Canada's Original Think Tank

Inquiry on bridge tolls and the Confederation Bridge

Inquiry on bridge tolls and the Confederation Bridge

Inquiry on bridge tolls and the Confederation Bridge

Hon. Percy E. Downe rose pursuant to notice of March 20, 2019:

That he will call the attention of the Senate to:

(a)The importance of the federally-owned Confederation Bridge to the economy and way of life of Prince Edward Island, providing a vital link for commerce, tourism and the necessities of daily life for the people of that province;

(b)The heavy financial burden imposed by the toll on that Bridge, which amounted to $35.00 when it was first opened in May of 1997, but now stands at $47.75, an increase of 36 per cent, surely making the $3.70 per kilometer drive one of the most costly in Canada;

(c)The fact that while Prince Edward Islanders are grateful to have Confederation Bridge for the tremendous convenience and reduced transportation time for goods travelling to and from the Island, the reason Islanders initially agreed to a toll was the understanding that large scale federal transportation infrastructure programs required a “user pay” system in the form of tolls, and that was the only way they were going to get a bridge to replace the previous year-round ferry service;

(d)The change to that longstanding user pay policy when Justin Trudeau promised in the middle of the 2015 election campaign to cancel the toll on the replacement Champlain Bridge — like Confederation Bridge, also federally owned — being built in Montreal if he won;

(e)The Liberal victory in October of 2015 that resulted in the promised cancellation of the toll. However, keeping that impulsive election promise has pitted region against region and Canadians against Canadians. The feeling among many Prince Edward Islanders is that the federal government has favoured one part of the country by eliminating the toll on one bridge it owns and not on the other, and they wonder why Canadians are being treated differently depending on where they live;

(f)The repeated government justification for this unequal treatment — that the Champlain Bridge’s status as a “replacement” bridge warrants such inequality — rings hollow among those on the losing end of this disparity, both because the original Champlain Bridge charged a toll for 28 years, until it was paid for, and because the idea that the new Champlain Bridge is a “replacement bridge” is a distinction without a difference. Every bridge is a replacement for what came before, be that an older bridge, a ferry, or an alternate route. The decision to treat “new” and “replacement” bridges differently is every bit as much a political decision as the decision to cancel the toll on the Champlain Bridge;

(g)The Prime Minister’s statement, when asked in January 2017 about the unfairness of the toll on Confederation Bridge, that he would commit to, in his words “look at what can be done to make sure that people are able to travel freely and openly across this country at modest costs”, is a two year old commitment to Prince Edward Islanders that remains unfulfilled and is a promise unkept;

(h)Therefore, the Senate Chamber should examine and discuss the strain on the unity of Canada caused by this inconsistency in how our fellow citizens are treated, depending on where they reside in Canada and recommend to the government possible solutions to this problem.

He said: Honourable senators, I would like to speak to my inquiry on bridge tolls, which some of you have heard me speak about before.

The fundamental basis of this inquiry is the inconsistency of a federal government policy that allows a $47.75 toll per crossing on the Confederation Bridge in Prince Edward Island while cancelling the proposed toll on the new replacement Champlain Bridge in Montreal.

Although Prince Edward Islanders are grateful to have the Confederation Bridge for the tremendous convenience and reduced transportation time for goods travelling to and from the Island, the reason Islanders initially agreed to a toll was the understanding that large-scale federal transportation infrastructure projects required a user pay system in the form of tolls, and that was the only way they were going to get a bridge to replace the previous year-round ferry service.

Beyond the problem of a $47.75 toll for passenger cars and the serious effect that can have on both Islanders and on tourism is the significantly higher toll for many commercial vehicles and what that means for the Island economy in general.

In the course of my efforts to draw public attention to this inequality, I have heard from grain farmers and other exporters who cite the toll their shippers have to pay — $72.50 for the typical tractor trailer — which can amount to many thousands of dollars a year. This has a serious impact on their ability to do business, effectively serving as a tariff on exports, particularly when it comes to agriculture and the fisheries, both of which are vital to the Prince Edward Island economy.

During the last federal election, then-Liberal Leader Justin Trudeau announced that, if elected, he would not proceed with the plan to charge tolls on Montreal’s new Champlain Bridge, a $4.2 billion project now nearing completion. A 2015 estimate prepared by the Parliamentary Budget Officer had calculated the loss to the federal treasury arising from Prime Minister Trudeau’s promise to be $4.3 billion over 30 years, or $143.3 million per year in lost revenue.

However, there are also additional costs, because in contrast to the arrangements for the Confederation Bridge in Prince Edward Island with its $47.75 toll, Ottawa is also paying all maintenance costs for the Champlain Bridge at an average of $25 million per year. So the total annual cost of the Champlain Bridge in foregone tolls and maintenance is $168.4 million.

In 2017, the Minister of Infrastructure and Communities stated that the new Gordie Howe International Bridge in Windsor, Ontario, will have a toll. Canada now has two major multi-billion-dollar bridge projects under way. However, where Windsor’s Gordie Howe International Bridge — which is estimated to cost $5.7 billion to build and maintain — will charge a toll, the replacement Champlain Bridge in Montreal will be toll-free. Meanwhile, Prince Edward Islanders continue to pay $47.75 to use the Confederation Bridge, which cost slightly over $1 billion to construct in the 1990s.

So the question is: Why are Canadian taxpayers paying the full construction and maintenance costs 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 $168 million annually to remove the toll on the Champlain Bridge and cover the maintenance costs but not to spend much less to remove the toll on the Confederation Bridge? The subsidy to the Confederation Bridge operator plus the lost revenue from tolls would still be 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 Fall 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 transportation 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?

The federal government is not being straightforward with Canadians on why it is not charging tolls on Montreal’s new Champlain Bridge but is continuing a user-pay policy on the Confederation Bridge in Prince Edward Island and the future Gordie Howe International Bridge in Windsor. In fact, it is putting forth arguments that are, at best, flawed.

For example, government representatives keep repeating, as the Infrastructure Minister said in this chamber on May 10, 2016:

. . . related to the new toll-free Champlain Bridge in Montreal, the bridge that we are building is a replacement. It is not a new bridge. The bridge that already exists needs to be replaced. The reason we are committed to not having a toll on the new Champlain Bridge is that the current one does not have a toll.

In reality, colleagues, the current Champlain Bridge charged a toll for half of its existence, from 1962 until the toll was abolished on May 4, 1990, when the construction costs were paid; that took 28 years.

Furthermore, the view that there can’t be a toll on the new Champlain Bridge because it is a “replacement” would also apply to the Confederation Bridge, replacing, as it did, a ferry service. Canada made a constitutional promise to Prince Edward Island as part of its entry into Confederation in 1873. The Terms of Union when Prince Edward Island joined Canada required:

That the Dominion Government shall assume and defray all the charges for the following services, viz: —

. . . Efficient Steam Service for the conveyance of mails and passengers, to be established and maintained between the Island and the mainland of the Dominion, Winter and Summer, thus placing the Island in continuous communication with the Intercolonial Railway and the railway system of the Dominion;

In other words, a year-round connection between Prince Edward Island and Canada was a precondition for the colony’s entry into Confederation. As time and technology advanced, “continuous communication” evolved from “steam service” and ice boats to car ferries and, now, to the permanent fixed link that is Confederation Bridge, a development acknowledged and, indeed, enabled by a 1993 amendment to the Constitution that clarified that:

. . . a fixed crossing joining the Island to the mainland may be substituted for the steam service . . . .

As busy and important as the Champlain Bridge, new or old, might be, it does not exist to meet a constitutional requirement. The Confederation Bridge does.

It also bears remembering that there is no requirement in law that the replacement for a toll-free bridge cannot itself charge a toll. In fact, the original plan for the replacement Champlain Bridge included tolls, as was mentioned in the 2014 federal budget.

If all Canadian taxpayers must collectively finance the cost of both 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 long-standing user-pay policy for transportation mega-projects in Canada, then Prince Edward Islanders can look forward to the removal of tolls on the 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.

(1700)

Prime Minister Trudeau recognized the problem with the $47.75 toll on the Confederation Bridge in his remarks during a Town Hall meeting on January 13, 2017. When he was asked a question about the outrageously high tolls on Confederation Bridge, he replied that the bridge was:

. . . an expensive bridge to build and it’s an expensive bridge to cross.

At that same public meeting, he committed to:

. . . look at what can be done to make sure that people are able to travel freely, travel efficiently and openly across this country at modest costs.

Prince Edward Islanders are still waiting for the Prime Minister to deliver those modest costs.

In conclusion, the Government of Canada must answer two questions. Does the policy of a toll-free Champlain Bridge make any financial sense to anyone? And why are Canadians being treated differently depending upon where they live? Thank you.

The Hon. the Speaker pro tempore: Senator Downe, would you accept some questions?

Senator Downe: Yes.

Hon. André Pratte: Senator, I ask my question as someone in favour of the toll on the Champlain Bridge, which did not make me very popular in Montreal. You are aware, of course, of the particular situation of the Champlain Bridge. It’s an urban bridge between the suburbs and the island of Montreal. One of the difficulties of imposing a toll — and as I said, I agree with a toll — is that if you impose too high a poll, people will simply go on the other four bridges making congestion worse and the bridge less profitable.

I was wondering, considering how you considered this issue in detail, how you would address the particular problem?

Senator Downe: Thank you, Senator Pratte, for your question and for your support for tolls.

The answer to your question was actually determined in the 2014 budget, which I think I quoted. They had determined what the toll would be on the bridge and it was quite low. The difference, of course, between the two bridges is the population base. Montreal would have a much higher usage than Prince Edward Island. Therefore, their toll was nowhere near $47. As I recall, it was $1.50 or $1.80 per trip. The principle — as I can tell by your question you agree — either it is user pay everywhere or it is not user pay everywhere, and a toll is user pay. The toll would be lower. Federal officials told me that the toll on the Confederation Bridge was partly because of the volume of traffic. I indicated to them that if they lowered or eliminated the toll I could guarantee them the traffic would increase.

Hon. Carolyn Stewart Olsen: Would you take another question, senator? You did not mention in your speaking notes about the particular problems you have if you live on an island regarding medical appointments, which are at great cost. Even passport offices — I remember one of the senators brought that up. Islanders are not able to just stay on the island. They have to move back and forth, especially for medical appointments.

Would you agree with me that is an additional cost that many people can’t afford?

Senator Downe: Absolutely. I’m glad you raised that. I didn’t have time to put everything in the speech. We often hear we’re a small province, but we have 10 provinces. We are equal to the others, we just have a smaller population base. That smaller population base means many medical services, particularly for children, are in Halifax or Moncton, and people travel there constantly. In fact, one of the groups I hear from on a regular basis are those in the nursing profession who contact me about the tremendous strain on family finances. Not only do they have to travel over, but back and forth constantly, particularly for childcare.

You mentioned passports. I mentioned before in this chamber that I was at my local neighbourhood store and we had no passport office. They come occasionally to P.E.I., but we don’t have a passport office. The store owner wanted to go back to Lebanon. He filled out the passport application and drove to Halifax and everything was fine, but when he got back to Charlottetown there was a mistake and he needed to go back. That’s $47.75 times two before even paying for the passport. It’s a tremendous inconvenience and cost for islanders.

The Hon. the Speaker pro tempore: There are other senators who want to ask you questions. Do you want five more minutes?

Senator Downe: Yes, five more minutes.

The Hon. the Speaker pro tempore: Is it agreed, honourable senators?

Hon. Senators: Agreed.

Hon. Leo Housakos: Thank you, Senator Downe, for bringing this issue to the forefront. It’s an important issue in this chamber. Like Senator Pratte, I too, as a Montreal senator, am in favour of tolls on the Champlain Bridge. I’m also in favour of tolls for maintenance on the Cartier Bridge, for that matter. I believe paying for use is important. I believe Montreal taxpayers already pay a significantly higher tax rate for property taxes to maintain infrastructure costs. People who come in from off the island should be paying their fair share.

Having said that, you brought up some interesting points. Currently, the government is in negotiations to make up for changing this PPP to a non-toll bridge in Montreal. Neither chamber, not the House nor the Senate, has had any feedback from the government. There are negotiations going on between Transport Canada and lawyers for SNC-Lavalin, probably the same lawyers asking for a DPA from the government, as far as I know. The government says they will bring that information forward to Parliament as expeditiously as possible. Of course, you know we rise at the end of June.

Are you concerned about that negotiation? Is there a risk we might not get those figures until after the election? My ultimate question is, was this decision a fiscal or political one on the part of the Prime Minister in the last election?

Senator Downe: I cannot read the Prime Minister’s mind, but many of us in this chamber have been involved in campaigns where we advocated for platform items thinking it would win votes and then had to live with the results afterwards. This may fall into one of those categories.

My concern about the first part of your question is when the contract was awarded for the construction of the Champlain Bridge, it was with the understanding there would be tolls. The infrastructure for the tolls would be built. There’s a significant saving to the people building the bridge. SNC-Lavalin, I think, is 50 per cent owner of the company building it. There’s a significant saving in the tens of millions of dollars because they don’t have to do toll collection, which is an additional revenue stream for their bottom line.

Hon. Mohamed-Iqbal Ravalia: Senator Downe, if I may just extend the line of questioning with respect to what, in my mind, is a moral and ethical dilemma for Newfoundlanders. We are the only island, the only province, not directly connected to the mainland either by a bridge or a tunnel. We’re highly dependent on the Marine Atlantic ferry, which incurs a significant cost upon Newfoundlanders who wish to get to the mainland. The majority of our produce comes across on a ferry service that is often dependent on inclement weather conditions. Would logic not afford the federal government to consider a no-charge cost for the ferry? Thank you.

Senator Downe: You make an excellent point because, as bad as it is for Prince Edward Island, it’s even worse for Newfoundland and Labrador. It drives up your cost of living substantially because of incredibly high tolls. This is why, when you change a policy like this after the 2015 election, it has impacts and implications across the country. My concern is — and we’re talking about Bill C-69 here. We’re talking about Bill C-48, the pipeline and tanker ban. These are all issues that impact national unity in the sense of togetherness and everybody being treated the same.

This toll issue is a problem. Prince Edward Islanders are asking why this is happening. We pay taxes. Why are our taxes going to pay for a toll-free bridge in Montreal when part of our taxes go to the yearly subsidy on the Confederation Bridge, but we also pay for it? I think Newfoundland and Labrador has a very strong case that if this user pay policy is changing, you should be close to the front of the line to benefit from it.