Evidence of meeting #34 for Fisheries and Oceans in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was harbour.
Director of Recreation and Community Services, City of Belleville
The majority of the repairs we've had at Meyers Pier and Victoria Harbour over the years have been done through cost sharing--50% small craft harbour funding and 50% from the City of Belleville, from its operating budget for the site.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
When you made the decision to go down this divestiture path, was there a point where you could have made the decision to continue with the status quo, or was there pressure on you from DFO, from the small craft harbours program, to divest? How did you come to this decision?
Chief Administrative Officer, City of Belleville
Perhaps I could respond to that question.
No, certainly the intention of the small crafts harbours program was clear, and the opportunity was presented. But the challenges we were facing were certainly well known. Fortunately, Lyle Vanclief, a previous member for our riding, was very instrumental in securing some additional funding to help deal with the environmental issues. It was really that initiative at the federal level that kind of put it over the top, if you will, in terms of the city's willingness to pursue this aggressively. Until that point, the city was certainly aware of the opportunity, but was greatly concerned. Now, we saw the opportunity to perhaps bring this to some sort of a conclusion that would be to everybody's liking.
So we did not see that as pressure; we saw that as an opportunity. What we failed to appreciate at the time—and of course everybody did—was exactly the challenges we'd face getting through the provincial Ministry of the Environment. But we still see this as an opportunity.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
I have just one final question.
Are those who use the facility there enthusiastically supporting this direction of the city owning the property?
Chief Administrative Officer, City of Belleville
Yes, I think so. Certainly the community, I believe.... Maybe Mayor Ellis can speak to that question in terms of the community.
Mayor, City of Belleville
Again, we've seen other communities that have given up their waterfronts, and I think I could probably pose the question as this. What would the federal government do if we didn't take it over? That was a question that was really never answered by the Department of Fisheries and Oceans.
As a political football, it didn't seem there was really a good outcome unless we took it over. Now whether it was a bluff that we would have had to play and say we weren't interested in spending the money, and see what the next step was.... Obviously, the land is leased to us, and I believe the lease is up in the next year. So council did support it with some reservations, I guess. The reservations are about the next step. We've seen some of our waterfront down the road that is industrially polluted and in the wrong hands; we'd end up with the worst nightmare, if somebody does take it over and doesn't do a proper cleanup. If we lose our waterfront, what are we going to leave with our citizens down the road? That's my children and your children. The sense is that if it does go into private hands and it's not cleaned up properly—and we see that right now in another land case—it could get a whole lot worse.
The only situation I'll allude to is that recreation is not profit-bearing for the city. Taking the property over, we're definitely going to have greater operating costs, and I don't see any way of any revenue really coming out that's going to cover those costs. When you look at our long-term master plan, yes, recreation contributes to our being a healthy community. It's a circle. When you have waterfront festivals and you have the tourism coming in, it doesn't really benefit the city coffers. It benefits the tax base, as in the hotels and the business, but we really don't have any income. And when I look at the facilities and what we have there, the people who walk away with the money are the provincial and federal governments, with the GST and PST. We have an event and we spend $100,000 on a waterfront festival, and we end up breaking even or contributing money towards it, and with the GST and the PST, the federal and provincial governments are the ones that benefit. Again, it helps jobs and it helps industry, but it does cost the taxpayers money to have these events.
I've always been wondering, in the sense of what we need.... I guess to say it politely, the tax system is broken. For every dollar that's collected in taxes, the municipality gets 8¢ and the upper tiers get the 92¢, and we provide 60% of the services. We've taken this land over, we're going to be providing more services, and it's going to cost us more money. That's what we have to be aware of overall.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Thanks very much.
I'll see if Daryl has anything.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
The one difficulty I see with the whole waterfront area that is not similar to every other divestiture is the major environmental issue we have. This is not a stand-alone, because there are similar issues in other parts of the country, but it is not your typical divestiture, because you had an unknown.
The concern I have is, what if? What happens with the environmental concern if you take it over, and what happens if you don't take it over? We still have an environmental concern that has to be dealt with either way, so some significant dollars have to be put into the environmental remediation.
Quite honestly, I am very pleased that a working arrangement is in place and is going forward. I have a number of concerns yet, but I'm delighted to hear your tendering is within budget. That's remarkable, given some of the circumstances we're hearing today.
The original cost of the remedial action has dramatically gone up over the years. Could you give me a breakdown on the inflationary aspect of this? We're not talking about a one- or two-year cycle; you've been involved with this for 10 years or more. Is it strictly due to inflation, or has it been due more to increased levels of bureaucracy--i.e., approvals and mandates from the various environment ministries, etc.?
Chief Administrative Officer, City of Belleville
Certainly inflation will have had some effect, but the remedial actions we need to take are probably more sophisticated and certainly involve a greater degree of study and assessment than was anticipated at the very beginning. It's probably the standard, more than any other factor, that has resulted in the increase in costs.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Has there been any discussion with DFO with regard to the increased costs involved?
Chief Administrative Officer, City of Belleville
We have talked about that. We've talked about the operating costs or the longer-term liability costs with DFO staff, and they've been very sympathetic to our concerns. We've had an excellent working relationship with the staff, and they've been very cognizant of our concerns. They of course are limited in terms of what they can do by virtue of some of the parameters of the program, but they were certainly sympathetic to our concerns.
As a result of the challenges we faced in working through some of these obstacles, they've been very supportive of the extensions and some of the frustrations they've had to go through in terms of helping us get through the process. I think there's a clear understanding by both parties--both DFO and the city--as to what's been going on and why these costs have increased over time.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
I was reading the previous report of the standing committee back in December--
Conservative
The Chair Conservative Fabian Manning
I'll come back to you in a minute. I want to do a five-minute round.
Thank you, Mr. Kramp.
Go ahead, Mr. Byrne.
Liberal
Gerry Byrne Liberal Humber—St. Barbe—Baie Verte, NL
Your testimony is very helpful to us. We're not probing this particular harbour or facility; what we're doing is using your experiences to analyze what needs to fit our recommendations to the national program.
I think what you're saying is really important. What I'm hearing is that you've got a base agreement of $15 million--$5 million and $10 million--and it's a quantum, a fixed amount of money. You've spent $3.5 million or thereabouts; you've got another contract tendered that is legally binding to you for $12 million, so the $15 million will now be spent. You'll be left with a good, pristine, as-it-was site, environmentally remediated.
But not one cent will be spent on water lot improvements such as breakwaters, wharfs, or slipways, nor will one cent be spent on upland development such as restaurants, boardwalks, or tourism infrastructure. You're committed to taking this over as soon as this $12 million contract is completed and the site is remediated.
Are you aware that once you take over real property ownership, the small craft harbours program is no longer eligible to fund anything related to this harbour facility?
I'm asking these meanspirited questions simply to get confidence that you understand the situation in front of you. Unless you get additional moneys prior to taking real property ownership of this from the small craft harbours branch, there's really nothing on the table afterwards. Once city hall does take ownership of this, the only opportunities are from existing cost-shared federal-provincial-municipal government programs, such as the MRIF, the Building Canada fund, and so on. Are you very clear on that?
Chief Administrative Officer, City of Belleville
Yes. The council was very aware of those facts and was very aware of what we'll call long-term liabilities. They made the decision to proceed regardless because of the importance of the harbour to the city.
Perhaps Mayor Ellis might want to comment on why that was done.
Mayor, City of Belleville
Again, that was kind of the gun to our heads. The alternative was unknown. I think it was Mr. MacDiarmid, from Fisheries, who came to council. The alternative was that our lease might not be renewed and that a fence could be put up.
When you look at it, it all might wash out well. On the other hand, we have a big liability we're assuming, because we feel it's the right thing to do. It will keep the waterfront in our coffers. I don't think there was really an alternative. It was either take it or lose it, and that's the way it was kind of presented to council.
Liberal
Director of Recreation and Community Services, City of Belleville
If I may, I'll just add to the comments relevant to the city's operation. Of course, with the small craft harbours program giving us the extension, rest assured that the staff has already approached the small craft harbours people for some minor capital funding for issues that we know will have to be addressed at the time we take over ownership. So we're trying to take advantage of a delay.
I'll speak as a longstanding employee of the City of Belleville and as someone who has been involved with this particular site for a long time, even prior to taking over the operation. Every city council has come to the table since the decision about divestiture. We have stressed to council that this harbour needs to remain under the operation of the city so that when it comes to development, we as a city will be able to write the direction and not have it written by somebody else.
Prior to Mayor Ellis coming to office, and even prior to Mr. Hyndman coming on staff, there were private developers who wanted to do a development down at the waterfront, which would basically have taken it out of public hands. It would have changed the character of the site and changed access to the site. That was an argument and a discussion for politicians.
Liberal
Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL
I just have a couple of quick questions.
This is an offshoot of small craft harbours. You talked about the gas tax issue. This is probably a question for you, Mayor Ellis. With regard to the gas tax, that five cents of the excise tax, provincial and federal, would some of that be eligible, once you take ownership, with regard to the harbour? That's my first question.
The second one is to the others.
Liberal
Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL
Basically, what would you recommend be changed in the divestiture program itself?
Mayor, City of Belleville
I guess touching on the gas tax, we pretty well have most of our gas tax spent. We're building bridges and roads, and unfortunately, with our infrastructure probably not like any community in Ontario, we probably need about $300 million to correct the problems we have. We're fortunate that we're not as badly off as some communities with their wants and needs, but we're slowly getting that way.
Again, on the gas tax, I believe we have allotted it in our budget to about 2012--Steve can touch on that--for a link on a bridge to a highway.
Chief Administrative Officer, City of Belleville
The gas tax moneys have been greatly appreciated, because we do have some very serious issues. The road issues and the bridge issue are, as Mayor Ellis mentioned, where our priorities are. I think we'll find that throughout the community there are going to be some extremely important priorities that will have to get attention with gas tax dollars, which might preclude money going into the harbour. It's a case of needs versus wants, and that's the challenge we'll face.
In terms of the program itself and what should be changed, frankly, as I mentioned in my opening remarks, I think the program is a good policy. It's a good practice for the federal government to pursue. I think you should continue to pursue this line of approach with regard to harbours.
What I would suggest, however, is that perhaps the government needs to look a little more carefully at the kinds of liabilities it's passing on to local communities, not just in terms of the present situation but into the future as well. Maybe there should be some flexibility in the funding to enable municipalities to enter into agreements with a greater degree of certainty and clarity as to how issues that might evolve over time are going to be funded.
If we had a perfect crystal ball and knew that our financial world would be a much more attractive place in 30 years' time, we'd be much more comfortable taking those risks. But we don't know that. So at this point, we're going into it blindly. And that does cause us some concern, not to the point that we're saying no, because we see the opportunity there, but I would suggest that this may be something that perhaps the program should look at.