Justices give Trudeau go-ahead for $1-billion payment to fund highway

Furious investors at 407 Express Toll Route wrote a letter to the premier’s office in 2014

Documents filed in court provide new insight into the federal government’s last-ditch attempt to force Ford’s government to pay for the fully operational 407 Express Toll Route.

The documents, obtained through an Access to Information request, reveal a company that offered $2-billion in cash and equity financing to the 407 authority decided the chances of the Ontario government simply signing on for the $1-billion in concession payments they were entitled to have been highly unlikely.

Investors at the 407 Express Toll Route argued the federal government gave the provincially-run 407 about 18 months to pay into a national equalization program that would help pay for the project, or the government would impose a $1-billion penalty.

Documents filed in court provide new insight into the federal government’s last-ditch attempt to force Ford’s government to pay for the fully operational 407 Express Toll Route.

Forcing a payment would have jeopardized $8 billion of investments made by Ford’s government during the previous two years to attract more than 30 companies.

Judge Pritchard, of the Ontario Superior Court of Justice, refused in July 2018 to impose the penalty, arguing that federal laws made the penalty “confiscatory.”

Pritchard noted that the penalty would have been a “theft from the taxpayer.”

Still, in October 2018, Canada’s Supreme Court overturned Pritchard’s decision in a 5-2 decision, granting the federal government the right to impose its own penalty against the 407 authority.

Pritchard has since indicated he will consider whether to reverse his decision when the Supreme Court application is before him.

The Ontario Revenue Agency initially rejected the investors’ claim, citing the $1-billion penalty imposed on the 407 authority for past traffic-related penalties in the same region.

But the provincial government — then led by Kathleen Wynne — agreed to that demand when pressured by Federal Minister for Finance Bill Morneau.

Documents filed by 407 express toll agreement company, ATAC, in September 2017, shows the deal the federal government struck included the punishment.

In April 2018, Prime Minister Justin Trudeau admitted to knowing about and promising to accept a $1-billion penalty payment even before the deal was announced.

Allied Properties REIT would have been required to shoulder the $2-billion investment if the $1-billion penalty payment had been approved.

That is the same private company that wrote a letter to Ford’s office in 2014 regarding the $1-billion penalty and who subsequently urged him to approve the deal.

The letter was posted online earlier this month.

Leave a Comment