Evidence of meeting #68 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was p3s.
A recording is available from Parliament.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Mr. Moist, you mentioned that certain pension funds are profiting off the 407. Can you name any of them?
National President, Canadian Union of Public Employees
I can't directly, no. I know that one of the major investors is a Spanish consortium, but I'd be surprised if there weren't pension investment in the 407. It may not be Canadian pension investment.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Could you guess what the biggest pension investment is in that project?
National President, Canadian Union of Public Employees
It wouldn't surprise me if Teachers' doesn't have some skin in that game, but I don't know that for a fact. I couldn't testify to that.
Conservative
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It owns 40% of the 407 now. Therefore, 40% of the dividends from that highway are owned by the Canada Pension Plan, which I believe your organization has called for an expansion of.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
The Canada Pension Plan also owns profitable banks and oil companies across the country and relies on the profits of those corporations for its income. Of course, those profits are only available after tax, but you spoke out today against reductions in taxes for Canadian business.
If the Canada Pension Plan should not be profiting from the 407, and if it should not be profiting from businesses like banks and oil companies, how do you expect it to gain the returns on investment that it requires to pay out benefits to its recipients?
National President, Canadian Union of Public Employees
Through the chair, there may be a conflict of public pursuits here, because I do think that it's in the interests of the Canada Pension Plan to make rates of return and deliver pensions to Canadians.
The other public test, though, is this: is the 407 in the interests of the ratepayers of Ontario, who are underwriting it for 90 or 99 years? I'll say 90. Mr. McGuinty ran for office saying, “When I'm premier, I'm going to get to the bottom of this deal and I want some of those profits for the people of Ontario.” He was told by the courts to forget it.
So it may be a great highway for institutional investors like CPP. Mr. McGuinty, at least for one person—I agree with him on this—thought it was a bad decision by the Harris government for the people of Ontario. There's a convergence of different public issues here.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It is so bad that he's expanded the decision and is lengthening the 407 under the same P3 model that predated his premiership.
In British Columbia, we have the Canada Line, which is one-third funded by private sector investors. One of them is a pension as well. It's the Caisse de dépôt. We have Quebec pensioners funding public transit in British Columbia, and British Columbians paying returns back to Quebec pensioners through their fares.
I'm sorry, but I'm having a hard time finding what's wrong with that. Can you tell me?
National President, Canadian Union of Public Employees
From the point of view of institutional investors or pension fund investors, there may be nothing wrong with it. Are these—
Conservative
National President, Canadian Union of Public Employees
Are these good deals for the province of British Columbia?
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
According to the British Columbian government, the project came in tens of millions of dollars below what a traditional public tender would have done. It came online three months ahead of schedule, on budget, and ridership numbers have vastly exceeded expectations. So I'm still having a hard time understanding the problem.
National President, Canadian Union of Public Employees
We've never seen the details of that deal, whether it's a good deal in the interests of the taxpayers or the citizens of British Columbia.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It's the biggest capital project in British Columbia history. I have not heard anything negative said about it, but if you can point me to something, then I'd be glad to hear it.
I think we all agree the gas plant was a boondoggle. I think even the provincial Liberal government that executed this decision would agree with that now.
Can you tell me which private sector entity caused the loss of $250 million, and what they did to cause it?
National President, Canadian Union of Public Employees
I don't know of any private sector entity that caused $200 million to have to be paid. The devil's in the details, and we find out that somebody on behalf of the people of Ontario negotiated that the private sector put up $50 million to $60 million. The Globe has used both figures. To get out of this deal, we're now at $240 million.
So somebody in the public realm on behalf of the people of Ontario negotiated that level of risk exposure for the citizens of Ontario. I think it cost somebody his career.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
If the government were to contract anyone to build a plant, wouldn't you presume the contractor would want a penalty if the government suddenly cancelled its own contract?
National President, Canadian Union of Public Employees
Through the chair, I negotiate for a living and I think the private consortium did a good job of negotiating for themselves here, and the Government of Ontario will have to face the people at some point.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
You don't think any blame is attributable to the government that first decided on the plant and then changed its mind after signing the deal?
National President, Canadian Union of Public Employees
The politics of it are well established. I wouldn't disagree with you on that.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I think the politics are the whole issue. My point is that if P3s are a problem, in this case the P3 that caused the problem was public. The government made the decision and conducted itself in a way that cost the money, not the private sector. Perhaps you're making a good case for less central planning in the procurement of power, rather than more government control in its production.
National President, Canadian Union of Public Employees
Through the chair, I expect government at all levels to mind the public interest, and it isn't in the public interest to sole source or to have this lack of transparency.
My colleague who's sitting behind me, our chief economist, appeared before the other committee that has met on this subject. Years after certain P3s, seven auditors general, including the Auditor General of Canada, said they don't appear to have transferred much risk and they've been more expensive in the way you chose.
Don't get me wrong. There's nothing wrong with the Confederation Bridge between P.E.I. and New Brunswick. It was well built, on time. Your Auditor General, not CUPE, said it cost $45 million more than the public option. Tolls have increased faster than government was warned, so the devil's in the details here. Your auditors general are telling you the devil's in the details.
