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Alright, friends from south of the border—and even fellow Canadians outside Toronto—curious about this “Highway 407” fuss you keep hearing?
Let me break it down for you. But first, a word from our sponsor:
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Highway 407 is a toll highway skirting the northern edge of Toronto, Ontario’s largest city. Imagine the bypass highways you see in major US metro areas—except without toll booths or stopping for coins. Instead, electronic cameras or transponders track your trip and bill you later. It’s about 150 kilometers (or 94 miles for the US-friendly), connecting suburbs like Mississauga, Brampton, Vaughan, Markham, and beyond.
The highway launched in the late 1990s and was soon privatized under a 99-year lease deal. Ontario sold the original 68 km section to a private consortium for roughly $3 billion—a long-term lease where private investors run, expand, and collect tolls. By now, that tollway has extended eastward, expanded lanes, and is worth billions more. Tens of thousands of drivers use it daily to avoid the deadly traffic jams on Highway 401, Canada’s busiest road, famously called “the world's busiest truck route.”
So, who owns this highway now? The ownership group is a mix of global and Canadian heavyweights. Nearly half (48%) is owned by Ferrovial, a Spanish infrastructure giant. The Canada Pension Plan Investment Board (CPP Investments)—yes, the pension fund that manages retirement savings for millions of Canadians—owns about 44% along with other institutional investors. Recently, PSP Investments, another big Canadian public pension fund, joined in with a roughly 7.5% stake. That means Canadian retirees are, in a sense, co-owners of this tollway, benefiting from its hefty profits while commuting Ontarians are paying tolls.
Why did Ontario do this? Simply put: cash upfront. Like a mortgage, they sold off this vital transportation artery to private investors for immediate funds. It made sense in the short term. The private operator invested in tech (no cash toll booths!), expansions, and upkeep, pushing the tolled highway model into the future.
But before you start thinking, “Great idea, Ontario can teach us how to privatize,” there’s a twist—this deal also came with headaches. The highway’s tolls are infamously high, and billing disputes (including license plate denials) have made drivers raise their blood pressure. Moreover, the lease is so long (think of it as buying a century-old car lease) that Ontario won’t regain highway control until the late 2090s.
Because of this, recent eastward expansions of the highway were done by the Ontario government itself—no private middlemen—signaling a pullback from privatization. Canada is increasingly favoring public control over critical infrastructure, for good reason: it keeps decisions, pricing, and expansions accountable to the public.
So, will you see the next “Highway 407” deal in the US or Canada anytime soon? Not likely. Governments on both sides of the border are wary of ceding such control permanently, especially with vital urban arteries. The 407 is something of a cautionary tale: blazing a path into tech-savvy tolling and highway expansion, but at a price that left many wishing they’d kept the keys.
And for our American neighbors pondering Canadian toll roads: 407 is a glimpse of a different approach for dealing with gridlock, but also a reminder that the devil’s in the long-term details.
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