Sea to Sky highway project making money once again…but not for the taxpayers of BC

Call me a geek but the big transportation projects of BC have always been of keen interest to me and I’ve written about many. The Kicking Horse bridge, the South Fraser Perimeter road,Port Mann Bridge and of course, the infamous Sea to Sky highway.

With the discussion of road pricing and regional tolling sure to be back on the radar come fall, many have often wondered why there isn’t a toll for visitors on the Sea to Sky, which would surely be a cash cow the province could milk for a century.

I revealed the reason why it can’t be tolled here back in 2010 with confidential documents from Macquarie, one of the consortium members – the sea to sky P3 agreement already had a ‘shadow toll’ included as part of the governments payments to the concessionaire:

Even in the face of confidential documents and proof from companies promoting their involvement in the landmark project, the ministry of transportation denied it. Several times,including when the Globe and Mail’s Mark Hume picked it up. 

The Sea to Sky highway deal has been the subject of much speculation and discussion since I revealed those confidential documents from the concessionaire Macquarie, which indicated shadow toll payments were part of the deal. Called Vehicle Usage Payments, also known as Traffic Volume or Traffic usage payments, are in addition to  the normal maintenance and availability payments made to the operator, and are based on the number of vehicles that travel the highway, the size of those vehicles and the distance they travel.

Payments are made monthly from the BC government to the sea to sky operator and although they are capped at some point, the addition of these shadow toll payments beyond the regular maintenance and operation payments ensures a good return on the initial investment of the concessionaire and is an incentive to companies who wish to bid on projects like this one, or to consortiums like the one who now own that stake in the sea to sky.

In this case, the deal goes to 2030.

However, in 2010 the Macquarie consortium behind the financing of that project, sold 100% of their stake to Fieria, the Nova Scotia Pension Plan and the third member, Regimes de Rentes du Mouvement Desjardins( 9th largest private pension plan in Canada)

All stood to benefit from a stable and growing income for their funds over the next 20 years – on the backs of your hard-earned dollars. In changing economic times, a government making regular payments is a safe and secure investment opportunity. But over the past few years there have been a few issues including one failed attempt by the new stakeholders to refinance the project.

This press release, details the newly completed refinancing effort.



It’s interesting to me, and should be to you, because of the secrecy  and government denials. It’s a public highway,one of which the ministry of transportation has succinctly said over and over again,to myself and several press outlets( see links above) did not have a shadow toll.

And yet darn it, someone forgot to tell Moodys Investor Services they weren’t supposed to talk about the shadow toll the BC government has both denied and tried to keep hidden from the taxpayers in BC when they recently assigned a rating to the project: 


” The Issuer, however, is exposed to some operating risks over the remaining term of the concession, including traffic volume risk related to the shadow toll structure included in the payment mechanism of the Concession Agreement, full debt repayment contingent on the receipt of the End of Term Payment based on the final asset conditions and relatively weak projected financial metrics (minimum 1.15x and 1.19x average annual debt service coverage ratios as calculated by Moody’s which includes all movements to and from the reserve accounts). These risks are well mitigated by a lengthy traffic history with demonstrated consistent growth and a base case traffic forecast prepared by a reputable firm, look forward mechanisms in the O&M Contract and a solid cash break-even ratio at over 34.6% to manage any deductions and/or unexpected increased costs over the remaining term. The Issuer’s financial profile also demonstrated good resiliency to changes in the traffic forecast as indicated by Project Co’s ability to generate minimum/average DSCRs of 1.13x/1.17x should traffic projections decline by 5% and minimum/average DSCRs of 1.11x/1.15x should traffic projections decline by 10%”


Well would you look at that? But how can this be? Just last spring Transportation Minister Todd Stone was again denying there were shadow tolls on the Sea to Sky, according to this Hansard transcript: Click on the image to see a bigger version.


Come on Todd, you’re better than that, trying to spin Claire Trevena. The gig’s up.

Will this newer transportation minister now say Moody’s is mistaken too? Or continue to play a rather insulting game with taxpayers by continuing to pretend this isn’t a lovely way to keep people from avoiding the road with a real toll?

Like they told this reporter from the Squamish Chief? :

This isn’t the only time the government has been caught in a fib. Remember the sea to sky retaining walls story I broke here? The ones government said were fine and inspected regularly? With some minor cosmetic issues?

That is, until the ministry confessed the builder has used materials that did not meet ministry specifications…and major work was done to two walls.

And you wonder why I have such an issue with this government. Six years later, busted once again by a major ratings agency…

Heading out to the Sea to Sky this weekend? Better enjoy it. You’re paying for it every single time you go.. the only way you’ll make money off of this one, is if you invested in this deal.

((( And how much is the province paying every year to the private partner,including the shadow toll vehicle count payments? Approx. $ 51 million dollars this year alone… Norm took a look at this in a previous post, HERE: )))

24 thoughts on “Sea to Sky highway project making money once again…but not for the taxpayers of BC

  1. I’m going to see what my BC Lib MLA, John Martin, has to say about this. (He doesn’t always answer…)

    Here’s my letter:

    “I was reading an article in the Squamish Chief newspaper, that says the Sea-to-Sky highway is being tolled… but in a secret way.

    “A shadow toll is paid to the road operator by the government instead of by the road user, and is based on traffic counts and an agreed rate per vehicle type.”

    I would like to know the rate for a small passenger car, as I would like to pay this toll myself. We drove on the highway on May 5 of 2015. We went as far as Squamish and came back home later in the day (paying tolls both ways on the Port Mann Bridge.) There were three people in the car, if there is a lower rate for carpooling on the Sea-to-Sky.

    Please let me know the fee that was paid on our behalf, so we can reimburse the Ministry of Transportation.

    Liked by 1 person

  2. Haha! That is one fantastic letter. I would rather pay a toll myself personally on that highway as well. I think it’s terrible how even Todd Stone who inherited this from Falcon, still sticks to the party line of putting semantics over honesty with voters, taxpayers and the opposition.

    This is one man I would love to be across from in the legislature because I know every one of these projects better than he does, or likely anyone else in the house. I’ve had the good graces of many top transportation industry experts and engineers walk me through them from the inside out.

    Anyways, there is a good reason governments use shadow toll aka ” vehicle volume/ vehicle usage /traffic counts on this kind of road.

    The World Bank spells the comparatives between real tolls and shadow tolls here, at their link on concessionaire payment options:

    Public accounts shows this years minimum payment to the private partner to be $51 million.


    1. $51 million for one year? I hope this covers maintenance, as the whole project was $500 million. How much did the province pay of that?


      1. Yes, it does, but allegedly Stone said that Kiewit was covering the cost of the retaining walls that were built with substandard materials.

        The province pays back not only the cost of construction to the private partner but these other payments go far beyond to give a good rate of return to the private partner for doing so. That’s why the refinancing was so interesting as well as the Moodys report. It states that a number of factors could impact this. Like if the provinces credit rating was lowered, or if traffic volumes reduced. I recommend reading the entire report for those financially inclined.


  3. And how about the other Ministries – Health, Education, etc. We already know (some) of Mining. Cleanup deficiencies. Are they run with the same degree of opaqueness, subterfuge, lying. I can hardly wait for Chrispy’s ‘transparent’ government! And her trillion dollar LNG bonanza. Oh, a balanced budget and 100,000 new jobs. “Families First”, my arse!
    Have a great day and enjoy the goods times while you can.


    1. This is why I pretty much don’t believe any claims this government makes without proof. Because even when proof is presented to show they are lying…not even spinning mind you, but outright lying in the legislature on many items, they will continue to deny,deflect and then resort to trying to discredit in an effort to once again deflect.

      Stone is again,shown to be dishonest on two major stories I’ve broken. Have some integrity.


  4. So, let’s see if I understand how this works.
    A European tourist picks up an RV in Edmonton, sails right on through Clearwater without even honking and eventually heads for Whistler. The rental RV gets counted on the Sea to Sky and the good folks in Clearwater pay the toll.

    If I lived in Clearwater, or anywhere in BC, I do think I would be annoyed about that.


    1. Which is why the government tries so hard to refer to it as any other way they can, other than what the entire industry calls it: A shadow toll.

      This document from 2015 shows traffic volumes from a while back and on page 7 shows where the count stations are. From the looks of it, its a damn profitable component even when capped to prevent government here, from facing what happened in Portugal when the shadow toll wasn’t capped in one agreement.When traffic volumes go up, it increases what government has to pay and in Portugal it nearly bankrupted the country.

      Click to access 1430416078260_ThJpVCgbGTvFQXhHXfSpyrbypQMQPzQZHMGrGFZKCfwWxK1gSJ8k!-91937584!1430413467110.pdf


  5. Oh, and I forgot, the car counters fell apart so how do they know how many vehicles chugged along there? Why, they let the contactor tell them. Nice gig.


    1. Yes,some of the counters were never working right from day 1. So how does one estimate the proper number? Or is government just handing over the maximum payable under the cap?

      Big questions. No answers. Will the opposition pick this up? The Greens? The BC conservatives have been tweeting the heck out of it…what there are of them 🙂

      These are public funds paid to this investment fund. Public funds. Talking to an expert writing a book he was telling me in many countries once the deal is done, the terms are public for transparency.
      Here in BC, they are still pretending these aren’t shadow tolls…..


  6. All this is largely a very expensive way to hide the size of the provincial debt. It costs a lot more than just borrowing the money. And one of the costs is that it inhibits public transit and passenger train investments; the company could likely sue if transit service reduced the number of cars driving on the route, and therefore their revenue.


  7. Simply creating more cynicism among the populace by hiding, defelcting, ignoring, etc etc. Is it any wonder most of the pubic doesn’t believe anything the government says? Our “open and accountable” BC Liberals are have been the most duplicitous, shady and secretive government we’ve ever had.


    1. Mosko, if you asked “most of the public” what a shadow toll is, they couldn’t tell you. IPPs, couldn’t tell you. Site C, don’t know where it is.

      That is why it is vitally important that these blogs get passed around and we dog our employees, otherwise known as MLAs.


  8. BC Ferries..BC Rail..BC Hydro..Shadow tolls…Quick wins…corruption corruption and more corruption…LNG industry belly up before it started….What do all those issues have in common….Bloggers revealed the dirty details of the dirty acts these BC Liberals inflicted on those entities and on the taxpayers of British Columbia…..Those issues have one more thing in common….Mainstream B.C. legislative media failed on covering those issues at the time, and when bloggers were proven right years later….

    BC.s store-bought media forget the past even happened, and they never send credit our direction…

    Farrell on BC Hydro…Straight Goods on LNG….Laila on everything Surrey and major infrastructure…

    Unfortunately BC’s legislative media will not commit to journalism….and as I suspect, they won’t produce journalism again, at least not until the BC NDP are in power…



  9. The stench has been in the air for a long time with all P3 projects including the Fort St John Hospital where a substantial portion of the $370 or so Million is borrowed at 14.5% interest. The government has been very secretive about final cost amounts on what was announced as a $300 Million project. One would think that this new facility would accommodate more beds, but no, it has the same 55 bed capacity that was in place previously. Interestingly enough, Acciona, yes the same Acciona that is a large part of Peace River Hydro Partners currently working for BC Hydro on the Site C Dam, was in charge.
    So if you can’t shadow toll, jack up the interest rate. Feels the same from a ratepayer/taxpayer perspective. Any new government next spring needs to perform forensic audits of all P3 projects and shut down Partnerships BC (department of poor deals) as the evidence shows the costs are too high and injurious to taxpayers.


    1. “14.5% interest.” I believe you — but do you have a reference?

      What government or business would pay THAT high a rate? Were they using a credit card?


  10. Hello Laila, Thank you AGAIN for all the hard work you do, on behalf of us who care about BC.
    I have a rather naïve and basic question. Forwarding this article to the Sun, Province and CBC,
    and Global would amount to nothing. Are you going to mention this on air with Jon Mcomb on
    I would think many people in BC would be pissed to hear about it!
    Also, do think the NDP know about this, and would you suggest forwarding it to the NDP, and if so, who would I send it to? Sorry, that was more than one question! I want to do something other than tell friends and family on this post, so you advice would be most welcome!!
    Bless you,
    ps- I did a little PayPal “gift” about 4 days ago, not sure if it went to you yet? I will check into it
    tomorrow. I also encourage all readers to help Laila as well. She is helping us!


    1. Thank you for the kind words Kerry 🙂 We discuss what is going to be on the show the day before and certainly I will bring it up.

      The NDP do know about it and have since the very first time I wrote about it. Harry Bains at the time was asked for comment and did not. And the story died until I followed through with it to the end and even now. Perhaps you can ask the NDP why they didn’t follow up on it or continue pressing in the leg? I’d be curious.

      No Kerry, I have not received anything and there is no record of anything having come in from your email address.Please do check, I would be concerned if it was actually sent and did not arrive, and email via my contact page 🙂


      1. Hi Laila,
        Who do suggest to send the post to at the NDP? Is it better to call the head office and ask for a MLA to call back? Here in Abbotsford, we have no NDP MLA.
        I will check on the Paypal in the morning!
        Have a great evening!


        1. I would send it right to John Horgan, I am told he answers emails quickly Kerry. Have a good night too, and we’ll touch base in the am.


  11. Hi Laila, I took your advice, and forwarded your post to John Horgan. Got the standard reply,
    indicating the number of emails, tries to answer each one personally, a canned response if you will. That was 3 days ago. The very next day, a reply from Claire Trevena, transportation critic.
    Hope this works..

    Dear Mr. McAllister,

    Thank you for writing to John Horgan regarding the shadow tolls issue, we appreciate your email and your support. John has asked me to respond to your letter as the Official Opposition Spokesperson for Transportation and Infrastructure.

    The New Democrat Opposition agrees with you that the issue of shadow tolling on the Sea to Sky highway is very concerning. This problem is rooted in the BC Liberal government’s commitment to public private partnerships. These partnerships mean we end up paying a great deal more money for our infrastructure.

    As transportation spokesperson I have questioned the Minister of Transportation and Infrastructure Todd Stone about the shadow tolling in the Legislature but according to Minister Stone there are no issues. I will continue to press Minister Stone on this issue and work to ensure the affordability and accessibility of transportation and infrastructure in British Columbia.


    Claire Trevena,

    MLA, North Island and Opposition Spokesperson for Transportation and Infrastructure, B.C. Ferries, and B.C. Transit

    Well, made me happy! I did watch the Ledge on Thursday, but she didn’t bring it up. It was short notice for her though. I would advice ALL OF YOUR READERS to do the same. Send Laila’s post to the MLA of your choice. I have also sent it to Gary Mason of the Globe and Mail. He is away until Aug 5 I believe. He wrote about Clark’s cash bag ($50,000) for her doing fundraisers for the Liberal Party. Laila did too, but after Mason’s story, which the NDP had been hammering Clark for a good couple of weeks, the local idiots, The Sun, The Province, Global TV finally had to report it. It was a good week after Mason wrote before the asses here figured they should.
    Pretty pathetic when the MSM here won’t move fast until a paper in Toronto post something nasty against the Queen of Mean.
    Please help spread the word, just send this post once, maybe, just maybe, it will pick up some traction. Oh, don’t forget local papers, as well as the Tyee, the Strait, etc. If enough people start asking questions about this damn toll, Liberals might be in trouble.
    Soap box now put away for the nite…
    Kerry in Abbotsford


    1. Sorry for the delay, I’ve been moving.

      While the NDP recently brought this up as the transcript I posted says, sadly the NDP did not comment years ago when I broke this story and stayed silent on it until Claire brought it up. And then she let it go and didn’t pursue it. The question again is that although they are concerned about P3’s they wont commit to not using them themselves either.


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