Liberals are masters of public finance in one particular way. They deliver opportunities to deal makers and deal flippers, with details of all transactions hidden from view. It wasn’t long before the first flip happened on the Sea-to-Sky project. This is from a 2010 press release,
“A consortium of Canadian investors led by Fiera Axium Infrastructure Inc. and composed of Fiera Axium Infrastructure Canada L.P., Régime de rentes du Mouvement Desjardins and Nova Scotia Pension Agency (the “Consortium”) today announced it has acquired 100% of the economic interests in the design-build-finance-operate (“DBFO”) concession rights associated with the Sea-to-Sky Highway Improvement Project (“S2S”)…from Macquarie Essential Assets Partnership (“MEAP”)…a private unlisted fund established in 2003…”
Sea-to-Sky completes a bond financing, Financial Post, Jun 10, 2016:
One year ago, …$583.1 million of debt that was to be issued by Sea-to-Sky Highway Investment LP. The issuer operates the British Columbia road from Horseshoe Bay to Whistler that’s part of Highway 99 under a private public partnership.
…the proceeds of which were to be used to repay bank debt, “to settle the interest rate swap arrangements,” as well as provide an “equity distribution” to the equity sponsor.
That was the plan. The sponsor — at the time called Fiera Axium Infrastructure — hired Scotia Capital, Desjardins Securities and Casgrain & Co. to round up buyers. For whatever reason — and market conditions were as good as any — the deal didn’t get done.
Early this year, Fiera sold the 35 per cent stake it held in the sponsor — back to the sponsor (now called Axium Infrastructure)…
News item, June 10, 2005:
VANCOUVER (CP) – The British Columbia government has signed a deal with a transportation consortium to design, build and manage improvement to the Sea-to-Sky Highway north of Vancouver.
Transportation Minister Kevin Falcon said the project is on time and on budget after he announced the $400 million agreement with the S2S Transportation Group…
In a 2009 letter to the National Post editor, Falcon had more to say about “on time and on budget:
Re: Vancouver Should Pay, editorial, Jan. 13.
This editorial incorrectly stated that the Sea-to-Sky Highway expansion is “behind schedule” and “over budget.” The fact is that the $600-million improvement project is both on budget and on schedule…”
A 2012 report by the Auditor General noted the capital costs were $795 million and reminded that the public private partnership was responsible for building only part of the Sea to Sky Highway,
…the Province (represented by the Ministry of Transportation and Infrastructure) entered into a P3 agreement with the Sea-to-Sky Highway Investment Limited Partnership (a group of private companies) to design, build and finance about two-thirds of the highway improvements and to operate and maintain the entire highway for 25 years. The ministry is responsible for managing the remaining one-third of improvements…”
We shall examine whether or not the project was “on budget” or slightly over the $400 $600 $795 million figure.
From B.C. Public Accounts (Updated for FY 2015):
SEA TO SKY HIGHWAY INVESTMENT LIMITED PARTNERSHIP
|Fiscal Year||Payments||Future Obligations||Grand Total|
|2021 & beyond||$ 451,000,000|
|Totals||$ 477,479,040||$ 699,000,000||$ 1,176,479,040|
From The Vancouver Sun, December 23, 2005:
The portion of the highway between West Vancouver and Squamish has the largest traffic volume, with an average of 13,500 vehicle movements each day.
The Squamish – Whistler traffic counted about 8,000 per day. Averaging the two segments over a full year suggests about 4 million vehicles using Sea to Sky Highway annually. With operating cost around $60 million a year, each vehicle movement costs taxpayers about $15. If traffic has grown by 15%, the subsidy would be about $12. However, the subsidy would be higher if we factored in the cost of the one-third portion of the Highway paid for directly by the province.
So, if you are a taxpayer paying tolls to cross the Fraser River or if you are using one of BC Ferries’ profitable routes — Tsawwassen – Swartz Bay and Departure Bay – Horseshoe Bay — take satisfaction in the financial assistance you provide through subsidies to the poor folks headed for Whistler ski hills.
More than three years ago, Laila Yuile wrote excellent pieces on the Sea to Sky Highway. Click HERE to begin looking at her work.