Replacing the George Massey Tunnel with a bridge would cost $3.5 billion to build, but another $8 billion in debt servicing, according to documents leaked to and by the NDP Party.
The party says it filed a freedom of information request several months ago to obtain information on the project’s financing. The documents released had financing details redacted, the NDP press release states.
But the party then received leaked documents that detail the proposed bond issues for the project. It released those documents Friday May 5, along with a press release that states, “financing costs for the bridge will add another $8 billion in costs that British Columbians will be paying for the next 50 years - bringing the total bill to nearly $12 billion.”
The two-page document shows the province proposes to raise the capital for the bridge through the issuing of 18 bonds, at $200 million to $525 million each, with various maturity terms.
During the construction phase, the government would issue seven-year term bullet bonds with a 3.15% interest rate, as well as 30-year bonds at 3.57% to 3.9% interest rates.
The total provincial interest costs on the bonds between 2017 and 2047 would be $5.2 billion, “prior to federal assistance.” In other words, that’s how much the interest from the province would be without federal money.
The total interest costs between 2017 and 2068 – when the debt would be retired – would be $8 billion.
There was no money earmarked for the George Massey Tunnel replacement project in the last federal budget. The BC Liberal government said it would move ahead with it anyway.
The leaked documents are just two pages long, so there is no explanation on how revenues from tolls factor into the long-term financing and debt repayment.
At a press availability this morning, Premier Christy Clark was asked to explain the $8 billion in interest payments.
She either would not or could not explain it, saying only “It’s going to come in on budget, it’s going to come in on time, and we’re going to get it done like we said we would.”
However, B.C. Transportation Minister Todd Stone later likened the interest payments spread over 50 years the same as a mortgage on a house.
“Yes, there will be a loan and it will be spread out over the next 50 years – like a mortgage," he said in a press release.
"As an example, if you bought a home for $750,000 today and pay it off over a 35- year period, you'll pay nearly $1 million in interest. You wouldn’t say you paid $1.75 million for the home. It’s the exactly the same principle for the Massey Bridge – and the reason we're doing it is to keep toll rates low for commuters.”