Mr. Speaker, it is extremely important that members of Parliament have some clearly defined rules for dealing with lobbyists. It is important that the Senate have this as well but perhaps it is not incumbent upon this House to enact rules for the unelected Senate. It first has to clean its own house and then develop its own rules.
Lobbying has long been one of those grey areas where the concept has been accepted but frowned upon depending upon who was actually doing it. If organizations such as firefighters lobby to make Parliament aware of problems within their profession, it is considered to be quite acceptable. If business lobbies for a particular advantage, then it becomes less clear. If that business lobbies using its own existing personnel, it is generally considered more acceptable than if it hires somebody to lobby on its behalf.
There is a bit of hypocrisy in this attitude. Lobbying is either right or wrong. We should not be making judgments based solely on who is doing the lobbying. This is one of the first issues that Motion No. 23 should address.
Another area of lobbying that needs to be addressed by Motion No. 23 is what constitutes excessive lobbying. If lobbying is a legal activity with no definition as to who can do it or how much can be done, how can any level of activity be considered excessive under the current unregulated structure?
A lack of specific guidelines for elected members and for that matter the lobbyists themselves have caused many problems for both. It is appropriate to spend some time reviewing one of those problems.
During the 1993 election the Liberals took aim at the Pearson Development Corporation contract to redevelop terminals 1 and 2 at Pearson International Airport. The main hue and cry that they raised was that of excessive lobbying which led to a largely patronage deal which should be cancelled.
Was this contract an example of excessive lobbying? Did that lobbying lead to a patronage deal? To determine this, let us start at the beginning.
Terminal 3 had already been privatized and there was no particular objection to this. In September 1989 the Matthews group submitted an unsolicited bid for the privatization of terminals 1 and 2. The proposal was not accepted. Two and one-half years later in March 1992, the government issued a request for proposal for the privatization of terminals 1 and 2.
One of the Liberals' claims was that the original bid was a form of lobbying and that the original proposal gave the proposers an unfair advantage in their bidding in 1992. If the request for a proposal had followed on the heels of the unsolicited bid, there may have been some justification for such an argument.
Two and one-half years later, a claim such as that is totally invalid. Although there were and still are no guidelines for lobbying, the Liberals pushed forward with their claim that lobbying in the Pearson contract was excessive. This brings me back to my earlier question, how can lobbying be considered excessive to the point of justifying the cancellation of a contract if there are no guidelines to compare it to?
A motorist was driving down the street at the legal speed limit on a clear day when another driver pulled out in front of the motorist and a collision occurred. At the inquiry after the accident it was determined that the speed limit followed by the
first driver was too high given the limited visibility for vehicles entering the street in that area.
The inquiry recommended that the speed be reduced. This does not make the first driver guilty of speeding. The speed limit cannot be retroactively reduced. This, however, is exactly what the Liberals were trying to do with regard to lobbying in the Pearson contract.
There is no definition of excessive and no evidence that there was any abnormal amount of lobbying in the pursuit of the contract. The Liberals, who by this time had formed the government, cancelled the contract citing excessive lobbying and resultant patronage.
At the time of the last election the Pearson contract was very controversial. Allegations of excessive lobbying and patronage flowed freely. Prime reasons for these accusations were not those directly involved in the contract. Rather, it was the fact that it was put together by the Mulroney government which was by then looked upon as unscrupulous and possibly corrupt.
The Pearson contract was a victim of election rhetoric, which I was caught up in as well. I was one of the voices that questioned whether or not the contract holders were entitled to any compensation if the accusations levelled against them were true.
The leader of the Liberal Party stated that if the Liberals formed the government, they would review the contract process and cancel that contract if they found problems in the process. So far so good as far as I was concerned.
As promised, the new Prime Minister set out to review the contract. For that purpose he appointed Robert Nixon as the sole person responsible for carrying out the 30-day review. Nixon was a long time Liberal Party supporter, father of a sitting Liberal MP and was rewarded for his $80,000 report by being appointed chairman of Atomic Energy of Canada, not exactly an auspicious beginning for a party decrying claims of patronage regarding the signing of the Pearson contract. The Nixon review did not interview under oath, talked only to certain people excluding some of the principals involved, and did not allow an opportunity for any of the testimony to be rebutted.
The report stated that the deal was bad and should be cancelled but did not produce one word of evidence to support that claim. Again the general allegation of excessive lobbying was raised as one of the major justifications.
The Nixon report was the rationale for the Liberal's Bill C-22 which not only cancelled the contract but allowed the government to decide for itself who got compensated and how much they got. It also allowed the government to insinuate the deal was crooked because of tactics such as lobbying without allowing the accused to clear their names and reputations in a court of law.
This is a very interesting strategy for the Liberals and it would have worked was if not for all the evidence to the contrary that started to surface. At that point they tried to expand their rhetoric to suggest that it was not a good deal financially but the evidence does not support this either.
The legislation was subject to a debate in the House of Commons. When it reached the committee stage, I started to realize that the flaw in the process may not have been in the awarding of the contract but rather the way in which the contract was cancelled. Many of the witnesses requested by either me or the Bloc representative did not appear and the Liberal dominated committee refused to press those people to attend.
The most significant person to be requested and not appear was Robert Nixon. In his case it was not a matter of not showing up but rather a refusal of the majority of the committee to invite him. The committee response to the request was: You have his report, what do you need him for?
One witness of note who did appear was Sandy Morrison of Air Canada who was the main anchor tenant in the contract. Air Canada spoke strongly in favour of the contract and requested that it proceed as quickly as possible.
By this time it had been decided by the government to set up another Liberal long time supporter and former law partner of the Prime Minister, Robert Wright, to review the compensation claims and to make a report to the minister. From this report the minister would decide who got paid and how much they would receive. Compensation was to be limited to out of pocket claims only with no consideration of any further request including lobbying costs and third party claims against the Pearson Development Corporation.
The report and the decision would be confidential and would be protected from access to information by making it a cabinet document which is protected for 20 years. I questioned why this process was bypassing the transport committee and cloaking itself in secrecy. I did not receive a satisfactory answer.
I believe it is proper that we examine the results of the Liberals' false vendetta against the Pearson group so that we can fully understand the importance of lobbying guidelines and what happens when no such guidelines exist.
As I earlier stated, when it appeared the accusation of excessive lobbying alone would not be enough to justify the cancelling of the contract, the Liberals then tried to suggest it was not a good financial deal to cover up the fact that the real
reason for cancelling the deal was political gain. As evidence later showed, the Liberals knew from the very beginning that it was not a bad financial deal but they had painted themselves into a political corner and they did not know how to get out.
Through access to information, I came into the possession of a secret government document dated October 29, 1993, supplied to Robert Nixon for his review of the Pearson contract. This document was supplied by William Rowat, associate deputy minister of transport. In that document it is clearly stated that the rate of return to the crown from the contract is considerably better than the crown construction option and that the Pearson Development Corporation return on investment was endorsed as reasonable by both the Department of Finance and an independent financial consultant hired by the government.
A second government document dated November 4, 1993 later appeared through court disclosure which further elaborates on the financial feasibility of the contract. This second document was also used to give direction to Nixon. It pointed out that in order for the crown construction option to generate revenues equivalent to the private sector deal, a real revenue growth factor of 10 per cent per year until cost recovery was completed would be necessary.
Historically speaking, the government management growth in revenues has been at or below inflation, projected for the purpose of the analysis at 3 per cent per annum. Using a more realistic real revenue growth rate of 3.5 per cent per year, the crown construction option would have realized $250 million less over the term of the contract than through the privatization method.
The second government document also discusses the possible cost of cancelling the contract. The options identified are: negotiate or expropriate, which leave the government open to damages ranging from $500 million to $2 billion; or legislate, which could limit the government's liability but leave it open to many more potential problems including severe capacity and congestion problems, increased costs and the undermining of government leasing and contracting processes if it is seen as a precedent.
The document also discusses the possibility of renegotiating or restructuring the contract, but it makes it very clear that this is not a desirable option. Nowhere in that document does it suggest that Nixon should examine the deal to see if it is clean and if so, to recommend that it proceed. From this it seems very obvious to conclude that Nixon was directed toward a very specific outcome.
I have never questioned the government's right to cancel the Pearson airport contract. In light of all the information that is now available, I might question the wisdom of the cancellation, but not the right to do so. With that right goes an obligation to see that justice is done, which does not appear to be happening in the handling of this contract.
All of this has been initiated by the Liberal government which was looking for an election issue and seized upon Pearson airport as a viable victim. It utilized a lack of any lobbying guidelines as a way to try to justify its actions. What is the impact of this flagrant attempt to utilize the lack of lobbying guidelines? It can be looked at by a complete factual and documented review of the impact on Pearson airport.
I will pass over commenting on that part because I will be short of time. There is so much evidence on this contract, but I have to move along.
Allow me to mention another aspect of this whole process in which the fact that the Pearson International Airport is involved at all is wholly coincidental. That aspect is the rule of law.
Under Bill C-22 the government is allowed to cancel a signed contract and decide for itself who gets what compensation. It also allows it to insinuate that the deal and those involved in it were crooked without allowing the accused to clear their names and reputations in a court of law.
What that government action does is pronounce a group of Canadians guilty until proven innocent and then removes their right to prove their innocence. This action relates much more to a dictatorship than it does to a democracy.
All of this started as a result of an opportunity for the Liberals to seek political gain by utilizing the fact that there were no guidelines for dealing with lobbyists or lobbying activities.
Motion No. 23 will not only provide clear and long overdue guidelines for all MPs when dealing with lobbyists, it will protect the public from unscrupulous action by a political party. It may even protect the Liberals from their own tendency toward election rhetoric.