TORONTO, (Feb. 10, 2004) — The Ontario Superior Court of Justice has ruled that the Ontario Government’s default process will not begin until the dispute resolution process with 407 ETR is complete.

The government filed the default order after 407 went ahead with a planned toll rate increase on Feb. 1. The Ontario Liberals claim the highway company needs government approval to increase rates, and issued a notice of default which automatically triggers a 60-day “cure period” that requires 407 to remedy the situation before it is declared in default of the contract. If it didn’t, the highway could have found itself back under government control.

407 ETR has insisted that the contract allows it to raise tolls unilaterally. Yesterday, lawyers for the group won an injunction to delay the start of the 60-day period of the default notice until after an adjudicator decides whether the company has violated the contract. The dispute resolution process, which is also part of the contract, got underway Jan. 20.

“Now that the issue of default has been addressed, we will turn our attention to the dispute resolution process,” said 407 ETR spokesperson Dale Albers. “We are confident in our contractual rights to raise tolls and we look forward to putting our case forward.”

Former transportation minister Frank Klees has stated in the past he knows the contract well, warning that the government has little legal ground to force the highway to roll back tolls. Several bond rating agencies familiar with the contract have also stated they are puzzled over how the Liberal government expects to win its standoff.