Highways in jeopardy as Carillion teeters

The private company that maintains major London-area highways could run out of money within a week and be bailed out by the province, the Ontario NDP transportation critic says.

Wayne Gates, the MPP for the Niagara Falls area, has written Premier Kathleen Wynne, demanding she disclose the backup plan in the event that Carillion Canada shuts down operations.

“Commuters need to be assured their safety will be protected, and workers need to know if they will continue to be paid,” Gates wrote.

Carillion Canada sought creditor protection in January after the financial collapse of its parent firm in the United Kingdom.

Carillion Canada has 6,000 employees and has a contract with the provincial government to maintain highways east, west and south of London, including highways 401, 402 and 403.

Gates said Carillion Canada is in “dire condition” and will run out of money as early as Monday.

He said when Carillion Canada filed for creditor protection, filings revealed it owes $750 million to creditors, and only has enough cash to sustain operations until Feb. 19.

Gates said he has received calls from Carillion highway maintenance employees who live in his riding, worried they would not paid after this week.

Gates said those workers told him they have been assured by government officials they will be paid beyond Feb. 19. He said that may signal that Wynne’s Liberal government will bail out the company.

“Show us the agreement. We believe that if there is an agreement with Carillion, everyone should know what it is and what the guarantees are,” Gates said in an interview.

The Carillion issue is being handled by Transportation Minister Kathryn McGarry, who took over the portfolio just last month after a cabinet shuffle.

Celso Pereira, a McGarry spokesman, sent an emailed statement to Postmedia News that appears to quash Gates’s assertion that the Wynne government has plans to bail out Carillion.

“(The Ministry of Transportation) has and will continue to pay Carillion Canada only for the services they provide and we are closely monitoring funds paid to Carillion to verify that all employees and suppliers working to maintain Ontario’s highways are paid. To date, we have no concerns in that regard,” the email said.

Carillion Canada spokesman Cody Johnstone issued a brief statement: “Carillion is continuing to proudly deliver highways maintenance services across its contracts and our employees continue to be paid.”

Gates said the potential collapse of Carillion Canada shows the underlying risk of contracting out vital public services like highway maintenance.

In 2015, the province levied fines totalling $900,000 against Carillon Canada for failing to properly maintain the Queen Elizabeth Way during two separate storms.

Gates said the public services have eroded since the provincial government launched public-private partnerships.

“Service is not as good and we believe it should come back into public hands,” Gates said.