Transport Committee on May 16th, 2006

[Thomas Garlock]

I think they've been terrifically engaged, keeping in mind that the members of our respective boards and commissions are appointed largely from the communities.

In my case, I have a Canadian commissioner from Niagara Falls; another from St. Catharines, very close by, and another from Niagara-on-the-Lake, to the north of Niagara Falls. All are intimately aware of the issues of importance to their respective communities.

This is mirrored on the United States side. In my nearly six-year tenure as general manager, I've been given clear direction to be engaged with communities on both sides of the river and to make sure that we understand, appreciate, and respond to local concerns.

I'm very proud that I've recently completed the chairmanship of the board of directors of the Chamber of Commerce of Niagara Falls, Canada--you can detect by the strange way I speak that I may be an American. We are truly binational in our part of the world, and our commission operates that way.

[Andy Scott, Liberal, Fredericton, NB]

As a maritimer, it all sounds the same to us.

I think I heard you say in your opening comments that notwithstanding that everyone on the Canadian side comes from some place--it's a given-- they are appointed by the province. Would the municipalities involved have the same comfort that the people coming from St. Catharines would hold the view that would satisfy the Municipality of St. Catharines? I'm trying to get to the question of relative roles here.

[Thomas Garlock]

All I can tell you is that I have not heard any complaints from the community about the activities of the commission or the representation of the community on the commission.

I can tell you that our complaints are minimal. I think I did say earlier that we are starting to hear from some people about the disparity between the two currencies, and we are going to have to address that. But by and large, I believe that communities on both sides of the river feel that they are well served.

[Andy Scott, Liberal, Fredericton, NB]

What is your relationship with the other entities that are represented, outside the areas that you cover, elsewhere in Canada?

[Thomas Garlock]

I've not really had contact with the eastern bridges. Mostly they're operated by the provinces and the states. You don't have a stand-alone operator such as the Peace Bridge Authority or the Niagara Falls Bridge Commission there, so it's been almost non-existent, in all honesty.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

I see we're almost out of time, so I'll try to be very quick. I know I won't have very much to add after all the opportunities of the other members; however, the 65% of the people who voted for me in northeastern Alberta are glad that I can participate today.

On my first question, you referred to the May 12, 2006 Standard & Poor's article?

[Thomas Garlock]

Yes, the advisory that they issued.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

That advisory is actually titled “Canada's Bill C-3 Unlikely to Affect Blue Water Bridge Authority Credit Profile”.

[Thomas Garlock]

That is correct, Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

In fact, the first paragraph actually says, "Standard & Poor's Ratings Services today said that neither its 'AA-' ratings nor its stable outlook on Sarnia, Ont.-based Blue Water Bridge Authority...are affected as a result of Bill C-3...”.

[Thomas Garlock]

It does say that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

It actually goes on further to say that the BWBA's current toll-setting autonomy is one of the authority's most important credit-supporting features, and that the draft legislation as currently published would not actually impose any constraints on the BWBA's toll-setting autonomy but simply specify that the government had the power to do so.

In fact, isn't this legislation really putting it in the hands of the minister, where it would be the challenge of the bridge authorities or the bridge independent owners to challenge the government's or the minister's position on toll-setting? Isn't that fair to say?

[Thomas Garlock]

It's not entirely clear yet, and I think it will be clarified in the rule-making, in the regulatory process.

I should add, too, Mr. Jean, that if you read further in the advisory from Standard & Poor's you'll see there are some caveats that speak to potential future issues from the Blue Water Bridge Authority. We've also included a discussion contained in an e-mail from an officer of Standard & Poor's about the legislation, and that has also been made available to the clerk.

On the face of it, it would likely not have immediate impact on present bond holders. I, however, am an exception. I do have a number of swaps in place on our 2003 refinance that may or may not be influenced by the legislation.

But for the most part, for existing bonds that are already in the hands of issuers there would be no downgrading in the bond unless the government took action. But with a future issuance, the markets could view this as being somewhat chilling and it could have an effect on the rating, and thereby the cost to borrow.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

But you'd agree with me that Standard & Poor's actually says in this particular article that it wouldn't have an effect on the rating?

[Thomas Garlock]

On the existing rating, I would agree.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

And indeed, wouldn't you still have the ability to seek damages and even an injunction from the court if such were to take place? If there were an imposition by the minister, which seems unlikely in the circumstances, but if he were to impose some sort of tariff restriction, either up or down, the authority would have immediate redress to go to the court to seek an injunction, because they could show that it actually harmed them in some capacity.

[Thomas Garlock]

Mr. Jean, this simple bridge manager has no interest in tangling with the minister.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

You would if it affected your bond rating, I'm certain.

[Thomas Garlock]

Well, I'm optimistic that we can address that in this forum, in Parliament, before it would ever come to that.

Again, it goes back to our conversations with the Department of Transport. They were not insensitive to what we were saying. I think it's a divergence of opinion, in terms of where it should be addressed. Should it be addressed here by Parliament, or should it be addressed by the minister in rule-making?

We feel strongly that it should be a policy statement and part of Parliament within the statute. That would give us and our rating agencies and our bond holders a measure of comfort.

[The Chair, Conservative, Merv Tweed]

Mr. Jean, you have 20 seconds.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Wouldn't you agree, though, this is a situation that can't continue as it is because the minister has no authority to indeed regulate the flow of traffic without this legislation, and this would put the bridge authorities and the bridge owners on reaction instead of, in essence, the ability to do whatever they want?

Of course you have mentioned that the flow of traffic across those borders is so important to Canada, which of course it is.

[Thomas Garlock]

I'm not going to portray this as a BTOA position, but I personally would agree with you that we fulfill a federal purpose and that it is appropriate for the ministry to have an oversight role.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you.

[The Chair, Conservative, Merv Tweed]

I'd like to thank you, Mr. Garlock, for attending today, and we'll take your words under advice as a committee.