Labrador Transportation Initiative Fund

In March 1997, the province assumed responsibility for the ferry service on and to the coast of Labrador from the federal government in return for a $340 million cash settlement and related ferry service infrastructure.

In January 1998, the funds were placed in the newly established Labrador Transportation Initiative Fund. The fund operates under the authority of the Labrador Transportation Initiative Fund Act and is governed by a Board of Management. Total interest earned on the fund to date is $65.5 million.

The fund was established to complete Phases I (upgrade road from Wabush to Happy Valley-Goose Bay) and II of the Trans Labrador Highway (TLH) (from Red Bay to Cartwright), to assume full provincial responsibility for the Labrador coastal ferry services and to finance Labrador transportation initiatives that may be approved by Cabinet. It was recognized from the beginning that there would be insufficient resources in the fund to complete Phase III of the TLH and additional funds would have to be found.

By March 31, 2003, it is anticipated that $308.1 million will be paid from the fund as follows:

Phase I and II of TLH		182.8 Million
Ferry Services		97.4 Million
Other		27.9 Million
Pinsent�s Arm	3.0 Million
Access Road to St. Lewis	8.0 Million
Northern Coast Roads	6.0 Million
Southern Coast Roads	3.0 Million
Environment Impact Study Phase	31.0 Million
Northwest River Road Upgrade	1.0 Million
Upgrade TLH Churchill Falls-Esker	3.7 Million
Two Maintenance Depots	1.4 Million
Wabush to Ashuanipi Bridge Upgrade	0.8 Million
Total		$308.1 Million

Upon completion of these projects, it is estimated that $100 million will be available in the fund.

The province will take $97 million into general revenue in 2002-2003. This is prudent cash management since government�s costs of borrowing exceeds the interest being earned on the fund.

Phase I and II of the TLH will be completed in 2002-2003 and government�s commitments for road construction from this fund will be met.

The ongoing operation of the ferry service to coastal Labrador would have depleted the balance of the fund in less than eight years, at which time government would have to cover the cost from its general revenues. The province will assume full responsibility for funding the ferry service in 2003-2004 and beyond.