The decision to sell the Highway 407 in Ontario was a major point of contention in the province’s political landscape. It was a move that sparked fierce debate, with some arguing it was a necessary decision, while others saw it as a reckless act that would ultimately cost taxpayers billions of dollars.
The sale was initiated by the Progressive Conservative government under Premier Mike Harris in 1999. At the time, the province was facing significant budgetary pressures due to mounting debt and a struggling economy. The sale of the 407 was seen as a way to generate revenue, while also shifting the financial burden of operating and maintaining the highway to the private sector.
The sale was controversial from the outset, with many criticizing it as a short-sighted decision that would ultimately cost the province more in the long run. This criticism was fueled by the fact that the toll collection on the highway was extremely lucrative, with the government estimated to have earned half a billion dollars annually from the tolls.
Despite the outcry over the sale, it went ahead, with the private consortium 407 International purchasing the highway for a whopping $3.1 billion. The government’s decision to sell the highway was met with widespread criticism from public interest groups, who argued that it was a misguided move that would ultimately cost taxpayers billions of dollars.
While the sale was initially seen as a financial success for the government, with the $3.1 billion injection providing a much-needed boost to the province’s coffers, it soon became clear that the decision to sell the highway was not without its consequences. The private consortium that took over the 407 quickly hiked up toll rates, leading to public outcry.
The government’s decision to sell the highway also had broader implications for the province’s transportation infrastructure. The sale effectively took one of the province’s most important roads out of public hands, and left it in the hands of a private company with little accountability to the people of Ontario.
Overall, the sale of the 407 remains a contentious issue in Ontario’s political landscape. While some continue to defend the decision as a necessary move, others argue that it was a reckless act that put the province’s taxpayers at significant risk. Whatever the case, the decision to sell the highway will remain a topic of debate and controversy for years to come.
Who was the Premier of Ontario when the 407 was sold?
The Premier of Ontario at the time when the 407 was sold was Dalton McGuinty. This controversial decision to lease the 407 ETR (Express Toll Route) for 99 years to a Spanish-led consortium occurred in 1999, during McGuinty’s tenure as the leader of the opposition party in the Ontario legislature. It was met with widespread criticism from the public, the media, and opposition parties because it was seen as a huge loss of public assets.
Even though he was not in power at the time the 407 was sold, McGuinty did not oppose or condemn the decision. When he became the Premier of Ontario in 2003, McGuinty chose to honour the controversial agreement made by his predecessor Mike Harris of Progressive Conservative Party. This decision has been hotly debated, as some critics argue that the toll road was sold far below its actual value and resulted in a loss of potential revenue for the government. The controversy surrounding the sale of the 407 continues to this day, and there are ongoing debates about the long-term impact on Ontario’s public assets and infrastructure.
What was the rationale behind the decision to sell the 407?
The decision to sell the 407 was based on several factors. The first reason was a need for cash by the Canadian government. In 1999, when the government sold its stake in the 407, the economy was not performing well, and the government was facing a huge budget deficit. Therefore, selling the 407 was seen as a way to generate much-needed revenue and reduce the deficit.
Another factor that contributed to the decision to sell the 407 was the belief that the private sector would be better suited to operate and expand the toll highway. The private sector was seen as having the expertise and resources to make significant investments in the infrastructure and improve the highway’s operations. Also, private ownership was viewed as a way to encourage competition and innovation in the transportation sector.
Finally, the government saw the 407 as an asset that could be better utilized by a private owner. The 407 was a relatively new highway, having opened in 1997, and needed significant investment to continue to grow. With the government facing fiscal challenges and limited resources, selling the highway to the private sector was viewed as a way to unlock its full potential and benefit Canadians.
What was the selling price of the 407 and how was it determined?
The selling price of the 407 highway was determined through a complex bidding process that took place over several years. In 1999, the provincial government decided to sell the highway to a private consortium in order to raise funds to pay down debt. An auction was held, with the minimum bid set at $1.6 billion. Several companies expressed interest, and after a lengthy negotiation process, the winning bid was submitted by a consortium consisting of Canadian construction company SNC-Lavalin, Spanish toll road operator Cintra, and Australian investment bank Macquarie.
The final selling price of the 407 was $3.1 billion, which was significantly higher than the minimum bid. This was due in part to the innovative financing structure of the deal, which allowed investors to purchase shares in the ownership consortium rather than purchasing the highway outright. The winning consortium paid $1.6 billion in cash up front, with the remainder of the purchase price being financed through bonds and equity shares. Over time, the value of these shares increased as toll revenues grew, and the consortium was able to sell its ownership stake for a significant profit several years later.
How has the sale of the 407 affected transportation and infrastructure developments in Ontario?
The sale of the 407 highway to a foreign consortium in 1999 had a significant impact on transportation and infrastructure development in Ontario. The 407 highway is a 108-kilometer toll road that runs along the outskirts of Toronto, connecting several major highways and facilitating the movement of people and goods in the province. Selling a major highway like the 407 to foreign owners was not without controversy. However, the sale brought in billions of dollars to the provincial government, which they could use to fund other infrastructure projects.
The sale of the 407 also prompted the Ontario government to reassess their approach to transportation infrastructure planning. In an effort to ensure that their transportation plans align with the needs and priorities of Ontario residents, the Ontario government has since focused on developing transit solutions that are efficient, cost-effective, and environmentally sustainable. This shift in focus has led to several significant infrastructure projects in Ontario, such as the Eglinton Crosstown LRT and the GO Regional Express Rail program. These projects have helped to alleviate traffic congestion and reduce the carbon footprint of transportation in Ontario.
In conclusion, the sale of the 407 was a pivotal moment in Ontario’s transportation history. While it was met with some criticism, it ultimately acted as a catalyst for positive change in the province’s transportation policies and infrastructure planning. The province’s investment in sustainable transit solutions has led to significant progress towards a more efficient and environmentally conscious transportation system in Ontario.
Have there been any attempts to re-acquire the 407 by the Ontario government since its sale?
The 407 ETR was sold to a consortium led by SNC-Lavalin in 1999 for $3.1 billion. Since its sale, there have been several attempts by the Ontario government to re-acquire the toll road. The main reason behind this is the constant increase in tolls on the 407 ETR, which has made it one of the most expensive highways in Canada. The high tolls have been a source of frustration for many drivers, especially those who use the highway regularly.
In 2018, the Progressive Conservative Party of Ontario, led by Doug Ford, made an election promise to buy back the highway if elected. However, this promise has not yet been fulfilled. In January 2021, it was reported that the Ontario government had held discussions with the 407’s current owners regarding a possible buyback, but no agreement was reached. At present, the 407 ETR remains privately owned, and the tolls continue to increase. Despite ongoing discussions and promises, it remains to be seen if the Ontario government will be able to successfully re-acquire the highway in the future.