That a message be sent to the Senate to acquaint Their Honours that this House disagrees with the amendments made by the Senate to Bill C-22, an act respecting certain agreements concerning the redevelopment and operation of terminals 1 and 2 at Lester B. Pearson International Airport.
Mr. Speaker, today I am proposing that the House of Commons respond to the Senate's message, which proposed amendments to Bill C-22, by indicating the complete rejection by this House of its amendments to a bill which seeks to cancel the contracts entered into by the previous government concerning the redevelopment and ownership of terminals 1 and 2 at Lester B. Pearson International Airport.
Bill C-22 was designed to cancel the agreements between Her Majesty and the T1 T2 Limited partnership. These arrangements were entered into, as everyone knows, during the dying days of the last government now nearly a year ago. The agreements turned over the development and operation of terminals 1 and 2 at Lester B. Pearson international for 57 years to a group of private developers.
The agreements were examined and were found not to be in the public interest. The facts in arriving at this determination can be stated very succinctly. The agreements as I indicated were signed just weeks before an election. They did not contain a cancellation clause when the government of the day had to know it was going to lose the election and the deal was being widely questioned. The agreement was for 57 years, 20 years more than the normal amortization period for buildings and the time normally associated with the recovery of this kind of an investment.
The after tax rate of return has been estimated by some at 14.2 per cent. However, this figure does not take into account profits the individual partners would have realized on contracts they held with the partnership. The actual rate of return for the partners in this deal would be more in the order of 28 per cent.
The original tender period was for 90 days, then it was extended to 120 days. The submissions that were received covered thousands of pages of technical and financial information because the process in effect had granted an enormous advantage to those companies that had lobbied the government for the project. They had made their preparations and they were ready when the tender call was issued.
One of the proponents had commenced lobbying to achieve the privatization of these terminals in mid-1989, had submitted an unsolicited proposal, offered policy advice to then ministers of the crown. Surely this is not a normal tendering process or acceptable practice.
The Leader of the Official Opposition, now the Prime Minister, indicated clearly before the election and while this deal was being consummated that the deal would be reviewed.
I could go on with the list of unusual elements in this process that Mr. Nixon described in his report as flawed. I do not really think it is of much use at this stage. We have gone through it over and over again.
I want to point out today that Canadians generally and voters in the metro Toronto area particularly understood the flaws in the deal were enough to reject it, and they did so massively. That is one on the major and principal reasons why the Liberals took every seat in metro in that election last fall. If no one else understood it, the voters knew a tender process is generally designed to provide a winner and some losers. The previous government cooked up a process which produced a winning loser and losing winner. Rather than permitting the merger of a financially strapped winner with a wealthy loser, as it turned out, a new tender call obviously would have been what was appropriate.
One of the hired guns for the consortium has described Bill C-22 as an act worthy only of a banana republic. I contend quite the contrary because Bill C-22 provides for the correction of actions that are characteristic of what goes on in so-called banana republics.
The government is firmly committed to reject the ways of the former government. This transaction is riddled with interference by lobbyists, favouritism, behind-the-scenes wheeling and dealing, manipulation of legitimate private interests and disregard for public service impartiality. As a whole, it is unacceptable.
The government intends to protect the country's interests and the tqaxpayers' dollars. We believe that matters that can jeopardize our economy and our competitiveness as a country should be negotiated under a transparent and accessible process.
In legislating an end to these agreements, the government took several factors into account: the need for a quick decision on future requirements at Pearson, once these agreements were set aside; the government's commitment to put public interest before favouritism and the quest for excessive profits; and the fact athat the private sector would have gained control of one of the most important assets in the field of transportation by means of an arrangement that would have generated unreasonable profits for a favoured few.
On July 13 I announced a national airport policy that would ensure the existence of a safe, efficient, competitive network of airports across the country and would be managed in the best interest of Canadian taxpayers and the travelling public.
However the opportunity to benefit from the advice and competence of dedicated people representing regional and local interest is being denied to Lester B. International Airport, owing to the cloud that these agreements cast.
There are some in this place who would have us believe that if the matter is before the courts for years somehow we could do what would be done in the other airports across the country through Canadian airport authorities. One would have to be very naive to think that any group of citizens would take on the operation of terminal 1 and terminal 2 while all the threat of litigation and all that could imply hung out there for months and in fact years, knowing the size and the magnitude of the problem.
Terminals 1 and 2 at Toronto Pearson airport need upgrading. I agree with my hon. friend opposite on that. The parking garages are in a deplorable state. Safety and security are being put in question. The list is long of what has to be done at Pearson. The opportunity to provide travellers with newer, safer and more modern services is being denied to users of Pearson.
We have stated time and time again that it is our intention to treat the T1 T2 Limited Partnership in a fair and equitable manner considering the circumstances. We have recognized that not all the partners were involved to the same extent in this flawed process and that private sector companies not part of the consortium should not be unduly penalized.
We have asked that the partnership submit their out of pocket expenses as well as those of third parties. We wish and we undertake to see to it that all parties are repaid funds they have spent consistent with good business practice, but we will not compensate for lobbyist fees and charges.
I am aware of the need for public accountability on the matter. I know members of the House of Commons, the Auditor General, the public accounts committee and the interested parties, the people who have the taxpayers' interest at heart, will review whatever decision is made by the government to pay those legitimate out of pocket expenses. I welcome that thorough review because I understand my responsibilities in the matter.
Members of the House of Commons must understand that the out of pocket expenses were for financiers, planners, engineers, managers and designers. Not a single dime was spent on steel, concrete, lumber, escalators or other services normally associated with airport operations. Clearly the out of pocket expenses did not enhance the value of the property or provide any benefits to the taxpayer or the traveller.
Responsibility to the taxpayer and fairness toward T 1 T 2 Limited Partnership and third parties is what Bill C-22 is about.
Let us take a look at the amount of the bill the Tory majority of members in the other place want to foist on Canadian taxpayers. The consortium has replied to our request for its appropriate out of pocket expenses by submitting claims to the Canadian people for approximately $445 million. Of this amount, $415 million represent loss of profits to the consortium or its partners in various third party capacities. The consortium is not interested
in fair compensation; it wants to sting the Canadian public for over $400 million.
I have to ask all colleagues in the House and Canadians if they think the Conservative majority in the other place is being responsible when it says it is not concerned about the consequences of its action as far as money goes. It claims that all it is interested in is the principle of the bill. How can anyone be so irresponsible with taxpayers' dollars?
I thank my Liberal colleagues in the other place. We have been through a lot on the bill; a lot has been said. I have the greatest respect for those members in the other place, including independent members who mounted a stout defence of the legislation and have spoken eloquently to protect the interests of Canadian taxpayers. I know those people with their hearts and their heads in the right place will rise to the occasion again.
As for those who presently hold the majority they cling to in the other place, their method of dealing with the issue does not improve my opinion of them, which should not come as a surprise to anyone.
I sincerely believe Canadians in every part of the country who support every political party represented in the House will be outraged when they understand the size and the amount of the bill the Tory majority in the other place is planning to drop on them. The bill for their defeat of Bill C-22 will be $445 million.