Auditor General identifies cost of eliminating tolls

During the last federal election, Liberal Party leader Justin Trudeau announced that if elected, he would not institute a toll on Montreal’s new Champlain Bridge—a $4.2 billion project.

On May 29th 2018, the Auditor General of Canada reported that the decision to eliminate tolls on the federally owned Champlain Bridge in Montreal will result in lost revenue to the Government of Canada of at least $3 billion over 30 years. Previously, the Parliamentary Budget Officer had estimated those losses to be $4.3 billion. The average of these estimates amounts to a yearly cost to the Canadian government of $121.7 million, just for the tolls.

Unlike Confederation Bridge in Prince Edward Island, with its $47 toll, the government is also paying all maintenance costs for the Champlain Bridge at an average rate of $25.1 million per year, bringing the total annual cost of the Champlain Bridge, tolls and maintenance, to $146.8 million.

The then Federal Minister of Infrastructure and Communities, Amarjeet Sohi, has stated that the new Gordie Howe Bridge in Windsor, Ontario, estimated to cost up to $4.8 billion, will have a toll. Canada now faces a situation where two major multi-billion dollar bridge projects are underway, both costing over $4 billion. However, where Windsor’s Gordie Howe Bridge will charge a toll, the replacement Champlain Bridge in Montreal will be toll-free. Meanwhile, Prince Edward Islanders continue to pay $47 to use Confederation Bridge, which cost slightly over $1 billion to construct.

Why are Canadian taxpayers paying the full construction and maintenance cost of the Champlain Bridge in Montreal, while users of the other bridges pay a toll to cover those same expenses, when all three bridges are owned by the Government of Canada?

To be specific, why is the federal government prepared to spend over $146 million annually to remove the toll on the Champlain Bridge and cover the maintenance costs, but refuses to spend much less to remove the toll on Confederation Bridge? The subsidy to the Confederation Bridge operator, plus the lost revenue from tolls, would cost less money than the yearly cost of the subsidy to the Champlain Bridge.

The problem with this discrepancy goes beyond issues of simple fairness, important as those are. The government’s commitment to a toll-free Champlain Bridge flies in the face of its plan to, in the words of its 2016 Economic Statement, “leverage its investments in infrastructure, by bringing in private capital”. In other words, government will no longer be expected to foot the entire bill for large-scale infrastructure projects, but rather will partner with, or leave the entire job to, the private sector. Of course, private investors aren’t going to fund Canadian infrastructure projects out of the goodness of their hearts; they expect to make their money back with more besides, and that means tolls. All this begs the question, if toll revenue is so important to the sustainability of an infrastructure renewal program, why isn’t there a toll on the Champlain Bridge?

If all Canadian taxpayers must collectively finance both the cost of construction and maintenance of the Champlain Bridge, and Montreal ends up getting a $4 billion government funded bridge with no tolls, then Canadians in the rest of the country have a right to receive equal treatment. 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 on Confederation Bridge. And residents of Southern Ontario should be able to cross their new bridge without paying both to build it and to use it.

However, the question the Government of Canada must ask—and answer—is whether the policy of a toll-free Champlain Bridge makes any financial sense to anyone. And why are Canadians being treated differently depending upon where they live?

  Senator Percy Downe