STANDING COMMITTEE ON PUBLIC ACCOUNTS
Mr. Russell MacKinnon
MR. CHAIRMAN: Good morning, ladies and gentlemen, welcome to today's Public Accounts Committee. Today our witnesses will be representatives of the Halifax-Dartmouth Bridge Commission. The Chairman, Mr. Larry Doane, is with us, and we have the General Manager and CEO, Mr. Steve Snider, and the Treasurer, Mr. Ken Munro. Also in attendance we have representatives from the Auditor General's Office, Mr. Roy Salmon and Ms. Ann Ryan. I will allow the members of the committee to introduce themselves, starting on my immediate left.
[The committee members introduced themselves.]
MR. CHAIRMAN: Generally speaking, gentlemen, how we start off is we will allow for 5, 10 or 15 minute opening remarks, then we will open up the floor for questions. With that, you have the floor.
MR. LARRY DOANE: Good morning, gentlemen. I must say I was a little surprised when I received the invitation to attend this committee hearing to note that it was at 8:00 o'clock in the morning, I really didn't think you folks started work that early. I suppose with the weather we have had, you might as well be here as outdoors.
I would like to start off with the notes that we sent you, and just describe some statutory matters affecting the Bridge Commission. Just to give you a flavour of how we operate, within what bounds and what rules we operate may be helpful. First of all, we were incorporated back in 1950, so this is really our 50th birthday this year. I am not sure exactly which day we were incorporated, but it was about 50 years ago. Our assignment was to construct, operate and maintain bridges across Halifax Harbour and the Northwest Arm; that, we have done to date. Our board has five members appointed by the province by Governor in Council, and four by the municipality. From the provincial appointees come the chairman and the secretary of the commission. We are appointed for three years. We formulate our own by-laws but they must be approved by the Governor in Council. We hire people on our own, and we establish their salaries and wages.
Subject to approval by the Governor in Council, we are able to borrow money and provide security, but that is subject to provincial approval. We do have expropriation powers included in our Act. We are a public utility, however that does render us subject to the Nova Scotia Utility and Review Board provisions. In our Statutes we are specifically exempt from control by the Utility and Review Board on capital expenditures, on borrowing and on depreciation reserves. The legislators saw fit to exclude the Utility and Review Board, or the Public Utilities Board as it then was, from regulating us in those areas.
However, our most telling regulation from the Nova Scotia Utility and Review Board is on our tolls, we do not increase or decrease our tolls at will. We have to go to the Utility and Review Board, and that board calls hearings, advertises our intentions and, of course, we go through quite a process to get toll increases.
There is a provision in our Statutes that after all of our indebtedness has been retired, the province may take over the assets and obligations of the commission. I always thought that clause was unnecessary, because the province has the power to take over in any event, all they have to do is change the legislation. However, it is there, I suppose, for clarity. One of our statutory obligations is to present an annual report to the province, with financial statements audited by a private sector auditor appointed by the Governor in Council. We are also subject to the Auditor General's review.
Now, in the interest of telling you a bit about our operations and much more interesting than our Statutes, Steve Snider, our General Manager and CEO, will talk about operations.
MR. STEVE SNIDER: Good morning. I am going to speak on three sections this morning, traffic, operations and electronic toll collection. The Halifax-Dartmouth Bridge Commission first opened the Macdonald Bridge on April 2, 1955. Our first full year of operation saw us handling about 2,770,000 vehicles. The amount of traffic that we experienced in that first full year was quite in excess of what had been anticipated, and it didn't take very many years before the commission was looking at opening a second bridge.
Indeed, the MacKay Bridge was opened on July 10, 1970. The first full year of operation for the two bridges collectively, together, saw us handling almost 12 million crossings.
The year 1999 saw us handling 29,832,000 vehicles, which was about a 3.1 per cent increase over 1998. What is interesting is that the 1999 number just narrowly missed setting a record. Our record year for traffic was in 1988. The only reason that we didn't exceed that was that 1988 was a leap year and had one extra day. As a result, we were short by a few thousand vehicles.
For 2000, we are anticipating this year that we will have almost 31 million crossings, 30,800,000. That will equate to an increase of about 3.2 per cent. In terms of vehicular traffic, there is no question that we have seen some significant growth over the last couple of years, and that we at the commission expect that as the local economy grows, so will the traffic on our structures. Currently, cars and light trucks represent about 96.5 per cent of our traffic, the balance of 3.5 per cent remaining is made up of straight trucks, tractor trailers and buses.
The operations at the Halifax-Dartmouth Bridge Commission, of course, are run on a 24 hours a day, 7 days a week, 365 days a year basis. To the best of our knowledge, by the way, we have only experienced one closure of either of the structures due to inclement weather, and that was back in December 1963. We closed down for several hours because of a blizzard. We currently operate a total of seven traffic lanes on the two structures - four on the MacKay with two dedicated in each direction and the Macdonald has the three lanes, the third lane which reverses at 11:50 a.m. and 11:50 p.m. consistently. The addition of the third lane on the MacDonald Bridge has effectively increased our peak period capacity by 33 per cent in that instead of having three lanes in each direction we now have a total of four lanes in each direction.
The congestion-reducing effects of the third lane and electronic toll collection have significantly helped to reduce congestion for our commuters. Effectively, we have also reduced significantly the fuel emissions and engine idling time. Where our patrons once experienced 10 to 15 minute delays at the bridge head during peak periods, we now have virtually smooth traffic flow.
Electronic toll collection, better known as MacPass was introduced in October 1998. It was well-established technology; these transponders have been used in other operations in the United States for about 10 years. We currently have over 25,000 transponders in use, we just reached that number earlier this month. We are still issuing transponders at the rate of about 800 per month. MacPass usage currently represents approximately 24 per cent of our total traffic volume. The peak period traffic covered by MacPass is about 30 per cent. The MacPass usage will account for in excess of 7 million crossings this year on our two structures.
There is good time savings to be had between use of coins and tokens versus transponders, and through some rough calculations we have estimated that MacPass this year will reduce engine idling time on our plazas by about 21,000 hours. The remarkable thing about MacPass is that it has had tremendous acceptance by the commercial sector. When I say commercial sector, we speak of class 2's, 3's, 4's and 5's as being pretty well exclusively commercial traffic and 70 per cent of our total commercial traffic has switched over to MacPass. Clearly, the commercial users have seen the benefits of MacPass and have taken it up quickly. Over the next couple of years, the Halifax-Dartmouth Bridge Commission will continue to promote MacPass in an effort to further reduce our plaza congestion.
MR. DOANE: Thank you Steve. Gentlemen, just in the interest of sending out our accountability which is primarily to the province, but also to others, I will just refer quickly to a few items.
I did refer to the statutory accountability issues in my first remarks. In a non-statutory basis, we do provide quarterly financial statements to the Department of Finance and we follow the provincial purchasing guidelines.
Third party accountability is very important to us. You may have noticed from information provided to you that we have issued toll revenue bonds, $100 million of bonds and, of course, were subject to agreement with the bondholders and subject to the terms therefore of those bonds. That is somewhat restrictive - in fact, the bondholders, in our agreement with them, specify the use of our funds. The Security Commissions, because we have a public issue of bonds, also have to be satisfied right across Canada so our disclosure requirements for Security Commissions are as any commercial operation would be.
Certain items we have no direct restriction, but we have certainly some indirect. On asset purchases we are not directly restricted on what assets we purchase unless it is a new bridge. In the case of a new bridge, we have to have provincial approval. We are not restricted on our employees hired or on the salaries paid.
We do also control ourselves in that we watch our expenses pretty closely. We really have three categories of expense - operating, maintenance, and administration - which we call OMA, is the one we have the most control over and I will refer to that in a moment. Then we have financing costs, primarily interest, and we don't control that from year to year and that is part of our financing agreement and then depreciation of our capital assets.
In the area over which we have the most control, our OMA, we budget carefully for our expenses. Our budget is approved by our full board; we budget twice a year. I sent out for you in the materials that I provided a 10 year comparison of budget to actual. There are two things I think to be noted there - over the 10 year period only one year did we go over budget slightly. We went over by some $60,000 and in trying to find the reason, we looked back and discovered that what had happened, our budgeting in that year, we had missed the
fact that there would be 27 pay periods instead of 26, so we had an extra pay period in that year that we had not budgeted for, so it did push us slightly over, but $60,000 on $4.5 million is still pretty close and that was the only year that we went over budget.
Something else to notice, if you have seen the figures, is how consistent our expense figures have been. That is operating, maintenance and administration - in the beginning it was $4.2 million, up to $4.6 million at the end of the 10 year period, so that is pretty consistent through a period of the 1990's. That is really the whole decade of the 1990's and there was certainly more inflation than is reflected in our expense increases, so we are quite pleased with that.
I have also noted some financing - and you may have some questions on this. First of all, I would like to note that we are self-supporting. We do not have any appropriations from the province whatsoever and our bond issue is not guaranteed by the province. We were able to make the bond issue on our own because of our bond ratings from DBRS and Standard and Poor's which came in at AA-low and A-plus, respectively. We are quite pleased with that and we included a brief summary from each of the bond raters with our materials to give you an idea what they thought of us.
We refinanced in 1997, primarily because we were doing the major project of three lanes, but also to bring our interest rate down. We had an interest rate of 11 per cent, upon re-financing we were able to get it down below 6 per cent. Now, on $100 million, that is a saving of $5 million a year, which we thought was a pretty good result.
Our long-term debt at the moment is $123 million total and if we net out the amount of reserves we have set aside for repayment, it is at $8 million as of the end of September. That nets us down to $115 million.
I think, Mr. Chairman, those are all the remarks I want to make. All three of us are available to answer questions.
MR. CHAIRMAN: Thank you, Mr. Doane. We will start off questioning with the NDP caucus and perhaps we will start off with 20 minute rounds, if that is agreeable? Okay.
Mr. Holm.
MR. JOHN HOLM: You have answered a number of them - one of them being in your last comments - that I was going to ask. I note that the bond rating, the $100 million comes due, I think in 2007?
MR. DOANE: Yes, the bonds come due in December 2007.
MR. HOLM: Okay, that is for the $100 million bond. Now, in addition to that, you have another $23 million?
MR. DOANE: Yes, $23 million from the province at the moment.
MR. HOLM: That is a debt to the provincial government then?
MR. DOANE: That is correct.
MR. HOLM: Was that taken out during the time of the recent expansion as a . . .
MR. DOANE: Yes, it was. It actually was financing in conjunction with our bond issue. The Department of Finance suggested that we have a line of credit just to supplement the bond borrowing and I believe that their feeling - they worked very closely with us on our financing by the way - was that it helped because our bond interest rate was a fixed 10-year interest rate and the provincial loan is a floating rate.
MR. HOLM: What rate is the province charging you?
MR. DOANE: Well, it is floating. As I say, at the present time, I think it is around 6.2 if I . . .
MR. KEN MUNRO: Yes, it is at 6.147.
MR. HOLM: Okay, so it is a little bit more. Has there been any consideration to pay off the province or get rid of their line of credit and lock in at a fixed rate?
MR. DOANE: The provincial loan is repayable in December, 2007, the same time as the bond, and we are accumulating funds in various accounts to enable us to apply those funds to both loans. As I mentioned, I think in the materials I put out, although the bond and the provincial loan are both completely due in 2007, our accumulated funds will not be 100 per cent sufficient to pay it off totally, so we will have to do a refinancing in 2007, but the provincial loan is payable then.
Now, the provincial loan, we are permitted to make payments at any time and we do not have a fixed schedule of payments. At the present time on our reserve funds that we are holding for repayment, we are making more interest than we are paying. So it would seem inefficient to use that money to pay down debt before have to.
MR. HOLM: What is the projected debt? You do long-term planning or guesstimating anyway - and that is pretty well all you can do sometimes when you are talking about the money markets, but when the 2007 date rolls around - based on revenue coming
in and projections for maintenance traffic volumes, et cetera, what do you anticipate, what is the target for the total debt in 2007 when the refinancing occurs?
MR. DOANE: I really cannot tell you that. I am sorry, I do not know. There are although we are financing in Canadian dollars now by the way, and have been since 1991 . . .
MR. HOLM: And that is a very positive move. I appreciate that, yes.
MR. DOANE: We know the kind of dollars we have to use at least, although that part is fixed and our interest rate insofar as the $100 million is concerned is fixed. It is a floating rate with the province, but on the bonds it is fixed; so we do have certain parameters that we can work with on projection, but our problem is we do not know what major capital items might come along between now and then.
MR. HOLM: I appreciate that.
MR. DOANE: And we do not know what interest rates may be on our investments.
MR. HOLM: No, and so that is why I said a guesstimate, okay. I did not say an estimate, I said a guesstimate. You have managed to put away $8 million in different accounts towards the fund; how long has it taken the commission to develop that $8 million reserve, over how many years or months?
MR. DOANE: Our cash flow - and I have not really worked out the figure you are asking for - is roughly $9 million a year. We intend to put all of that into reserves and earn interest on it and use it to pay the debt in 2007. The reason there is only $8 million there now is that we have been using our cash flow, along with the borrowing to pay for the project. So there has been some use of our funds in paying for the project.
MR. HOLM: So unless some major capital expenditures come up, which could . . .
MR. DOANE: Oh, yes. In fact there is one that we know will come up before 2007.
MR. HOLM: But is it fair to say that of that $9 million, at least $5 million of that will be at least able to be applied against the debt in 2007? So that is at least $45 million or more, $45 million to $50 million off of the $123 million. Is that a reasonable kind of guesstimate?
MR. DOANE: Yes, as a guesstimate that is reasonable.
MR. HOLM: I appreciate that you cannot foresee any more than I can when the leak is going to spring in my roof at home and I am going to have to do some repairs, but you do some kind of budgeting and the commission has certainly had a lot of experience managing and running bridges and I would think the general condition of them. So although you cannot
pin it down exactly to the million dollar figure, I am surprised that there has not been some kind of long-range projection as to where, in terms of the financial situation, it would be in 2007. I will just say that. If I could, in terms of the MacPass, I cannot even remember what I paid for it when I bought mine, I think it was $30?
MR. DOANE: Yes.
MR. HOLM: How much additional revenue has been brought in by the sale of MacPasses?
MR. DOANE: I am going to turn that over to Steve. He is more knowledgeable on some of these operating issues.
MR. SNIDER: Actually through the sale of the transponders themselves, nothing. I say nothing, the transponders have been costing us $29 and change. So by the time you add on the cost of a couple of Velcro stickers and some packaging material, it has just been on a break-even basis.
MR. HOLM: In terms of the actual then in operation, there is a lot of change you do not have to count and a lot of tokens you do not have to sell. Have you done any kind of projections in terms of what the sale of that number has actually saved the commission itself?
MR. SNIDER: To this point in time, we have actually spent more money.
MR. HOLM: Oh, is that right?
MR. SNIDER: Yes. Our focus with MacPass was exclusively customer service. We knew at the beginning that it would cost us more. The possible elimination of tokens at some point in time down the road may generate some savings, but right now we only have about two people working in our accounting area on a continuous basis. As long as we have cash and some tokens, we are still going to have to have that same number of people. So there is not a great amount of labour savings, but it has been a customer service focus.
MR. HOLM: On another issue, in terms of the actual tolls that are charged, and you have provided us with the rates on all the different sizes and so on of vehicles, are there any plans for rate changes - either up or down - any discussions of that?
MR. DOANE: None, no change anticipated either up or down. As I mentioned, we are quite fixed. Our parameters are somewhat more fixed than they used to be when we had foreign debt and we find our tolls are sufficient to handle our debt and handle our operating expenses. So we are quite satisfied that the tolls are sufficient for the foreseeable future. I cannot predict. Traffic might drop 10 per cent or 20 per cent, but I doubt that very much, or we might have some sort of disaster, but other than that, we do not . . .
MR. HOLM: Hopefully not.
MR. DOANE: Even in our insurance, which I think we provided in the materials, we are insured for loss of revenue for a period of time if we had a really big disaster like a ship running into a bridge or something. So we should be able to replace our revenues in the event of a major disaster.
MR. HOLM: Certainly I know I, and I think most users of the bridges, and Nova Scotians were very pleased that the debt was brought back to Canadian dollars. We saw what it cost us the last time in terms of the debt when a former Progressive Conservative Government had taken that debt off, sure, but that is water under the bridge so to speak. So we will not get into that one at the moment.
In terms of the expansion that had taken place and the work on the Macdonald Bridge, what was the final actual cost and how did that total actual cost compare to the projected costs of that expansion?
MR. DOANE: I am using approximate figures here.
MR. HOLM: Yes.
MR. DOANE: I should mention the expansion also included replacing and, in fact, the project started as a replacement of the approach decks. Just for clarification, the approach decks are the non-suspended portion of the bridge, this is the Dartmouth side. So the bridge here is really placed on piers similar to, say, the Confederation Bridge going to P.E.I. It is not a suspension bridge out to here, and then a much shorter piece on the Halifax side. This is a cross-section of the Macdonald Bridge.
[8:30 a.m.]
So these approach decks were made of reinforced concrete back in the early 1950's, and it was starting to crumble, frankly. The concrete was crumbling and . . .
MR. HOLM: I remember watching that being done.
MR. DOANE: Yes, and we do annual inspections of the bridge. We have our engineers do an annual inspection. They had told us we were getting to a danger point.
MR. HOLM: But in terms of the total projects, I think . . .
MR. DOANE: The total project was in the vicinity of $56 million.
MR. HOLM: And what had been projected?
MR. DOANE: That was approximately correct, yes. We were actually, I think, about $700,000 under our projected, our budget.
MR. HOLM: That was the figure I was looking for. Now when you say you were $700,000 under the projected cost, did that include the cost of the lights that were put on the bridge? Was that where the $700,000 went?
MR. DOANE: No, we had not projected the lights. We had not planned the lights when we set up the project and decided to do the project.
MR. HOLM: Was that paid for out of that, the fact that it came under budget, what was projected, as I understand it.
MR. DOANE: Yes.
MR. HOLM: Okay. I understand those lights cost about $600,000.
MR. DOANE: That's right, a little under but only slightly.
MR. HOLM: Yes, okay. So we have $600,000 candles, if I can, this is our 50th birthday, so the commission has $50,000 candles sitting on the Macdonald Bridge.
I am just looking, for example, at the budget under Maintenance. The budget for 2000 is $538,000, that is what is projected. I was one who was making some unkind comments about that $600,000 expenditure, given the needs, I appreciate - everybody doesn't necessarily - that the Bridge Commission is not the Department of Health, it is not the Department of Education, but here we are, we went out and spent $600,000 because we came in under budget. That sounds to me like, you know, people are critical of government departments that if you have a few dollars left over at the end of the fiscal year, before the year runs out, you run out and spend that money to make sure that it is gone and that your budget or so on would not be reduced the following year.
Here we spent $600,000 for lights. I guess they have to be lit, but I am not convinced that that was necessarily a wise move and, if you just consider even the interest on that $600,000, if that had been collecting interest sitting in the bank, that would have been generating a few more dollars and, when 2007 rolled around, my guess is that that would be close to $1 million, in terms of the $600,000 plus the interest that would have grown on top of that. I would like to know, did a Minister of Finance or the Finance Department give authorization? They are one of the co-signers of the loan or a guarantee of the line of credit. Did one of them give authority to spend that money and, if so, when and who was it?
MR. DOANE: I don't think there was any formal approval from the province. We don't require that but they were certainly aware of it.
MR. HOLM: Did they express any reservations?
MR. DOANE: No, I don't recall any reservations being expressed. We had been contemplating this for some time, it wasn't something we decided to do just because we had some money left over. We had been discussing this at our board level for some time. In fact, in our 1998 annual report it was mentioned there. It was in a press release that we put out when we introduced the 1998 annual report to the media. At those times it was referred to as something we would like to do but we didn't indicate there was a firm plan for it but that we would like to do it. So the reason for using the money was because we didn't have to go out and borrow it. It was convenient in that sense.
[8:35 a.m. Mr. David Morse took the Chair.]
MR. HOLM If I could, there was just one other question I would like to ask. It is something you touched on briefly before, that is the safety issue, like a ship running into the pillars or the supports of the bridges. I would like to ask - and I know about the supports that have been put around the cages or stone cribs and so on. I am interested if there has been any kind of an evaluation or assessment done as to potential, increased potential risk, or measures that would have to be taken because of, let's say, the new supertankers, super post-Panamax ships. We are starting to have some of those larger vessels visiting our port and we hope that some day there will be even more. Those would potentially pose a greater risk if they were to run into one of the bridges than, I don't know if we call them conventional ships, but the traditional ships that have been coming to our port. Has there been any kind of an evaluation or lookout as to whether or not additional measures need to be taken to ensure the security of those bridges in the case of a collision?
MR. DOANE: I am not sure if the members of the committee are familiar with our procedures now. What we do at the present time, any time a large ship - not yachts and things - but large commercial shipping goes under our bridges, we station people, commissionaires on each end of the bridge so that if something does happen, like a ship running into one of our towers or if the ship is too high and happened to hit the roadway, we would be able to immediately close the bridge to traffic and clear it. We could clear it then immediately and stop any new traffic coming onto it. So every single ship that goes under those bridges is monitored by our people at each end of the bridge. We monitor the harbour traffic, radio traffic and we know when the ships are coming and we put the men out there.
Now the question of the bigger ships, the post-Panamax ships, that is something we haven't considered as a board, as a greater risk. We are, of course, aware that we have a height limitation and there is nothing we can do about that, so unless there is something that I am not aware of, Steve or Ken might be able to add.
MR. SNIDER: The post-Panamax ships, my understanding is that they are as much wider as they are higher. We have a clearance under the Macdonald Bridge currently of 45.6 metres. The bridge has a fair amount of movement to it, meaning that with expansion and contraction from the cold of the winter to the heat of the summer, we could have the bridge drop as much as 11 feet at centre span. Thank God that suspension bridges move, that is what they are supposed to do, move.
MR. HOLM: I feel it sometimes, too.
MR. SNIDER: We deal with the Queen's Harbour Master and with the Atlantic Pilotage Authority and the Canadian Coast Guard traffic office on a continuing basis. Any time we have a vessel coming in that is within two metres of our bridge, they notify us of that and we stand a special watch. But at this point in time, no, there is no tremendous concern. We do carry on discussions with them on a continuous basis. The only thing we have to watch is that we have a traveller that moves under the bridge for purposes of maintenance. That reduces the clearance by about 1.5 metres. So at times we have moved that traveller out of the way so that antennas won't strike it.
Generally speaking, no, we fully anticipate that post-Panamax vessels will be able to continue to navigate the harbour with no big threat to the bridges.
MR. CHAIRMAN: Thank you, Mr. Snider. I would like to recognize the honourable member for Cape Breton West.
MR. RUSSELL MACKINNON: Mr. Chairman, first of all, at the outset I would like to congratulate the Bridge Commission, their staff and the Board of Directors. I have read the reports and the activities that have taken place over the last several years, particularly since your last appearance here at Public Accounts. I must say, as a small business person, I am quite impressed with the way you have taken control of the financial situation and the overall management.
There are some issues, obviously, as time passes and activities change your priorities, your objectives and planning strategies. Looking at metro, the Halifax-Dartmouth area and in general the Halifax Regional Municipality, the population trend is obviously on the upswing. Estimates are that perhaps over the next five years there will be another 30,000 increase in population. What is the saturation point, or the maximum capacity that you feel both bridges will be able to handle in terms of traffic flow?
MR. DOANE: I am afraid that we don't have good, hard numbers on that. The last traffic study that was done was in the early 1990's. We are very much aware of that. In fact, in the early 1990's, we had a traffic study of our own completed. There haven't been any that we are aware of since then. We do stay in close touch with the municipality. Steve attends
meetings with Mr. McCusker of HRM, who is the traffic authority for Halifax Regional Municipality. We do try to keep on top of it that way.
As far as population is concerned, I think the next census is next year. We will, of course, be watching that. The traffic seems to increase with the economy, and we are in a good economy right now, as I think everyone would agree. Our traffic has increased the last two years. We don't really know if it will continue at that pace, but if it does, I would think we would have a major congestion problem in about 10 years. I really can't tell you whether traffic will continue to increase as it has the last two years. We think the third lane has increased our traffic, and the ramp and the MacPass, because when you put them all together, it makes it more convenient for travellers.
People do have a choice. For example, people who live in Bedford and north of Bedford - and that is an increasing population out there - they have a choice which side of the harbour to come down. If they are heading for peninsular Halifax, work in the hospitals or the universities or downtown, they can come down either side, and many of them choose to come down the Dartmouth side and cross the bridge, if it is convenient. We have made it much more convenient, as Steve indicated earlier. We think that we have cut the congestion by more than half, and we are getting very favourable comments from our customers on that.
Steve mentioned the push we have on to get more MacPass in operation; if we can do that, we can handle a lot more traffic. Surprisingly that little pass makes a tremendous difference in the wait time at the toll booths; you just don't wait at all, you just go through. That makes a tremendous difference in congestion. Our next push, actually, is to get more MacPass out in the public hands. We are looking now at trying to improve the convenience of acquiring a MacPass. We believe that will help our congestion considerably.
Right now congestion isn't a problem for us, but it could become a problem over time - there is no question. We will be watching both the population and the traffic statistics to see what happens. Also, we are subject to the road planning, the traffic planning that HRM and the province may do. Where the roads go can have a tremendous effect on our traffic. If you look at the MacKay Bridge, for example, and what happened on the Dartmouth side after that was built, the burst of growth in Burnside in and around the bridge was incredible and, in large measure I believe, because of the road system that was put in there. So where the roads go in makes a tremendous difference to us, and we do keep on top of that.
MR. MACKINNON: So you feel that the third lane has pretty well solved your congestion problem now. I interpret your comments about the MacPass as being a way to extend the lifeline so to speak, in terms of when you would hit that saturation or total congestion point beyond a 10-year period. Is that your intent, to try to promote the MacPass as one of your elements to reduce that congestion?
MR. DOANE: Yes. We have physically maxed-out now, in terms of physical structure; we cannot add any more lanes. The two bridges are now at maximum capacity in terms of what can be done to them. We are relying now on improving the traffic flow through the use of the MacPass.
MR. MACKINNON: Last week we had representatives from the Halifax Port Authority before the Public Accounts Committee, and one of the suggestions is that they may be looking at starting the construction of a third container terminal to handle the increased container traffic. That would be, obviously, in the north end of the harbour. I would suggest that would have an impact on the overall traffic as well, because it is integrated.
Just to shift the focus slightly, because you are between two different entities here, really you are between the municipality and the province and you are trying to operate in harmony with both of them, has there been any discussion with Metro Transit in terms of merging your operations with Metro Transit?
MR. DOANE: Not that I am aware of. We do talk to Metro Transit; in fact they are one of our major customers, and we do the best we can to accommodate them. We have, over time, had separate bus toll booths and we try to make things convenient for them, and they have a special toll arrangement with us. Our tolls are mostly based on the weight of the vehicle but, in the case of buses, because they are mass transit, their tolls are about half what they would be if we charged them on a strict weight basis as we do with other vehicles.
MR. MACKINNON: Have there been any discussions between you and the province in terms of this latest initiative by the province, in terms of deregulation? There was a Red Tape Reduction Task Force - at least in name - that suggested deregulating the fees between inner-city transit systems.
MR. DOANE: I am aware of the commission.
MR. MACKINNON: Have there have discussions between you and this Red Tape Reduction Task Force?
MR. DOANE: I am not aware of any. I will turn to my colleagues. No.
MR. MACKINNON: Obviously that deregulation would have an impact on your ability to offer this particular rate to your customer, would it not?
MR. DOANE: I'm not sure, I don't know enough about the deregulation.
MR. MACKINNON: Well, just to clarify, the government appointed five Tory backbenchers and one business person from metro here, in the form of a task force, to go around the province and find ways to eliminate red tape. One of their recommendations is
to deregulate the busing fees between various transit organizations on the inner cities. Of course that would mean that you wouldn't have set rate structures, as per the Utility and Review Board.
MR. BARRY BARNET: Mr. Chairman, on a point of order, maybe clarification; the recommendation has nothing to do with inner city transport. It has to do with transportation in the province from city to city or town to town. The recommendation doesn't deal with Metro Transit. If the member had read the report, he would know and understand that but obviously he is reading reports or getting information from bad sources.
MR. CHAIRMAN: That is not a point of order.
MR. MACKINNON: I agree, Mr. Chairman, it wasn't a point of order. It was certainly ill-conceived and ill-constructed. Whether it be between cities or inner city, it is essentially the same impact because when you deregulate, you are going to get into the open market structure, you are not going to be controlled by the Utility and Review Board. So that would obviously have an impact on your ability to offer a special rate to, let's say, Metro Transit, am I correct?
MR. DOANE: Well, it would. If it is deregulated, it would allow us much more freedom. At the moment we have very little self . . .
MR. MACKINNON: So really what you are saying is your fee structure would have nowhere to go but up. If you have given them a premium rate now and that type of competition kicked in, I mean would they not be in a position where they would be paying more in line with what you are . . .
MR. DOANE: Oh, I don't think so. You have to remember that almost half of the board is municipal representatives and the municipalities contribute to the Metro Transit deficit each year. They are not anxious to see the bridge tolls go up on buses.
MR. MACKINNON: So what you are suggesting is there could be friction from the municipal level, in terms of adopting that type of policy.
MR. DOANE: Let me put it this way, we had a very close vote the last time we went for a toll increase on buses, which we did once while I have been Chairman. We had a very close vote. The municipal members of the board were not anxious to see any increase.
MR. MACKINNON: Of course a provincial law would overrule that, wouldn't it?
MR. DOANE: Well yes, of course.
MR. MACKINNON: Have there been any discussions with the province in terms of the province's intent to take over the Bridge Commission?
MR. DOANE: No, none in my time as Chairman. I have been Chairman since late 1992, about eight years now, and there have not been any discussions with me about the takeover of the Bridge Commission.
I notice the question was asked in earlier hearings of this committee, in 1991 or 1990, I am not sure in which year.
MR. BARNET: It comes up every 10 years.
MR. MACKINNON: I asked that particularly because the Minister of Finance, and the government in general, has indicated that what they wanted to do was reduce the total number of agencies, boards and commissions. Obviously if, according to your projections, the Bridge Commission will be debt free within, what, the next 20 years?
MR. DOANE: Probably.
MR. MACKINNON: Probably, and actually it would be, some would say, a cash cow, barring some unforseen capital expense or whatever. You would be generating a profit of, what, $8 million?
MR. DOANE: Oh, I couldn't tell you in 20 years.
MR. MACKINNON: In today's terms.
MR. DOANE: We are generating profits now of between $5 million and $6 million and that is after about $4 million of depreciation, so we are generating about $9 million a year in cash flow. I could not hazard a guess as to what it would be in 20 years time.
MR. CHAIRMAN: The honourable member for Dartmouth East.
DR. JAMES SMITH: Mr. Chairman, I want to thank the witnesses for coming, from the point of view of bringing us up to date on their activities. I just want to say how I appreciate the administration and the whole way of doing business. I think that's been futuristic as well, as we could be in this part of the world. I for one, think the lights were a great thing, as opposed to my colleagues on the left, and sometimes very left.
It is a capital city. I think there are a few things that should make it look like a capital city, along with Citadel Hill and a few other promontories, I think this is one of them. I am very pleased. I appreciate that this morning, when I leave here and in an hour I will go down and get on, from Barrington Street, the ramp there, and it is almost a joy to go to the bridge
now and the lights have added to that, the accessibility. I have travelled this bridge since I started to work in Dartmouth and I come back and forth to hospitals very frequently, sometimes several times a day, and I have seen the ups and downs of that. So we have had a history in the 1970's and 1980's of misfortune - and financial. It seems to be the history of this province. I don't think they were unrelated. I believe the way business was being done in the province at that time, that some of the players were key in both areas. I don't want to get into that now, that is history, hopefully.
Some areas I was wondering about, with jobs generated and salaries, I read this last evening and I know there is some information on that, but just roughly, what is the ballpark figure, how many jobs? I noticed when you were here before, some of the old notes we had, they spoke of the number of jobs created. So as a job generator in this area, what is the number of jobs, and roughly, what is your salary total?
MR. DOANE: Because it might embarrass my colleagues, I will start off by telling you that Steve's salary is $74,000 a year and Ken's is $66,500, roughly, just so they won't be embarrassed because I am going to now turn it over to them to talk to you about . . .
DR. SMITH: I didn't ask you that specifically but I think that is fair enough and it is public knowledge anyway, so . . .
MR. DOANE: Well, that's right, we are a public body.
DR. SMITH: I was thinking more as an economic driver as an employer, but thanks for that information.
I think my time has run out. Maybe we could come back for the second round and have a turn.
MR. CHAIRMAN: We will now turn it over to the PC caucus.
The honourable member for Colchester-Musquodoboit Valley.
MR. BROOKE TAYLOR: Thank you, Mr. Chairman. I am just wondering, perhaps to shift gears a little bit, what percentage of the Halifax-Dartmouth Bridge Commission's traffic, so to speak, on the A. Murray MacKay Bridge, is commercial?
MR. DOANE: On the MacKay Bridge, well, again I will have to turn to our operations people to - first of all, I should clarify that we do not allow trucks on the Macdonald Bridge.
MR. TAYLOR: I said MacKay, sir.
MR. DOANE: Yes, but I wanted people here to understand that we don't allow trucks. Our total commercial traffic is around 3.5 per cent of our total volume that is commercial. Maybe Ken can tell us . . .
MR. KEN MUNRO: On the MacKay Bridge in 1999, we carried 19,747,577 vehicles of all classes. Of that 19 million, we had what we call Class 1, which is our private-passenger cars, small vans, small pickup trucks, that was 18,887,000. So we were carrying approximately 900,000 commercial vehicles - what we classify as commercial vehicles which are the various levels of trucks, plus the buses.
[9:00 a.m.]
MR. DOANE: If my quick calculations are correct, that would be about 5 per cent of the MacKay Bridge traffic.
MR. TAYLOR: I looked at the schedule of tolls and I understand that if you pay cash, it costs approximately $5.25 for your average tractor trailer to travel the MacKay Bridge and . . .
MR. DOANE: Yes, $5.25.
MR. TAYLOR: So, if approximately 5 per cent of your traffic is commercial in nature on the MacKay Bridge, and I guess coming from that industry, my experience has been that especially in the mornings and evenings, a lot of commercial vehicles are trying to get to Halterm or Ceres. I am wondering if the commission ever discussed possibly creating a commercial lane only during certain times of the day as is done in other Canadian and American cities? To expedite commerce, to let this industry move a little bit quicker and cheaper.
MR. DOANE: We haven't looked at it in my time, which is eight years, but Ken, you have been around the longest with the commission, have we looked at separate trucking lanes on the MacKay at any time?
MR. MUNRO: No, we have not looked at separate trucking lanes at all because of the volume of traffic that is private passenger. The way the traffic is moving these days, back and forth between the cities, it is almost 50 per cent each way. So, with your small class of vehicles, your Class 1 which is 97 per cent of our volume, that would not lead to a steady flow of our traffic.
MR. TAYLOR: Mr. Chairman, I am talking about particular times and I certainly do not mean a dedicated lane from east to west, north to south, I was especially talking about a dedicated booth to enable these trucks to flow through a little easier, quicker and I would like to point out with the high price of fuel, a little cheaper.
MR. MUNRO: We have basically achieved that for them now with our MacPass because of the vehicles that you are talking about, 70 per cent of that volume is now on electronic tolls and with the dedicated lanes that we have - and we do have dedicated lanes for MacPass that service our heavy vehicles - they flow right through. So, it is a smaller majority right now that are not on the electronic tolls. In that heavy truck they would have to go through what we refer to as a service lane which is with a person in a booth.
MR. TAYLOR: Now this 5 per cent of your overall traffic being commercial, it generates what percentage of your revenue?
MR. MUNRO: Approximately 10 per cent.
MR. TAYLOR: So, 5 per cent creates about 10 per cent.
MR. MUNRO: It is about 3 per cent of our total traffic.
MR. TAYLOR: I note, as per the Halifax-Dartmouth Bridge Commission Act that the composition of the commission itself is made up - and I know the Governor in Council has the ability I believe to name three members to the commission, but I note that most members, if not all, are essentially from the Halifax-Dartmouth area, the urban areas. I am wondering - and I have always been concerned about this - that concerns related to the trucking industry are not really being represented on the commission. Obviously, there is nobody from the industry on that commission, I am just wondering, most of the members, if not all, come from the urban area and do a great job, I am sure. But, I am just wondering how the commission receives input and what type of consultation over the years has the commission had with the trucking industry, other than increasing rates and then hearing mostly negative feedback from the sector?
MR. DOANE: I will try and answer that one for you Mr. Taylor. You are correct that our board is all from the metropolitan area and I don't have, by the way, any input into the appointments. It is done by the provincial government as to five members and done by the municipal government as to four members. I suppose the thinking is that this is a metropolitan area facility and so therefore, that is why they are appointed as they are.
You are also right, there is no one on our board who has a direct connection to the trucking industry. The communications that we have with the trucking industry come about primarily at the Utility and Review Board hearings. We had an example in 1993, I believe it was, where we asked the Utility and Review Board for an increase in the truck tolls and of course, at the hearings, the truckers association was very ably represented and quite active in their opposition. In fact, after the Utility and Review Board approved toll increases, which were not quite up to the level that we had asked for, but they approved increases, the truckers association took the Utility and Review Board to court to try and have those increases set aside. They went through the Supreme Court of Nova Scotia, the Appeal Court of Nova
Scotia and took it to the Supreme Court of Canada, but they were refused leave to appeal there.
During that time, we had a number of discussions with representatives of the trucking industry. But I do not think that we have met with them for about two years now perhaps since we last met with them. What you say is correct, there is no direct representation from truckers on our board. Steve.
MR. SNIDER: We have some interaction with the trucking association from time to time. I have made presentations at their annual meetings. When we were looking at introducing MacPass, we invited representatives from local industry to sit on focus sessions that we had and talk about how they would like to see electronic toll collection systems operating. So we have had some interaction, but not heavily on an ongoing basis.
MR. TAYLOR: A different issue, Mr. Chairman, but the same principle. We go through this on various agencies, boards and commissions and the industry is certainly the biggest - according to Statistics Canada - employer in this nation and I think perhaps in Nova Scotia it is the second largest employer. It is not good enough, I don't believe, for the industry and representatives of the trucking industry to have to go to a hearing to fight a proposed rate increase. I think there should be ongoing consultation and I have brought this issue up with members of my own government and I intend to advance that particular cause with the HRM and the old Halifax-Dartmouth Bridge Commission Act. It really has not been amended so to speak to take into consideration that now we are in the Halifax Regional Municipality and I think four members are appointed by HRM. There used to be two by the county, one by the City of Halifax and one by the City of Dartmouth and now I note that there are five urban councillors on the commission. Perhaps somebody else will speak to why the former administration decided in their wisdom to put another urban councillor on the Bridge Commission, but I would think that it is very important that the commission look at bringing in the different stakeholders.
I don't necessarily think you have to have somebody on the commission that represents the trucking industry, but I really think it is important, Mr. Doane - you indicate maybe you haven't had discussions for two years now - that the commission from time to time bring in - and I am sure you do - different presenters to express concerns that they might have.
Enough said about that, Mr. Chairman, and just to shift gears again. The lights on the Macdonald Bridge, I agree they certainly are most impressive. Does the commission plan on putting similar on the MacKay Bridge?
MR. DOANE: At one time we hoped to be able to do that. In fact, we made an application to - I have forgotten the exact name of the group - the Federal Millennium Committee I will call it; that is probably close enough. They were making grants to groups
that had a millennium project and we felt that lighting both bridges would be a good millennium project. We applied to the federal agency that was distributing these funds, but we were rejected on the basis that they did not support infrastructure millennium projects; this was the answer we got to our application. So when that happened, that cut out any hope we had at the time to light both bridges. It would be nice to light them both, but we have to, as has been pointed out to me here this morning, be careful not to waste our customers' money. We are a public authority and we have to be careful of that.
The Macdonald Bridge seemed, by the way, to be the most appropriate one. If you look at the two bridges, that seemed to be the most appropriate one to light because it is closer to the centre of the main population of both sides of the harbour - and I was going to say both cities, being an old-timer around here - it seemed to be the best one to be lit. I think it has worked out that way. I know it sounds strange. You do not think of a bridge as a thing of beauty, but people do tell us that they think the Macdonald is the best looking of the two bridges, and therefore the most appropriate one to be lit.
MR. TAYLOR: I think I recall reading somewhere where the estimated cost to light the MacKay Bridge was approximately $800,000. Whether or not that is accurate, I do not know but, I guess based on that cost, obviously you would have to give that a lot of consideration. I do not know whether such an initiative, lighting the MacKay Bridge, would be eligible through HRDC, Mr. Chairman, but I do note that (Laughter) Well, there are certainly water fountains and things of that . . .
MR. DOANE: We have not applied there by the way.
MR. TAYLOR: No, we are just asking if they are eligible, Mr. Chairman. (Interruption)
MR. CHAIRMAN: Order, please.
MR. TAYLOR: Also in your mandate you have the ability to maintain and make capital improvements to the existing bridges and/or build a third bridge or one over the Northwest Arm. Is the commission looking at, or has it looked at the Northwest Arm as a potential crossing as a way to alleviate some of the concerns with that area or is it just too expensive to even consider?
MR. DOANE: To the best of my knowledge, the commission has not looked at it since the 1960's. At that time the commission, together with some professionals, did a study on where the second bridge should go. That was one of the options, to come across from Dartmouth to Georges Island, across to the Halifax peninsula, through the South End and across the Northwest Arm. Another option was where the MacKay Bridge is now and I have forgotten what the third option was. It seems to me there were three. (Interruptions) Oh, the third was a tunnel.
Now, to the best of my knowledge, we have not looked at additional crossings since that time but, again, our historian is Ken Munro. He has been with the commission for over 20 years, so I will ask him if he is aware of any.
MR. MUNRO: No, not since the last time that they were done, the ones you just referred to.
MR. TAYLOR: Just one last question, Mr. Chairman. I know policing the bridge must be terribly difficult and a number of people, I suppose, still try to slip through without tossing the cash or the toll in the basket, but is that a major concern or is it just a small part of the overall operation of the bridge?
MR. DOANE: Running the tolls, of course, is a very popular exercise. You may recall that Kriegoff, the great Quebec painter, did a number of paintings of bilking the toll, I think they were called. That was in the days of horse and sleighs, but people have been bilking the tolls forever it seems.
We did an estimate a few years ago on what it might be costing us, and it is strictly an estimate because we do not have an accurate means of calculating. Our estimate was it might be costing us $100,000 a year. Now, that is out of more than $20 million in tolls. There is a point beyond which you do not want to spend money to save money because sometimes the expenditure can be more than the saving, but what we did was we put in-gates on most of our toll lanes.
You will recall from coming across the bridge they are quite fast moving. They go up. Putting in those gates we believe has diminished that bilking the tolls that was going on. Now, not eliminated, there are still some and you are quite right that they are difficult to police because once they go through, they are gone unless the traffic is really bad and it is hard for our people to police them, to catch them, although they become after awhile identifiable. Our people begin to recognize the cars that are going to do this. They have all sorts of ways of doing it. We have new toll equipment now which is quite sophisticated in terms of rejecting slugs and that sort of thing, false coins, and our toll equipment is much better now than it was and with the gates and our watching, we think we have it down pretty well.
MR. CHAIRMAN: You have 49 seconds.
MR. TAYLOR: You talk about the gates that you put in place. Mr. Doane, if you put a token in the basket rolling through, is it designed to open in time before you run into it because I will tell you, you know, you try to flow along as quickly as you can, throw the token in the basket, keep on trucking so to speak. You do not want to burn any bridges or anything like that, but you want to keep going right along.
MR. DOANE: I am hearing lots of bridge puns today. (Interruptions)
MR. TAYLOR: Barry has it figured out, but the mechanism will open, if you put a token in, unless you have got dragger or something, you cannot ram it?
MR. DOANE: We have had people hit the barriers but they are designed to break away so, hopefully, they do not damage the car if it hits it and does not damage our gates to an unrepairable condition, but Steve, you are more knowledgeable of operations.
MR. SNIDER: Generally, for instance, if I drive up to my garage and I use my garage door opener, I make sure the garage door is open before I drive in. So we encourage people to make sure the gates are up before they drive on through.
MR. CHAIRMAN: Perhaps certain honourable members could have a private meeting with officials of the Halifax-Dartmouth Bridge Commission on their driving activities. We will go to a second round at this point, perhaps 10 minutes each. We will start off with the NDP, Mr. Dexter.
MR. DEXTER: I just wanted to follow up on that point because what happens, of course, especially with the MacPass, I do not use the tokens that the Tories use, I use the modern convenience of the MacPass, and one of the things that happens, of course, is you get very dependent on it. I mean you can literally go through the tolls very quickly, as you said, and you see lots of traffic going through there very quickly. You become very dependent on that transponder and if for some reason it doesn't work - on one occasion I found myself very close to that barrier, and yesterday, for the first time, actually, I came through and it didn't open, and bang, I hit it. The commissionaire came out and took down the number of the transponder, to find out why it wasn't working correctly. They reset it. They are designed to swing out, that is the whole point. I noticed, being very up close to them, that they are quite cushioned and they are designed not to damage the vehicle or the passenger. It seems to me that that must be something that happens reasonably regularly.
MR. SNIDER: It happens several times a day in each plaza. There are various reasons. Our biggest difficulty is with people who won't follow the mounting instructions. They come through and they pull the transponder out of their pockets, and they are waving it. Well, if you hold it upside down or it is turned around backwards - it is meant to be mounted in a particular manner and that has to be done. Another difficulty is that if you are a cash user and you don't notice the yellow lights, and come in and keep your account replenished, then you have a red light, you are not going to get a green light if you have no money in your account. That is a problem. Another one that occurs, sometimes people will have a credit card and it expires. If you don't call us and advise us that your credit card has expired, we are unable to renew or replenish your account. We do try to call as many people as we can, but sometimes you will get more in one month and the list gets a little long. So that is also a problem.
From time to time, an antennae may be out of adjustment slightly. But if we get two or three people who don't get a green light, then we quickly identify that and adjust it. Other reasons, once in a while a vehicle will be caught by what we call a heartbeat, that is that the system is basically pulsing, it is testing itself all the time, and that happens during a one second time period, once an hour or so. We are looking at ways of minimizing that impact. Overall the system seems to be working very well and has great acceptance. We have had people tell us that it is the greatest thing since sliced bread.
MR. DEXTER: Just for the record, I have mine on automatic debit, so it wasn't that it ran out of money. (Interruptions) It is interesting, because that is the second time I have heard that. In fact, my CAA membership is on automatic renewal, and they do that only once a year. Of course, I think credit cards are four years or five years in length. Apparently it is at the end of four years, and they wrote to tell me that the credit card that I had given them will expire and I have to renew.
MR. CHAIRMAN: Let the record show that the honourable member's bank account was not overdrawn.
MR. DEXTER: That is right, exactly. I only have one other question, because it strikes me as something that exists here in the budgeting. I am interested to know, there is $22,000 set aside in the budget for conferences and seminars, I didn't know if there was a conference of bridge owners or if there is some society or something that holds conferences regularly, I was just wondering what that was about.
MR. SNIDER: The Halifax-Dartmouth Bridge Commission is a member of the International Bridge, Tunnel and Turnpike Association. I am pleased to report that we had the opportunity of hosting that event here in 1999, at which time we had about 750 people attend the conference. For interest sake, generally their comments were that Halifax was the nicest place they have ever had this conference. They were absolutely pleased with the city and found it to be beautiful.
There are 26 countries who belong to this organization. Most of the representation comes from the northeastern United States. It has been a very worthwhile organization for us to belong to. For instance, we first identified electronic toll collection as an option through those folks. There is a good sharing of knowledge and information related to bridge maintenance and toll collection. That is where the majority of what we expend on that goes to.
MR. DEXTER: I don't intend to be critical of those organizations, I know, in fact, that they often generate many substantial and worthwhile ideas. I guess I was wondering, how many delegates would you normally send in a year to the conference?
MR. SNIDER: These are several different ones. There is an operations one, there is a finance and treasury one, there is a maintenance one. We would have six different conferences. We have one that two people go to, and the other ones are attended by just a single person.
MR. DEXTER: Mr. Chairman, those are all my questions. I just want to thank the witnesses for being here this morning. I enjoyed the information they gave us.
MR. CHAIRMAN: Would the honourable member for Sackville-Cobequid be taking up the balance of the NDP time?
MR. HOLM: All of our questions have been asked.
MR. CHAIRMAN: The honourable member for Dartmouth East.
DR. SMITH: We did comment a bit earlier on some of the activities, but I just wanted to highlight - perhaps in thanking the witnesses - the idea of a public utility being a corporate citizen. I think the relationships that you have built with the Bridge Walk, the people and those types of activities, I think it has been very positive for a public utility to do that. We are usually very critical of our witnesses here some days, some days things get a little bit testy. I think you have gotten away very well today, so you must be doing something right, either that or you are very smart and nobody has uncovered it yet. I don't want to sound too much like I am just holding hands and having good thoughts. I think those types of activities have really been indicative of a good corporate citizen. I guess that leads to my question about, as an economic driver in this area, the salary amount, and how many employees do you have?
MR. MUNROE: I have that all together for you. We have a total, at the bridge, of 22 full-time employees; we have four part-time employees; and we have two seasonal employees, for a total 28 employees. This is what we consider our core staff. In addition to that, we have a contract with the Canadian Corps of Commissionaires, and they provide jobs for 50 personnel, and that is 365 days a year, round the clock. In addition to that, we have our summer painting program which runs from May until about the first week of October, and that provides 50 jobs for painters on both bridges. As you are aware, we continually paint our bridges, we never stop. The last, we have approximately 12 landscapers, who come on about mid-May and work until about the first week of September. They look after our grounds. That provides a total of 140 jobs in the area. The salaries associated with that works out to approximately $2.6 million, for those 140 people.
DR. SMITH: Great. Thank you very much. That is the other compliment I forgot to make, since we are handing them out, the landscaping. I always felt that the Halifax side did better than Dartmouth. I don't want to get into that mindset, because I hate to hear people complaining that way about Dartmouth versus Halifax. They are both unique communities,
with lots of strengths, equally. I always push for a little bit more, especially around the MacKay Bridge.
I have always wondered about Wyse Road, as an American friend of mine called it, Unwyse Road. Was there no way to get that underneath there, and get that out of the mix at the end of the bridge? As soon as you come off the bridge, it is sort of ironic that you run into a four lane highway. Is there no solution to that, that wouldn't cost an arm and a leg?
MR. SNIDER: If I understand the question, you are speaking of the traffic on the Macdonald Bridge and how it intersects at Wyse Road.
DR. SMITH: Correct. Unwyse Road.
MR. SNIDER: Back when we started the third lane project, we had some brief discussions concerning it. You could look at grade separation at that particular location, but it would cost a fair amount of money. At this point in time, traffic flows very well. We had the discussions with HRM, they are hoping to install a set of traffic lights up at the top of Nantucket Avenue where it intersects Victoria Road. Then they would change the light time at that intersection so we would get more of a straight flow, instead of people making a left turn.
[9:30 a.m.]
At this point in time, until traffic increases somewhat more, having just one level is satisfactory, in the terms of the HRM traffic folks.
DR. SMITH: I think you are right now, things are going very well and I think the changes you have made are very positive. I always think of the Armdale Rotary as to why grades have not been put there and on Wyse Road.
Just a question on tolls, and I think they are probably still off on most of the bridges and that, but they have toll highways, I know, in some areas. If you were going to take off the tolls - have you had any discussions with the provincial government on that, removing tolls from the MacKay and Macdonald Bridges? If so, how would you do that, in light of what you have told us with your financing with the province?
MR. DOANE: The first part of your question; we have not had any discussion with the province regarding the removal of tolls. Many people think that when the debt is paid off, and I say when, not if, but when the debt is paid off many people think we will be able to remove tolls. As you have seen, we spend $4.5 million to $5 million a year on operations, maintenance and administration, so we would at least have to cover that.
Also, our bridges are getting older. Twenty years from now there will, undoubtedly, be some major capital expenditures on both bridges. In fact, the Macdonald Bridge has probably reached the half-way point in its life. We depreciate it on that basis but we are not carrying depreciation funds. We are not setting aside money for major capital projects, we are setting aside money to pay down debt first. So there always will be an operations cost and, as the bridges get older, there will be considerable capital costs, I believe. So I don't see tolls coming off completely. They may come down after the debt is done.
DR. SMITH: Because you would need to make that up from the province. The province would have to be committed to putting that in, if you had an arrangement with them there.
MR. DOANE: Yes.
DR. SMITH: Maybe they wouldn't have to be involved but, to me, it would seem to be.
Just one brief question on tax. I know from the meeting last night, what is the tax arrangement with the HRM? You pay for your buildings, you are taxed on your buildings, but not the land, is that correct?
MR. DOANE: We pay for everything that is located on land, basically. The bridge itself, across the water, is not assessed. I don't know whether that was a jurisdictional thing at one time or what was the reason. I think I am correct in that comment, yes.
DR. SMITH: Thank you very much. Keep up the good work. We will see you at the Bridge Walk.
MR. CHAIRMAN: The honourable member for Cape Breton West. You have just a little over four minutes.
MR. MACKINNON: Mr. Chairman, I would like to go back to this issue of the Red Tape Reduction Task Force. It is a fairly independent board, made up of four Tories and one businessman from Halifax - five Tories, I am sorry, so it is fairly objective.
The suggestion about deregulating the fee structure for busing, as they referred, between inner cities, whether that be between Halifax-Dartmouth, the old structure, or whether it be between Halifax and Sydney or whatever. Essentially in Nova Scotia we have only one major provincial transit system, that is the Acadian Lines. Is there a special fee structure you have for Acadian Lines, similar to what you have for Metro Transit?
MR. DOANE: We have scheduled buses pay half what non-scheduled buses pay. That includes Metro Transit, it also includes scheduled buses like Acadian Lines.
MR. MACKINNON: So they pay half?
MR. DOANE: They pay half of the toll of non-scheduled buses. Now, by non-scheduled buses, that would be the tourist buses, for example.
MR. MACKINNON: Are they scheduled?
MR. DOANE: No.
MR. MACKINNON: Okay, so they would pay the full rate.
MR. DOANE: They would pay the full rate. Charters would pay the full rate. Just the scheduled buses. That was done to give a break on the multi-occupancy.
MR. MACKINNON: Let's put it in layman's terms here; if an Acadian Lines bus crosses the bridge, what would it pay?
MR. DOANE: It would pay $1.20.
MR. MUNRO: $1.20, the same as Metro Transit.
MR. MACKINNON: Now if it was a school bus coming from . . .
MR. MUNRO: It would pay $1.20. School buses, Acadian Lines, Zinck's, Metro Transit; the company for the school buses currently in the area is Stock Transportation. Zinck's run the scheduled bus lines down the Eastern Shore and they also run the scheduled Airline Buses. Acadian Lines, of course, have the . . .
MR. MACKINNON: For all intents and purposes, Mr. Munro, the transit system in Nova Scotia, they are getting a preferential rate.
MR. MUNRO: They are, as ruled by the Utility and Review Board, that is correct.
MR. MACKINNON: So from your perspective, obviously you have had no discussions with this red tape commission or with the provincial government on the possibility of deregulation but yet you are a major factor because they use your facilities on a daily basis.
MR. MUNRO: Yes, they do.
MR. MACKINNON: Can you envisage any scenarios of the cause and effect relationship there, with deregulation? I am rather perplexed, if they are getting preferential treatment already (Interruptions) served, is what I am trying to get at here.
MR. DOANE: If I understand your question, I mean there has been no indication from our board that we would want to, what would you call it, take advantage of a deregulation by jacking up rates. The board has recognized, and I think this was clear in Mr. Munro's remarks, the board has recognized that scheduled buses and multi-occupant vehicles should have a break. For example, when we speak of buses, those small buses that carry 15 people or less - I don't what you would call them, you see quite a few commuter-type buses that come in from suburbs - we classify them with automobiles. So if you have one of those commuter buses with 13 or 14 people on board, you get the same price as an automobile, 60 cents.
MR. MACKINNON: Well, the single largest interest is, in fact, the Irving family, Acadian Lines. Am I correct?
MR. MUNRO: As far as to my knowledge, that is the largest commercial ownership, yes.
MR. MACKINNON: I rest my case.
MR. DOANE: Metro Transit would be our major user among the buses, so Metro Transit would be the major user.
MR. CHAIRMAN: Thank you. For a moment I thought that things were going so well this morning that somebody must have slipped some Prozac in the water, but I see that is not entirely the case.
The honourable member for Colchester North for the government caucus.
MR. WILLIAM LANGILLE: The question of traffic, you people are strictly in the business of the movement of traffic, is that right?
MR. DOANE: That is our business, yes.
MR. LANGILLE: Now, looking at Halifax's unique position as a peninsula, I believe you have Armdale, Bi Hi, Bedford and the two bridges, and those are your only accesses into the city, is that more or less correct?
MR. DOANE: Yes, that is the Bedford Highway, the Armdale Rotary and the bridges, that is pretty well it.
MR. LANGILLE: After the new bridge was built in 1970, in 1971, what was your traffic volume?
MR. DOANE: Steve, I think you have got that. We do our numbers on both bridges.
MR. LANGILLE: For both bridges, I mean.
MR. SNIDER: In 1971 the traffic for both bridges was 11,950,000.
MR. LANGILLE: Okay, so that has increased to 31 million in approximately 30 years.
MR. SNIDER: That is correct.
MR. LANGILLE: Which would be an increase of approximately 19 million people a year?
MR. SNIDER: Crosses, yes.
MR. LANGILLE: Now, projecting that into another 30 years, you would probably have that much more plus and I guess that is where I am leading to here because I think traffic projections are very important. I realize that you said earlier you are working with HRM and they are doing a survey next year, but I believe for the traffic volume on the bridges that that is a very important aspect and you should be on top of that. Having said that, I would like to move . . .
MR. TAYLOR: Shift gears.
MR. LANGILLE: Shift gears, right, the trucker here. I would like to move into your safety record. I am concerned about this for public safety because in the last night and so on I think everybody here in the room has seen what has happened in Detroit, in Windsor, the bridge and looking at the painters hanging off the scaffolds and the ones who went in the water. Could you advise us what your safety record has been on the two bridges?
MR. SNIDER: Our safety record at the Bridge Commission is very good. There was a fatality back I believe in the late 1980's. It was not a bridge employee, it was somebody who had worked for a contractor. In my six and one-half years at the commission, working with our superintendent of maintenance, the safety record has been very good. First and foremost the safety of our employees and the safety of the travelling public is most important and nothing takes precedence over that.
We have employees who have a full five point harness when they are out painting on the structures, underneath it or climbing on top, and they have lanyards on at all times. If an employee working on the bridge is found to not be fastened on when he goes over the side or over the rail, he will be cautioned - well, cautioned is a light word - he will be severely warned once about that. If he is found to do that a second time, the employee will be dismissed. We have no tolerance for not following the safety rules at the Bridge Commission.
MR. LANGILLE: Also I believe you said you have 50 painters in the summer. Is that correct? So 50 painters and I guess my concern is . . .
MR. SNIDER: Well, 45 to 50.
MR. LANGILLE: Well, 45 to 50. I guess my concern is, what happened in Windsor was caused by high winds, what checks do you have in place if we have high winds here? Whose authority is it to pull the painters off the bridge? Is it yours or is it the contractor?
MR. SNIDER: The painters work for us directly, the ones that we currently use. The superintendent of maintenance would make that decision. To the best of my knowledge in my six and one-half years at the commission, we have never had a situation where, you know, just because of winds that they were unable to work. In wet, rainy conditions, of course, they cannot work out there. The travelling platforms that we use for working on the underside of our two bridges are permanent structures. We do not use any temporary scaffolding that is suspended underneath. So these travellers are permanently affixed and are very secure. We do have some small scaffolding that we use on the side of the Macdonald Bridge on the bicycle lane and sidewalk, but they are tied right off to the structure and they are inside the railings.
MR. LANGILLE: Thank you very much.
MR. SNIDER: My pleasure.
MR. CHAIRMAN: The honourable member for Sackville-Beaver Bank.
MR. BARRY BARNET: Mr. Chairman, I just want to go back to something that you had indicated earlier about the Red Tape Reduction Task Force and I really found it interesting that we can confuse buses and bridges, but I would say as a member of that task force that the task force made no recommendations whatsoever that would have a negative impact at all on bus traffic within the city boundaries. In fact, the only thing that you could actually clearly say is that the recommendation would allow for the deregulation of busing outside of the cities, those inter-city transit, like Acadian Lines and like the ones that come from away and, quite frankly, it is a big stretch of the imagination to ever conceivably believe that a recommendation from that commission has anything to do with this Bridge Commission. It is rabbit tracks to go off in that direction. I do not know how he could even tie it in, but he did. (Interruption)
Mr. Chairman, through you to Mr. Doane, the Auditor General's Report of last year made a recommendation and there were a number of recommendations with respect to your own auditors. What is the progress and how have you made out with respect to those recommendations?
MR. DOANE: Yes, you are correct that both our own auditors and the Auditor General made comments. The way that works is our auditors, who are appointed by the provincial government and not by us, but they are a private sector auditing firm and they send the financial statements when they are completed, the notes and any management letters, as we call them, to the Auditor General. So those management letters, and there are copies in your material, that came to us also go to the Auditor General and I believe that is where the Auditor General picked up the information to make his comments.
Also enclosed in your material, I believe it was a June letter, our auditors wrote us after they completed the 1998 audit and then there was a letter the following January when they were just beginning or were part-way through their next audit. We said to them, comment to us on what you see pertaining to the areas you wanted improved last year, have we improved them? I believe you have the private sector auditor's letter in that regard.
MR. BARNET: We have a copy.
MR. DOANE: In effect, each item had been improved to their satisfaction.
MR. BARNET: My next question is surrounding the bridge expansion plan and the debt and deficit. I know there has been a lot of discussion here today and, quite frankly, there is a lot of information in the briefing book with respect to this, but I want to refer back to an article in The Daily News on December 6, 1997. The then Minister of Finance, Bill Gillis, spoke to The Daily News or was interviewed as a result of issues surrounding refinancing and what he said at that time was finally we have turned the corner on this debt and deficit issue with respect to bridge financing and that as a result of some change in direction, and I will quote exactly what he said, "When the new bonds come due in 2007, it is expected the bridge commission will have put aside enough money to re-pay the major portion of the $100 million issue, Gillis said." He was talking about the $100-million line of credit.
In 1997 I would have expected that based on the sinking fund and your capital fund, that if you had continued on with the same process of putting in $5 million per year, that at this point in time you would have $5 million times three, $15 million there, not $5 million, and that by the time you reached 2007, you would have actually reached about $45 million or $50 million and my projection is that you are going to have $38 million. So at the end of the day, the $23 million and the $100 million will be paid down to about $89 million and not anywhere near what Mr. Gillis was indicating to the people of Halifax. What he was saying is that, you know, he led people to believe that a major portion of that would be paid off and the fact is that there has been no money set aside until 2000 and now we have from 2000 to 2007 to try to play catch up to get those sinking funds and that capital fund replenished or at least put in a situation where we can pay off some of that principal.
My major fear, like everyone else's, is the fact that we are going to get down the road in 2007 and there will be another capital project that will come along and this thing will be perpetual, we will be forever paying interest on capital money. I want to know from the commission, can the constituents ever see an end to this thing and did the capital project because (Interruption) One minute left?
MR. CHAIRMAN: You are done.
MR. BARNET: I am done.
MR. DOANE: Mr. Chairman, would you like me to answer Mr. Barnet's question?
MR. CHAIRMAN: Sure.
MR. DOANE: It is a difficult question to precisely answer, Mr. Barnet, because I did not have input to Minister Gillis before he made that remark. That was not a calculation that he got from me and neither did your $38 million estimate come from me, but I think you can see why I was cautious earlier in this meeting to say that I really didn't know where it would be. Perhaps he was a little optimistic and perhaps your estimate is a little pessimistic, but I really can't . . .
MR. BARNET: My information comes from your book. You know you say . . .
MR. CHAIRMAN: Order, please.
MR. DOANE: Yes, $5 million is what we are putting away annually on what I think of as the old loan. The old loan would have been due next year, in 2001. It was a 10 year financing that was taken out in 1991.
MR. CHAIRMAN: Okay, that concludes our questioning. There is enough time for one short snapper from each caucus. The NDP are passing, and the Liberal caucus is passing. One short snapper for Mr. Taylor.
MR. TAYLOR: I know that the Summary Proceedings Act and the Motor Vehicle Act apply to the bridge and it seems to me - and I apologize, Mr. Chairman, I was out a few times during the hearing this morning - relative to photo radar and things of that nature, and I am not sure, but I am just curious, it seems to me as if the Bridge Commission is using photo radar or some similar type mechanism, and in fact it is not permissible in the province on all of our public highways and bridges, et cetera. Am I wrong or is that just a . . .
MR. DOANE: No, we use radar guns similar to what the RCMP use on the highway and in fact our people have been trained by the RCMP on the use of those radar guns.
MR. TAYLOR: But it is not the so-called photo radar?
MR. DOANE: Oh, no, we do not use photo control for speed control.
MR. TAYLOR: Thank you.
MR. CHAIRMAN: Okay, I am going to allow Mr. Morse one short snapper as well since the other two caucuses have passed.
MR. MORSE: For the interest of the committee, and I suspect that the members of the Bridge Commission are well aware of this, but in an earlier life when I grew up in Halifax it seems to me that when the subject of siting the MacKay Bridge came up, there was a concern that there was a curse. How are we making out with the curse?
MR. DOANE: Well, the curse goes back to before my time, but as I understand the curse, it goes something like this: One of the British naval officers took a liking to an Indian maiden in the area and took her away to England with him. The Indian maiden's father was quite upset about all this so he put a curse on the bridges. I can't quote the curse, but it had to do with three bridges and the first two met the terms of the curse; the Indian chief was right on with the first two. The third one would have been the Macdonald Bridge, which was the third bridge to be built across Halifax Harbour and the other two went back into the 1800's, so none of us here remember them, but the third one would have been the Macdonald Bridge. At the formal official opening of the Macdonald Bridge, an Indian chief was brought in to take the curse off, so far we have survived a number of hurricanes and other nasty bits of weather.
MR. CHAIRMAN: With that in mind, perhaps we will stay tuned for the next episode when perhaps on a future day the Halifax-Dartmouth Bridge Commission may appear again. On behalf of the committee, we would like to thank all members of the commission for coming and appearing and being forthright in their answers. It has been very helpful, I am sure, to all members of the committee.
Just some short notices on future meetings. Next Wednesday, we have a briefing session in the Committees Office on student aid, between 8:00 a.m. and 10:00 a.m. Also, all members should have in their files by now copies of the draft Air Ambulance Report, for our annual report of the Public Accounts Committee. If we have some time at the end of next week's session, the briefing session with the Auditor General, then maybe we will peruse that and try to fine-tune it.
MR. TAYLOR: Mr. Chairman, we were conferring here a little earlier, unofficially of course, but these briefing sessions, some of us who travel in and use the bridges almost on a daily basis, I am just wondering if we could meet at 9:00 a.m. for the briefing sessions.
MR. CHAIRMAN: The problem with that is that it starts conflicting with different caucuses' scheduled meetings.
MR. TAYLOR: This does too. We could have an hour briefing from 9:00 a.m. to 10:00 a.m.
MR. CHAIRMAN: It will take a good hour and a half anyway, to go through this. The purpose of the briefing session - really it is an optional thing - is essentially a process we put in place to assist members to be better prepared. It is not a mandatory thing.
MR. TAYLOR: It is kind of important if you go to the follow-up hearing.
MR. CHAIRMAN: Bearing in mind that all members have an obligation to do their own research as well.
MR. TAYLOR: I am sure you spent most of last evening . . .
MR. CHAIRMAN: I did, I drove back and forth across the bridge all day thinking about questions. That concludes today's meeting.
The meeting is adjourned.
[The committee adjourned at 9:57 a.m.]
