Audit of Financial Statements of Saint Lawrence Seaway Development Corporation, Calendar Year 1976

Gao ID: FOD-77-13 September 13, 1977

The Saint Lawrence Seaway Development Corporation is the wholly-owned Government corporation created in 1959 to provide for construction, operation, and development--jointly between the United States and Canada--of the 27-foot-deep seaway between Montreal and Lake Erie. The Corporation has projected that beginning in 1978 it will not be able to meet its revenue bond redemption schedule as currently structured. The Governments of Canada and the United States are negotiating a toll increase, but it is unlikely that, even with the increase, enough revenues will be generated to resolve the Corporation's financial situation.

The corporation has considered several options, including asking the Secretary of the Treasury to alter the bond maturity dates, seeking legislative cancellation of the debt, or asking the Congress for appropriated funds. However, the Corporation does not plan to act on these options until the toll increase negotiations are concluded. Review of the Corporation's financial statements indicates that they present fairly the Corporation's financial position at December 31, 1976 and 1975, the results of its operations, and the source and application of its funds for the years then ended in conformity with principles and standards of accounting prescribed by the Comptroller General of the United States.

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