Transportation Investment Plan

British Columbia: The Pacific Gateway

British Columbia's transportation network is vital in developing the provincial economy over the next decade. Under the BC Ports Strategy, expanding the capacity and capability of the existing port terminal, rail and road systems are key elements to enhancing the province's potential as a gateway to and from international markets. As well, investments to help remove traffic congestion, ensure road safety, promote alternatives to road use and improve airport facilities are also key to developing BC as a desired tourism and recreation destination.

Under the Pacific Gateway initiative, the transportation investment plan and ports strategy together will help to further develop the province as a gateway to the world and the world's gateway into British Columbia.

Transportation Investment Plan

Budget 2005 updates and builds on the three-year transportation investment plans that were announced in the last two budgets. Amongst other priorities, the plan focuses on:

• improving road safety and reliability;
• expanding BC as a trade gateway to the world; and
• revitalizing the BC economy through a more-efficient, cost-effective and competitive transportation system.

Over the next three years, the updated transportation plan provides:

• $2 billion of additional provincial investment in transportation infrastructure; and
• $1.3 billion of additional investment leveraged through federal cost-sharing and partnerships with the private sector, local governments and other agencies.

Key elements of the plan include:

• inclusion of the estimated three-year funding commitments to the $1.7 billion ($ 2003) Richmond-Airport-Vancouver rapid transit project (RAV) by the provincial, federal, local, airport authority and private funding agencies – the total provincial commitment to this multi-year project is $435 million;
• acceleration of cost-shared Gateway initiatives to enhance the movement of goods to and from seaports, airports and inter-modal terminals in the Lower Mainland;
• cost-shared border infrastructure investments to reduce delays for the trucking industry and improve security;
• continuation of major improvements to the Sea-to-Sky Highway; and
• investments to further improve road access for the oil and gas industry.

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Transportation Investment Plan – Financing

The transportation investment plan is administered through the BC Transportation Financing Authority (BCTFA) and is based on the following principles:

• the province will dedicate revenue or other funding sources to finance its contributions;
• federal cost-sharing will be secured on all eligible projects and programs;
• additional transportation investment will be leveraged through partnerships with private partners; and
• provincial spending on new transportation investments will not increase taxpayer-supported debt of the BCTFA above $3.4 billion.

Since Budget 2004, a number of developments have been incorporated into the plan, such as the provincial commitment to the RAV project, accelerated Gateway initiatives and other priorities. In addition, the portion of the costs of the Sea-to-Sky Highway financed by the private sector is being included in the debt of the BCTFA under accounting policy requirements. These changes require additional provincial funding to support the transportation investment plan.

The larger-than-expected surplus in 2004/05 has allowed the government to make a number of strategic choices. These include paying down government direct operating debt while also reinvesting some of the surplus into long-lasting transportation investments over the longer term.

Last year's transportation investment plan had already assumed the recent $200 million of BC Rail proceeds distributed to the BCTFA in November 2004. To help finance additional capital investments in the updated three-year plan, a further $550 million will be dedicated to the BCTFA from the 2004/05 surplus. Together, these investments totaling $750 million will help ensure that the transportation investment plan remains fully funded over the next three years.

In order to transfer part of the government's surplus to the BCTFA in 2004/05, the Ministry of Transportation will be requesting a Supplementary Estimate to provide a one-time capital assistance grant of $550 million to be used by the BCTFA to reduce its capital debt requirements in 2004/05 and 2005/06. The effect of this grant, and of the earlier BC Rail distribution, will have no impact on the government's summary accounts bottom line, as the grant and distribution expenses will result in an offsetting revenue gain to the BCTFA.

Over the longer term, the government will be reviewing the transportation investment plan and if necessary, will make adjustments to ensure that the plan remains affordable.

Further information on the transportation investment plan can be found on the Ministry of Transportation website at: www.gov.bc.ca/tran/.