The Livable Blog

Some very interesting news, and another great opportunity to write a letter to the editor. The Vancouver Sun says this about letters to the editor:

To submit letters to the editor for publication in The Vancouver Sun newspaper: sunletters@vancouversun.com. Text only, please; no attachments.

Letters must contain the author's name, address and a daytime telephone number. Maximum length is 200 words; shorter is better. The Vancouver Sun reserves the right to edit, condense or reject any contribution

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See below for the letter I wrote. Someone needs to write one that mentions that the South Fraser Freeway would be completely funded by taxes.

Auditor-general rightly rejects claim Port Mann Bridge is self-supporting

Liberals should heed Doyle's distinction advice

By Vaughn Palmer, Vancouver Sun December 8, 2009

Auditor-General John Doyle got straight to the point with a legislature committee recently, when explaining his rejection of the B.C. Liberal government decision to to classify the Port Mann Bridge project as a "self-supporting crown corporation."

"There are no tolls, there is no bridge," Doyle told the public accounts committee. "Therefore it is premature to consider it to be a self-supporting entity."

The more detailed explanation took some time and amounted to much the same thing. The independent financial watchdog disagrees with the government's accounting treatment of the single most expensive public construction project in provincial history.

The Liberals, on the eve of the last election, launched the $3.3-billion plan to replace the existing Port Mann crossing with a twinned span and widen adjacent sections of Highway 1.

They vowed the funding for the entire project -- construction and interest charges over five years, maintenance and operation costs for the following three decades--would be recovered by a hefty vehicle toll.

On that expectation, they parked the project on the books of the Transportation Investment Corporation, a government-owned entity that was especially legislated into being in the spring of 2008.

But initially, the Liberals had intended that the corporation would be the government player in a public private partnership.

The private partners and their bankers would bankroll construction, assume much of the risk, and recover their investment through a 35-year operating agreement that gave them access to the estimated $100 million a year (for starters) tolling revenues.

Then came the near collapse of credit markets in the fall of 2008. The Liberals soon found themselves short of private sector suitors on their preferred time frame -- i.e. getting the project underway in time for the spring 2009 election campaign.

So they decided the government would become the banker, using its taxpayer-backed powers to borrow and spend. The first $313 million was out the door by summer. The remaining $3 billion will be doled out before the scheduled completion date in the winter of 2013.

But even though central government was now the sole underwriter of the Port Mann project, the Liberals continued to insist that it was being built by a "self-supporting crown corporation."

The distinction matters. The provincial debt is accounted for in two main categories. Borrowing to build schools, hospitals, roads, bridges -- all that is underwritten by tax revenues. Hence the term taxpayer-supported debt.

But the big commercial crown corporations like BC Hydro and the Insurance Corp. of B.C. have their own sources of revenue from ratepayers and customers. Their borrowing is considered self-supported debt.

The government's own debt-management targets put the emphasis on holding down taxpayer-supported debt. So the Liberals, by relegating the Port Mann project to a so-called "self-supporting crown corporation," were excluding its share of borrowing from the taxpayer-supported debt.

A not inconsequential bit of bookkeeping, as it turns out. Over time the taxpayer-supported share of the total provincial debt could be understated by several billion dollars.

[snip]

vpalmer@shawlink.ca
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Full text at http://www.vancouversun.com/entertainment/Auditor+general+rightly+rejects+claim+Port+Mann+Bridge+self+supporting/2318565/story.html

My Letter - You can do much better!

Dear Editor

Auditor-General John Doyle is right to reject the provincial Liberal’s attempt to keep the debt from the Port Mann/ Highway 1 freeway expansion off the books. (Liberals should heed Doyle's distinction advice - Vaughn Palmer December 8) This $3.1 billion freeway expansion will probably never be "self-supporting” with tolls because it conflicts with our need to reduce greenhouse gas emissions, and because the age of cheap oil is over. Overcoming automobile dependency is now both an ecological and economic necessity; and that means reduced toll revenues and an ongoing drain on public finances to pay interest on the debt.

Borrowing billions to build infrastructure for the age of cheap oil is foolish, and given the climate crisis could even be considered criminally negligent. It is time to green the Gateway Program and spend billions on public transit and efficient ways to move goods such as electric rail and short sea shipping instead.