The Deh Cho Bridge’s Rising Toll

After three years, the Deh Cho Bridge might finally be starting to pay for itself.

The $202-million monument to the dangers of unstable financial backing managed to rake in more revenues from tolling during the latest fiscal year than anticipated, according to Transportation officials.

Tolls for freight vehicles heading northwards across the bridge added up to over $4.4 million in 2014-15, exceeding, for the first time, the annual goal of $4 million. That exceeds the $3.9 million collected in 2013-14 and the $1.4 million garnered in the bridge’s first five months.

In total, the department has collected around $9.7 million in tolls since the bridge’s opening in December 2012, though this recent upward trend could be short-lived, according to department spokesperson Pietro de Bastiani.

“Toll revenues will fluctuate from year to year depending on the level of economic activity in the North Slave Region,” he said.

The territorial government hopes to pay for the bridge over 35 years, with toll revenues and the annual $2.6 million saved from the now-defunct ice bridge and ferry operations keeping the project cost-neutral.

But a slump in the resource economy and the climbing cost of living mean tolls have had to keep rising for the bridge to break even.

This raises the question: just how high can they feasibly go?

Some trucks pay nearly $400 per trip

In 2012, bridge tolls for northbound commercial vehicles over 4,500 kg started out at $75-$91.25 per crossing for those with two to four axles (Class A), $150-$166.25 for those with fix or six axles (Class B) and $275-$291.25 for trucks with seven or more axles (Class C).

Weeks before the bridge had even opened, transport companies had begun planning to raise their rates for customers in Yellowknife, Fort Providence and Behchoko in response to the coming tolls.

“All trucks utilizing the bridge must pay a remittance fee for every northbound crossing. Therefore, we will be instituting a Toll Service Charge per shipment on all freight delivered,” Grimshaw Trucking L.P. wrote in a letter to customers in November 2012.

That “non-negotiable” service charge amounted to an additional $4.50 per flat on freight up to 562 pounds, or $0.80 per hundredweight for freight between 563 and 24,375 pounds, to a maximum charge of $195.

Westcan Freight Systems passed a similar “crossing fee” on to its customers, at $0.80 per hundredweight for less than a truckload, $175 for a full five or six axle truckload, and $320 for a full truckload with six to seven axles – that is, 115 per cent of the original toll, charged to businesses in Yellowknife.

Since then, the tolls have kept rising. As of June 1, 2014, tolls were increased by as much as $4.75, with rates going up to $76-$93 for Class A, $152-$169 for Class B and $279-$296 for Class C.

In May, those tolls increased again. Class A vehicles now pay $77-$95, Class B pay $155-$172, and Class C trucks $284-$302. A new Class D was even introduced for vehicles with nine or more axles. Those trucks pay $374-$392 per crossing.

In that time, the cost of living has also risen in Yellowknife, with food prices seeing the greatest jump. August 2015 data compiled by the NWT Bureau of Statistics shows the Consumer Price Index (CPI) in Yellowknife rose two percent compared to a year ago, with food prices having shot up six percent from 2014. Since 2012, food prices have risen in Yellowknife by over 12 percent.

Can tolls counter the cost of living?

While it’s unclear if the rising cost of goods in Yellowknife has something to do with increased shipping costs, the GNWT believes that bridge tolls can actually remedy the climbing cost of goods in the territory.

According to de Bastiani, the annual increase in bridge tolls has been to “keep up with” the rising cost of living as an offset measure, in which tolls are increased by the same percentage as the Yellowknife all goods CPI rate, then rounded to the nearest dollar.

But with so many factors in play, the territorial government says it has no workable method for tracking the economic impact of the bridge on residents, whether that be positive or negative.

“Economists were engaged before the bridge came into service to track the economic impacts of the toll, but they determined the impact was so small it could not be meaningfully tracked,” de Bastiani said. “For example, if the entire amount of the toll on a Super B transport truck bringing fuel into Yellowknife was passed on to the consumer, the impact of the toll would be less than one cent per litre.”

The price of freedom

For de Bastiani, the benefits of the bridge are social, increasing accessibility and ease of travel to 72 percent of the population, who now have uninterrupted year-round access to the highway system.

“Since the Deh Cho Bridge opened in 2012, residents, businesses and industry in the North Slave Region have enjoyed and benefitted from, for the first time in the history of the NWT, year-round access to the national highway system,” he said. “Businesses and industry no longer have to plan for ferry outages for freeze-up and ice crossing break-up or plan for the ferry nighttime closures.”

While some businesses might be seeing added shipping fees, helicopters are no longer required to fly 500 tonnes of supplies across the Mackenzie each spring during break-up, saving businesses at least $310,000 per year. Warehousing costs have also been reduced, and transport trucks can utilize their assets year-round.

The GNWT also no longer has to finance the approximately $2.6 million in annual work to construct the ice bridge and operate the Merv Hardie ferry at Fort Providence. Those funds were redirected toward maintenance of the bridge, toll administration and interest repayment on the debt incurred to build the bridge.

A captive market lost

Still, the financial impacts of the bridge may not only be limited to added or reduced costs, but rather vanished revenue.

The Snowshoe Inn in Fort Providence, according to manager Linda Croft, was never a big advocate of the bridge.

“The ferry held an alluring appeal to many travellers,” she said. “To know it was the only way in and the only way out added a sense of excitement to trips North. Even when there were threats of closure, ice road worries, etc., it still added to the northern experience.”

It also added to the hotel’s business in the form of late night check-ins: people who spent the night in Fort Providence while waiting for the ferry in the morning were a key clientele that has largely been erased by the permanent highway link, according to Croft.

“Other than the year of opening when everyone came to ‘see’ the bridge, we have not had an increase in traffic,” she said. “I am the one who does the majority of the late-night check-ins as I live on-site, and I can safely say our late night drop-ins have diminished by at least 70 per cent. I used to wake nightly to welcome guests. Now it is sometimes once a week – sometimes weeks – between each one.”

The bridge also “took away” business that would come in when the ferry could not cross or the ice road was not ready, she said.

“It would only take one closure for us to fill the hotel. Now that no longer happens.”

‘Crooked logic’

“One of the oft-overlooked aspects to this was the intent for it to be developed for the economic benefits to the community of Fort Providence,” said Bob Bromley. The soon-to-be retired MLA of Weledeh was in the midst of packing up his office as he reflected on the original capital planning process.

“This was completely bizarre, as there are so many things that could have been done for real economic benefit to the community, which would have been much more economic and long-lasting.”

A cost-benefit analysis of the bridge done in 2002 reported the project would bring benefits to the territory based on its original cost of $55 million and completion date of 2005.

In 2007, an updated report found benefits would be marginal if the bridge cost $155 million.

Five years later, the bridge would finally open as a fully government-owned piece of infrastructure rather than a public-private partnership with a price tag of $202 million. No further analysis was done to calculate the cost-benefit of the bridge at that price.

“The analyses on rate of return for the bridge indicated that there was essentially no, or very marginal, rate of return to the investment in the Deh Cho Bridge, so despite it being classified as self-serving debt, financial analyses did not fully support that,” Bromley said.  

Though he believes the bridge has likely saved some residents money on plane tickets during spring and fall when the state of the river is in flux, Bromley hinted that the largest cost of the bridge has been its contribution to a growing legacy of risky infrastructure investment.

Most worrisome of all, Bromley said, is to see the “same crooked logic” applied to ongoing infrastructure development in the territory, like the Inuvik-Tuktoyaktuk Highway currently under construction, and the government’s new plans to build an all-weather road to the diamond mines.

“Nobody seems to be asking the hard questions about what is meaningful economic investment for this small population of people spread across such a huge area,” he said. “Lousy politics were making these decisions, as opposed to objective appraisals of real public interest.”

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