Roads: Ontario/GTA Highways Discussion

[Jonny5]

I would imagine there is some international law that Ontario would be violating as well. After all we are dealing with a foreign entity here, they can't just legislate the company out of existence.

The lease operating agreement would specify the jurisdiction whose law would apply to disputes about the agreement and that is certainly going to be explicitly written as the law of Ontario. Laws of other jurisdictions would be moot.

 

[Admiral Beez]

The lease operating agreement would specify the jurisdiction whose law would apply to disputes about the agreement and that is certainly going to be explicitly written as the law of Ontario. Laws of other jurisdictions would be moot.

Exactly. All it would take is for Doug to pass a new law canceling the or amending the laws. And if it’s not Doug, I wouldn’t put it past a future Liberal or NDP government to rip it up.

Smallwood might have doomed his province by tying Labarador’s energy sales to low rates with Quebec, but that’s interprovincial, with arbitration at the Federal level. The Australians who whoever owns the 407 would be dumb AF to think Ontarians will honour a near century long lease on public property. The premier that will eventually cancel that deal probably isn’t even born yet, but she/he will be coming for you.

Not that I want the 407 to be free, it’s a good barrier to sprawl and development as it is. I just want the money to stay home to help fund transit or general revenue.

 

[rbt]

The Australians who whoever owns the 407 ...

That's what makes thoughts of killing it through legislation interesting:
Canada Pension Plan owns 40%
OMERS owns 10.01%
SNC-Lavalin 6.76% (~3000 Ontario employees)

The foreign component is Ferrovial (based in Spain) with 43.23%

 

[TRONto]

I was wondering what leverage the province has as the McGuinty government claimed the contract was rock solid. What if there was a provincial tax on tolls of about $0.25/km? It makes the 407 lose value and then breaking the contract has less penalty???

 

[lenaitch]

I was wondering what leverage the province has as the McGuinty government claimed the contract was rock solid. What if there was a provincial tax on tolls of about $0.25/km? It makes the 407 lose value and then breaking the contract has less penalty???

I'm unclear (and unsuccessfully tried to research) whether the province/feds has the authority to tax a non-government toll (fee). It might be founded on on tax law or the 407 lease agreement. It seems they seldom miss an opportunity. If it were taxed, I doubt either would have the authority to apply a tax above the prevailing GST or PST rate.

 

[jamincan]

Of course the government has the authority to apply a tax on tolls. They can pretty much tax whatever they like within Canada with some restrictions from treaties (although Canadian law would still always supersede those treaties within Canada). The only question is which level of government would have that authority. Since the provinces have jurisdiction over transportation, they would be the logical level of government, but I suppose there might be some sort of arcane argument the federal government could put forth for their own jurisdiction

 

[lenaitch]

Of course the government has the authority to apply a tax on tolls. They can pretty much tax whatever they like within Canada with some restrictions from treaties (although Canadian law would still always supersede those treaties within Canada). The only question is which level of government would have that authority. Since the provinces have jurisdiction over transportation, they would be the logical level of government, but I suppose there might be some sort of arcane argument the federal government could put forth for their own jurisdiction

It seems they, along with bridge and ferry tolls, are currently exempt from HST:

Ferries, Toll Roads and Toll Bridges - Canada.ca

Ferries, Toll Roads and Toll Bridges

www.canada.ca

Of course, laws can change, but I would think it would take a federal/provincial agreement (the 'H' in HST). A tax representing something like 50% would probably take a little more backroom work.

 

[Steve X]

There is also a risk of the 407 company suing the government for screwing over their profits if usage drops or stops growing. Notwithstanding clause might solve that!

 

[rbt]

IDK. We canceled the Beer Store contract, or threatened to without worry about international law.

Thretened. We even passed the legislation believed necessary to limit losses (Bill 115) from terminating the contract, but AFAIK the Beer Store contract stands unchanged and the OPC seems to have dropped the subject.

 

[rbt]

I'm unclear (and unsuccessfully tried to research) whether the province/feds has the authority to tax a non-government toll (fee). It might be founded on on tax law or the 407 lease agreement. It seems they seldom miss an opportunity. If it were taxed, I doubt either would have the authority to apply a tax above the prevailing GST or PST rate.

Here is the Highway 407 Agreement as it stood in 2002 (amendments may exist). At a quick glance, relevant legislation for dispute handling is mentioned by specific revision of the law (cannot be updated) but I didn't see anything about targeted taxation.

https://www.407etr.com/documents/sales/entirecontract.pdf

Sale Agreements | 407 ETR

 

[Fritter]

Instead of all this discussion of breaking contracts and taxing tolls, why not a discussion of simply entering into a formal re-negotiation of the contract. Who knows just what MIGHT be achievable going in this direction.

 

[Jonny5]

There is also a risk of the 407 company suing the government for screwing over their profits if usage drops or stops growing. Notwithstanding clause might solve that!

Note that given the who are the majority owners, profits are mostly used to accumulate and pay out pension income to Ontario residents who then pay taxes on that income. I'm not sure you aren't taking from one hand and putting it in another here.

 

[TRONto]

Note that given the who are the majority owners, profits are mostly used to accumulate and pay out pension income to Ontario residents who then pay taxes on that income. I'm not sure you aren't taking from one hand and putting it in another here.

so another way the GTA is subsidizing the rest of the country :S

 

[markhamdevelopments]

Here are some photos of the 401/418 and 407/35/115 interchange I took while on a GO bus.

 

[markhamdevelopments]