American Dream

An arbitration panel has ruled by 2/1 in favor of 407ETR in an important dispute with the provincial government over 2002 as a base year for calculating permissible toll rates or incurring congestion penalties under the terms of its 99 year concession. The majority of the arbitration panel James Redmond, an Alberta lawyer and George Finlayson, retired from the Ontario Court of Appeal ruled that based on the facts of the case and the concession contract that 2002 was properly designated the base year. Moreover they said the province had accepted 2002 as a base year, and could not reverse itself. Another arbitrator dissented, siding with the province.

The case revolved around whether the concessionaire completed extensions to the tollroad in time for designating 2002 as 'base year'.

This is one of many quarrels which the leftist provincial government of Dalton McGinty has picked with the concessionaire since coming to power some 20 months ago. They had campaigned in elections saying they would "roll back" toll increases.

The province based their case for 2002 not being a valid base year on the fact that a single off-ramp at Mavis Rd - one of 197 entries or exits - was finished later than the extensions. Lawyers for 407ETR argued that this off-ramp was not one of the extensions themselves, and pointed out that the delay was caused by the government itself. Under agreements between 407ETR and the government, the government was responsible for acquiring right of way for the ramp. Government delays in delivering right of way to the concessionaire was the cause of the late opening the ramp.

Enrique Diaz-Rato, president and CEO of 407 ETR said in a press release this evening: "We have demonstrated our compliance with the contract in another dispute initiated by the province. We are very pleased with the decision, although we would have preferred to settle the existing disputes with the province amicably, rather than through litigation."

We asked for a copy of the arbitrators' ruling but were told under the terms of dispute resolution it cannot be released unless the arbitrators' decision is appealed. The government has previously appealed the arbitrators rulings, and taken them to higher courts when it lost in the first court. A slew of disputes are in arbitration or litigation.