(Editor's note:  This letter about governance issues at the Toronto Port Authority was sent to the minister by Bob Kotyk.)

The Honourable John Baird

Minister of Minister of Transport,

Infrastructure and Communities

Minister

I sent an email on August 30 about matters concerning the Toronto Port Authority (TPA) and the laceName w:st="on">TorontolaceName> laceType w:st="on">IslandlaceType> laceType w:st="on">AirportlaceType> to Prime Minister Harper . One of the topics was board governance at the TPA.  Shortly after, his office indicated that the email had been forwarded to you.  I assume that because it wasn’t directly addressed to you that you didn’t prepare a response.  In all fairness, the question put was to the prime minister so I understand why you chose to ignore the email.

However, given certain recent accounts in the media about governance at the TPA, I should now like to address you directly on this issue.

Please recall that one of your appointees to the TPA Board of Directors, Colin Watson, was the subject of an investigation by Ethics Commissioner Mary Dawson over a vote to approve funds for a new ferry for the laceName w:st="on">TorontolaceName> laceType w:st="on">IslandlaceType> laceType w:st="on">AirportlaceType> that would result in a substantial benefit to his friend and colleague Robert Deluce.

Ms Dawson reached the conclusion that under the Act governing her office, Mr. Watson’s vote did not result in a conflict of interest.

Curious as to why even though she cited them, Ms Watson did not consider the TPA’s Letters Patent, Schedule E, Code of Conduct which states:

1.2 Principles. This Code shall be interpreted in accordance with the following general principles:

(c) public confidence and trust in the integrity and impartiality of the Authority may be as equally compromised by the appearance of a conflict as by the existence of an actual conflict;

I emailed the Commissioner’s office about consideration of the TPA’s Letters Patent and received the following response.

“The Watson Report outlined the Commissioner’s conclusions following an examination under section 45 of the Act to determine whether or not Mr. Watson contravened subsection 6(1) or section 21 of the Act.  While the TPA’s Letters Patent were reviewed in order to better understand the context in which the board operated, she does not have the mandate to determine whether Mr. Watson contravened the board’s own Code of Conduct (emphasis mine).

Judging by some of the findings and testimony in The Watson Report, it appears, that Mr. Watson created the appearance of a conflict of interest under 1.2 Principles (c).  However, because of the restrictions placed on Ms Dawson under the Act, the question remains.  Did Mr. Watson create an appearance of a conflict of interest with his vote and thus a de facto conflict of interest according tto the Board's own Code of Conductunder the TPA’s Letters Patent?

Clearly, the question can’t be answered by the Ethics Commissioner. 

Neither can it be answered by the Auditor General.  In a related matter, on June 10, 2009, four concerned TPA directors wrote the Auditor-General of Canada asking that she conduct a special investigation of the TPA.  On June 25, 2009, Auditor-General Fraser reported that her office does “not have the mandate to do so.”

That leaves two possible authorities left to investigate charges of conflict of interest with regard to board members of Canada’s port authorities, the minister responsible and the board of directors.

In your case as minister responsible, I fear that you may have lost the objectivity to deal with the TPA Board at arm’s length.  For example, in response to the TPA board’s deadlock over the vote on a new ferry, that was serious enough to warrant the Ethics Commissioner’s attention, rather than attempting conciliation and compromise, you appointed two new members to the board of a port authority whose port ranks as 19^th in tonnage shipped yet has more directors than either Hamilton’s or Montreal’s ports.

The two new directors as well as certain others warrant a close look in light of the overall composition of the Board.

Jeremy Adams, for example, was Health Minister Elizabeth Witmer’s communications assistant in 1998 under Mike Harris’ tenure as premier of Ontario.  In 2004, Mr. Adams was campaign manager for Jim Flaherty when Mr. Flaherty lost the Ontario Tory leadership to John Tory.  This year, Mr. Adams was a spokesman for Tim Hudak.  Mr. Hudak won the Ontario Tory leadership, replacing John Tory.  During the campaign, Mike Harris worked behind the scenes for Mr. Hudak who had been one of Mr. Harris’ cabinet ministers and part of the Common Sense Revolution. 

Sean Morley spent nearly four years as senior policy advisor to the Minister of Education and Training, and to the Minister of Training, Colleges and Universities during the Harris regime.  This year Mr. Morley was the agent for Christine Elliott’s campaign in her losing bid for the Ontario Tory leadership.  Christine Elliott is Jim Flaherty’s wife.  Jim Flaherty, the current federal Conservative finance minister, who was Ontario finance minister under Mr. Harris.

Robert Poirier, who has raised thousands of dollars for the Conservative party since 2005, hosted a $1,100-a-plate fundraiser with Industry Minister Tony Clement at Toronto's Albany Club in January this year.  Mr. Clement was Minister of Health under Mike Harris before Mr. Harris quit.  Mr. Clement has been called “one of the chief architects of Harris' Common Sense Revolution.”  

Craig Rix was a former aide to Jim Flaherty.  Mr. Rix was aide to Mr. Flaherty when Mr. Flaherty was Ontario's labour minister in the late 1990s, in the Progressive Conservative government of Mike Harris.

Whether true or not, as a former minister under Mike Harris, you could be considered favourably bias towards any of these directors or others who vote with them in a potential conflict situation.  In fact, given the appointments of these important members of the “Common Sense Revolution”, it appears you have a clear political agenda.

Can the Board itself be counted on to police its directors for conflict of interest?  Certainly in the case of Mr. Watson, this wasn’t the case and an outside agent was required.  However, as the attached document TPA responds to Olivia Chow (Ed’s Note: The document is available at torontoport.com/PortAuthority/media_content.asp?id=359) seems to indicate, those not on side are treated somewhat disdainfully, hardly an incentive to constructive dialogue and decision making.

In the final analysis, the Ethics Commissioner does not have full jurisdiction to carry out an investigation of port authority board members.  The Auditor-General does not have the mandate to do so.  A split board, at least in the case of the TPA, has proven to be incapable of doing so.  The ministerr responsible may face the temptation to play politics as the current TPA situation suggests. 

Accordingly, where are the checks and balances when questions of conflict of interest by Canada’s port authority board members arise?

Sincerely,

Bob Kotyk