What's fair for the St. Lawrence River is fair for the rest of Canada

  • National Newswatch

The Champlain Bridge in Montreal is in dire need of replacement and to help finance construction of a new bridge—at a cost of up to $5 billion—and ensure its proper maintenance after it opens in 2018, the current federal government intends to charge bridge users a toll for an amount yet to be determined (traffic studies and media reports have suggested it could be anywhere from $2 to $7 per crossing).Even though a toll was charged on the existing Champlain Bridge until 1990, the Mayor of Montreal and the Premier of Quebec both want the new bridge to be toll-free. Joining them is the Leader of the Official Opposition, Thomas Mulcair, who has expressed his adamant opposition to any toll being levied on a new Champlain Bridge, saying that Ottawa has an “obligation” to replace the bridge, calling it “the most important bridge in Canada” and “essential infrastructure for Quebec and Canada”.Justin Trudeau has yet to state a public position, but given that he and Mr. Mulcair are both MPs from Montreal, we can assume political pressure is building to match the NDP's position. Prime Minister Harper has announced that his government will follow the long-standing user pay policy for major infrastructure projects and will impose a toll to cover construction and maintenance costs.The NDP Leader's no tolls policy will surely be well received in Quebec given that several NDP MPs hold seats along the south shore where the bridge will be built, but the price tag of the NDP Leader's populist position could be enormous.If Montreal ends up getting a $5 billion bridge, paid for by the Government of Canada with no tolls, why would the rest of Canada continue to pay any toll on our bridge or ferries?Prince Edward Islanders for example would not ignore the precedent that would be set by a “toll-free” Champlain Bridge. The fees Islanders currently pay to use Confederation Bridge and the Wood Island Ferry that connect Prince Edward Island to the mainland are a considerable barrier to anyone seeking to travel, grow tourism or move goods to market. Currently, Islanders pay a $45.50 toll fee for automobiles to cross the Confederation Bridge, which cost over $1 billion to build. At $3.50 per kilometer, the Confederation Bridge must surely be the most expensive drive in the country.The proposed Champlain Bridge project is highly similar to the Confederation Bridge given that the new bridge will be built using a Public-Private Partnership and that both are built to last approximately 100 years. The only significant difference between the two projects is the cost: a private consortium built the Confederation Bridge at a cost of slightly over $1 billion, about $4billion less than the current projections for a new Champlain Bridge. These are large sums of money, but we must bear in mind that if the Government of Canada decided to build Confederation Bridge on its own, instead of using a private company, the cost overruns incurred by the Government – and the final cost to Canadian taxpayers – would have been many times higher. As the Auditor General reported in a 1995 study of the project:“ Our findings on risk management indicate that the Northumberland Strait Crossing Project shows definite improvement over previous megaprojects, specifically in the protection of the Crown against potential cost overruns and withdrawal of support by private sector contractors, follow-up of environmental requirements, and provision of project information.”Strait Crossing, the company that built the Confederation Bridge, continues to pay for its construction costs through a complex financing arrangement that relies, in part, on annual payments from the federal government to retire bonds that were sold to raise the bulk of the over $1 billion price tag up front. The federal government passed the Northumberland Strait Crossing Act in 1993, guaranteeing annual payments of $42 million (1992 dollars indexed to inflation) over 35 years to bondholders. The money for these bond payments purportedly equals the annual subsidy for the constitutionally required ferry service that was replaced by the bridge.The “no tolls” position taken by Thomas Mulcair does not make any economic sense. If Mr. Mulcair sees fit to reason that all Canadian taxpayers should collectively finance both the cost of constructing and maintaining such “essential infrastructure for Quebec and Canada” as the Champlain Bridge, then the $45.50 toll on the Confederation Bridge, a constitutionally required “essential condition” of Prince Edward Island's terms of joining Confederation, should be eliminated. If we are going to discard the longstanding user pay policy for transportation megaprojects in Canada, then Prince Edward Islanders can look forward to the removal of tolls for ferries servicing our region, as well as the Confederation Bridge. Atlantic Canadians can also expect relief from fees on other transportation infrastructure, such as the ferry between Cape Breton and Newfoundland and Labrador.The bottom line is this: Is Mr. Mulcair in favour of toll-free transportation infrastructure projects everywhere in Canada, or just in Quebec? Atlantic Canadians should be seeking clarification from the Leader of the Official Opposition about his no tolls policy, after all, what's fair for the St. Lawrence River is fair for the rest of Canada.Percy Downe is a Senator from Charlottetown.