Debates of April 26th, 1994

Pearson International Airport Agreements Act

[John Nunziata, Liberal, York South—Weston, ON]

Mr. Speaker, the contract was signed on October 7 and the member raises his concern about this diplomatic problem we might have.

If anything, the message was sent out loud and clear by the Prime Minister and the Minister of Transport when this contract was cancelled. The message was if you want to do business with the Government of Canada then you have to do it above board in a responsible and reasonable way and it ought to contemplate the public interest.

In this particular case Mr. Nixon made it abundantly clear that there were a lot of shady aspects to this particular deal. There were a lot of backroom negotiations and much manipulation. There were a lot of payoffs. Lobbyists were selling access. They were arranging meetings for very significant fees.

The hon. member talks about this particular company that might feel particularly aggrieved. One wonders whether it hired one of the lobbying firms involved. Surely as responsible business people they knew what was going on.

In any event would the member not agree their claim is not for out of pocket expenses but for lost profits? Any out of pocket expenses they may have incurred could only have taken place after the signing of the actual contract on October 7. After that of course they knew on October 25 the government would change.

Again would the hon. member not agree that any company that in any way shape or form was involved with this contract, or hoped to gain as a result of this contract knew very well that the contract would be cancelled even before it was signed? Therefore why would it expend one red cent when the writing was already on the wall?

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I repeat that I agree with those comments. They are legitimate comments.

In a discussion with the Dutch embassy just now it feels Bill C-22 unjustly punishes third party firms associated with Pearson. It says that the Schiphol airport authority being non-political should not be caught up in the whole Canadian political corruption the hon. member mentioned. According to the embassy it is saying the company from Holland feels it has a claim.

Again I get to the diplomacy. I am not saying that position is right. Obviously the courts will determine that. However it has filed a claim in the Canadian courts about this deal. Therefore it is obvious it feels this is not a dead issue and that it is not something it should not raise.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I am more inclined to endorse the recommendations of the hon. member who spoke before the Reform member. I wonder which principles come into play. I can understand that there may have been companies which unfortunately entered in good faith into negotiations or made some kind of deal with T1 T2 Partnership Limited. But, getting back to what the Liberal member was saying, what reason would we have for compensating individuals who were truly involved in some kind of scheme against the government?

If a group of criminals spends a substantial amount of money plotting to rob a bank and then screws up, the bank is not about to compensate those people for the costs incurred in the planning of the robbery. That is the principle I am having trouble understanding. I hope that the Reform member is not trying to tell me that we would be better off paying compensation to avoid lawsuits from foreign companies. Is that what he is suggesting?

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, let me make it extremely clear. I am recommending we compensate no one involved in any part of this, including foreign companies that are now making claims in court. We should not compensate them. All I am saying is those claims are out there and it does not help our

image. That is all I am concerned about. Do not compensate them at all.

[John Nunziata, Liberal, York South—Weston, ON]

Mr. Speaker, the third party contracts the hon. member refers to would fall within the definition of agreement under the bill. In effect the bill cancels or precludes any legal recourse whatsoever for all contracts whether they are with the consortium or other third parties who might have participated. I just wanted to make that point.

One further point is that the request for proposals dated March 1992 made it abundantly clear to all those who wanted to bid on this contract that the government was under no obligation to accept any of the bids. In fact the government reserved the right to reject any or all of the proposals and to elect not to proceed with the project.

All the companies involved in the bidding process, and perhaps this foreign company was one of them, knew in advance that any moneys they spent in preparing the proposal could very well have been money lost because the government made it clear in its bid for proposals it could elect not to proceed with the project.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I agree totally with that comment.

[Joe Comuzzi, Liberal, Thunder Bay—Nipigon, ON]

Mr. Speaker, I am pleased to discuss Bill C-22 today. The essence of the bill is to put a fence around the problems surrounding the development of Canada's largest airport for the last number of years. It not only puts a fence around the problem in delineating a timeframe but it also goes on to speak about the type of compensation, if any, which is to be allowed to the successful bidders.

In the minister's statements today, lobbying fees, other costs and loss of profit are not going to be considered in the eventual solution to this problem.

It is interesting and I say with pride that there has been some continuity in the Liberal Party. From its inception we have opposed the concept of privatizing Pearson airport, even when we were sitting on that side of the House.

On June 12, 1989 in the recommendations of the federal caucus task force on the future of Pearson International Airport, my colleague who spoke a few moments ago stated in part: "It should never be allowed that Pearson be privatized. It should always remain as a viable and important part of the infrastructure of Canada. It should always be used for the public policy and in the public interest of all Canadians". That was in a report made by my colleague as far back as 1989.

This problem had its genesis when the government of the day decided it should privatize a new terminal that was being built at Pearson. As a result of that process a private consortium was allowed to build what we now know as Trillium or terminal 3.

To this day, as hard as we worked when we were in opposition to find out the terms of that contractual arrangement between the owners of Trillium and the government of the day, we were not made privy to that very important document that allowed the first privatized terminal at Pearson airport.

We were told at the time that the reason for the privatization of terminal 3 was that Canadians did not have the means by which to expand airport facilities in that area. That had some semblance of accuracy. However we failed to realize at that time that terminal 1 could have been made into a more efficient airport with the expenditure of a few million dollars for modernization.

As they got on with the building and prior to the opening of terminal 3 we were advised that there was a move afoot to privatize terminals 1 and 2. The reason was that the government wanted, and this is a very important concept, to provide a competitive factor at Pearson International Airport in order to keep in balance the privatized interests that were operating at terminal 3 and terminals 1 and 2 under another entirely different corporate structure. This was to bring some balance for the best interest of the consumer who was travelling in and out of that airport. That was the reason it came forward with the privatization concept of terminals 1 and 2.

We had some concerns about the privatization concept. As a result of that the Liberals while on that side of the House entered into another task force proposal. That was done on September 12, 1990, one year after the first proposal. We found that the contract for terminal 3 had been entered into but there had not at that time been any designation of any airline that would use that airport.

I will quote from some of our findings of that task force. Please recall that in 1990 the airlines, as they are today, were experiencing severe financial difficulties. Part of the findings were that the airlines in the country, particularly Canadian, faced the dilemma that operationally it could not use terminal 3. At the same time Canadian could not afford to move into that airport. It would have been a financial disaster. That came from one of the leaders of the Canadian airline industry at that time.

We found as a result of that study in 1990, and these feelings were expressed in the House just prior to the opening of Trillium, that the cost of flying into terminal 3 would be prohibitive to the average Canadian consumer. Those of us who sometimes travel at government expense perhaps do not not

realize the cost of travelling as much as we should. However the cost of going into terminal 3 would have been prohibitive to the average Canadian wage earner in the country flying with his family or wanting to see the rest of Canada.

We knew that exorbitant rental fees were being charged. After terminal 3 opened there was almost a rebellion by everyone renting space in terminal 3. The costs of leases to the airlines and the the retailers were passed on to the travelling customer.

If terminals 1 and 2 are privatized, price increases can be expected for every consumer. Terminal 3 will set the pattern for terminals 1 and 2 should privatization be allowed. Either way, whether it is privatization with one consortium of terminal 3 and privatization by another corporate citizen of terminals 1 and 2, there will be one inevitable conclusion: The cost of travelling into Toronto, the largest airport in the country, will increase substantially. Those were our findings. Those were our recommendations. The government carried on, although we were sincere in trying to get it to change its mind.

Let us see what happened after that. All of a sudden people showed up at some of our offices, including I am sure the office of my colleague who just spoke, saying: "We want to show you our proposal". This was long before the government asked for proposals for the privatization of terminals 1 and 2.

In 1991 people came to my office and said: "We would like to show you our proposals for terminals 1 and 2". I told them the government had not asked for proposals. The answer was: "Yes, but we are anticipating that this government is going to ask for proposals for privatization".

Finally, I believe in March 1992, the government asked for formal presentations for proposals for the privatization of terminals 1 and 2. As a result three proposals were made. The first proposal was by the then owners of terminal 3. That was not met with much favour because of the competitive factor that we wanted to maintain between terminals 1 and 3.

A very good proposal was submitted by the British Airport Authority which operates the airports in England and other places on the continent. It had some very good ideas that I think we should incorporate into what we are trying to do at Pearson today. However its proposal was shortlived. It did not meet with favour.

The third proposal was from a company called Paxport. Paxport always seemed to have the inside track for whatever reason. Eventually, as these proposal were being discussed, Air Canada made it known that Paxport made a proposal that interested it most and since it was operating exclusively out of terminal 2, Paxport was the proposal it would entertain.

Going back to the original statement, competitiveness was always a factor in the privatization of terminals 1 and 2. The Paxport proposal was looked on with favour by Air Canada. Eventually something else happened.

Terminal 3 was taken over by a corporation called Pearson Development Corporation. The previous owner sold out interest to Pearson Development Corporation.

[An hon. member]

Who owns Pearson Development Corporation?

[Joe Comuzzi, Liberal, Thunder Bay—Nipigon, ON]

Then Paxport disappeared, the one that was operating with favour. Where did it resurrect itself? Pearson Development Corporation. All of a sudden, having been given assurances by the government of the day that there would be competition at the airport in Toronto, as the government was getting close to awarding the tender we found that there was going to be no competition at Pearson International Airport. In fact the three terminals, terminal 3 which was called Trillium, terminal 2 and terminal 1, would all be under the direct control of Pearson Development Corporation.

[An hon. member]

A real monopoly.

[Joe Comuzzi, Liberal, Thunder Bay—Nipigon, ON]

A real monopoly in Canada's main hub, the largest airport and our pride and joy in Canada. That move was just unconscionable.

We in the government kept expressing our displeasure at what we saw happening at the Pearson airport complex. We stated throughout the election, including when we were approaching October, that the Pearson privatization was not a rational, logical proposal for the public interests of Canada.

What was proposed for all other airports in the country was to put every one of them under what we called local airport authorities. That vested the local airport in each of our communities under a local control made up of non-profit oriented business people, men and women who would operate the airports in the best interests of their communities. That was not a bad idea and we supported that legislation.

We asked the government of the day why, if local airport authorities were all right for Vancouver, Edmonton, Calgary, Winnipeg, Mirabel, Dorval and other airports in the country, they would not be good for Pearson International Airport.

The reason was simply that we were having a difficult time getting along with all of the jurisdictions that surround Pearson airport at the municipal level. That did not wash.

The second reason was that Pearson was such a strong international airport that it could not be left to the control of a local authority, although that did not apply to Dorval, Winnipeg, Edmonton, Calgary or Vancouver. The whole concept never ever made any sense.

Those who knew about it most were those who eventually evolved from Paxport into Pearson Development Corporation. In June, July, August and September 1993 the issue became hotter and hotter on the political stage. Time does not allow me, Mr. Speaker, to give you some insight into the lengthy meetings with the lobbyists.

Former ministers of the government were getting into the bargaining process with the Pearson Development Corporation and the Department of Transport. When the lobbyists found out that it was slipping away they entered into a contract knowing full well that if there was going to be a change in government, the Pearson deal was going to be cancelled. That was the first move this government made and I am thankful that it was.

That brings us to where we are today. My colleagues in the House and I suspect that within the next four to eight weeks the Pearson deal will be cut, finished once and for all, and we can get on to doing the things that are necessary at Pearson airport not only for the benefit of metro Toronto and southwestern Ontario but for the benefit of the travelling public in Canada as a whole.

When we get rid of this problem and through to the eventual climax, we must look at the contractual arrangement that was entered into. A contract was signed on October 7 or October 8, 20 days before the election. That in itself was unconscionable. We talked today in the House about awarding compensation. Our minister, who is much more generous than a lot of us on this side of the House, said the government is not going to pay for lost profits and lobbying fees but it will look at out of pocket expenses in so far as the proposals were concerned.

Are we looking at the cost of making the proposals by the British Airport Authority which made an excellent proposal but was not given the opportunity to bid with any degree of certainty?

If we look at Pearson Development Corporation it is only just, equitable and right that we look at what the British Airport Authority did in trying to present its best proposal to the House and to the government of the day. We must also look at the other proposals that were made and see what costs were borne by them. That is just, that is equitable and that is right.

To be exclusive in looking at compensation for out of pocket expenses for Pearson Development Corporation alone is not the right thing to do. We should take in the whole gamut of all those who spent considerable time and expense in developing proposals.

In conclusion, I trust that in the next four to eight weeks my colleagues on all sides of the House will be happy to get this problem over with as quickly as possible in order to get on with the decision as to whether we need a north-south runway at Pearson and deal with the problems associated with two extra east-west runways. Let us get on with the problem of what is going to happen to terminal 1. Should it be refurbished? It is a very good airport and accommodates eight or nine million people a year very comfortably.

In so far as transportation requirements are concerned in the country, we have to start to get on track. We are being superseded by communities that are not even half the size of Toronto. We are falling backward because we are failing to act and failing to do what is necessary in not only airport transportation but in passenger rail service and finding an economical way of getting our goods to market so that we can be globally competitive.

I implore all of my colleagues on all sides of the House, let us get down to business, let us get Pearson over with as fast as we can, let us get on with making Pearson a world class airport that we can all be proud of. I know the government with the support of our people on the other side will work toward this very fundamental, vital role for this airport that will be to the benefit of all of us.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I have trouble understanding the comments made by the hon. member for Thunder Bay-Nipigon. He seems in complete agreement with what has been said on this side of the House since this morning. The Canadian people, and the Quebec people among others, can testify to the barely concealed and unconcealable embarrassment of the speakers from the party in office with regard to Bill C-22.

We are told: "There has been scheming; acts that would otherwise be unquestionably criminal have been committed by politicians and business people. But let us forget about that, so that Toronto airport can be developed. Let us forget about all that and stop talking about it, as it does not make things move forward". Is this case as urgent today as it was on October 7? What is preventing us from getting to the bottom of this and looking at the facts? Is it the urgency of it, as the hon. member for Thunder Bay-Nipigon is telling me?

I understand the urgent need, at some point, to resolve this issue, but the members opposite seem to be trying to hide behind convoluted language and they almost get away with it. Some things need to be clarified. We must clear things up.

Why do they not want to clear things up? If no serious impropriety has been committed in this case, unlike what Mr. Nixon says in his report, the Canadian people will at least feel that the government then in office and the current government acted in their interest. Why refuse at all costs to get to the bottom of this?

I ask the hon. member for Thunder Bay-Nipigon to try to justify this behaviour, if he thinks he is still strong enough to do it.

[Joe Comuzzi, Liberal, Thunder Bay—Nipigon, ON]

Mr. Speaker, perhaps I did not make myself clear at the outset of my intervention today. I am not defending anything that went on in the past. I feel as my colleague does that there were a lot of things that went on with respect to the privatization concept that may one day be exposed.

I do not think that is our job today. I think our responsibility here today is to get on with the problem of deciding if there is compensation to a party, Pearson Development Corporation. Leave the problems of the workings of government and how they evolved for another day so it does not hamper what we want to do immediately. I have nothing to hide nor does this government have anything to hide with what we have done.

If there is anyone who wants to hide anything I would suggest to my colleagues that the previous government should be answering to how it got us into this position at Pearson Development Corporation up to this point.

All we are trying to do, and I impress this upon my friend, is clean up a mess. A royal commission, I suspect that is what my friend is alluding to.-What is a royal commission? A royal commission is four, five or half a dozen independent people who have not perhaps been exposed to the problem before. They are funded. What is the price of a royal commission today? The last one I saw on transportation policy came out to be $22 million. Do we need that type of venture today? Do we need that type of inquisition in order to tell us something that we already know? Are we prepared to spend that kind of money? We will have a report in 18 months or 24 months-that is what it takes to have a royal commission now-on something we already know.

I understand. I sympathize. I appreciate the comments the member just made but I am saying let us get on with the job. Get this thing over with and not only work here for Pearson International Airport, but work on behalf of every airport in this country.

[Jack Ramsay, Reform, Crowfoot, AB]

Mr. Speaker, I share the view of my Bloc colleague. I want to thank him for putting on the record the kind of sordid history of this whole mess.

I remember the need for disclosure that involved the Petrofina sale and I remember the cry of the opposition to the Liberal government of the day to provide the Auditor General with all details necessary to report fully on that purchase. I remember it refused to provide that. Then the government changed and as Canadians we heard the Liberal opposition demanding of the Conservative government to do the very same thing, to reveal all the financial details to the Auditor General so that he could make an accurate report to the public on the sale of Petrofina. That never happened.

The hon. member mentioned a contract that was let with regard to the development of the third terminal and that they had asked for the details of that.

Is the government prepared to provide information, to make a full disclosure on this? We do not need a royal commission of inquiry, but bring all the pertinent documents and table them in this House so that the public has access to them and the representatives of the Canadian people have access to those documents so that if we want to examine them we can or any interested body can make representation for that kind of information.

Would the member comment on that.

[Joe Comuzzi, Liberal, Thunder Bay—Nipigon, ON]

Mr. Speaker, I would very much like to comment on that and I am pleased to hear the member say that we do not need a royal commission.

His question is so timely. We had a meeting this morning of the steering committee on transport. The Reform Party had I think two representatives there and we agreed unanimously that what we want the transport committee of the House of Commons to do is go into as much detail as we possibly can, to get as much information as we possibly can, to put it out on the table as fast as we can so that through this medium people in this House and people in this country will know exactly what kind of process was ongoing to strike that kind of deal that interfered with the rights of Canadians.

I hope that we can all learn a lesson on this side and on the member's side that we should never, if we represent the people in this country properly, allow ourselves to get into that kind of negotiating process again. I would be very upset if I saw anyone in this House get into that type of process of negotiation with such lobbying and such influence that it would be embarrassing to be a member of this government.

I welcome that question. The information that the member is requesting will be forthcoming through the Standing Committee on Transport and his membership in his party.

[John Nunziata, Liberal, York South—Weston, ON]

Mr. Speaker, I want to compliment the hon. member for his submissions today. As a result of his submissions I am sure it is clear to everyone that he is one of the resident experts on Pearson International Airport, indeed on transportation issues.

I have always admired the depth of knowledge of my colleague. I am not only saying this because I happen to agree with him, but since his election to Parliament in 1988 he has distinguished himself as one of the foremost experts on transportation matters, in particular with regard to the Pearson airport deal. I know he provided me with a lot of advice on this particular matter.

He and I share the opinion that it takes a lot of audacity on the part of Mr. Bronfman and other principals in the Pearson Development Corporation to put forward a claim of close to $200 million for compensation-that is right, after all of the shenanigans that took place.

The hon. member has pointed out some of the aspects of the deal that caused Mr. Nixon to make the following conclusions: "My review has left me with one conclusion, to leave in place an inadequate contract, arrived at through such a flawed process and under the shadow of possible political manipulation, is unacceptable". Mr. Bronfman has the audacity to put forward a claim.

My question for my friend and colleague is: Does he believe that they ought to be entitled to anything at all? In my respectful submission, Mr. Bronfman and the Pearson Development Corporation, as a result of everything that transpired, deserve to be told to take a hike. They are not deserving of a single red cent as a result of the unconscionable nature of this contract.

If he agrees on that being the case, would he not agree that-

[The Acting Speaker (Mr. Kilger)]

Order. I am sorry, we do not want to extend the time too much longer. I would like to ask the member for Thunder Bay-Nipigon to respond, please.

[Joe Comuzzi, Liberal, Thunder Bay—Nipigon, ON]

Mr. Speaker, I should respond by thanking first the member for those very kind remarks. I will try to be succinct. I think the starting point for these negotiations is just that, zero.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, the Prime Minister had promised to make public all the details regarding the negotiation of a privatization agreement concerning Pearson Airport as well as the agreement itself.

Instead, we have a study done by a former Ontario Liberal minister, behind closed doors, that explains that political personnel and lobbyists had a role to play, a role out of the ordinary, in the negotiation of this agreement. We have few details and nobody is being blamed. We must shed more light on this, and only a public inquiry can do it.

Till we know the role of the various players, that is to say governments, officials, political personnel, lobbyists and investors in these negotiations, and till we know who exercised pressure to have this deal signed come what may, even during the election campaign, we will not be able to determine whether investors are really victims that should be compensated, or players who managed to get a hasty signature, and therefore should not get anything from the public purse.

Since the government wants to appear open and show us that it functions in a transparent way, it should allow the royal commission of inquiry we have been asking for since the very beginning of this affair. We must shed light on a case which just might be one of the biggest patronage affairs in the history of Canada.

I should point out that in the first few days of this government- I was hearing this morning comments sometimes odious, often uncalled for -the Minister of Transport was not against such an inquiry on the Pearson deal. Several Liberal members of the Toronto caucus were definitely in favour. However, they soon realized that friends of their party were also involved, not just friends of the Conservative Party, so the government and the minister backed down and went for a report prepared behind closed doors: the Nixon report.

There is no doubt, when you look at the people involved, that there were many lobbyists very close to the previous Conservative government. Let me name just a few. There was Pat MacAdam, a Conservative lobbyist and college friend of Brian Mulroney. There was Bill Fox, a Conservative lobbyist who is a former press secretary and personal friend of Brian Mulroney. There was Harry Near, a Conservative lobbyist and a long time party activist. There was Don Matthews, former chairman of Brian Mulroney's nomination campaign in 1983, and also former chairman of the Conservative Party and of the party's fund-raising campaign. There was Hugh Riopel, a lobbyist who was an important member of Mr. Mulroney's staff. There was John Llegate, a close friend of Michael Wilson. There was also Fred Doucet, who has always been related to the Conservative Party in one way or another.

However, there were also Liberals, which probably explains certain things. This is probably why, in spite of all the promises made regarding an eventual royal commission of inquiry to find out the details regarding the privatization of Pearson Airport, such an exercise was not conducted with all the necessary transparency.

For example, the people involved included senator Leo Kolber, who made the headlines during the election campaign, when he organized for the current Prime Minister a very private dinner meeting, a simple affair where the cover charge was a mere $1,000. Senator Kolber invited well-known personalities such as Charles Bronfman, who also happened to be involved in the Pearson dealings.

Also present was Herb Metcalfe, a lobbyist with the Capital Hill group, as well as an official for Claridge Properties and a former organizer for the current Prime Minister. There were others and there will be others such as Ramsay Whitters, a Liberal lobbyist closely related to the Prime Minister. There were all kinds of people.

So, when I look at all this, I can understand that the Liberal Party of Canada did not want to embarrass its friends who probably indirectly contribute, through their interests in Canadian ventures, to the party financing, and this is probably why the government did not want to shed light on this episode.

The members opposite are upset because we name their friends and point out the major reason why such an indecent bill was tabled today by a government willing to let its friends off the hook, in spite of their involvement in the privatization of Pearson Airport.

The public has the right to know all the details surrounding this decision, and this is why the Bloc Quebecois demands a public and independent inquiry which will shed light on these dealings. The situation is so serious in fact that the Minister of Transport himself stated that the federal government was considering setting up a royal commission of inquiry. The minister made that statement on November 29, 1993. It is true that new appointees are always full of good intentions when they take over a department. I suspect the minister was quickly called to order by his party's establishment.

We must not only mention the involvement of friends of the Liberal Party of Canada. There is also a whole series of strange, bizarre and even indecent things which have occurred from a financial point of view regarding the transaction as such, and these things must be pointed out. I will just name a few. We have examined the contract in its entirety and that is why it would be interesting to have a royal commission go over these incongruities together.

First, the term of the contract. The term would be divided in two: a 37-year term, with the possibility to renew for another 20 years. What for? Why did the federal government accept to do this for the Pearson Airport investors at the time? To avoid paying an Ontario transfer tax whereby you have to pay some $10 million in taxes on leases with terms over 50 years.

So, with the help of the federal government, the investors were able through that clause to circumvent the Ontario tax. Have you ever heard of a federal government conniving in defrauding provincial tax?

Second incongruity: the way the rent is to be calculated. It says in the contract that it can be calculated one of two ways. I will mention just one about which there are no less than ten oddities, ten seldom if ever used clauses in this kind of contract, especially for multimillion dollar transactions like the privatization of the Pearson Airport. The contract provides that PDC, Pearson Development Corporation, must pay 30.5 per cent of its previous year gross income to the government, up to a maximum of $125 million of gross income. On any amount exceeding $125 million in gross income, PDC would have to pay to the government 45.5 per cent of its gross income in rent.

Normally, gross income includes all income generated by the operation of air terminals but, in the case of the Pearson Airport, it excludes no less than 10 deductions considered as unusual in this kind of contract. The first one relates to taxes paid by consumers, passengers and occupants which are collected by Pearson Development Corporation on behalf of the government. Second, certain unusual items do not go into the calculation of the gross income, which is unusual. If you deduct these unusual items when calculating gross income, of course this will reduce the rent to be paid.

So unusual earnings were intentionally removed from the contract so that the Pearson lease could be reduced over the 57 years. The third incongruity in this financial deal is that other types of income provided for, while not extraordinary, are not usual and do not originate from regular terminal operations, including the sale of assets. In other words, again, gross leasing costs are reduced by exempting these unusual types of income.

There were other inconguities in the provisions on investment income. I will not go into detail on this as there are actuarial tables available, but I will say that this type of investment income provision is unusual in this kind of transaction. I could mention the discounts and refunds granted by PDC to airport tenants. I could talk about the money recovered and spent by the government to occupy parts of the airport, where inconsistencies and things that are unusual in this kind of deal were noted everywhere.

We could also talk about the amounts collected by PDC on behalf of the government or any other party, which is a rather unusual clause in this type of contract. I would also like to point out another clause whereby the federal government covered Pearson's debts although it was not involved in operations in any way. In other words, it covered bad debts although it was no longer involved in airport management. It is a disgrace, Mr. Speaker.

I could also talk about the $70 million paid to Air Canada to convince it to support privatization. Imagine, convincing Air Canada to support a privatization project as inappropriate and unusual as the Pearson airport deal.

We could also mention the severance allowance for employees of Transport Canada. The Government of Canada had offered severance allowances to 160 of its employees, although their jobs with Pearson Development Corporation were guaranteed for two years, under conditions similar to those in their current jobs. This severance allowance was supposed to cost Canadian taxpayers the trifling sum of $5.5 million.

It is also appalling to see, especially in a transaction of this nature, the total lack of any financial analysis, of any sound and independent projections of the main parties' revenues, and I am referring to the two investment corporations which later

merged, and also the lack of any analysis of these investors' status. When we look at Paxport and the other party to this transaction, it is clear that all was not rosy. The financial situation of Paxport was appalling.

So we could talk about all kinds of anomalies, and we could go on for ever, because when you look at the fine print, there are always questions that arise regarding this deal.

So by going ahead with the bill before the House this morning and by refusing to conduct a public inquiry into this matter, the government has lost its credibility, a government that during the election campaign claimed that it was going to restore the confidence of citizens in government by opting for transparency and integrity. I think they are off to a very bad start.

I think it is time Liberal members opposite, who look rather depressed by the course of events, decided to wake up. It is time they did, because my colleagues and I have the impression they are being manipulated by the establishment of their party and by their minister who comes to caucus meetings with instructions to vote for this and support that and do the other. They are mainly being manipulated by the leaders of the Liberal Party establishment.

I beg them to wake up, because the public is starting to wake up. It is fed up with patronage and money going to the friends of the party, fed up with the lack of policies for public funding, fed up with the lack of transparency and integrity-in other words, fed up with people who for years criticized the previous government's lack of integrity in condemning a deal which they practically endorsed, because friends of the Liberal Party of Canada are involved, and they are directly involved.

For all these reasons, I will vote against Bill C-22, and on behalf of my colleagues, and the Leader of the Opposition made the same request this morning, I ask that a royal commission of inquiry be appointed to investigate this matter.

Thank you, Mr. Speaker, and I hope my colleagues opposite wake up some day, because their behaviour today is irresponsible.

[Joe Fontana, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, the statements made by the hon. member are, to say the least, absolutely unfounded. To accuse this party, that did what it said it was going to do and cancelled the deal, and call us puppets, is absolutely ridiculous.

We are not the party that is trying to abrogate its responsibilities to the Canadian public. We are, by this legislation, doing what we promised before the election and what we promised since we have been elected: cancel the deal because we knew it was not in the public interest. Even the Bloc admits that the process is bad and that the substance of the agreement is not good.

I wish the member would be a little more generous with his terms. It was his leader who was party to that gang of hoodlums, as we knew the previous government, for a good many years. I am getting sick and tired of listening to your hypocrisy, pointing fingers here-

[The Acting Speaker (Mr. Kilger)]

Order. I would like to remind members to direct their interventions through the Chair, please.

[Joe Fontana, Liberal, London East, ON]

Mr. Speaker, through the Chair, he is a hypocrite and so is his leader and-

[The Acting Speaker (Mr. Kilger)]

Order. That is not acceptable. The Chair will ask the parliamentary secretary to withdraw that unparliamentary remark.

[Joe Fontana, Liberal, London East, ON]

Mr. Speaker, it is only unparliamentary when it is not true. I will not withdraw the comment because we are taking all kinds of accusations-

[The Acting Speaker (Mr. Kilger)]

Order. I know that members feel very strongly about issues that they bring to the floor of the House. By and large each and every one of us conducts ourselves in a respectful manner to uphold the traditions of this House and I think also to fulfil the expectations of our constituents across this great land of ours. In the Chamber at times there is a great deal of passion in our discussions and deliberations, but I would ask the Parliamentary Secretary to the Minister of Transport to reconsider and to withdraw that remark.