Doug Ford's Pro-Business War Should Include the Highway 407 Contract
A report on rabble.ca, confirms that Doug Ford has set forth on a mission to dismiss Ontario's business contracts. While this is seen as a welcome development, the premier is said to be wasting time with inconsequential deals like the contract between the province and the beer store, when the government could rather deal with more troubling business, such as the privatization of Highway 407.
The article claims that several conservative cabinet ministers and MPPs, Ontario Attorney have been uploading selfies captured while smiling in front of corner stores, to basically make everyone feel they should be grateful that the Ford government has tabled legislation which enables them to purchase beer at their neighborhood snack shops whenever they want.
Prior to this, the only legal way to buy beer was to buy it in bulk from the industries that manufacture it, or at the supermarkets, that sell it.
While Ontarians are happy to save a few dollars on the beer run, a lot more dollars could be saved if the city would also address serious issues such as the highway 407 contract.
The 407 deal which was signed by the former Premier Mike Harris, gave control over the highway to the Spanish-based Grupo Ferrovial for a period of 99 years
In 1999, Mike Harris made what is now considered by many to be an extremely unintelligent move by signing a deal in which he, gave a company the right to charge tolls on the 407 Highway for an entire century, in exchange for $3.1 billion.
Today, the highway is worth about $30 billion and an analyst with the National Bank, quoted on rabble, described it as a "revenue-generating monster."
Although the selection of Grupo Ferrovial was done through a proper bidding process, in the discussion on the deal’s terms, the government, while negotiating, had not imposed a limit on how high the company could raise its tolls.
Back in the early 90s when the highway was constructed, the government of Bob Rae pledged that whatever amount will be collected by charging tolls on the highway will be used to finance its construction, and after the cost was paid, the highway just like all other Ontario highways, would be free.
This means that, if the highway wasn’t privatized, it would have at this time, most likely been free of any tolls. But now due to this contract, road users will have to pay costly tolls for approximately the next 80 years.
Stanford Borin, a professor of Public Management at the University of Toronto,advises that Ford could cancel this contract.
The company would of course sue the government for nullifying the contract, but according to Borin, this wouldn't matter, as by then the business model would be damaged, as stated in a review published in 2004 .
Nullifying the 407 deal which otherwise will for almost a century charge unnecessary tolls, is obviously a way bigger deal than this 10 years with the beer store.
Also, the beer deal was much more straightforward with a consideration paid to views of the members of the public, meanwhile the 407 contract was negotiated and signed confidentially.