Teranet Transaction Reduces Debt By $1 Billion
McGuinty Government Saves Ontarians $50 Million In Annual Interest Costs
Ontario announced the official renewal of Teranet Inc.'s exclusive licences to provide electronic land registration and writs services to the province. This will keep the system modern, user-friendly, reliable and secure for an additional 50 years.
Borealis Infrastructure, Teranet's owner, made a $1 billion payment to the province, which will be used to reduce the province's debt. This debt reduction will decrease Ontario's ongoing borrowing requirements and save Ontarians up to $250 million over five years in annual interest costs. Combined with the $1 billion reduction in deficit announced earlier this fall, due to stronger than anticipated growth in the province, the government will be borrowing $2 billion less than forecasted.
TD Securities Inc., the province's financial advisor, stated that the consideration paid by Teranet in this transaction is fair, from a financial point of view. This agreement is an example of how the McGuinty government is reducing debt for Ontarians now and in the future to support priority investments such as schools and hospitals and grow a stronger economy as part of the Open Ontario plan.
- Beginning in 2017, Teranet will pay the province annual royalties, estimated to be $50 million in 2017-18 and tied to Teranet's revenues thereafter.
- Ontario is the first jurisdiction in the world to provide electronic registration of land-related documents
- Borealis Infrastructure, a division of Ontario Municipal Employees Retirement System (OMERS), has been Teranet's owner since 2008.
- Since 1991, Teranet has successfully automated 5.8 million parcels of land.
“The terms of the Teranet agreement provide significant benefits for Ontarians, both today and in the future. With a $1 billion upfront payment, future royalty payments and significant consumer protections, this deal provides excellent value for Ontario taxpayers.”