Doug Ford plans to start building a new superhighway near the 401 next year. Why not move all the trucks to the 407 toll highway instead?
By Paul Webster Special to the Star
Sat., Dec. 19, 2020
For some half a million people on any given day in the GTA, a big part of the daily grind boils down to one infamously infuriating three-digit number: 401.
As in, Highway 401.
On North America’s busiest highway, wedged between walls of barely moving trucks, commuters and truckers have plenty of time to meditate on a superhighway-sized irritant: just a few kilometres to the north, toll-paying traffic is whizzing along with ease on Highway 407, the lightly used private toll road that runs parallel to the 401 for more than 100 kilometres across the northern GTA.
Kevin Sack, spokesperson for the consortium dominated by the Canada Pension Plan Investment Board that owns the 407, freely acknowledges there’s plenty of room for more trucks and cars on the toll road.
“We’d be happy to have much more traffic,” he says, although the far-from-negligible cost of the tolls — up to 60 cents a kilometre for cars and almost three times that for trucks — represents a big barrier to increased usage by cars and trucks alike. “Lots more trucks and cars are welcome.”
The Ontario government, mindful that angry commuters are also angry voters, has been studying how to break the 401 impasse for years.
And in fact, just two years ago, an expert panel commissioned by the government recommended it accept Sack’s invitation, and start routing many more trucks onto the underused 407. If necessary, recommended the panel — which included a former deputy minister, a Ryerson University professor and a Bay Street lawyer — the government should bargain with the 407’s owners to make this happen.
Instead of taking that advice, however, the government has decided to build a third freeway — the GTA West Corridor (GTAW).
Like the 407, the GTAW — irreverently labelled by opponents as Highway 413 — will also run parallel to the 401.
Natasha Tremblay, spokesperson for Ontario Transportation Minister Caroline Mulroney, says the new superhighway is expected to host more than 300,000 vehicle trips a day, and provide “greater connectivity between urban growth centres” that will generate “greater economic vitality.”
The problem is, the new highway would not only cost taxpayers billions of dollars, it would be an environmental disaster, critics say. Meanwhile, due to the pandemic, the 407 now has so little traffic on it, its owners could be on the hook to pay “congestion payments” to the government for not meeting traffic quotas.
So why isn’t the government doing more to get traffic off the 401 and onto the underused 407?
The new freeway is adamantly opposed by the mayors of Halton and Brampton, as well as environmentalists, including Tim Gray, executive director of Environmental Defence, a national action group.
Gray notes that Ontario Premier Doug Ford’s decision to fast-track the GTAW brushed aside the advice the government solicited from its very own experts, who advised that “providing truck priority on Hwy. 407 through additional highway capacity or subsidy (e.g., trucks would pay no toll) would deliver travel time benefits that are similar to the new GTAW corridor.”
Gray warns that if the GTAW is built, it will destroy much of the last remaining open countryside, farmlands, conservation lands and headwaters within the GTA.
“Because the GTAW will have severely negative impacts on numerous rivers, wetlands and headwaters areas, it poses a threat to the drinking water of everyone in the GTA,” Gray warns.
Despite the advice the Ontario government solicited that urged it to get more trucks onto the 407, Ford has diminished environmental assessment law and disempowered conservation agencies in order to fast-track the GTAW, critics say. Current plans are to start construction by the end of next year.
But when the COVID-19 crisis hit in March, the government’s GTA’s superhighway calculus suddenly changed in a dramatically unexpected way.
With massive numbers of commuters suddenly working from home, highway traffic volumes quickly dropped, especially on the 407.
In fact, traffic volumes plunged so heavily, confirms 407 spokesperson Sack, that its owners — dominated by the Canada Pension Plan — now want “relief” from the contractual payments they owe the Ontario government.
Sack confirms that due to dramatic declines in traffic and toll revenues during the COVID crisis, unless the company can persuade the Ontario government to give it relief, it will have to pay “congestion payments” to the province for failing to meet the traffic volume levels stipulated in its contract.
Under the agreement between the Ontario government and the 407’s owners, the owners are “responsible for attracting specific traffic thresholds while providing a reliable free-flowing highway or face a penalty,” confirms government spokesperson Natasha Tremblay.
This is the first time in the 20-year history of the 407 that its owners have appealed to taxpayers for relief within its contract, Sack says, while explaining that the 407 consortium’s contract with the Ontario government specifies that relief is warranted in certain disastrous “force majeure” situations, possibly including the COVID-19 pandemic.
In light of all this, environmentalists, urban planners and public pension fund experts all say the time has come for executives at 407 International Inc. and the Canada Pension Plan’s money managers to work with provincial and federal officials to open up their dramatically underused private toll road to more truck traffic.
Doing that, they say, will eliminate the need for a new highway that will destroy much of the last open country to the north of the GTA.
“This is a golden opportunity for the provincial government, and the Canadian government, through its ownership of the Canada Pension Plan, to help avoid the huge environmental and financial costs of building the new freeway by getting large numbers of trucks moving on the 407 at last,” Gray says.
Not only is the GTAW not needed, given the availability of the 407, notes Peter Miasek, director of Transport Action Ontario, a group that lobbies for new investment in mass transit systems rather than freeways, it’s also unaffordable.
At a time when the province is running up massive COVID-induced fiscal deficits, the GTAW — which Gray and Miasek estimate will cost the province at least $6 billion and possibly as much as $10 billion to build — is a huge expense that taxpayers can easily avoid. “Getting more traffic, especially trucks, onto the 407 is a wonderful solution,” Miasek says.
Debbie Gordon, who sits on the steering committee for the Ontario Greenbelt Alliance, which has 100 member groups devoted to protecting undeveloped lands across the Golden Horseshoe, fully agrees.
“New mega-highways are like a gateway drug for urban sprawl and environmental destruction,” she says. “In fact, the GTAW should really be seen not just as a highway but actually as a hugely profitable scheme for land developers, many of whom are closely connected to Ford.”
Government spokeswoman Tremblay declined to answer questions about the total estimated cost of the new highway, and about whether the government has studied if expanded use of the 407 could avert the need for construction of the GTAW.
Like Gray, Gordon argues that the Canada Pension Plan’s investment executives — who claim in numerous public statements to be carefully guided by sustainable investment concerns — have a duty to ensure their Highway 407 asset be put to better use to help avert the substantial environmental and financial impacts of the proposed new highway.
“If they want to talk the talk on environmental sustainability, they now need to start walking the walk,” Gordon says about the money managers at the Canada Pension Plan Investment Board.
“Otherwise, I think we have to ask whether they really do have the same values as those of the tens of millions of Canadians who own the money that they manage?”
Matti Siemiatycki, interim director of the School of Cities at the University of Toronto and an expert on public pension fund accountability, warns that getting the CPPIB to act now to help resolve the situation won’t be easy in light of its duty to maximize its income on behalf of public pensioners, and its complete independence from the federal government, despite being a Canadian government agency.
Even so, Siemiatycki says, the CPPIB ought to now engage in a public discussion of the situation concerning the calls for increased usage of the 407 in order to avert building the GTAW.
“The new highway should not be built in the context of the growing climate change crisis that Canadians face,” he argues. “The role of the public pension fund should be scrutinized.”
Canada Pension Plan Investment Board (CPPIB) spokesperson Darryl Konynenbelt confirmed that last year the board increased its stake in 407 International to just over 50 per cent when it paid $3 billion for an additional 10 per cent of the toll road. But the pension fund’s investment executives decline to comment on the current situation, he says. “I would suggest you call 407-ETR directly,” he advised.
“We’re watching the situation closely,” says Kevin Li, senior vice-president and infrastructure finance team lead at bond-rating agency DBRS Morningstar, which noted in its most recent report on the 407 ownership consortium that, until this year at least, the highway paid almost half a billion dollars in annual dividends to its shareholders, including the Canada Pension Plan, Madrid-based Cintra Inc. and Montreal-based SNC-Lavalin Inc.
Government spokeswoman Tremblay said in an email that “the ministry of transportation has previously played a role in encouraging 407 ETR to take a greater share of truck traffic in the GTA, such as the introduction of a successful ‘heavy vehicle reward program’ in 2006.” But the ministry’s agreement with 407 ETR “does not provide a role for the ministry to be involved in setting or influencing the private company’s tolls or fees,” she added.
Tremblay declined to discuss whether the Ontario government plans to grant the owners of the 407 the relief from payments to the government that they seek.
Ryerson University professor Matthias Sweet, a traffic congestion expert who sat on the expert panel that advised the Ontario government to avoid building the GTAW by routing more trucks onto the 407, points to a substantial body of scientific evidence indicating that when environmental and human health costs are factored in, new highways cost far more than just their multi-billion-dollar construction price tags.
“The disconnect between research and planning practice is stark when identifying traffic congestion policies which can also support economic objectives,” Sweet noted in a 2011 study.
Tom Green, a transportation analyst with the David Suzuki Foundation, notes that in October, a Green Budget Coalition of 25 environmental groups, including the David Suzuki Foundation, advised Ottawa to “make ineligible for federal funding road projects or other transportation infrastructure that will lock in or exacerbate pollution, GHG emissions and loss of natural habitat.”
But Kevin Skerrett, a public pension investment expert with the Canadian Union of Public Employees, cautions that despite Ottawa’s ownership of the Canada Pension Plan, federal Finance Minister Chrystia Freeland likely can do little to encourage the government-owned CPPIB to help avert the severe financial and environmental costs associated with building the GTAW.
“There’s probably no easy way for her to step in,” he says about Freeland. “At least not without serious grassroots pressure.”
Green, meanwhile, agrees with Sweet that many of the real costs of superhighways are hidden, and that the GTAW is not needed in light of the government’s current opportunity to ensure greater use of the 407.
Building the new GTAW freeway, says Green “is a case study of what we shouldn’t do.”