Mr. Speaker, I usually rise with enthusiasm in this House to speak to various bills introduced by the government. In fact, I often open my remarks by saying it is with pleasure that I will rise in this House to speak to such and such a bill.
Today however, it is without enthusiasm and even with disappointment that I do. I am taking part in this debate with no pleasure, but with the conviction of carrying out my duties and obligations as a parliamentarian.
It is indeed my duty to stand up in this House and publicly denounce the bill now being debated. The debate on Bill C-22 opened last Tuesday has brought to light an absolutely outrageous business. The contract to privatize Pearson airport entered into by the previous Conservative government has turned out to be an exercise in distributing presents to the friends of the system, the whole thing being engineered in an atmosphere of scheming and secrecy.
Allow me to recall a number of flaws that led eminently serious observers to come to that conclusion.
In 1993, Pearson airport generated over $23 million in profit. Under the contract passed with the Conservative government in the middle of an election campaign, Pearson Development Corporation was to operate Terminals 1 and 2 for an annual fee of $27 million.
At first glance, it looked like this transaction could be profitable to the taxpayers.
The picture changes completely once you know that the corporation with the winning bid was planning a 350 per cent hike in passenger fees, which would have resulted in a net increase in earnings totalling over $100 million annually, airport users footing the bill, naturally.
Air Canada publicly challenged this decision. To sugar the pill, Air Canada was also given a little bonus in the form of rent reduction, another cost to be absorbed by the taxpayers, naturally.
The reason given by the government to explain why it was not increasing fees itself and pocketing these substantial profits was the necessity to finance major redevelopment work in Terminal 1, to the tune of $100 million. Yet, in a huge fit of generosity, the government granted Pearson Development Corporation a 40 per cent rent deferral for 1994, 1995, 1996 and part of 1997.
While these amounts were to be eventually reimbursed with interest, the fact remains nonetheless that the government was reneging on its promise not to finance the modernization of Terminal 1 by accepting that rent be deferred over four years. Also, it is stunning to see the obvious lack of financial analysis in the development of these privatization agreements. No financial viability study was done, and Paxport, to which the contract was originally awarded, was faced with serious financial difficulties and decided to team up with its only competitor, Claridge Inc., thus creating a monopoly situation.
Yet, for some obscure reasons, the contract was not cancelled, even though it should have been. It must also be pointed out that, because the contract was split in two periods of 37 years and 20 years, the owners do not have to pay provincial tax, which would have amounted to ten million dollars if the contract had been awarded for a period of 50 years. Even if you include the cost of work paid by investors, the taxpayer is still the big loser in this transaction.
I also want to mention briefly that several newspapers have reported that the rate of return of about 14.2 per cent after tax given to Pearson Development Corporation was too high for this type of transaction. The media, the Ontario government, public opinion, and even the Liberal Party at the very end of the election campaign, have all voiced their opposition to that outrageous deal. Common sense dictates that the government should have gone to the bottom of this issue.
Unfortunately, this is not the case at all. Bill C-22 is not the beginning of a new era. It is a smokescreen to cover the dealings that took place. The government wants to avoid at any cost having to go to the root of the problem, which is first an acute lack of transparency in the privatization process, collusion between the old federal parties and certain private businesses, and also a lack of appropriate legislation to regulate the activities of lobbyists.
Last October, the government appointed a former Ontario Liberal minister, Mr. Robert Nixon, to conduct an in camera inquiry to find out about the dealings which led, as Mr. Nixon said in his report, to ``an inadequate contract arrived at through such a flawed process and under the shadow of possible political manipulation''.
Mr. Speaker, I remind the government that you rarely shed light on an issue when you look at it behind closed doors. Also, a former Liberal minister, regardless of his personal credibility, is certainly not the best choice to inquire about a transaction in which some key players are directly linked to the Liberal Party of Canada.
Following that inquiry, and in a moment of clear-mindedness and common sense on its part, the government decided to fulfil its election promise and cancel the formal agreement with Pearson Development Corporation. Unfortunately, the government did so in such a way that everything leads us to believe that it has every intention of paying off its political debts to its friends. When I say its friends, I mean those of both the Conservatives and the Liberals, since the people and companies involved in this mysterious transaction are very closely related to one or the other of these old political parties.
While it is true that section 9 of Bill C-22 provides that no compensation will be given in lieu of unrealized profits, or for monies contributed to lobbying activities in connection with public office holders, the fact remains that, in section 10, the government gives the Minister of Transport the arbitrary right to pay to people of his choice such amounts as he deems appropriate.
Does not that open the door wide for some more abuse? Under section 10 of Bill C-22, the government can compensate and even reward individuals and corporations involved in a rather sordid deal which not only went against public interests, but also bordered on something criminal.
Last Tuesday, the Parliamentary Secretary to Minister of Transport said that the Liberal government had learned from the mistakes made by the previous government. I am not so sure about that. There is something fishy about the government's refusal to get right to the bottom of this nebulous deal, but the government adds insult to injury by giving itself carte blanche to hand out very generous compensation to the loyal contributors to the war chests of the old political parties. The government, which not so long ago solemnly promised to abide by such principles as openness, integrity and sound management of public funds, was quick to turn its back on its pious wish and to revert to its old habits. As the old saying goes: what is bred in the bone will not out of the flesh.
By allowing big corporations to generously contribute to the parties' election coffers, the Canada Elections Act certainly does not help to restore the credibility of federal politicians and political parties. By refusing to change the legislative framework under which such a deal was made, the current Liberal government is asking the public to make another profession of faith and to believe that it is totally impervious to the financial and corporative interests supporting it and to the pressure coming from its good friends.
All of this disgraceful incident just goes to prove how crucial it is to act as soon as possible and pass an act concerning the financing of political parties, something similar to Quebec's current legislation. This would release federal political parties from any obligation to the big financial interests and make politicians accountable to those they are supposed to represent, that is the people of Canada.
The other major problem stems from the fact that the legislation concerning lobbyists is full of holes and does not define specifically enough the nature of lobbyists and the nature of their activities. The identification of the individuals who are subjected to pressures raises also serious ethical problems.
The Nixon Report speaks of dealings by members of the political staff who got too much involved in the transaction. It seems that lobbyists are directly responsible in the case of several officials who were reassigned and others who asked to be replaced. The promoters behind the privatization proposal knew very well that a future Liberal government would revoke the privatization contract, so they decided to take a risk. The government should not have to compensate for investors' miscalculations. The reform of the Lobbyists Registration Act would greatly contribute to prevent such muddle which, I must say, borders on something illegal.
I urge the present government to do its utmost to avoid making the same mistakes as the Conservatives. It was a mistake, for example, to entrust the airport management to private interests while everywhere else in Canada and in Quebec it was agreed that the best solution was to establish a non-profit group composed of local interests. It was also a mistake to deal with this issue without taking into account the will and the choices of the province concerned.
To conclude, I will join the opposition leader in asking for the establishment as soon as possible of an independant royal inquiry commission to get right to the bottom of this nebulous privatization deal so that never again organized and well-funded interests may influence the decision-making process in such a big way. This public inquiry could pave the way for the reform of the Lobbyists Registration Act. At the same time, it is imperative that the government amends the Election Act so that
Canadians begin again to trust their political institutions as well as politicians.