November 30, 2009

Stephen Harper, Prime Minister of Canada

Dear Prime Minister:

We write to you to again regarding the conduct of your government’s agency, the Toronto Port Authority. We note that your government has failed to address the serious governance issues we set out in our July 22, 2009 letter to you.

Perhaps as a consequence of that failure, the problems continue, and grow.

We write now about aggressive efforts by the TPA and its Chair Mark McQueen to insist that the City of Toronto pay $11,800,000 to the TPA – to bring up to date the installments required by a settlement of a lawsuit brought by the TPA against the City shortly after it was created in 1999.

The lawsuit was always flimsy: brought by one government body (the TPA) against another (the City) over a land transfer from what was a City-controlled agency, the Toronto Harbour Commission, to another City-controlled agency, Toronto Economic Development Corporation. The transfer was made in good faith and appropriately documented. Lawyers’ opinions were obtained to ensure that all necessary legal concerns were addressed.

That claim would never have been brought had the federal government not taken away the City’s control of its Harbour Commission, and placed it under vigorous federal government control. And even then, it was unlikely to have been commenced if the federal government had honoured the requirements of the Canada Marine Act that requires all but three of the directors to be representative of port user groups. As you know, none are save one director with a close relationship to Porter Air’s CEO. Currently, the most common feature of the TPA’s directors is a close relationship with your political party.

The TPA  managed to secure this settlement only because your current Minister of Natural Resources, Lisa Raitt, then CEO of the TPA, along with others, lobbied the  Lastman council so vigorously that it caved in 2003, agreeing to lease the disputed land back to the TPA, and to pay $48 million  over ten years.

The annual payments under this settlement had not been made, in large part because the TPA had refused to pay its assessed property taxes of $39,588,000, from 1999 to 2008[i]. This dispute is currently in the Federal Court of Canada[ii]. Every other property owner in the City is expected to pay their taxes when due. The TPA should not be hiding behind the fact that it is a federal government agency to refuse to do so.

What the TPA is doing is insisting that the City pay up on the settlement – dubiously obtained as it was – while at the same time continuing to refuse to pay its fair share of property taxes. The amounts of money involved are not trivial, and will significantly affect the ability of the City to meet its citizens’ needs and expectations.

Your government has recognized the financial straits municipalities are in - lacking a tax base sufficient to pay for the services downloaded onto them over the past decade or so.  The result has been a steady deterioration of City services, depleted reserves, and rising property taxes and fees charged.

While not alone, Toronto has very serious financial problems arising from those financial straits.

On the other hand, with Porter’s apparent success, the TPA is no longer in need of money – it turned a profit last year, and promises to make more money as Porter continues to expand. It has nothing to spend the City’s money on – save to repay the debt it incurred to buy ferries for Porter, and to repair long-since-collapsed seawalls at the Eastern and Western Gaps of Toronto’s harbour..

And there is no accountability for how it spends money – its meetings are secret, and directors are sworn to confidentiality.

Mr. McQueen and the TPA should be ashamed of their actions.

In light of their continuing failure to acknowledge the interests of the citizens of Toronto we implore you to intervene.

The only practical solution is for your government to reverse the mistake made in 1999 that replaced the City’s control of its waterfront with the unaccountable TPA. That solution, which only your government can implement, resolves all of the issues of accountability that have arisen, and that have led to such shameful behaviour of your appointees to the TPA board.

Unless that mistake is reversed, this mess will inevitably become even more embarrassing for your government.

Yours truly

Brian Iler, Chair, CommunityAIR       

cc. John Baird, Mayor David Miller