Huge Public Asset to be Sold by Ports Toronto: Federal Liberals Approve with No Community Input

By Thursday, May 4, 2017 0 No tags Permalink 0

(Editor’s note: The issue of the sale of land by Ports Toronto has aroused great interest. We are publishing here a more complete version of the press release issued by CommunityAIR.)

Press Release issued by CommunityAIR May 1, 2017

Today, Ports Toronto announced they have Federal Liberal approval for the sale of a massively valuable 1.8 acre parcel of land at 30 Bay /60 Harbour Street in the heart of downtown Toronto to Oxford Properties.

Although this parcel is a public asset, neither Ports Toronto or the Federal Liberals undertook any public consultation before making this decision.

The proceeds of the sale will be paid to Ports Toronto, which has exhibited a studied disregard for the public benefit in its decision-making. Its Board of Directors is dominated by individuals associated with the Federal Conservative Party[1], and operates as an arms-length enterprise, with the majority of its directors appointed by the Federal Government.

According to its former chair, Mark McQueen, Ports Toronto, originally intended to partner with Oxford Properties to maximize its earnings from that property, intending  to use those proceeds to backstop obligations related to its $85M pedestrian tunnel to the Island Airport, developed as a P3 (public‑private partnership). Wrote McQueen,

In 2010, once it became apparent that PortsToronto would be proceeding with the pedestrian tunnel project at Billy Bishop Toronto City Airport without any financial support or guarantee from the Conservative government’s infrastructure stimulus program, the 30 Bay Street development became necessary to mitigate the risk associated with the pending P3 availability payment (negating choice #1).

This is the second time the Port Authority has approached the Federal Liberals for a bailout.

According to Ports Toronto sources, ‎Treasury Board rejected a proposed partnership with Oxford Properties to co-develop the site last year. Now they’ve given away federal assets with no conditions or additional oversight to make sure the money is spent on public priorities, or even Ports Toronto priorities like shipping infrastructure repairs, instead of new subsidies to Porter Airlines[2].

Notwithstanding its public statements, Ports Toronto posts large operating losses each year[3].

“This is yet another decision by Ports Toronto that takes public assets and gives a private interest, its major tenant, Porter Airlines, the benefit. Porter has a near-monopoly at the Island Airport and directly benefits from any expenditure on Airport infrastructure.” said Brian Iler, Chair of CommunityAIR.

“We were thrilled that the federal Liberals took the bold step, when they first took office, to refuse Porter’s proposal, with the avid support of Ports Toronto, to operate jets out of the Island Airport, as that proposal placed Porter’s private interests ahead of the public interest. Now, the federal Liberals, without any public consultation or any apparent consideration of the public interest, have given Ports Toronto, and Porter, what they want.”


[1] Ports Toronto Directors currently are

  • Chair Robert Poirier, who has raised thousands of dollars for the Conservative party since 2005, including hostiong a $1,100-a-plate fundraiser with then‑Industry Minister Tony Clement at Toronto’s Albany Club.
  • Mark Curry is a financial supporter of the Conservative Party.
  • Sean Morley, spent nearly four years as senior policy advisor to cabinet ministers in the Mike Harris regime, and was the official agent for Christine Elliott in her losing bid for the Ontario Tory leadership
  • Jeremy Adams was campaign manager for Jim Flaherty when Mr. Flaherty lost the Ontario Tory leadership to John Tory and was a spokesperson for Ontario Conservative leader Tim Hudak.
  • Jan Innes, a provincial appointee
  • Amanda Walton, past president of the Conservative Party bastion in Toronto, the Albany Club.

[2] Porter Airlines has been the virtually‑exclusive beneficiary of massive subsidies from Ports Toronto.

These include:

  • exclusive use of the Island Airport for five years, and a near-monopoly since
  • $20M cash, derived from a “settlement” of Porter’s bogus claim for damages arising from Paul Martin’s cancellation of the proposed bridge
  • airport charges limited to net operating costs after all other revenue had been deducted (no charge that reflected the premium value of the Airport’s publicly-owned lands).
  • vastly below-market property taxes, notwithstanding  this Regulation under the Payments in Lieu of Taxes Act:

“a payment made by a corporation [i.e. Ports Toronto]  in lieu of a real property tax for a taxation year shall be not less than [my emphasis] the product of

(a) the corporation effective rate[1] in the taxation year applicable to the corporation property in respect of which the payment may be made; and

(b) the corporation property value[1] in the taxation year of that corporation property.”

  • Massive taxpayer dollars to fund Porter’s aircraft purchases. 16 of Porter’s first 20 aircraft were financed by loans of $283 million from the Federal Government’s Export Development Corporation. These loans were long term, and at surprising low interest rates: a weighted average rate of 4.92%, maturing between September 2021 and December 2024.
  • Two new ferries and terminals for $20 million – one with Ports Toronto board’s deciding vote cast by Colin Watson, an acknowledged “friend” of Mr. Deluce, contrary to the Ports Toronto’s own Code of Conduct.
  • PortsToronto readily agreed to extend its lease of the terminal lands to Porter past the expiry of the Tripartite Agreement on June 30, 2033, without any apparent public benefit in return, and no public consultation, solely to facilitate Porter’s sale of its terminal. It would appear that Porter’s best interests, and not the public interest, guided that decision.

[3] Those losses are camouflaged in Ports Toronto’s Financial Statements in two ways:

  • ~$35M cash made by the City of Toronto over ten years commencing in 2003 to resolve a dubious lawsuit brought by Ports Toronto (another $24.8M in payments from the City were not included in revenue, as they were required to be applied to non-Airport capital payments) were categorized as revenue, reducing the amount of operating losses that otherwise would have been apparent.
  • Airport Improvement Fees, collected from passengers using the Toronto Island Airport cannot be used to cover Airport operating costs, but are recorded as Airport revenue in Ports Toronto’s financial statements.

The Operating Agreement signed by PortsToronto with Porter Airlines in 2010 stipulates that Porter is required to pay, for its use of the Island Airport, a sum sufficient to ensure the Airport operation breaks even after the addition of 25% of Airport operating costs to be applied to Ports Toronto’s head office costs.

Instead, PortsToronto is charging Porter an amount less than its Airport operating costs, and drawing down on its capital assets to, in effect, subsidize Porter.

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