TORONTO, (Jan. 29, 2004) — The Ontario government has sent the first warning shot across the bow of the 407 ETR, promising a hard-fought court battle if the company proceeds with a planned toll increase.

The Ontario Liberals have alerted 407 International Inc. — a private consortium that bought the 108-km highway from the Conservative government in 1999 for $3.1 billion. — that if the company proceeds with toll increases February 1 without first obtaining government approval, they do so at the risk of defaulting under the contract — although the terms of the contract are under dispute resolution.

“We are putting 407 ETR on notice that we will fight tooth and nail to protect the public interest,” said Transportation Minister Harinder Takhar in a press release. “Time and time again, this company shows contempt for its contractual obligations, and contempt for the government and the people of Ontario. We want to be very clear that we’re not going away.”

One of the Liberals’ election promises was to roll back toll hikes to 2 per cent a year, plus inflation. Tolls have gone up five times in the last four years, and the last increase in February 2003 was almost 13 per cent. 407 ETR has another planned hike this February, which will see rates for a single combination truck rise two cents, and three cents for multiple units.

The Province initiated a dispute resolution process on January 20 in an attempt to resolve its conflict with 407 ETR over the company’s position that it may raise tolls without approval. Representatives of both sides are scheduled to meet shortly to commence the dispute resolution process.

The company maintains the original contract allows them to raise tolls without government interference. Breaking the contract may cost between $8 to $13 billion in compensation to 407 International’s investors, according to the company.