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"This project is a big drain on the taxpayers that will net $1billion for a consortium that will use public money to build, maintain and inspect the highway. The citizens of New Brunswick are being forced to hand over ownership and operation of a major road to MRDC, a business set up by a former Liberal cabinet minister. MRDC will be accountable only to its shareholders. Experienced and safety-conscious public highway workers will be gone. They’ll have to be replaced by cheap labour, in the interests of the company’s bottom line."

Tom Steep,
President, CUPE 1190 provincial highway employees

"The key to the project was there was not to be an increase in debt. That decision was made early on and that one decision, that one objective drove the whole project. We do feel there were other options."

Daryl Wilson
New Brunswick’s Auditor General

Privatized TransCanada highway robbery

New Brunswick’s privatized toll highway is coming under increasing fire for its inflated costs and high user fees – both of which will line private sector pockets.

Detailed study by the provincial Auditor General exposes the Fredericton-Moncton highway deal as little more than an expensive debt hiding exercise.

The auditor’s report, released in December 1999, finds that avoiding an increase in the provincial debt was the overriding factor in deciding how to finance and build the new four-lane stretch of highway. "That one objective drove the whole project," said Auditor General Daryl Wilson.

Wilson notes that the deal was carefully constructed to meet the definition of an operating lease, keeping the total construction costs off the province’s books. However, higher private sector borrowing costs, and a scheme forcing the government to buy the road back at ‘fair market value’ after nearly three decades of lease payments totalling $1.5 billion, make the toll highway deal a taxpayer rip-off.

Wilson says the former Liberal government did little to show what they were getting in return for the much higher costs — aside from hiding debt. He argues the government should have examined other financing options, including borrowing the money itself.

In addition to the lease payments, the private consortium (backed by former Liberal cabinet minister Doug Young) gets risk-free operation and maintenance payments that will rise with inflation for the next 20 years. Under the deal, maintenance will cost over $3 million more per year than if public sector workers did the job.

The privatized highway is also slated to be a toll highway, with a Fredericton-Moncton round trip costing $14. While the newly-elected Conservative government campaigned with a pledge to remove the tolls, it has not yet delivered on this promise. A late December announcement of an ‘agreement in principle’ to remove the tolls may bear fruit, but New Brunswick taxpayers will still be on the hook for millions of dollars that could have been saved if the highway hadn’t been privatized.