PORT MANN, GOLDEN EARS BRIDGES GO TOLL FREE
NDP fulfils promise, but debt passed on to all B.C. taxpayers
All B.C. taxpayers will share the burden of paying off billions in debt for the Port Mann Bridge and subsidizing the Golden Ears Bridge once tolls are removed from the two structures on Sept. 1.
The elimination of tolls, a move that was quickly criticized by Green party Leader Andrew Weaver and the Liberal Opposition, was a high-profile campaign promise of Premier John Horgan’s and will see daily bridge commuters save hundreds of dollars per year.
Standing next to the Fraser River with the Port Mann Bridge visible in the background on Friday morning, Horgan called the tolls “unfair” to people south of the river and said the debt from building the bridge will be transferred to B.C.’s taxpayer-supported debt load and paid for out of general revenue.
“This is traditionally how all infrastructure has been paid for across British Columbia, with the exception of the Coquihalla improvements that were made in the 1980s,” Horgan told reporters. “We can manage that within our fiscal framework and that will not have an impact, we believe, in our discussions with bond traders. It will not have an impact on our borrowing costs.”
Taxpayer-supported debt is estimated at $43.3 billion for the current fiscal year, according to figures released in February.
The province expects to spend $132 million on costs associated with toll removal. This includes winding down the Transportation Investment Corporation (TI Corp) — which oversees the Port Mann Bridge, its debt and tolling — and paying severance or penalties for cancelled contracts.
The total debt for the money-losing Port Mann Bridge, which cost $3.3 billion to build, is expected to be $4.2 billion this fiscal year. It’s supposed to be paid off by 2050.
TransLink, the regional transportation authority, owns the Golden Ears Bridge, and the contractor liability on the structure in 2016 was $1.049 billion. Financing for the Golden Ears must be repaid by 2041.
A one-year agreement has been struck between the province and TransLink that will see the government make monthly payments to TransLink to cover lost toll revenue, expected to be $57 million over the next year. That money will go toward operation, maintenance and financing costs.
“The province will make TransLink whole. There’s no financial impact on TransLink,” said TransLink CEO Kevin Desmond. “We have to work out a permanent agreement with them over the months ahead, but it’s neutral, cost neutral, for TransLink.”
TransLink will continue to subsidize bridge debt repayment to the tune of $40 million per year.
Eliminating tolls is expected to save commuters who cross the bridges twice each weekday about $1,500 per year. Commercial vehicle users could save $4,500 a year. On average, 40,000 vehicles cross the Golden Ears Bridge each weekday; there were, on average, 130,000 weekday crossings on the Port Mann in July 2017.
“I have always said that I thought (tolling) was a burden imposed on those who live south of the Fraser or are trying to get to south of the Fraser, so I think it’s really important news today and will be well received,” said Surrey Mayor Linda Hepner, who is also vice-chair of the TransLink mayors’ council.
Employees of TI Corp (a Crown corporation) will be affected by the toll elimination. Two weeks ago, the government removed four of the five members of TI Corp’s board. There are 90 TI Corp employees working in tolling, plus 40 other employees.
“While it’s a very exciting day to announce the end of tolls, it is also very troubling because it’s going to have a direct impact on many workers,” Minister of Transportation and Infrastructure Claire Trevena said.
“We’re concerned there are people whose lives are going to change because of this.”
She couldn’t say how many jobs would be lost, but said the government will help workers transition.
Quickpass, the service used for electronic tolling on the Golden Ears, is contracted. TransLink will maintain its contract with the company for some time to collect outstanding tolls.
Tolling infrastructure for both bridges will be removed over the next few months.
Trevena anticipated that, after the tolls are removed, congestion would ease on the Alex Fraser and Pattullo bridges. She said the government would watch “very closely” what happens at other crossings and major corridors.
Coquitlam Mayor Richard Stewart said that removing tolls could direct more traffic onto the overloaded Brunette overpass.
Port Coquitlam Mayor Greg Moore wondered how traffic flow on the congested Mary Hill Bypass would be impacted.
When asked if she considered “Toll Free B.C.” to be temporary in light of the fact a commission is looking at mobility pricing options for the region — which can include bridge tolls and road usage fees — Trevena said she didn’t.
“I would say that this is toll free. What the mayors are looking at is mobility pricing, which is not tolling. It’s looking at how people move,” she said.
Asked if the province would accept a recommendation from the commission that tolling be applied to some or all bridges in future, Trevena said: “We’re going to have to wait and see what they say.”
TransLink was also planning to use tolls to help pay for the Pattullo Bridge replacement, which is expected to be built by 2023.
The NDP told the TransLink mayors’ council during the election campaign that it was “committed to … addressing the shortfall in revenues” for the Pattullo. But on Friday Horgan didn’t have any details about what provisions will be made for that bridge. He said that a longer-term discussion will have to take place on how the province will contribute to TransLink’s transit and transportation improvement plans.
“We still have to work with the province on financing the Pattullo project. It’s urgent and we need to get that done in pretty short weeks,” said Desmond.
On Friday, Weaver, whose Greens formed a coalition government with the NDP, called the policy “reckless” and said it would have “high cost and low impact.”
B.C. Liberal transportation critic Jordan Sturdy and finance critic Shirley Bond said the NDP announcement doesn’t consider the long-term financial implications and effect on the province’s AAA credit rating.
Bond also suggested that it’s unfair in a different way.
“The premier himself said today that people shouldn’t have to pay tolls based on where they live,” said Bond. “Transferring the debt from these bridge projects to the province is essentially telling northern and Interior British Columbians that their tax dollars will be subsidizing Metro Vancouver commuters.”