Roads: Ontario/GTA Highways Discussion

[JasonParis]

I don't find the 403 naming confusing at all. If you have a driver's license you should have enough brain cells to figure this out. If the name of 403 through Mississauga is to complicated, then you might as well kill the 403/QEW combo through Oakville for the same reason. Name that the QEW, and have the 403 start at the 407 junction in Burlington.

That's actually what I'm saying. Kill the 403/QEW combo through Oakville/Burlington and just revert it to the QEW. The 403 then starts at the 407/Brant/Junction in Burlington. The other 403 through Mississauga would thereby likely just get renamed 410 as it really is just a continuation of it anyway.

As things are, it's fine for us as we all live here, but can see the differing 403s being a bit confusing for others/tourists. Either way, it's not a huge issue. Was just stating a slight preference that I think is more logical.

 

[gweed123]

That's actually what I'm saying. Kill the 403/QEW combo through Oakville/Burlington and just revert it to the QEW. The 403 then starts at the 407/Brant/Junction in Burlington. The other 403 through Mississauga would thereby likely just get renamed 410 as it really is just a continuation of it anyway.

As things are, it's fine for us as we all live here, but can see the differing 403s being a bit confusing for others/tourists. Either way, it's not a huge issue. Was just stating a slight preference that I think is more logical.

In that case the 410 would actually end at the QEW, since the N-S section along the Oakville-Mississauga border would become part of it as well. I guess technically it would still be a N-S highway, since the majority of the length of the highway would still be N-S, and the 410 number would be appropriate.

Just think of it as the original plan for the 410… with a little jog and connecting to the QEW a bit further west than originally planned .

 

[Translude15]

I'm hoping (although not realistically) that the Province and the consortium that own the 407 ETR will work out some sort of a highway swap agreement, whereby a new stretch of the 407 can be built from the current 401-407 interchange up to Guelph, connecting with the free portion of an upgraded Highway 7 to Kitchener.

The section of the 407 that should have been the 403 can be untolled during off-peak hours and renamed 403 (thereby 'completing' the highway). The north-south stretch of highway that is currently the 407 and 403 can form it's own new highway for the time being (from the 401 to the QEW), but be integrated into the new GTA West highway when it's built. The 407 ETR can continue on to Guelph, which would bring in roughly the same amount of toll revenue as the Halton stretch of the 407 does today. Everybody wins, and the highway system becomes a heck of a lot less convoluted.

I've always thought about this idea re: joining the 403 and 407 into a singular E-W route, especially considering the Halton stretch of 407 was originally intended to be the 403 anyways.

If such a plan were to become a reality, would it require re-configuring the 403-407 interchange?

 

[MrsNesbitt]

The province can expropriate it. Given the value of the asset, though, that would cost a lot and could take 10-20 years to regain. Still, we should do it. As time marches on, that expropriation will get cheaper, though. As 2098 gets closer and the value of the lease drops, its corresponding expropriation price will also drop.

I'd put that one in the "when we no longer have a deficit" file, hahaha. Cancelling a lease on a highway isn't exactly a good use of deficit spending.

Haha very true. Once that deficit is balanced, however, it would be well worth doing. As is we're locked in to getting nothing out of the 407 ETR until 2098 anyways. If it takes 20 years of toll revenue to regain the costs of cancelling the lease / expropriation, it's worth it - traffic will only be increasing on the 407.

I'm no fan of highway network expansion, but the fact that we have a premium toll relief highway that's not even under our own government's control is downright disgusting. While the 407 East is being built anyways as publicly-owned, I think this is a good time to get the conversation started.

 

[TOareaFan]

Haha very true. Once that deficit is balanced, however, it would be well worth doing. As is we're locked in to getting nothing out of the 407 ETR until 2098 anyways. If it takes 20 years of toll revenue to regain the costs of cancelling the lease / expropriation, it's worth it - traffic will only be increasing on the 407.

I am sorry, you lost me at the bolded part....what is it we would get out of an expropriated 407 in public hands that we are not getting out of it in private hands?

 

[MrsNesbitt]

I am sorry, you lost me at the bolded part....what is it we would get out of an expropriated 407 in public hands that we are not getting out of it in private hands?

Toll revenue, year after year...? Going into provincial hands where it can be re-invested in other important things like infrastructure and healthcare, instead of to for-profit private businesses?

 

[TOareaFan]

Toll revenue, year after year...? Going into provincial hands where it can be re-invested in other important things like infrastructure and healthcare, instead of to for-profit private businesses?

But we don't actually have laws that allow governments to steal stuff from the private sector.....if there was some sort of expropriation there would be a lot of negotiation around what amount of money would have to be paid to the consortium for them to surrender their leasehold interest. While the factors that went into the calc may vary (growth in use, growth in toll rates, discount rate, etc), the price would be the present value of all future net revenues that they would receive under their lease. So, essentially, you would pay them today the present value of 84 years worth of income...just to recieve that income over the 84 years of time. There would be no financial gain to the public.

 

[gweed123]

I've always thought about this idea re: joining the 403 and 407 into a singular E-W route, especially considering the Halton stretch of 407 was originally intended to be the 403 anyways.

If such a plan were to become a reality, would it require re-configuring the 403-407 interchange?

Yup exactly. And no I don't believe it would. The WB 403 to WB 407 is already a straight through configuration anyway. The interchange was built with straight through's being the primary movement, but because of the 90º turn both highways make, the principal movements are on what were intended to be the off-ramps. Any reconfiguration would primarily be repainting lane markings.

RE: 407 "expropriation": Technically it wouldn't be expropriation, because the land is still owned by MTO. It is on a 99 year lease to the consortium. Any "reclaiming" of the 407 would be via cancelling the contract and paying whatever penalty is involved in that. There wouldn't be any land changing hands, in a legal sense.

So, essentially, you would pay them today the present value of 84 years worth of income...just to recieve that income over the 84 years of time. There would be no financial gain to the public.

Strictly speaking, you're correct. However, other things need to be factored in. For example: what's the cost of widening parallel highways when that traffic could be absorbed by the 407 if it wasn't tolled so highly? What's the cost of building new parallel highways that may not be required if all of the capacity of the 407 were actually used?

Those factors may tip the scale, or they may not. But they need to be factored into the decision either way.

 

[MrsNesbitt]

But we don't actually have laws that allow governments to steal stuff from the private sector.....if there was some sort of expropriation there would be a lot of negotiation around what amount of money would have to be paid to the consortium for them to surrender their leasehold interest. While the factors that went into the calc may vary (growth in use, growth in toll rates, discount rate, etc), the price would be the present value of all future net revenues that they would receive under their lease. So, essentially, you would pay them today the present value of 84 years worth of income...just to recieve that income over the 84 years of time. There would be no financial gain to the public.

As it stands, if I'm not mistaken, the Ontario government still does own the 407 - its operation (and therefore the toll revenues) are simply leased to the consortium, which is why the 407 will inevitably come back under public control in the year 2098 (when the lease expires). Cancelling the lease would not be the same as the government blatantly stealing an asset from the private sector, and all 84 years' worth of revenues would not need to be paid to the consortium.

I am not a lawyer, but it seems very hard to believe that the owner of the asset cancelling the lease to an operator would be required to pay the entirety of the 84 years' worth of revenue.

 

[TOareaFan]

RE: 407 "expropriation": Technically it wouldn't be expropriation, because the land is still owned by MTO. It is on a 99 year lease to the consortium. Any "reclaiming" of the 407 would be via cancelling the contract and paying whatever penalty is involved in that. There wouldn't be any land changing hands, in a legal sense.

Expropriation is the taking of an asset (any asset but most often land) from private hands for the benefit of the public. The contract that you speak of is a leasehold interest in the land. A leashold interest (common definition) is a Claim or right to enjoy the exclusive possession and use of an asset or property for a stated definite period, as created by a written lease. A long-term lease interest is a valuable asset in its own right which can be traded or mortgaged as a physical asset.

Unless there is a specific early cancellation clause in the deal (and I am fairly sure we would have heard about that by now if it were) it would be subject to the same calcs/costs/negotiations that would ocurr if they had actually transferred title to the land.

 

[gweed123]

As it stands, if I'm not mistaken, the Ontario government still does own the 407 - its operation (and therefore the toll revenues) are simply leased to the consortium, which is why the 407 will inevitably come back under public control in the year 2098 (when the lease expires). Cancelling the lease would not be the same as the government blatantly stealing an asset from the private sector, and all 84 years' worth of revenues would not need to be paid to the consortium.

I am not a lawyer, but it seems very hard to believe that the owner of the asset cancelling the lease to an operator would be required to pay the entirety of the 84 years' worth of revenue.

If I remember correctly, the specifics of the deal were very, very friendly to the consortium (thanks Mike for that little gem). I remember reading somewhere that the cancellation penalties were quite high, so high that it would be politically unfeasible to fork over that kind of money to cancel the deal. Of course, I would imagine that amount would decrease over time though.

Once we're out of deficit spending, I think it would actually be a wise political move to cancel the deal, pay the costs, and loudly proclaim "The people of the GTA wanted out of this deal, and we listened. The days of exorbitant toll rates are over."

 

[TOareaFan]

I am not a lawyer, but it seems very hard to believe that the owner of the asset cancelling the lease to an operator would be required to pay the entirety of the 84 years' worth of revenue.

It may be hard for you to believe...but it is so. Think of the Hudson's Bay Company selling the leases to all those Zellers stores to Target. The buildings were/are owned by 3rd parties....but HBC had an exclusive right to operate in those stores under long term leases that were, for the most part, below current market rates. The owners of the stores gained nothing in that transaction but HBC was able to sell their rights to those leases to Target for the duration of the leases and realize a gain of over $2B.

A lease is a contract...it has a term....that term has to be honoured and you can't just arbitrarily cancel it and make up your own penalty and think that should be fine.

 

[MrsNesbitt]

If I remember correctly, the specifics of the deal were very, very friendly to the consortium (thanks Mike for that little gem). I remember reading somewhere that the cancellation penalties were quite high, so high that it would be politically unfeasible to fork over that kind of money to cancel the deal. Of course, I would imagine that amount would decrease over time though.

Once we're out of deficit spending, I think it would actually be a wise political move to cancel the deal, pay the costs, and loudly proclaim "The people of the GTA wanted out of this deal, and we listened. The days of exorbitant toll rates are over."

Mike Harris's idiocy will haunt this province for decades to come in many ways, good sir. I would agree that it's worth it to cancel the deal, even if, as TOareaFan states, such a cancellation would involve some very delicate negotiations. The price in any event would be high, and hopefully a team of provincial lawyers would be able to wrangle us out of some of the juicy terms given to the consortium, but even if the costs come to 84 years' worth of revenue, it's an investment in our future to be able to own this valuable asset for the public good and entirely control it ourselves.

And hopefully the people of Ontario will have learned from this debacle to never again let politicians sell away valuable assets for short-term gains.

 

[TOareaFan]

Mike Harris's idiocy will haunt this province for decades to come in many ways, good sir. I would agree that it's worth it to cancel the deal, even if, as TOareaFan states, such a cancellation would involve some very delicate negotiations. The price in any event would be high, and hopefully a team of provincial lawyers would be able to wrangle us out of some of the juicy terms given to the consortium, but even if the costs come to 84 years' worth of revenue, it's an investment in our future to be able to own this valuable asset for the public good and entirely control it ourselves.

Again, I ask, if the cost is 84 years of revenue (of course it would be present valued to today) and then there was 84 years of tolling to repay that cost....what benefit to the public good is there?

 

[MrsNesbitt]

Again, I ask, if the cost is 84 years of revenue (of course it would be present valued to today) and then there was 84 years of tolling to repay that cost....what benefit to the public good is there?

The public itself will see lower toll rates and the province will have free reign to work on the 407 as they see fit, including the ability to (at some arbitrary future time-point) build a parallel highway that directly competes with it for traffic, if necessary for reasons of traffic congestion, which is of course forbidden under the current terms of the lease.

There would also be benefits which are less tangible and less easy to put in terms of round numbers, such as the lessening of gridlock in the rest of the region by the 407 becoming an integral part of a publicly-owned network of infrastructure instead of a premium service, and the benefits of setting the idea that it is detrimental to sell off public infrastructure to private business firmly into the mindset of the populace.