The Airport Authority people are now driving around in hummers.

I support the runway expansion though dispite my concerns for the process.

Owl. Once you set up the Authority and bring in the **New Management Team** you then begin to look at where you can reduce costs, to save money, so that at some point you can get a raise.
Without fail this always means reducing staff.

The traditional way (Last 20 years) for Corporations, and now Government entities to make themselves look good is to reduce jobs.

I call it the 3 for 1 mentality. Take 3 jobs, get rid of 2 and let 1 do all the work. If one cant do it, then set up your phone with voice recordings, elevator music, and digital dialing by alphabet to get the party whom you wish to talk to, and then get a recording asking you to leave a message or call back. Cut corners on safety issues, have people work extra hours, but screw them out of overtime, bring in the team concept.

The Team Concept is in fact a situation where you get a group of 5 people to do the work that used to be done by 10. If you get to many complaints from customers, you then set up a Customer Service 1 800 number and they can talk to some low paid service representative in Pakistan.

You see this all the time in the Grocery Stores where they have 10 check outs but only three open. The express lane has a line up of 20 people and is in fact slower that the other lanes. If you look closely you will see that the person bagging your groceries is in fact the Produce Manager. The cashiers are getting 8 to 10 dollars per hour and are limited to 20 hours a week so the company can avoid paying any benefits.

I can give you hundreds of examples of how they can cut jobs, however I know, and you know that every company if it wants to be successful has to have qualified employees to run it. Those who run on a shoe string dont make it in the end.\

If employees could be shown on the books as an asset rather than a liability some of these people would still be working. In Germany and some other European Countries the value of a full time, well trained employee is recognized. It used to be that way in Canada, but we have lost it somewhere along the way.

"If employees could be shown on the books as an asset rather than a liability some of these people would still be working."

Kind of like a 'Cumulative Eligible Employee Capital' asset. Give a tax credit of say $10,000 a year for the employer (for each full-time employeed employee) deductible over a ten-year period. The future tax credit of the remaining nine years is now an accumulating future 'Cumulative Eligible Employee Capital' asset.

If they fire, layoff, or terminate the employee they forfiet the emplyees tax credit. If the employee quits or leaves they lose half the accumulated ballance. If an employee has retired from full-time employment they can cash in the full account over some sort of formula for future years.

A long-time full-time equivilent employee could be worth as much as $55,000 dollars in asset book value (nearly $200,000 revenue equivlient), and $10,000 a year in tax credits to the company which if they pay say 28% interest than that would translate to the revenue equivilent of $35,714 dollars for each employee the employer employs. Well above the poverty line, for less then the cost of a full-time welfare recipient.

Seems kind of basic so the wizards must have some justifications for not supporting job friendly accounting.

Owl your wrong again. the last time I road the bus the fair to Vancouver return was about $80.00. And that was on a business trip for an organization that I belong to. I can see where high flyers like yourself need the airport.

And since we are talking the cost of fares I can fly to London return for around $800.00. Or I can fly to Korea for $1100.00. I think air travellers are being ripped off and are using tax dollars to do it.

Cheers

Kimbo,

The reason take the plane to somewhere has nothing to do with dollar cost, it has to do with time cost.

As for fares to other places with millions of travellers, the economy of scale kicks in, as does increased competition for these destinations.