Mr. Speaker, I am honoured to rise to speak in favour of Bill C-22. I will start by identifying what we are talking about, specifically looking at Toronto area airport issues.
Pearson International Airport is Canada's premier airport. Thirty per cent of all air passengers in Canada go through Pearson; 20 million passengers in 1992. It is among the top 30 airports internationally, the third largest gateway to North America after JFK airport and the Miami airport. It is a critical hub for many smaller cities in Ontario and indeed Canada.
It has 15,000 employees on site. It creates 56,000 jobs in Ontario and accounts for over $4 billion of annual economic activity. That is the reason why the Pearson airport issue is so important.
We have before us Bill C-22 to deal specifically with matters pertaining to Pearson. I would like to give some background events leading up to the legal agreements which Bill C-22 deals with.
In 1989 the Matthews Group of companies submitted an unsolicited proposal to the federal government to privatize terminals 1 and 2 at Pearson. The government did not accept that proposal, but the following year it did announce that it would proceed with a request for proposals to obtain private sector participation in the modernization of the two terminals at Pearson.
The request for proposals for the privatization and the redevelopment of terminals 1 and 2 was issued by the federal government in March 1992 and the bidders were given 90 days to respond. Two bids were submitted: one by Paxport Inc., controlled by the Matthews Group, and the other by Claridge Holdings Inc.
In December 1992 the Paxport proposal was declared to be more acceptable and the company was given until mid-February 1993 to satisfy the government that it was a financially viable proposal. When Paxport could not demonstrate this or raise the necessary capital, it sought assistance from Claridge. The private sector participants then formed the Pearson Development Corporation, referred to as PDC, and T1 T2 Limited Partnership for the purposes of carrying out the project.
In August 1993 the federal government and PDC announced that they had reached an agreement to redevelop and operate terminals 1 and 2. Legal agreements were to be finalized in the autumn of 1993.
A federal election was called on September 8, 1993. During the election campaign the Leader of the Opposition, now the Prime Minister, declared that the new government under his leadership would cancel any deal to privatize terminals 1 and 2 if the transaction was deemed not to be in the public interest. The chief negotiator for the government sought written instructions on whether to complete the transactions and on October 7, 1993 received written direction that it was Prime Minister Campbell's wish to complete the deal on that date. The legal agreements were therefore finalized on October 7.
Subsequent to the election one of the first actions of the government was to review the Pearson deal. As many members have alluded to, the government engaged Mr. Robert Nixon to do an independent review. I would like to read the conclusion from his report: "My review has left me with but one conclusion, to leave in place an inadequate contract, arrived at with such a flawed process and under the shadow of possible political manipulation, is unacceptable. I recommend to you that the contract be cancelled".
I then went on to look further because obviously a bald statement like that does require some substantive support to be able to indicate the so-called flawed process. In looking at Mr. Nixon's report, page 8, subparagraph 3, I would like to read into the record some extracts to give Canadians an idea of some of the things that were of concern to Mr. Nixon in preparing his report:
"The request for proposals having as it did only a single stage and requiring proponents to engage in project definition as well as proposal submission and all within a 90 day timeframe created in my view an enormous advantage to a proponent that had previously submitted a proposal for privatizing and developing T1 and T2. Other management and construction firms not having been involved in the manoeuvring preceding the RFP had no chance to come up to speed and submit a bid in a short time period".
At this point Mr. Nixon noted that there are some timing irregularities and probably some improprieties, at least in appearance:
"With little construction and developing occurring others should have been sought out and given reasonable time to participate. Further, it is significant that no financial prequalification was required in this competition. For a project of this magnitude the selection of the best overall acceptable proposal without complete assurance of financial viability seems to me to have been highly unusual and unwise".
Finally Mr. Nixon states: "The concluding of this transaction at Prime Ministerial direction in the midst of an election campaign where this issue was controversial in my view flies in the face of normal and honourable democratic practice. It is a well known and carefully observed tradition that when governments dissolve Parliament they must accept a restricted power of decision during the election period. Certainly the closing of a transaction of significant financial importance sealing for 57 years the privatization of a major public asset should not have been entered into during an election campaign".
I have to reiterate that the government said very clearly during the election campaign that the Pearson agreement should not proceed and that if it did the government's intention was to review the deal and to cancel the deal if indeed it was not deemed to be in the public interest. It chose to proceed and in fact the government did honour its promise to the Canadian people.
We have heard a lot of speakers today discussing the process and how it is seriously flawed, that the substance was similarly flawed and that we really need a transportation vision for Canada, a comprehensive strategy for our transportation system.
During the election campaign it was very clear to me that Canadians were saying political credibility is zero. I think one of the things that all members know and have learned very well is that political credibility demands fiscal responsibility. That fiscal responsibility will result in hopefully the restored confidence of Canadians in our legislative process and indeed in the integrity and credibility of people in political life. The Pearson deal, as many have suggested, did not do justice to the Canadian people. It was the right thing to do.
I would like to turn now specifically to Bill C-22, an act respecting certain agreements concerning the redevelopment and operations of terminals 1 and 2 at Lester B. Pearson International Airport, which received first reading on April 13, 1994. I would like to read for the House the explanatory note:
The enactment concerns agreements arising out of the Request for Proposals for the Terminal Development Project at Lester B. Pearson International Airport or the negotiations following that Request. It declares the agreements not to have come into force and to have no legal effect, and bars certain actions or other proceedings against Her Majesty in the right of Canada in relation to the agreements.
The enactment also authorizes the Minister of Transport, with the approval of the Governor in Council, to enter into agreements for the payment of amounts in connection with the coming into force of the enactment.
The bill was presented to the House by the Minister of Industry on behalf of the Minister of Transport. In summary of the legislation it indicates that the proposed legislation-this is for the benefit of those who have not followed the debate so far-will cancel those agreements that were entered into. It will make clear that government is not obligated to compensate the developer and allow the minister to make some payments but not for specifically lobbyist fees or lost profits.
The government's policy has been and remains that it would consider reimbursing out of pocket expenses with the exception of the lobby fees but would not make payments for lost profits.
As I went through many of the documents that were available to us, I found with some interest rhetorical questions which I think probably many Canadians and maybe members have been considering. The first question one might ask is: Are not private sector companies now going to be afraid to do business with the government? I think that is a very fair question and I think the answer is not at all. The government takes its contractual obligations seriously, but this is a different and special case unlikely to arise again.
The Liberal Party made it very clear that we were concerned that the agreement might be contrary to the public interest but the parties risked signed that anyway. It is extremely important that the government gave notice and put the participants on notice. In spite of the clear message that was sent they took the public risk to proceed in any event.
The new government subsequently reviewed the agreement in detail and determined that it was indeed contrary to the public interest and that is precisely what we expect elected officials of governments to do.
The second question of note was why is the government being so hard on Pearson Development Corporation. It sounds like Pearson Development Corporation is going to lose a lot of money for the sin of negotiating a contract with the government of the day. Again that is a very relevant and good question, but we also have to understand that the people who entered into these agreements are responsible and professional business people and that the government wishes to negotiate with them in a fair and reasonable manner.
During the campaign our party made it very clear that we were concerned that the agreement was contrary to the public interest but the parties proceeded anyway. This is extremely important to the essence of the bill.
The government subsequently reviewed the agreement in detail and determined it was indeed contrary to the public interest. However the government stands by its commitments and there will be no payments for the lost profits or lobbying costs.
The final question that was stated was what are the government's future plans for Pearson International Airport. This is probably as important a question as any. I stated earlier in my speech some of the dimensions of the Pearson contribution to Canada, to jobs and to the economy. The Minister of Transport said that he intends to make a decision on airport administrative structure and potential expansion before the end of the year. He is seeking input from a large variety of sources, including his own caucus which will be giving him input with regard to the decisions.
I have a special interest in the Pearson airport issue because it is just north of my riding, a mere 10-minute drive from the east end of my riding. We have had a number of public meetings over the years on many controversial issues, many relating to privatization, some relating to the expansion of the airport, and recently a very emotional debate with regard to expansion of runways, the new north-south runways which were already subject to a major environmental assessment review.
Having had two public meetings, I think the last one was just two weeks ago, the people who have participated in this debate over these many long months have said one thing, that they agree Pearson is an extremely important economic unit to Canada and that the future of Pearson has to be handled in a comprehensive but careful manner to ensure that they will be able to maintain Pearson as the focal airport of Canada.
At this point I do not intend to debate the merits of expansion of the airport, of privatization. All I can say is that the people I represent and who have attended these public meetings are calling out and asking the government to provide the leadership with regard to this important economic unit.
I believe the bill is the next step in the process. Any time is a good time to cancel a bad agreement and to get on with the future of Pearson, which is the undertaking of the government today.
I would like to conclude my comments simply by making a reference to the amendment proposed by the leader of the Bloc Quebecois. It basically calls for a public inquiry. It has a lot to do with the fact that the bill does not deal sufficiently with the transparency of activities of Canadian lobbyists, which was the amendment from the Reform.
I have some difficulty understanding why that issue is relevant to this particular bill. There is no question the government has put everyone on notice that the activities of lobbyists are an important issue to this government and that it will be addressing specifically matters related to the lobbyist activity in our country.
Lobbyist activity does not directly relate to the bill. The bill deals with legal agreements and how we have a point of departure to get on with the business of the day to ensure that the future of Pearson is dealt with in a timely fashion.
The amendment appears to be quite inappropriate. I do not understand it. Pearson will continue to be the major airport for Canada. It is my pleasure to have spoken today in favour of Bill C-22.