Rating agency calls toll removal ‘credit negative’

VANCOUVER (NEWS 1130) – Will the NDP’s move to eliminate tolls on two local bridges hurt our province’s credit rating and increase the government’s borrowing costs?

The decision to scrap crossing fees on the Port Mann and Golden Ears bridges is a “negative credit” move, according to credit rating agency Moody’s.

But Lindsay Tedds, an economist with UVic’s School of Public Administration, says the larger-than-expected surplus should mean no immediate threat to our AAA credit rating.

“Our surplus has come in quite a bit higher than expected,” says Tedds. “The economic growth that we’re experiencing in this province is very much higher than had been predicted for this year.”

“There are push and pulls to this,” continues Tedds. “Just because there is this ‘credit negative’ hit, there will be revenue that takes its place. Overall we should be careful about [overreacting to Moody’s statement].”

The BC Liberals had warned during the election that scrapping tolls could hurt our credit rating — but Tedds says Moody’s would have likely commented in a similar way under a Liberal administration given that party had proposed capping tolls at $500 annually.

The Green Party is also weighing in. That party opposed the decision to eliminate tolls, and MLA Sonia Furstenau says the Greens will be pushing for other revenue sources, such as road pricing, in the months ahead.

“Tolls are a way of ensuring that people using the roads are the ones that are supporting it,” says Furstenau. “We’re really looking forward to the Mayors Council mobility pricing report in the spring.”

“For a number of reasons, we have to be looking at mobility pricing, and not just to ensure that infrastructure spending is being done in a proper way, but also to recognize that we need to put incentives for people to get out of single vehicle car use in the province, and that’s not just an economic issue, it’s also an environmental issue when we look at the emissions that come from single vehicle cars.”