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That’s when province estimates highway will be paid for
Diane Saurette, executive director, finance and strategic planning capital projects, for the Transportation and Infrastructure Renewal Department talks to members of Cumberland County chambers of commerce during a meeting Monday while the department’s infrastructure programs executive director Bruce Fitzner and Cumberland North MLA Terry Farrell look on. Saurette and Fitzner told the business audience and municipal officials that the Cobequid Pass could be paid for as early as 2019-20.
©Darrell Cole - TC Media
AMHERST, N.S. – Tolls on the Cobequid Pass could be removed as early as 2019 or 2020.
Officials from the provincial Transportation and Infrastructure Renewal Department were in Amherst on Monday to meet with representatives from Cumberland County’s chambers of commerce and municipal officials to provide clarification over confusion on when the debt for the 44-kilometre highway between Thomson Station and Glenholm will be paid off.
I think business in Cumberland County would rather have no tolls and a level playing field with the rest of Nova Scotia, but I think the clarification that the tolls will come off earlier than originally reported will certainly relieve a lot of people’s concerns. Sue McIsaac, Cumberland Business Connector
Once that’s done, the province will have the option of removing the tolls motorists have been paying since the highway was opened in November 1997.
“I think business in Cumberland County would rather have no tolls and a level playing field with the rest of Nova Scotia, but I think the clarification that the tolls will come off earlier than originally reported will certainly relieve a lot of people’s concerns,” Sue McIsaac of the Cumberland Business Connector said. “We have a great highway there and it has its benefits, but we also feel disadvantaged that we have to pay tolls to use that highway so we’d prefer to have no tolls.”
Diane Saurette and Bruce Fitzner of Transportation and Infrastructure Renewal were invited to the meeting by Cumberland North MLA Terry Farrell to alleviate concerns that were raised last year when Cumberland South MLA and PC leader Jamie Baillie accused the province of being sneaky about the tolls.
Last November, Baillie said the government was condemning Cumberland County motorists to paying the toll for eight more years to 2026 when it could have been paid off in 2018. He said the Liberal government could have paid off the highway earlier because of higher than forecast toll revenues, but chose to keep the extra revenue instead of applying it to the highway.
Saurette said stopping pre-payments had nothing to do with paying the highway off earlier. The extra revenue collected in tolls can only be used for the highway and not for things like health and education. She said stopping the pre-payments has no impact on the repayment schedule.
“Making the pre-payments gives the bond holders money early. Not making pre-payments and having the money flow to excess reserves account in the corporation gives them the opportunity to invest the money and make interest revenue, which is then considered revenue for the toll highway,” she said. “Because it’s a bond financing, we are committed for 30 years. We can pay the debt earlier but we also have to pay the interest for the 30-year period of time. We’re locked into that. So until we have enough money in excess cash to make the lump sum payment to pay it off, we’re locked into that.
She said that will likely happen in three to four years. Saurette estimates it will cost approximately $65 million to pay off the debt.
Farrell said there continues to be a lot of misinformation circulating respecting the time remaining for the collection of tolls.
“I have heard from many of my neighbours, friends and colleagues who use the toll highway on a regular basis and I believe they deserve to be more fully informed,” Farrell said. “Our government decided in 2016-17 to change the method of paying the debt on the Cobequid Pass. This decision does not extend the life of the Cobequid Pass project. This decision does not mean we will pay tolls for a longer period.”
He said a previous Conservative government had decided to make prepayments to the bondholders from toll revenues.
“That decision only benefitted the bondholders, not toll payers or taxpayers,” Farrell said. “Not making prepayments, investing the cash and earning revenue for the corporation will have the corporation paying the debt off even sooner. The fact is that tolls will stop being charged when all costs related to the highway have been paid or otherwise discharged
Bill Dowe, chairman of the Truckers Association of Nova Scotia, said he is still against tolls, but appreciates the clarification provided.
“We still don’t have a definitive data but we have an approximation, which is six years earlier than the minister’s letter said. That brings some solace to how much longer we’re going to have to pay tolls,” said Dowe, who said tolls have been very costly to his membership and adds to the cost of doing business in northern Nova Scotia.
With the province considering tolls to build other highways in Nova Scotia, Farrell said government will have a decision to make in a few years. However, he pledged, any decision to continue tolls would include a discussion with residents and businesses in Cumberland County.