Private shareholders operating the taxpayer-owned Confederation Bridge to Prince Edward Island are about to have an extra $3 million, thanks to a Department of Transport Covid grant..Bridge operators were already scheduled to receive billions in subsidies under a 35-year lease, and the grant will add $2.87 million, said Blacklock’s Reporter..“It’s a result of the unique and unexpected circumstances experienced over the last 18 months due to Covid-19 travel restrictions,” said Allison St-Jean, spokesperson for the Transport department. “This funding will ensure the operator’s revenue losses due to Covid are not transferred to bridge users through toll increases.”.The $1 billion bridge was built at taxpayers’ expense then leased to Strait Crossing Development Inc., a private company whose shareholders include corporate investors in France and the Netherlands. The lease guarantees subsidies totaling $2.2 billion, according to records, in addition to millions in toll revenues..The transport department yesterday did not explain why an additional grant was required. “This funding will help Prince Edward Island’s recovery,” staff wrote in a statement..Cabinet in an Inquiry Of Ministry tabled in the Commons in 2014, the only disclosure of confidential terms of the Bridge Operating Government to date, said toll revenues on the Bridge averaged $30.3 million a year. Independent estimates put costs at about $17 million a year. Actual revenues in the first seventeen years totaled $515,401,266..“Here is a living, breathing example of risk-free investment for a corporation,” then-Liberal MP Gerry Byrne (Humber-St. Barbe, Nfld. & Labrador) — who had requested terms of the Bridge lease — said in an interview at the time..“Why couldn’t the government just operate it themselves?” said Byrne. “The cost is going up exponentially. It is the taxpayer who is getting dinged on that.”.“The whole notion of public-private partnerships is controversial,” said Byrne. “The government subsidizes construction and the private sector draws the full benefit from capital investment while running little risk whatsoever.”.The Parliamentary Budget Office in a 2016 report Cost Estimate Of Tax Credit For Confederation Bridge Tolls concluded operators were running a 117 percent profit margin while charging some of the highest tolls in Canada. Current tolls are $48.50 to travel 13 kilometres..The Canadian Union of Public Employees in a 1998 report depicted the contract as a no-lose proposition for the bridge company..“The risks to which the private sector will be exposed are much lower than those to which the federal government will be exposed once it takes ownership of the bridge in 35 years,” said An Analysis Of A Public-Private Partnership: The Confederation Bridge..“Thirty-five years may be enough time for the bridge to require very costly repairs at taxpayers’ expense.”.Mike D’Amour is the British Columbia Bureau Chief for the Western Standard..,.mdamour@westernstandardonline.com
Private shareholders operating the taxpayer-owned Confederation Bridge to Prince Edward Island are about to have an extra $3 million, thanks to a Department of Transport Covid grant..Bridge operators were already scheduled to receive billions in subsidies under a 35-year lease, and the grant will add $2.87 million, said Blacklock’s Reporter..“It’s a result of the unique and unexpected circumstances experienced over the last 18 months due to Covid-19 travel restrictions,” said Allison St-Jean, spokesperson for the Transport department. “This funding will ensure the operator’s revenue losses due to Covid are not transferred to bridge users through toll increases.”.The $1 billion bridge was built at taxpayers’ expense then leased to Strait Crossing Development Inc., a private company whose shareholders include corporate investors in France and the Netherlands. The lease guarantees subsidies totaling $2.2 billion, according to records, in addition to millions in toll revenues..The transport department yesterday did not explain why an additional grant was required. “This funding will help Prince Edward Island’s recovery,” staff wrote in a statement..Cabinet in an Inquiry Of Ministry tabled in the Commons in 2014, the only disclosure of confidential terms of the Bridge Operating Government to date, said toll revenues on the Bridge averaged $30.3 million a year. Independent estimates put costs at about $17 million a year. Actual revenues in the first seventeen years totaled $515,401,266..“Here is a living, breathing example of risk-free investment for a corporation,” then-Liberal MP Gerry Byrne (Humber-St. Barbe, Nfld. & Labrador) — who had requested terms of the Bridge lease — said in an interview at the time..“Why couldn’t the government just operate it themselves?” said Byrne. “The cost is going up exponentially. It is the taxpayer who is getting dinged on that.”.“The whole notion of public-private partnerships is controversial,” said Byrne. “The government subsidizes construction and the private sector draws the full benefit from capital investment while running little risk whatsoever.”.The Parliamentary Budget Office in a 2016 report Cost Estimate Of Tax Credit For Confederation Bridge Tolls concluded operators were running a 117 percent profit margin while charging some of the highest tolls in Canada. Current tolls are $48.50 to travel 13 kilometres..The Canadian Union of Public Employees in a 1998 report depicted the contract as a no-lose proposition for the bridge company..“The risks to which the private sector will be exposed are much lower than those to which the federal government will be exposed once it takes ownership of the bridge in 35 years,” said An Analysis Of A Public-Private Partnership: The Confederation Bridge..“Thirty-five years may be enough time for the bridge to require very costly repairs at taxpayers’ expense.”.Mike D’Amour is the British Columbia Bureau Chief for the Western Standard..,.mdamour@westernstandardonline.com
