Thank you for your correspondence on this very important issue. I have received a number of emails so please accept this letter as a response to the collection of issues and concerns received by my constituents.
I share your frustration and disappointment with the transaction. As many of you know, the project to develop the parking lot around the old Harbour Commission Building on Bay Street was originally proposed as a joint development with Ports Toronto and a private developer. That proposal would have seen Ports Toronto enter into a long term lease with a selected proponent for approximately 99 years at about $5 million per year. Ports Toronto would have borrowed against the revenue and realized an immediate capital gain of about $500 million.
Working with my colleagues in Ottawa and in accordance with the Canada Marine Act, the above proposal was not allowed to move forward. Port authorities are only allowed to conduct business directly related to responsibilities outlined in their Letters Patent. Ports Toronto is not permitted to act as a commercial real estate developer. The transaction proposed by Ports Toronto was not approved.
Unfortunately, Ports Toronto was successful with a different proposal. Federal port authorities are allowed to declare land under their ownership as surplus and sell the asset. This is a “delegated authority” under the Canada Marine Act. The way the federal charter is set up, the only role for the Minister of Transport and the President of the Treasury Board is one of review. If, in the mind of the Federal Government, the land is not in fact surplus, but rather critical to port operation, the Transport Minister can prevent the sale.
Additionally, only the Board of Directors of Ports Toronto can construct a deal to surrender surplus lands, and by law they must use the funds to finance capital improvements to their facilities. Without public meetings, it is impossible to know of their exact plans. Opening up the meetings to public scrutiny must be addressed to further protect the public interest.
The parking lot on Bay Street has been assessed as surplus. The sale has been approved. The Minister of Transport will not interfere with the day-to-day operations of the port authority and will not intervene. I have urged the Minister to explore if conditions are possible on the sale. One of the conditions would be to make sure that Ports Toronto agrees to only use the proceeds to support marine activity in the port, and if money is to be spent on the airport, that all expenditures be consistent with the Tripartite Agreement. As the transaction moves forward, I will update the community and I will fight for these conditions to be implemented.
Ports Toronto has said publicly that the proceeds will be directed towards marine infrastructure, but it has also said that it will use the majority of the proceeds to pay down its debt. In conversation with the CEO of Ports Toronto, Geoffrey Wilson, I was informed that a substantial amount of the revenue will likely be used to retire existing debt. My guess is that they will retire this debt; new borrowing capacity of course brings new worries.
Reform of Ports Toronto remains my goal. There are new appointments coming forward and I continue to work to ensure that appointees are drawn from the community of harbour users and that the Board of Directors is made up of people prepared to support the vision of a clean, green waterfront. Additionally, I will ensure that appointees understand that the delicate balances of ecological, culture, residential and recreational uses are front and centre.
I am currently in the process of organizing a meeting with Community Air and No Jets, as well as neighbourhood leaders, and those who have contacted me with their concerns to talk further on this issue. I look forward to meeting with all of you to talk about the challenges that remain ahead of us.
Adam Vaughan, M.P.