CommunityAIR Press Release on Tunnel

CommunityAIR issued the following press release July 30.

$82.5M for Four Minutes of “Smoothing”?

Questions Seeking Answers as Island Airport Tunnel Opens

For Immediate Release Wednesday, July 29, 2015
Contact: Brian Iler, Chair
416-835-4384 (cell)
416-598-0544 (work direct)

CommunityAIR has some questions about the $82.5 million Island Airport tunnel, finally opening tomorrow:

1. “Smoothing”? The tunnel’s sole rationale is to smooth the flow of passenger traffic, shaving just four minutes off passenger wait times .. Also see Airbiz Airport Capacity Report Peer Review

The Canadian Press quoted the CEO of Ports Toronto this way:
“In the world of aviation every second counts, not least to our business travellers, who often fly specifically from our Billy Bishop [airport]so they can leave their meeting and get to their flights in a matter of minutes,” said president and CEO Geoffrey Wilson.
Is that it? Four minutes of business travellers’ time?
What possible business case can be made for spending such a huge sum just for some four minutes of “smoothing”?
Put another way, isn’t spending $82.5 million for a bit of smoothing of passenger flow an incredible waste of public assets?

2. Will it be used?

Will passengers really use a facility that requires them to take an elevator down six stories, travel across through the tunnel, and take another elevator back up, when the ferry is right there – or will be in another few minutes?

3. Why the Skyrocketing Costs?

The tunnel was originally projected by Ports Toronto to cost as little as $20 million (June 2009), then $38 million (August 2009), $45 million in 2010, and now $82.5 million.
What happened?
And if this kind of money is available to a public authority, aren’t there far higher priorities for public expenditure than building Porter (the Airport’s almost-exclusive user) a tunnel?

4. Will Passengers Pay?

We know that Porter has survived so far by charging a premium fare for the convenience it offers: its Q1 2010 financial statements (the only ones available) revealed a yield (revenue per revenue passenger mile) of 48.23 cents, far higher than either WestJet or Air Canada – both under or around 20 cents.
Since the tunnel’s cost will be borne by a surcharge on Island Airport passengers – as long as Porter is around – will passengers be willing to pay even more for the privilege of having a tunnel built?

5. Will the Public Pay?

Public-private partnerships such as the deal that saw this tunnel built are negotiated in secret. But Ports Toronto’s financial statements disclose that $6,853,000 in tunnel “Servicing Costs” must be paid each year until 2034, and $1,301,000 plus inflation each year for tunnel operating costs.
Payment of these annual sums is dependent upon an income stream, essentially from Porter’s operations.
The airline industry is always deeply troubled, and Porter has yet to release evidence that it can achieve profitability – the last evidence available (in 2010) disclosed $44.5 million in accumulated losses. Its business at the Island Airport peaked in 2012 .
Has Ports Toronto guaranteed the private investment in the tunnel? Ports Toronto has refused to answer that question.
Wouldn’t the taxpayer be on the hook if a guarantee is called upon?

6. Didn’t Ports Toronto Promise Public Access to the Island Park and Homes?

Ports Toronto board chairman Mark McQueen said as much, in 2009 as he pitched the tunnel idea:

During the winter, the City of Toronto runs a ferry service to Wards and Algonquin Islands to allow the Island residents a chance to keep up with their daily lives. This service is estimated to cost Toronto taxpayers between $2 million and $3 million for the season. So long as people live on the Island, which may well be for at least another 99 years, they’ll need a way to get back and forth to work, shop for food, go to school, attend the small weekly protest vigil about the TCCA’s existence, and so forth.
Over a 10 year period, the present value of this ferry service runs around $25 million. Not very different than the cost of building a tunnel to the TCCA. We know two things for certain: i) folks will be living on the Islands well beyond the next 10 years, and ii) tunnel infrastructure lasts a lot longer than 10 years.
And if a tunnel were ever to be put in place, Islanders would be able to have much better access to the City than they have under the current circumstances of December – March’s windswept ferry. For the City, the opportunity to redirect that $2-$3 million per season to other worthwhile causes would appeal to any City Councillor with an eye on the strains of the current municipal budget.

The Star agreed. In its June 8, 2009 editorial, For an island tunnel, it opined:

“A tunnel would also provide island residents with reliable, year-around access to the mainland, thereby reducing the need for the costly winter ferry service to the islands.”

Why isn’t the promised public access to the Island happening?

7. Or, Is This Tunnel All About Expansion?

Porter CEO Robert Deluce in 2010 suggested that’s what this tunnel is really about:

…But Mr. Deluce said Ports Toronto isn’t constrained by the existing cap, and could increase the total number of commercial slots available to 300 within three years, if a pedestrian tunnel is built by 2012 or so. [our emphasis] “It’s very much dependent on improvements to infrastructure,”

he said after a presentation to Insight Information Co.’s airline investment conference in Toronto .

8. Wasn’t This Tunnel Illegal?

Actually, yes. When then-PM Paul Martin cancelled the bridge to the Airport in 2006 by enacting a regulation prohibiting a “fixed link”, the tunnel was also prohibited.
Ports Toronto denied that, stating in its FAQ for the tunnel environmental assessment:

Question: Is this proposed pedestrian tunnel in violation of the Canada Marine Act prohibiting a “bridge or similar fixed link” to the island airport?
Answer: The project would comply with law, including the Canada Marine Act and Toronto Ports Toronto Regulation SOR/2005‐120, which was made under the Canada Marine Act. This regulation prohibits a bridge or similar fixed link. The proposed project is not a bridge or similar fixed link, including because it would involve tunnel access through the existing bedrock for pedestrians (no automobiles).

But even thought they vowed it wasn’t illegal, Porter’s friends in Ottawa opted to amend that Regulation in 2011 to permit it. As we said at the time:

“Instead of recognizing that this proposed tunnel is a complete waste of scarce public resources, the Harper government now is moving to legalize something that was clearly illegal.”

9. Finally, Why is Mark McQueen still Chairman/Director of Ports Toronto?
The Ports Toronto Letters Patent state:

The term of each director shall be three years.
The term of a director may be renewed once only

McQueen was appointed a director on September 25, 2007.

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CommunityAIR’s Backgrounder: Tunnel Vision

On June 24, 2009 Ports Toronto Chairman Mark McQueen wrote his account of the evolution of the latest attempt to make the islands part of the mainland.

According to Chairman McQueen, Mayor Barbara Hall advocated a large pedestrian tunnel more than five years ago. Mayor Hall also advocated a bridge to connect the airport to the mainland which is perhaps why she, although the front-runner, wasn’t re-elected.

In 2009, the tunnel idea became Chairman McQueen’s baby. However, according to him the tunnel wasn’t a particular project that he was looking to fund when the Conservative government sent out its wish list call for infrastructure money in February that year. His blog account says that the tunnel was a late addition.

On April 27, 2009 the Toronto City Airport formally announced the new Porter terminal. Then-Finance Minister Jim Flaherty, then-Minister of Transport John Baird, and Jean-Marc Lalonde, then parliamentary secretary to Ontario’s economic development minister, who said that he flies often on Porter for its convenience, were present.

According to Chairman McQueen, “Once the new terminal at the TCCA was formally announced on April 27th, it seemed appropriate to include the tunnel concept on the list of projects that the Minister could consider.” Chairman McQueen didn’t say if it was he who felt it appropriate to include the tunnel for John Baird to consider or if it was the movers and shakers getting together at the announcement and deciding the tunnel concept passed the smell test.

On May 14, 2009 Chairman McQueen added the tunnel to the list for stimulus funding. He then went to town.

In June 3, 2009, the Star featured a story, Tunnel vision at island airport; Ports Toronto eyes link to mainland under Lake Ontario. It reported on a Star editorial board meeting with Chairman McQueen.

On June 4, 2009 Chairman McQueen wrote in his blog,

“Earlier this week, a few of us from the Toronto Port Authority (now Ports Toronto) were given the opportunity to meet with the Editorial Board of the revitalized and energized Toronto Star.”

Nothing more happened about the tunnel until July 24 when the Economic Club of Canada – seemingly out of the blue – wrote Transport Minister Baird in support of a tunnel .

The letter contained this statement about reliable service for island residents:

“A tunnel would also provide island residents with reliable, year-around access to the mainland, thereby reducing the need for the costly winter ferry service to the islands.”

On August 6, 2009 Ports Toronto released the results of a poll conducted by Pollara. The portion of the poll that Ports Toronto chose to release claimed that 62% of surveyed Torontonians supported the tunnel concept.

On August 11, 2009, the Toronto Board of Trade – also seemingly out of the blue – wrote Transport Minister Baird in support of a tunnel.

However, their letter should come as no surprise. In a story carried by the Toronto Star on April 4, 1995, the Board of Trade was not only in favour of a fixed link but also jets.

On August 23, 2009, Ports Toronto issued another press release mentioning the 62% support for the tunnel.

On August 24, the Star followed with a story, Tunnel to island airport by 2011? It reported that Chairman McQueen issued a formal request for proposals to conduct an environmental assessment, the first step to any major construction project even though he didn’t have federal approval for the stimulus.

The Star editorial board obliged on August 25, 2009, with a second editorial, Tunnelling to the airport. It urged the feds to give Chairman McQueen his cash and once again repeated the misconception of island residents reaching their homes across a busy runway, surely a dead horse by now.

On October 6, 2009, Ports Toronto issued a statement declaring that it had run out of time for the infrastructure money deadline. Chairman McQueen left the announcement up to Ports Toronto Acting President and CEO Alan Paul .

Chairman McQueen insisted in a Toronto Star article on October 18, 2009, Mark McQueen, Czar of the Toronto waterfront, that the tunnel this time around was his idea.

On January 29, 2010 Ports Toronto announced the initiation of a Public-Private Partnership process to construct pedestrian tunnel from the mainland to the Billy Bishop Toronto City Airport.

On July 20, 2010, Ports Toronto ’s CEO, Geoff Wilson, wrote to a CommunityAIR member:

In response to your question, the Tripartite Agreement prohibits Ports Toronto from constructing or permitting the construction of a bridge or vehicular tunnel beneath the mainland and the BBTCA. The proposed pedestrian tunnel is not a bridge or vehicular tunnel beneath the mainland and the BBTCA.

CommunityAIR’s response to Wilson was this:

Geoff – there is no prohibition in the tripartite agreement for any bridge or tunnel – in fact, it expressly permits a bridge.

The prohibition is found in a regulation passed under the Canada Marine Act: it prohibits a bridge or similar fixed link (there is no suggestion that a non-vehicular tunnel is acceptable). The only possible “similar fixed link” is a tunnel, as there are only two ways to link, in a fixed way, two bodies of land –a bridge, or a tunnel. The only possible issue is what effect the word “similar” has – the laws does requires every word to have some meaning. Since a bridge is a bridge, “similar” cannot refer to another type of bridge. If it did not appear, the phrase would be “bridge or fixed link” – which would be broad enough to include pipes and conduits, I suggest. The insertion of the word “similar” then was, I suggest, meant to catch only those fixed links that are intended to carry people and/or vehicles from one shore to another. That certainly includes a tunnel.

If you have a legal opinion that concludes to the contrary, it would be most helpful for Ports Toronto to waive its privilege, and release it. Otherwise, telling the public that you have a legal opinion, but refusing to divulge it, does nothing to advance the discussion, and suggests either you don’t have such an opinion, or it concludes differently.

It’s like Mr. Deluce telling the public for years that his airline is profitable, but when his Prospectus is released, it became very clear that he misled us all. An accumulated deficit of $44,050,000, to March 31, 2010.

Openness and transparency build trust. Secrecy and opaqueness destroy it.

Ports Toronto , if it is truly seeking constructive dialogue, must release that opinion, and allow the discussion to flourish

There was no response.

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