Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 19 - Evidence

OTTAWA, Wednesday, April 23, 1997

The Standing Senate Committee on Transport and Communications, to which was referred Bill C-44, for making the system of Canadian ports competitive, efficient and commercially oriented, providing for the establishing of port authorities and the divesting of certain harbours and ports, for the commercialization of the St. Lawrence Seaway and ferry services and other matters related to maritime trade and transport and amending the Pilotage Act and amending and repealing other Acts as a consequence, met this day at 3:37 p.m. to give consideration to the bill.

Senator Lise Bacon (Chair) in the Chair.


The Chair: Honourable senators, around noon today, I received a letter from Senator Cochrane concerning witnesses. I will ask the clerk to distribute a copy of the letter to members. I asked the clerk to see how many witnesses the House of Commons transportation committee heard. He informs me that aside from officials of the department, the committee heard from 144 individuals and organizations.

Senator Cochrane, would you like to comment on your list of suggested witnesses, bearing in mind that we have several people appearing before us this afternoon?

Senator Cochrane: It is my understanding that some municipalities, especially municipalities from the smaller areas, should be heard. We have heard municipalities from the major ports. They appeared, I understand, when the committee was travelling. We did not hear from some of the ports that will be adversely affected by this bill, so I would like to hear from quite a few of them.

If my reading of this bill is right, some of these ports are affected by local industry. These local industries are the lifeblood of the whole community, and that is why I would like to hear from them.

Also, I want to hear from Marine Atlantic because ferry services will be included.

With respect to the pilotage authority, I think we need to hear from these people again if they have not been heard because the question of policing has not been settled. I do not know if the unions are represented.

What we do in the Senate does not have to depend on what they do in the House of Commons. We in the Senate give everything, even if it has been heard before, sober second thought. I do not think we should pass any legislation unless we study it thoroughly and give it a detailed inspection.

The Chair: It is my understanding that although the small ports are mentioned in the bill, they are not affected by this piece of legislation as much as the larger ports. That is why we did not have anyone from the small ports appear before the committee.

Senator Cochrane: That is probably why we should hear from them.

The Chair: They are not affected. I do not know if we should hear from them.

Senator Cochrane: No, that is not my reading of it. They will be affected. Our governments, too, should also be consulted.

The Chair: Officials from the department will be back here this afternoon. They appeared yesterday and were asked questions.

Senator Cochrane: But this is local government. The officials we heard yesterday were from the federal government.

The Chair: Senator Cochrane, I must repeat that 144 individuals or groups were heard in the House of Commons from September 30 to November 6. We could ask all the questions we wanted to ask to the officials yesterday. We have people appearing before us today. We can ask questions again today.

I am in your hands, senators. If you wish to have 48 witnesses added to the list, it is up to you to decide.

Senator Roberge: I have a recommendation. Perhaps we can hear our witnesses today and finalize things with the Ministry of Transport, following which we can reassess that question.

Senator Cochrane:I do not mind reassessing the question, but it is still an issue that I wish to put forward.

The Chair: We will deal with it later, then.

Senator Perrault: Madam Chair, have any of the provincial governments or the Minister of Transport requested the right to be heard?

The Chair: No.

Senator Cochrane: This bill just came to us.

The Chair: Unlike other bills where we received lots of phone calls, letters and faxes, we have not had that for Bill C-44. The people who asked to appear before us are appearing today or appeared yesterday.

Senator Perrault: You would not deny them the right to be heard. If they are not that interested then, of course, that is different.

The Chair: We will deal with this after we have heard our witnesses today. We will come back to your request, Senator Cochrane.

We have before us today Mr. Jack Layton, Councillor for the Regional Municipality of Toronto; Dan Leckie, Councillor for the City of Toronto; and Martin Silva, Councillor for the City of Toronto.


Mr. Martin Silva, Councillor, City of Toronto: Thank you, Madam Chair. My name is Martin Silva and I am a councillor for the City of Toronto. I am also a council-appointed member of the Toronto Harbour Commission. I would like to thank you for giving us the opportunity to appear before this committee.

I would also like to point out that I am not representing the Commission. Two other members of the Harbour Commission are also present, but they are not representing the Commission either, because our meeting of Friday last was cancelled, and as a result, we did not have the opportunity to debate these amendments to the Act at an official Harbour Commission meeting. So everyone here today is appearing as an individual.


Madam Chair and members of the committee, I will start by giving you a bit of the history about the Toronto Harbour Commission. It was formed in 1911 by an act of the federal Parliament of Canada. It was to be a commission composed of the City of Toronto, the federal government and the Board of Trade.

It worked extremely well for many years. It did a great job in the City of Toronto while the boats were coming in. It ran into a bit of a problem back in the 1950s when the St. Lawrence Seaway was built. There were expectations that Toronto would be the next Amsterdam or the next Copenhagen of North America because of the traffic coming up through the St. Lawrence Seaway. It would have been so had the container ship not been invented in the 1960s. That meant that containers were now coming by train or by highway. The port of Toronto had built a massive infrastructure to receive all of this freight, but the freight stopped in Montreal and came up by truck or by train. This meant that the Toronto Harbour Commission was saddled with a massive deficit. At the time, it piled up to something like $35 million. The Toronto Harbour Commission came to the federal government and said, "We are in trouble with this deficit, and you have to help us pay for it." The federal government said, "Well, you are a problem of the City of Toronto; let the City of Toronto pay your deficit." They went to the City of Toronto and were told, "I am sorry, Harbour Commission, but you are an agency of the federal government, so let the federal government deal with your deficit."

The commissioners at that point had only one alternative. They started selling the land they owned. Up to 1985, they paid down their debt by selling land. The city council of the City of Toronto became a little suspicious back in 1985 when a sale was made by one of the members of the Toronto Harbour Commission to a company in which he had an interest.

Until that point, the Toronto Harbour Commission did not have to report to the Minister of Transport because they said they were the City of Toronto; but, they did not report to the City of Toronto because they said they were a federal agency. It was an empire that lived on its own and made its own decisions.

In 1985, city council decided that instead of appointing citizens to the Harbour Commission, they would start appointing councillors. From 1985 until now, the City of Toronto has appointed three councillors to oversee the business of the Toronto Harbour Commission. As a result, all of the financial abuses that had gone on before have now stopped. The Toronto Harbour Commission has to come to city council every year and presented its budget for approval by the council. One of the things that has been done in the last five years is a reduction in the number of employees of the Harbour Commission from 240 down to 120.

There was a restaurant in the building. The restaurant alone used to cost $800,000 a year. That is the deficit the restaurant used to run. We have closed the restaurant, of course.

Now, things have been getting better. The lands were given to the economic agency of the City of Toronto, with the agreement of the federal government, and everything was going well.

We did not participate in the hearings in Hamilton. When the committee travelled to Hamilton, we did not participate in the meetings because the minister had guaranteed that Toronto would continue under the 1911 act until something could be negotiated between the city and the federal government, and that was fine. It needed more time.

What happened is that before third reading of the bill in committee of the whole, someone in Parliament decided to add the port of Toronto to the appendix that lists the national ports. It was not recommended by cabinet. I believe cabinet did not want that to happen, but a backbencher moved that amendment. With that amendment alone, he has completely put us in a situation where we do not know what will happen next. Members of this committee should ask critical questions about the relationship between the member of that committee and one of the harbour commissioners who has been lobbying in Ottawa for this.

The Chair: I remind you, Mr. Silva, that we are discussing the bill, not the process that was followed in the House of Commons.

Mr. Silva: I respect that, Madam Chair. It is just that this amendment was moved at third reading of Committee of the Whole. We believe the Senate of Canada was established to take a pondered, objective, second look at all pieces of legislation. This more than any other piece of legislation deserves that second look because the port of Toronto does not meet any of the three criteria that the law establishes for a national port. Why was the port of Toronto added as a national port? That is a key question.

To finalize my remarks, Madam Chair, if this is the only amendment that everyone disagrees with, I suggest that the bill be sent back to the House of Commons. It could be re-introduced immediately after the next election, and a major mistake that is about to be committed with the port of Toronto could then be rectified.

Mr. Dan Leckie, Councillor, City of Toronto: Madam Chair, the ward I represent includes the Toronto islands, the central waterfront and proceeds northward from there. At one time, the waterfront I represent basically consisted of wharves, shipping and large mills. Some of those relics are still a major part of our community. However, now we have a different situation developing on our waterfront. We have 10,000 people living along the shoreline. The wharves are now becoming centres of art. They are being used for retail purposes. They are becoming theatres and parks. They are becoming places of nature where people sail and fish. Some day we even hope people can swim there again.

I circulated to some of you this vision of the Toronto Bay. We are trying to do an environmental clean-up and get people back using the bay as it was originally delivered to us by nature.

This new vision of the central waterfront of Toronto is a vision of enormous economic importance as well, and one which I feel is jeopardized by this very bill.

I want to submit to the Senate a letter from the Mayor of Toronto and an attachment letter from 12 members of council. We have 16 members of council, 17 including the mayor. This letter basically states that we, the City of Toronto, had been satisfied by Minister Anderson that Toronto would not be recommended as a port authority; that the city, the Toronto Harbour Commission, and the federal government would abide by the existing legislation; and that there would be discussions between the federal government and the city on the new economic vision of what the Toronto Bay could become.

The mayor's office was given those assurances right up until the night before third reading of the bill in the House of Commons. We were shocked and have not had a council meeting since that time to consider this matter. That is why the mayor is writing to you and why members of council have signed this letter. I will give it to your clerk.

The Chair: This was never discussed at a city council meeting?

Mr. Leckie: This was not discussed at the city council in the form of a port authority. When the committee conducted its hearings in Hamilton, we had been given assurances that Toronto would not be included because it did not meet the criteria.

The Chair: I am referring to the letter you are tabling today. Was this discussed at a city council meeting?

Mr. Leckie: No. We have not had a general city council meeting since this occurred in the House of Commons. We will have one on May 12 where this will be discussed, but we needed to see you because we were not part of these negotiations. That is why the mayor and members of council have written to you.

I want to illustrate some of the characteristics in which the city does not meet the criteria of this legislation. Right now, Toronto port operations have about 1.6 million tonnes of activity per year. This ranks us 46th in the level of activity for ports in Canada, just below Blubber Bay, Newfoundland, in terms of level of significance.

Our sister city, Hamilton, has a port operation of 12 million tonnes, which is ten times more than the City of Toronto, yet Hamilton has not been recommended as a port authority.

By way of comparison, last night the chair of the Harbour Commission, Mr. Parmelee -- who will speak to you later -- and I were at a meeting of citizens of the central waterfront. We were discussing economic and cultural uses of the cultural harbour. The salmon fishing derby alone generates revenues of $100 million per year. The whole port operation is less than $4 million a year. I want you to think about that because it indicates a very different possibility for economic, recreational and cultural activity in the Toronto inner harbour, one that requires and necessitates cooperation and coordination between all agencies. You cannot have a dominant use.

The central point of my remarks is that a dominant use can be created by giving this port authority a Crown agency status which is above local jurisdiction, and that is the central problem with the legislation.

We have other activities along the waterfront. I told you about the 10,000 residents. We have theatre activities in the range of $300 million, tourism in the range of $770,000 worth of activity, and then there are film and arts activities. I will not go into those details. I just want to remind you what we are comparing this to is salt, cement and sugar activity worth only $4 million. Yet, the legislation states that this city has the importance of a national port and should be so designated and given the special powers of a Crown agency.

I want to show you the kind of investment going on in Toronto right now along our waterfront at the centre of Harbourfront and Riviera on Queen's Quay -- priority registration. There are developments going on to fill in the central waterfront with people. These include residential, walking, retail and recreational. There were two such full page ads in The Toronto Star just last Sunday alone. This vision of our central waterfront as a people place is essential to the long-term economic viability of a city like Toronto. This is where the prime lands are for future investment purposes. I urge you not to take that away.

Why does this port authority threaten this particular vision? There are two or three fundamental reasons. The first one, of course, is accountability to whom. The port authority will be made up of seven people. Four of them will be existing stakeholders in the $4 million worth of port-related activity, not the real drivers and engines of the economy downtown along the waterfront, but just those involved in terminal and port operations.

As well, there will be one representative from the federal government, the municipal government, and the province. There will not be any natural accountability to elected people in the local jurisdictions and municipality. That means the issues of accountability and coordination with local agencies so that we can have this exciting, natural, economic vision of the port -- the Toronto Bay vision -- will be more difficult.

Second, one of the institutions the port authority will own will be the Toronto City Centre Airport. Already there has been tremendous concern in Toronto about the future of that airport. It is just off our central waterfront on our islands, accessible now by ferry. When the Economic Development Committee of the City of Toronto last held hearings on this issue, the hearings started, I think, at 2:00 p.m. in the afternoon and went until 7:00 a.m. in the morning with some 150 deputations, the big majority of them from people concerned that this never become a jet port and that it never become one with a fixed link. Instead, they insisted that this airport be one that is not dominant, one that allows all the other uses -- the arts, recreation and the residential uses -- to coexist. That is critical.

What you are doing is creating a corporation -- a subsidiary of the port authority -- to run the airport with the responsibility of breaking even and becoming significant. There will not be any accountability to existing legislation of the municipality.

While a present tripartite agreement between the Harbour Commission, the city and the federal government controls the expansion of this airport, lawyers at the city are anxious that, depending on the letters patent that transfer this authority or control to the new port authority, it may or may not have to abide by agreements that controlled its size.

One of our great anxieties is that the airport could become a serious barrier to the vision of a Toronto Bay that we express in this document and that is unfolding as we speak. Some residences are less than 300 metres from the runway of this particular airport. You can understand the desperate need for local citizens to have some say about whether it expands. At the moment, it has not been financially viable and has been operating in a deficit situation. That is unfortunate, but it has co-existed with other uses, and we have been getting increasingly closer to solutions.

What I am trying to say is that to allow this legislation to proceed is undemocratic because the local community, the municipality, was not a party to the amendment put forth in the House of Commons at the last minute. It will create a situation in which accountability and coordination will be made increasingly difficult. It will create a Crown agency which does not have to abide by the local legislation, whether that be zoning or uses, and will have lands unto itself; and it will be contrary, potentially, to a vision which has enormous economic potential for the future waterfront of the City of Toronto.

Mr. Jack Layton, Councillor, Regional Municipality of Toronto: Madam Chair, I represent about half the area that is being named to be considered as a port. I am also speaking on behalf of Councillor Olivia Chow, who represents the downtown area at the regional level. Between us, I guess we cover the waterfront.

I am also the Chair of our Planning and Transportation Committee at Metro Council. This last-minute amendment affecting such a huge area of Toronto's most important land in the port was done in such a fashion that we have not had an opportunity to adopt a Metro Council position on this matter yet, so I am speaking as an individual councillor. I do not have a motion for you from our Metro Council. Frankly, had we known that such a dramatic proposal was coming forward and had there been any warning or opportunity to have a hearing on the matter and time to do so, I can assure you that we would have had a formal position in front of you. We would appreciate the Senate helping us take a position at the municipal level.

Unfortunately, no notice was given to any of the affected parties of the strategy of adopting an amendment just prior to third reading. This amendment, basically, took our Toronto Harbour Commission and made it a port authority. To have it done in that way is grossly unfair to all of us who are elected representatives of the people of Toronto and who have worked many years to build our waterfront to be one of the most successful and celebrated in the world.

I am speaking to you as a former member of the Toronto Harbour Commission as well. I have been involved in the evolution of this waterfront for a very long time. I must admit that I could not have imagined one level of government stepping in and simply scooping up all of this work and the structures that have been working cooperatively to create development and turning it over to an agency, the majority of the members of which will come from four businesses on the waterfront. That is simply wrong. It should not be allowed to happen, and the Senate should exercise its powers to turn that one amendment back.

After full hearings, Toronto could be added at a later date if wisdom moved us in that direction. Frankly, I doubt that it will. Toronto's waterfront is a success. It has gone from being a major port to being a multi-centred, multi-activity part of our city.

In 1970, we had 100 times as much activity in terms of tonnage in the Toronto port as we have today. Now, there may be a few people who have a vision that the Toronto port of the past can be made to happen again. Certainly our Harbour Commission has a business plan to pursue this and develop more tonnage in the port. No problem. We have reserved a large area of our port for the potential expansion, but we do not need to create an agency that is not involved with our city governments and our communities in order for this to happen. In fact, if anything, that will simply precipitate conflict.

I do want to say to you that we have replaced the economic activity that used to occur in the port with a great many other economic activities that are creating thousands of jobs. For example, under the leadership of former Mayor Art Eggleton, now the minister in charge of international trade, an organization called the Toronto Economic Development Company was created. Much of the Harbour Commission land that would clearly never be used for port land -- it was not even next to the water -- was turned over to this development agency. Seven years after its creation, I can tell you that every square foot of land it was working with is now under development, leased and tenanted. Businesses are bringing jobs back downtown.

Our great fear is that the port authority, in trying to deal with its smallness, will look to develop some of its lands in incompatible ways. People have talked about casinos on the waterfront. For heaven's sake, that should not be something the federal government is intervening in with a port authority. Our fear is that if you set up an economically unsustainable entity, it will have to do what the Harbour Commission was forced to do, as Councillor Silva said, and start selling off this land to the highest bidder. This will start to dismantle the wonderful balance we have created.

I know you have all been to Toronto and seen what is happening there with Harbourfront and the arts and culture and with our residential communities. There is everything from the Sky Dome right down to housing and Redpath Sugar coexisting. It is truly wonderful.

The new dimension that has been added that I want to underline is the environment community involvement in cleaning up the old bay. That used to be the dump. People used to dump old dead horses and sewage and everything into that bay. We have seen a wonderful, concerted effort by citizens to clean up this bay and turn it into something fantastic.

I know some of our industries like Redpath Sugar are always a little nervous about this. Will this mean their boats cannot get in? Well, it is in the interests of the City of Toronto, believe me, their boats get in. Redpath pays big taxes. It is in the interests of the City of Toronto that Redpath and those remaining users are always successful. We have even reserved an area for a special intermodal depot that could be used for port development in the future.

In summary, this one amendment was added at the very last stage when no one in Toronto had an opportunity to speak to it. That is what concerns us today, not the bill as a whole. We would urge you to exercise the opportunity you have to reconsider that particular matter.

The Chair: First reading of this bill in the House of Commons took place last June. That version at least gave a hint that Toronto will eventually be defined and is destined to become a Canada Port Authority. Why has it taken you so long to comment on this matter? Have you done that before now?

Mr. Layton: Oh, yes. Our mayor and councils have been involved in discussions with the minister throughout, and there were complete assurances that there would not be any rush and discussions would carry on. That is what you will see in the mayor's letter. Frankly, we were taken completely by surprise by the amendment that came in at the last moment.

The Chair: Did you appear before the committee in the House of Commons?

Mr. Layton: We did not consider that it was necessary because of the assurances we had from the minister. Everything seemed like it was moving on an even keel.

Mr. Leckie: The matter came up in our executive committee whether to appear or not, and a major report was put together by our legal staff. When the matter was considered at our executive committee, we were given the reassurance that the existing 1911 legislation with the Toronto Harbour Commissioners would continue until the federal government and the city had time to work out an alternate arrangement. We were urged not to participate in those hearings. Since, of course, there was a disagreement inside the city about what status the port should have and the federal government had been involved in those discussions, this was the compromise solution.

The mayor's office then worked with Minister Anderson's office and drafted actual wording to be introduced in the House of Commons two weeks ago. He to put forth a whole clause that would cover this off in the city's agreement. For that reason, we never saw any need to make a presentation or to be concerned because those reassurances had been provided by the minister.

The Chair: Your representatives have 12 signatures from members of the city council.

Mr. Leckie: That is how many members of city council we were able to get signatures from late yesterday afternoon when we had the indication that we could come and speak to you.

The Chair: Yet you said, at the beginning, that you represent yourself. That is what Mr. Silva said. Is that because you have not discussed it at the city council?

Mr. Leckie: There is no position of Toronto City Council.

Mr. Silva: We were in the middle of a city council meeting a week last Monday when we found out that the amendment had been introduced. It was as if the minister had told us one thing and the backbencher who introduced the amendment was doing something totally opposed to what the minister had agreed to.

Mr. Layton: We did not expect it would carry.

The Chair: The members of the committee, you mean?

Mr. Silva: It was put before Committee of the Whole.

The Chair: All members of the committee?

Mr. Silva: Yes.

Senator Spivak: It seems to me that the usurping of power of local communities is an ecumenical matter these days, particularly in Toronto.

Mr. Silva: Yes, indeed.

Mr. Leckie: Yes, we are feeling that.

Senator Spivak: I do not have any background on this bill since we just received it, and I do not know if we are really equipped to deal with it at the moment. Was there not a plan for the harbourfront and the whole lakefront of Toronto by the former mayor, Mr. Crombie? That was the Harbourfront Commission, was it not?

Mr. Silva: Yes.

Senator Spivak: Could you refresh my memory? I am from Winnipeg. What was the mandate? Under whose mandate was that particular report done? As well, did it have any bearing on what we are talking about here? It seems to me it was a very comprehensive, very enlightened and far-reaching plan. I do not remember the mandate. Was it also federal and provincial, or was it just municipal?

Mr. Layton: I was a member of council at that time.

Senator Spivak: How long ago was that?

Mr. Layton: I think David Crombie took over and established what started out as a waterfront commission and became a watershed study in about 1988. It started out as a federal royal commission. Fairly soon after that, the province decided to join in and name that same commission as a provincial commission, so it was functioning as both, which was quite an exciting model of cooperation. The city and the regional governments also became engaged.

You all know David Crombie. He has an ability to get people working together. It is one of his skills. Many people have worked together to realize his vision. It is not just his vision, of course; rather, it is one that emerged from the community as a whole.

David Crombie studied the Harbour Commission and its situation in great depth. Many volumes of studies were produced and suggested strategies were recommended, almost all of which are now in the process of being pursued and implemented. On a step-by-step partnership basis, that is how it has worked out.

Councillor Leckie can speak about his most recent conversations with the people at the Crombie Commission, which is now an implementation group. It has been given the mandate by the province to implement these kinds of ideas, and I can tell you that they are extremely concerned about this most recent amendment. It takes them by surprise as well, and they do not support it. I guess that is the story.

Mr. Silva: The mayor after Mr. Crombie, Mr. Art Eggleton, who is now a minister in cabinet, is the one who put forward the possibility of implementing the economic vision that is now also in the process of being implemented in Toronto. Crombie and Eggleton both worked towards the vision that is now being unfolded by this amendment.

Senator Spivak: Would you say that this is a policy change?

Mr. Silva: A very drastic one.

Senator Spivak: Coming directly in government, through some last-minute amendment. It hardly seems possible.

If you designate this as a port authority, does it negate the powers that all of the other bodies have in working towards this goal?

Mr. Silva: Yes.

Senator Spivak: Really? In one stroke, just like that.

Mr. Leckie: Yes, in one stroke. We spent quite a bit of time with the city's lawyers in the last two days trying to figure that out. As you know, there is a structure called paramountcy, which is a legal structure. There is a senior level of government which has an agency with similar jurisdiction.

Senator Spivak: We have that same structure. It is called the House of Commons.

Mr. Leckie: You have the same thing in the House of Commons. Their bylaws or laws take precedence. I will give you a silly example.

Senator Spivak: Actually, it is not true. I was just kidding.

Mr. Leckie: At the moment, the Toronto Harbour Commission has a law that says you cannot swim in the inner harbour. It is a very old law. People may not pay attention to it, but it is an example that might run contrary to the counter-vision we are trying to create of the Toronto Bay, which is to restore, do water quality improvements, create beaches and access points for boats, and create capacity for fishing, boating, sailing, canoeing, and ultimately swimming inside this area.

We are afraid that if you create this Crown authority, its vision and potential use will dominate, exclude or preclude more natural uses. We want something that fits in and that we are able to work with in terms of coordination and accountability with local agencies, not a body that has superior powers.

Senator Spivak: Are you suggesting that there is a way of melding in terms of what a Crown corporation might do, such as a port authority? Is that what you are looking for?

Mr. Leckie: Precisely.

Senator Spivak: That is what you would prefer, rather than some last-minute shot.

Mr. Leckie: When we had this matter before the executive committee at council, we spoke of our vision. The mayor and I have been very active in putting this initiative together and many other initiatives. We have a Waterfront Action Committee that is working on things like improving the dock front for waterfront promenades and everything else.

We presented our vision at the executive committee and noted that there are very significant federal interests here. We wanted a chance to meet with the federal government to see if there were ways of working together. We wanted to solve the problems of the Harbourfront Corporation, and through the good work of the federal government and the city, we have come up with a joint solution. We think a joint solution is possible in this case, but we do not want you to create an unaccountable, arm's-length Crown agency with superior powers.

Senator Spivak: In the time forthcoming, will you have a precise legal assessment of the varying powers here and what might occur? I understand you do not have this at the moment.

Mr. Leckie: Yes.

Senator Spivak: Are you looking at that?

Mr. Leckie: Absolutely. A lawyer has been assigned in the city, Dolores Morel, to work on this matter, and she has been working on it.

Senator Spivak: How long will that take?

Mr. Leckie: To get a legal opinion?

Senator Spivak: To understand the proper legal implications of this amendment.

Mr. Leckie: We think that we could have something for you after our next council meeting, which would be mid-May.

We also think that these matters are important. You do not have all the answers today, and you should seek them because this is a very critical matter to the economic and social future of the City of Toronto.

Senator Spivak: Madam Chair, has Mr. Crombie been asked to appear here? Has anyone from the Harbour Commission been asked to appear as witnesses? Is that a possibility?

The Chair: The Harbour Commission is represented here this afternoon.

Mr. Layton: You are speaking of very different representation. You will be hearing from the Harbour Commission chair and another member of the Harbour Commission, but this is not former Mayor Crombie and his waterfront.

The Chair: We know the difference. We have people representing the Harbour Commission.

Senator Spivak: I would ask, Madam Chair, if we could possibly prevail on Mayor Crombie to appear.

The Chair: We will discuss that later because we have another request from your colleague, Senator Cochrane.

Mr. Leckie: We have actually spoken with Mayor Crombie, and he is willing to depute.

The Chair: It is up to our committee to make that decision, Senator Spivak.

Senator Perrault: Reference was made to assurances. Reference was made to correspondence or communications between the Minister of Transport and Toronto city council that had the effect of providing assurances that there was no objection. Do you have copies of those letters that you would like to leave with the committee so we can see the written commitment?

Mr. Leckie: I have a letter from the mayor and the signed members of council.

The Chair: You all have a copy of the mayor's letter.

Mr. Leckie: We could provide additional documentation.

Senator Perrault: Reference was made to Minister Anderson.

The Chair: I have a letter from Minister Anderson here that I will read to you after we have finished.

Senator Perrault: How much time do you estimate you would need for further consultation on this matter?

Mr. Leckie: We think by mid-May. There is a council meeting May 12. We could have our staff work full out on it.

Senator Perrault: It would not be next week or anything like that, would it?

Mr. Leckie: No. There would not be an opportunity.

Senator Perrault: What is your ideal view of the future of the commission in Toronto?

Mr. Leckie: What we had agreed upon with Minister Anderson and what we were hoping was that the existing act, the 1911 legislation that created the Harbour Commission, would stay in existence until the city and the federal government had a chance to work the port operations into the bigger picture.

Senator Perrault: Do you have that commitment in writing?

Mr. Leckie: I can provide you with a letter from the minister's office, if you like, indicating the wording that had been agreed upon, and it could be signed by the mayor. I would be glad to do that, if that is of importance to you.

Senator Perrault: It would be useful to have it.

Senator Johnson: Most of my questions have been answered, but I wanted a clarification. When Nesbitt Burns first studied your situation and Toronto failed the test and then came back and did it again, what was that process?

Mr. Leckie: This was a process to determine whether Toronto qualified as a port authority.

Senator Johnson: Initially, you did not.

Mr. Leckie: That is right.

Senator Johnson: What changed that? Did the area change drastically between the studies?

Mr. Leckie: No. That is the point we made in our presentation, that the value of the port operation is under $4 million. We are the 44th busiest port. We do not feel that we qualify as a port authority.

Senator Johnson: I do not know the date when you qualified. When was that?

Mr. Silva: It was an amendment put at third reading in the House of Commons.

Senator Johnson: That was the amendment.

Mr. Silva: It was not debated. No rationale was provided.

Senator Johnson: We have not had a briefing on this. I am sorry that we are no further ahead than you are.

Mr. Silva: No one has those facts and figures. Someone introduced this amendment at the last minute in Committee of the Whole.

Senator Johnson: To include you.

Mr. Silva: To include us in the appendix of port authorities.

Mr. Layton: In fairness, there may be some individuals, including the backbencher in question, who imagine a port's future along the lines of the criteria, but the bill was not set up to put ports in that situation. Also, there is real doubt about whether that could ever be achieved. It certainly does not meet the tests set out in the bill at the moment, very far from it.

Senator Johnson: It does not meet the Canada Ports Authority criteria.

Mr. Layton: No. To be consistent, frankly, the ports authority criteria ought to be amended.

Senator Johnson: Do you have any idea as to why it was thrown into the package?

Mr. Layton: We can only speculate as to the motives of the backbencher in question.

The Chair: We will not do that here. We are discussing the bill, Mr. Layton. We are not campaigning.

Senator Johnson: I did not have any background on that decision, that amendment, or why you were put into the mix at this time.

Mr. Layton: Madam Chair, I am not sure what your remark is referring to.

The Chair: I think you understand what I mean.

Mr. Layton: I am a long-time representative of the area and have worked on the port.

The Chair: I know that and can appreciate that, but let us discuss the bill.

Mr. Layton: I have to say the insinuation is not particularly fair. I would appreciate an appropriate response.

The Chair: Let us be fair to everyone. Let us be fair to the MPs in the House of Commons who are trying to do their work. Let us be fair to you, trying to do your work at a representative of the City of Toronto and a city councillor.

Senator Johnson: I have been going through your pamphlet. What kind of impact will this bill have on your plans environmentally if the port of Toronto is turned into a CPA left with the present authority?

Mr. Leckie: I would like to speak to that as someone who has worked very hard on it. As you know, environmental solutions take the cooperation of all agencies and constituencies concerned.

One of the great things about the inner harbour and one of the good things about the fact that industrial activity has decreased is that there is no longer any industrial pollution in the inner harbour of Toronto. There are no longer any point sources of industrial pollution. That has led to dramatic improvements in water quality.

We still have very significant problems with pollutants coming down the Don River and through the Keating Channel, the floor of which is also polluted. That is a problem. The most significant pollution source now is human sewage and combined overflows. We are working with all of the agencies concerned to clean it up. Our expectation is that we will be able to get a water quality that allows swimming in the inner harbour of Toronto within five or ten years. We are very confident that we can do that.

Environmentally, our fear is that if you create a Crown authority which has a dominant power over other agencies and they have an industrial mandate, nothing precludes their participation in industrial activities which would jeopardize the environmental clean-up. That is our great anxiety. We want to make that the existing authorities are cooperative and accountable so we can work towards a joint solution. We are afraid of this with regard to the airport, which will be under this authority, and with regard to port lands.

There has been discussion, which has not been public, about an energy-from-waste incinerator that might be located on these lands. I point out to you that the City of Toronto has a bylaw which does not allow the incineration of anything. We have been successful in closing down eight incinerators that had major air quality and water quality impacts on our downtown area. That has been a very successful process. If you create an authority that has powers above the city in terms of bylaws, then we cannot control this incinerator coming into our port.

Recently there was a move to buy the Ontario Hydro site at the Huron Energy Centre as an energy-from-waste incinerator. We were very anxious that this not occur. You can create an agency that might be interested in doing so with great profit for itself.

Senator Johnson: It is very high risk.

Mr. Leckie: It is very high risk to us in terms of an environmental vision.

The Chair: I am trying to remember what I read about the bill. I read the bill and I read the information on the bill. The original bill specifically provided a solution for the Toronto Harbour Commission without providing any succession, if I remember well.

Mr. Leckie: That is right.

The Chair: A CPA structure will do it.

Mr. Leckie: There was a third option, which is what is happening.

The Chair: I am not finished.

What you call the Toronto CPA amendment will allow transition, and I am sure the Minister of Transport will be appointing a port transition committee to work with Transport Canada to prepare for the transition to a port authority. There will be consultations with the Province of Ontario and with municipal government authorities before letters patent are completed for Governor in Council approval. Do I remember well what I read?

Mr. Leckie: Yes, quite correctly. You see, a third alternative was put forward very early in the discussions with the city. Some studies were done when this bill was first proposed. The third alternative was what you are doing in most other jurisdictions, which is devolving the port activities under complete municipal control. Hamilton is a much larger port than Toronto. Hamilton will take exclusive responsibility for its own port operation in the future.

Some of us were in favour of that particular option. We think we could run these affairs very efficiently and cooperatively with our other city business. We would appoint a harbour master. We would make sure that the Parks Department and the Works Department work with the existing staff. We thought that was a very amicable solution. We discussed that with the minister's office when Mr. Young held the portfolio, and he was very interested in that option.

However, at the time, the existing Harbour Commission wanted to continue to exist. The compromise was to allow it to continue to exist until we have resolved these matters and not to move it to port authority status. I am personally and ultimately in favour of the port operation being under the direct jurisdiction of the municipality. We will take responsibility for its financing and its management, and I think we can do so quite efficiently.

The Chair: But you will be part of the discussion during the transition period.

Mr. Leckie: You do not understand. The last-minute amendment excludes us from that decision-making process. It puts into the equation a port authority appointed at arm's length from us. We will have representation on the new council. It will be one person, but it cannot be a councillor. I am the elected councillor for the waterfront area, yet this amendment takes away any influence I would have.

Mr. Layton: Perhaps I can add something to the transition question. Our concern is that the transition process is a transition to something we feel is wrong, namely, a port authority. We do not believe the port authority for a port with $4 million of activity is the right way to go. We would like to see this port activity functioning as a part of all the other billion dollars of economic activity, approximately, in our waterfront area. This $4 million has to have a place, and we would like to make sure it fits in a partnership. We think our existing structures have been reasonably good in achieving that goal.

Senator Johnson: Is Hamilton that much smaller? I do not know the area. Why would Hamilton be left out of this?

Mr. Silva: Hamilton is ten times bigger.

Mr. Leckie: The port activity is ten times bigger; the city is ten times smaller.

Senator Johnson: Why does it not fall under the CPA, in your opinion?

Mr. Silva: It is a puzzle to us.

Mr. Leckie: I think the purpose of the bill is to identify ports of national trade significance and to, therefore, continue to have the federal government play a role in those cases. Otherwise, all the other ports in Canada are being devolved to local authorities, to local responsibility.

Senator Johnson: Logically, one must say to oneself that the criteria applied to Hamilton and Toronto must be different. I thought it was supposed to be the same criteria.

Mr. Layton: One of our concerns is that there may be other agendas -- for example, land development agendas -- about which we do not know anything at this point. We all remember back to the original harbourfront land development. We went through some very difficult times. We are trying not to repeat that sort of thing, where a federal agency becomes a land developer on Toronto's waterfront and is not in a partnership with local communities.

Senator Johnson: I am not even getting into that kind of depth. I am just saying, based on the study and criteria, it is confusing.

Senator Spivak: Is all the land owned by the federal government?

Mr. Leckie: No.

Senator Spivak: That is what I wanted to know. I wanted to know who owns the land.

The Chair: I can understand that. I have a letter here from the Minister of Transport. I will have it distributed to the members of our committee. It reads as follows:

Further to the Standing Senate Committee on Transport and Communications' deliberations on Bill C-44, the Canada Marine Act, I am writing to respond to concerns about the need to involve the City of Toronto in the process of establishing the new Toronto Port Authority, in accordance with the proposed legislation.

In due course, I will be appointing a Port Transition Committee to work with Transport Canada on the transition to a port authority. As this transition process continues, I would like to assure the Committee of my intention to consult with the City of Toronto, as well as the Toronto Harbour Commission, in developing the letters patent for the Toronto Port Authority.

I trust this will address the concerns expressed by the City of Toronto.

I wish to append this to the minutes of the committee proceedings.

Senator Spivak: Could I have an answer to my question, Madam Chair?

The Chair: To your question?

Senator Spivak: Yes.

The Chair: I thought you had your answer.

Senator Spivak: No.

Mr. Silva: In terms of land ownership right now, half of that land is owned by TEDCO, the Toronto Economic Development Committee.

Senator Spivak: Is the other half owned by the federal government?

Mr. Silva: It is still owned by the Toronto Harbour Commission.

Senator Spivak: That does not affect anything.

Mr. Silva: Once the federal government is in, we are afraid that they can do anything they want.

Senator Johnson: Madam Chair, the minister could change after the election. Does this letter serve no matter who is in office? These things are not worth the paper they are printed on.

The Chair: This was sent to me. I am giving you copies.

Senator Johnson: I understand, Madam Chair, but it is certainly not a commitment. If the minister changes, the commitment ends.

Senator Roberge: You mentioned that there would be no municipal representation if this came about. I see in this book here that one director is appointed by municipal government. Remaining directors are appointed by the Governor in Council in consultation with users. Users should be individuals who possess generally acknowledged and accepted stature within the transportation industry or the business community and relevant knowledge and extensive experience related to the management of a business, to the operation of a port or to maritime trade.

Why do you say that people within the municipality will not be involved?

Mr. Leckie: It would not allow a member of council to be appointed to the port authority.

Senator Roberge: That is all right.

Mr. Leckie: There would be one appointee, but there would not be the cooperation, coordination and accountability with the local governments. In my opinion, this whole thing is about who controls certain lands and certain port responsibilities. We urge you to allow for a collaborative, accountable structure rather than one which is exclusively a Crown agency.

I did not say that there would not be any municipal influence. I said that we would not be under the powers of the municipality. The port authority would have superior powers. The municipality would only appoint one representative.

Senator Pépin: When you are speaking about land and use of land, if we look at the legislation, it states that it will be mandatory to have a annual public meeting, a quarterly financial report, a annual public audit and a public land-use plan. The annual general meeting shall be open to the public, at which directors and the chief executive officer are available to answer questions. Provision is made for disclosure of remuneration and expenses of board members and details of port operating expenses. I do not believe that it could be that negative and that the city would not have any input.

I was wondering if one of your preoccupations is the amount of money that perhaps the city will have to pay the port.

Mr. Layton: Let me focus on the suggestion that there would be a public land use plan. As you know, municipal government has land use planning as its primary and most important responsibility.

There is a very great difference between having a publicly available land use plan that people can look at and about which they can write a letter to an official who is not elected, and the land use planning process we have in Canada in municipalities, which involves extensive public hearings and votes by elected individuals. This latter process is very important and has been critical in producing some of our wonderful cities.

Speaking as the chair of our planning committee, I think you have singled out what we see as the most dangerous element of this -- the removal of the municipal planning function from our most important lands, which are our waterfront lands. It removes it completely. We will no longer have any authority to zone or adopt official plans for these lands. All we will have is a published plan by the port authority, and we will have to take it or leave it. We can write letters about it, but, ultimately, it will be up to those seven people to decide what happens.

We believe that could lead us in the direction, for example, of the wall of high rises that were built on Toronto's waterfront until the public and elected people began to intervene. That is precisely what we are concerned about.

Given that this port has no financial viability at $4 million and it is heavily subsidizing an airport which is losing money, what would you do in that situation? You would try to realize economic return through land development. This legislation will give that power to the port authority. It is simply not right for the federal government to set up an agency to move into land use planning like that in a major municipality. I think that is a fundamental error.

Mr. Silva: Madam Chair, perhaps I could comment regarding the subsidy to the port of Toronto. The City of Toronto right now is subsidizing the port of Toronto to the tune of $2.3 million. We are happy to do that. It is a decision of council. The port comes to city council with its budget and gets it approved, but this was only started three years ago. Previously, this budget process was never in the public realm. Now it is.

We made a political decision at city council to give a subsidy of $2.3 million and were happy to do so. We will continue to do so for as long as the three councillors on the board of the Toronto Harbour Commission have the control.

Senator Pépin: An assessment regarding the Toronto harbour was done by Nesbitt Burns. If you look at it, you find out that it has possibilities and they believe that it can be financed very well.


Mr. Silva: Yes, it is possible to finance the port, but not through port activities. The port could be financed through the sale of property, but this is not an option for the port of Toronto, because it is a small port and handles only one tenth of the cargo of a port like Hamilton.

Senator Pépin: One of the proposals talks about linking the Island Airport. Moreover, one of the sections of the railway has been upgraded, and I believe that discussions with the United Stated may be underway to bring in more containers.

Mr. Silva: The airport is also running a deficit, and the only way to make it profitable is to bring in jets. For example, the ferry that takes passengers....

Senator Pépin: You could build a bridge.

Mr. Silva: That would cost almost a million dollars, which would be divided three ways: the federal, provincial and municipal governments would each pay a third of the cost. The federal government is currently reducing its contribution, and the one from the provincial government has been eliminated all together. That leaves the municipal government's share and a small contribution from the federal government, which is being phased out completely.

Senator Pépin: Yes, but this document covers various aspects and includes a proposal saying that it could be done easily.


The Chair: Thank you very much, Mr. Leckie, Mr. Layton and Mr. Silva.

Our next witnesses are Mr. Parmelee and Mr. Joy from the Toronto Harbour Commission.

Please proceed.

Mr. Howard Joy, Councillor, Ward 14, City of Toronto, Vice-Chairman, Toronto Harbour Commission: Madam Chair, I am pleased to be here. I have heard a number of things today to which I would like to respond.

In my view, the port and the airport have been operating like boxers in a straightjacket. The city has, I think very intentionally, kept them poor and kept them from any kind of reasonable development. For instance, regarding the airport, the city continually refused to allow a fixed link, although the courts in Ontario judged that a fixed link was necessary for safety features. It still was voted down.

It was only when Minister Young came to Toronto and spoke to our mayor that our mayor made concessions and changed her vote. That is why we now have the fixed link moving ahead, slowly, but it will be there. It is very much needed in order to bring carriers in to use the airport.

A business plan was approved in the House of Commons. It tells anyone who is interested that these businesses can be, should be and will be self-sufficient. They will support themselves.

One of the senators asked why would Toronto become a port authority and not Hamilton. Well, let me tell you that Hamilton was to be a port authority and probably will be a port authority, but I believe Sheila Copps asked for it to be held in abeyance. She wanted some changes made to the legislation, and that was agreed upon. It is not that Hamilton has been overlooked and Toronto has been selected.

I heard that the City of Toronto pays the Harbour Commission $2.3 million in subsidies, and that is simply not true. The City of Toronto removed the land from the Harbour Commission on which the Harbour Commission received revenue. Under arbitration, supported in the courts, the City of Toronto is supposed to pay $6 million every year to the Harbour Commission for the lands that it removed, but it has not done that. The City of Toronto looked at the financial statements of the Harbour Commission, and after a great deal of haggling, it paid $2.3 million last year, which the Harbour Commission had to really fight for. I would not say that that is a subsidy. It is recompense for the land that was removed.

I might add that there is not a Harbour Commission or a port in North America that does not rely on its lands. What makes Hamilton successful is its lands. Hamilton imports different materials. They bring in a lot more tonnage because we are bringing in sugar and they are bringing in steel, and that makes a big difference.

I think that the Harbour Commission and the Toronto City Centre Airport have been abused by the city. I feel that it is a very bad situation.

I think that the Canada Marine Act and Bill C-44 will bring status to Toronto. The bill will recognize that what goes on in the port is not the private business of what is now the City of Toronto. It must be looked at in the context of the Greater Toronto Area. It already has clients and customers who are outside that Greater Toronto Area, and it is very important that we maintain a water link, a rail link and a road-highway link in that port area.

I hear things being said of wanting the Toronto Bay -- well, it is a harbour -- to revert to its origins. I know some rather whimsical material was passed out to you showing what the bay looked like in 1911, and I am sure some of us would like to live in the past, even as far back as 1911.

The legislation of 1911 is 86 years old. I think the federal government recognized this, and it is time for a change. It is time to come up to the times, and I believe this is what the federal government has done with Bill C-44. It puts, as I said, the Toronto Harbour Commission or Toronto Port Authority on a business footing. They are satisfied that it will be, and we are satisfied that it will be, self-supporting.

The lands that have been built by the Harbour Commission from dredging, et cetera, and adding to the shoreline of Toronto are bringing in over $100 million in property and business taxes, so it is ridiculous to say that here we have a business that only brings in $4 million. It is what the port represents, what the port can do in the future and what it has done in the past.

Right now Toronto is richer by over $100 million annually in property and business taxes from occupants on land created by the Harbour Commission. It has doubled the depth of the harbour, making it possible for sea-going ships to come in and bring us sugar from off-shore. That is for Redpath Sugar which, just in the last two years, has put in over $300 million. They do not want to be eased out by the threat of condominiums on their property line. I think that will be changed, but that is the way things are right now. We are fighting a battle for the survival of a business that is bringing us more than $1 million of taxes.

They do not want to be eased out by the threat of condominiums on their property line. I believe that will be changed, but that is the way things are now. We are fighting a battle for the survival of a business that is bringing us in more than a million dollars in taxes.

I do not mind the description of having a riviera on the water as a vision except that where is the economy being satisfied by a riviera on the water? I hear that we do not want a casino. I do not want a casino either, but if this is what we are talking about, a riviera, then we are talking about casinos. What we need is more business not less business down there.

Housing is one thing. Half of the Toronto Harbour is pretty well devoted to housing. I want to see the other half of it saved for port purposes.

Some people have a very parochial vision for Toronto, and I think by the year 2000 we should stop thinking of Toronto as a city on one of the Muskoka lakes. It will never be that way. If we have a harbour that you can swim in, we will not have the business that we need. That pretty well sums up my presentation.

I am a City Councillor and Vice-Chair of the Harbour Commission. I feel very strongly about this. My companion here is Charles Parmelee, Chairman of the Harbour Commission, and he does a very good job.

Mr. Charles D. Parmelee, Chairman, Toronto Harbour Commission: It is getting late in the day. Some of you look tired. What I will say is different than anything you have heard, so be ready.

I am serving my eighth year as a Harbour Commissioner. That proves I am the ultimate masochist in Toronto.

Second, you should know I am appointed by the federal government to the Harbour Commission on the recommendation of the Metro Toronto Board of Trade. I am an unpaid chairman, so you can probably figure that is what my testimony will be worth because I am not paid.

The Chair: I know how you feel.

Mr. Parmelee: I am a chief executive officer. I am not a politician, so you will not have to reprimand me for talking politics. I am not running for politics like certain other people that I have heard here today. I am a businessman and I feel very acutely.

Senator Spivak: Madam Chair, you stopped a witness earlier for talking about other people.

The Chair: We are discussing the bill, Mr. Parmelee.

Mr. Parmelee: I have you all awake now, so let us carry on.

You should know some other things about me. I am the only person in this room -- particularly people who talked here earlier -- who lives on Toronto Harbour. I have lived there for nine-and-a-half years. I live in a condominium corporation with a hundred other families. I am the president of the corporation and I know what their concerns are, and what is wrong and what is right. I also have a boat in Toronto. I have boated in the Toronto area, the harbour of the bay, for 24 years. I am a past commoner of the Royal Canadian Yacht Club. I live closer to the Toronto Island Airport than any other human being. No one lives closer. When I talk about what we are trying to do here and the vision, I am talking about my whole life, not just some political things.

If you want to hear now where I want to stand, I support the bill terrifically. I had no part in writing the bill, but I must say that at least as far as the Toronto Harbour Commission is concerned -- maybe it is good luck -- the bill fits what we need in Toronto and what we need to go ahead.

If someone in the room wrote the bill or was involved, I congratulate them. I congratulate the federal government, my government, for wanting to change the governance of the Harbour Commission and put some federal presence down in Toronto on the harbourfront so we can get ahead with the job and get the money and the taxes off the back of taxpayers.

The Toronto Harbour Commission is one of the finest things in Toronto that can help develop business and jobs. Toronto has been going down the tubes since about 1990. If you look at business through the port of Toronto, it has been down since 1990. I am glad to tell you that this year we are back up to where we were in 1990 and headed back up on a steeper pace than we have ever been. Although you have heard some people say we should close it down and that we do not need it, I believe we need it. We need it for business and we need it for jobs.

This is business infrastructure we are talking about. We are not talking about casinos. Although it was suggested, we have never discussed casinos in any way in the Toronto Harbour Commission boardroom.

The previous witnesses threw in the word "incinerators". We know nothing about incinerators and could not build one if we wanted to because we must pass the laws that everyone else must pass.

If I were to believe some of the scaremongering around this bill, I would move off my condominium on the port of Toronto tonight. I would sell it immediately because the value would obviously go down hill.

I believe exactly the opposite; I believe we can coexist. I believe all of the things said about the other uses of the port are important. I do not knock any of them. However, I say that having a port and a city centre airport to create jobs and economic activity is very important.

If you will excuse me, I have to talk about one little, semi-political thing. It was suggested that the City of Toronto was blind-sided regarding this bill. I would like to lay the facts out about exactly what happened regarding the City of Toronto and their knowledge of the bill.

On January 27, one of my fellow Harbour Commissioners went to visit the Mayor of Toronto to discuss the possibility of a new set-up or a positioning in the bill to go into the 21st century. We hoped that the mayor would do something about that. She did not, so the federal government, quietly and behind the scenes, sent the Honourable David Collenette to discuss with the mayor how things could be changed to suit the city. At that time, we had no idea about whether we would fit in the bill or not fit in the bill, but the federal government was trying to see if something could be worked out. I am sorry to say that the mayor, in her wisdom, totally disregarded these motions by Mr. Collenette.

On September 27, the five Harbour Commissioners met and, with great concern, drafted a memo about how we could restructure this so that it might be suitable to Toronto and suitable to the federal policies. It was given to the mayor by my associate here and Mr. Silva. The mayor has totally disregarded it right up until this day.

I find it very difficult to sit here and listen to the suggestion that somehow the City of Toronto has been blind-sided and did not know what was going on. I am authorized today to say that. I say it because I think it is the only way to set the record straight. That is exactly what happened. This is not a great surprise to the City of Toronto.

I have no idea what assurances the mayor thinks she had from someone. If there were assurances, I am not aware of them. I have never had any assurances from the government in this matter.

The idea that Toronto suddenly was able to fit into the criteria under the Nesbitt Burns study was for one reason -- they looked at the progress we have made in the Harbour Commission downsizing the operation and making it cost effective. They looked at our plans for the airport and the port. They looked at the fact that the city should be paying us $6 million for our land each year, not $2.3 million, and they concluded that we meet the criteria very well. I am glad to meet the criteria. We are not Hamilton. We are not a steel producing town.

This port supplies a whole range of industries. Someone said it only supplies salt, cement and sugar. Try to drive on our roads without salt; try to build anything without cement. Last but not least, the Redpath sugar refinery in the City of Toronto produces 35 per cent of all the sugar in Canada. These are important things. To suggest that they be written away so someone can go swimming and take the port back to the year 1911, I do not agree with that.

As a businessman, I am very supportive of this bill, although I am not involved in anyway. I am sure we can make it go. We have business plans that will make these enterprises profitable. There is no reason why they cannot be profitable enterprises. They will also service the business infrastructure of Toronto for the growth of the overall area.

Honourable senators, aside from that, I do not have any strong ideas. Thank you for your time.

Senator Spivak: I have a point of privilege. It is without prejudice.

Last week in committee, Madam Chair, you stopped one of our witnesses from speaking about a meeting in the House of Commons. Now you have allowed this gentleman to talk about secret negotiations with Mayor Barbara Hall. Surely the same criteria ought to apply to all our witnesses, which would have allowed the other witness to speak. I have no objection to what he says. I merely point out that the same criteria are not applied consistently. I think it is important for the members of this committee to know that the criteria are applied consistently.

The Chair: We heard previous witnesses. They could say whatever they wanted to say. We heard them for a whole hour.

Senator Spivak: You stopped them.

The Chair: Thirty minutes was allowed. We gave them plenty of time to be heard. I was under the impression that Mr. Parmelee wanted to straighten the record.

Senator Spivak: I am not referring to the previous witnesses at all. I am referring to our meeting last week when you stopped a witness from the library association from commenting on a meeting in the House of Commons.

The Chair: They were commenting on the work on the other side of the bill.

Senator Spivak: You said we cannot have that kind of testimony here because these people cannot defend themselves. Now we have a witness talking about Mayor Barbara Hall, and she is also not here to defend herself. You quoted Beauchesne. I simply want to suggest that you allowed a very similar situation today, and you stopped the other witness in mid-sentence.

I am not referring to these witnesses at all. I am referring to last week and the application of a gag order or a silencing order on one witness who appeared in connection with another bill. That gag order was not applied to this witness. I have no objection to what this witness is saying. I had no objection to the other witness. I do not take umbrage. I am merely suggesting that perhaps we ought to apply the same criteria.

The Chair: Do you want another chairperson?

Senator Spivak: Not at all. I merely point out that criteria should be the same.

The Chair: If you want someone else to chair the meeting, I can give my chair to any senator who will take it.

Senator Spivak: I was not suggesting that. It is within my right to raise a point of order.

The Chair: You made your point.

Honourable senators, I have a letter here from Toronto city councillors Joy, Adams and Walker. I will read it. It will be distributed to the members of the committee.

I hope that you will have a city council meeting very soon so you can settle some of the problems among yourselves and not here with us in the Senate.

The letter reads at follows:

I am a Member of the City Council of the City of Toronto, one of City's representatives on the Toronto Harbour Commission, and the Commission's Vice Chairman. I intend to come to Ottawa today to speak in favour of the Marine Bill and I wanted to set out a few things in writing before my appearance there.

I have reviewed a letter dated April 22, 1997, sent to you and signed by the Mayor of Toronto, Barbara Hall, wherein she alleges that there has not been adequate time to consider the amendments to the Canada Marine Act as they affect Toronto. The facts concerning the City's involvement in the consideration of this proposed legislation are at variance with what the Mayor's letter implies.

Last Autumn, at the time the Bill was first introduced into Parliament, the City staff were proposing various alternative options for organizations to manage the port and harbour resources. The City asked the Toronto Harbour Commissioners for their official response to the Marine statute. The Commissioner, including Councillor/Commissioner Hutcheon and Councillor/Commissioner Silva, unanimously endorsed a proposal to keep the current Commissioner with some changes, and so advised the City in October of 1996.

The Mayor took the matter in hand -- she did nothing. Various people met with her on behalf of the Government of Canada to try to resolve the future of the port as the legislation progressed to Committee hearings. The Mayor took no action although she had every opportunity to do so.

I am satisfied that the proposed Canada Marine Act is good legislation, deserving of the Senate's support. The national port restructuring in Canada should not be held up because of power struggles and squabbling amongst local politicians in the City of Toronto.

It would be imprudent, in any event, to endorse the Mayor's request since this City will disappear and be replaced by a new, larger municipality at the end of this year, subject to any legal challenges. I understand that the Chairman of Metropolitan Toronto, Mr. Alan Tonks, who is expected to be appointed by the Province of Ontario to head up the transition team for the new amalgamated municipality, supports the Canada Marine Act.

Yours truly,

Howard Joy, Councillor -- City of Toronto, Vice Chairman, Toronto Harbour Commission

John Adams, Councillor -- City of Toronto, Former Harbour Commissioner

Michael Walker, Councillor -- City of Toronto, Former Chair, Toronto Harbour Commission

I ask that this letter be tabled today.

Senator Roberge: In your view, what is the difference between your port and the port of Montreal, Vancouver or Halifax?

Mr. Parmelee: There are several differences. First, we are much smaller. Some people have tried to make the issue here "the bigger you are, the better you are". This policy and what I am saying is a good bill was not written for Toronto. It was written for the major ports across Canada, from Halifax to Vancouver.

All we are doing here is being qualified as one of those ports. We are not the biggest, but in some ways we are the most important because we supply a lot of mixed shipping for goods coming in and out of Toronto.

Vancouver is a major grain port. Hamilton is a major steel port. We have mixed cargoes coming in. Industries manufacturing in Ontario send their goods through our port. In addition, we have an intermodal facility where ships, trucks and rail all converge. That is where the future is going and that is why this port will be so successful.

The intermodal facility combines these three means of transportation to distribute goods mostly throughout Ontario. All of this is very important business infrastructure.

It is difficult to compare different ports. For instance, one of the largest tonnage ports in Canada is Goderich. Why? Because it has one of the world's largest salt mines and all they ship out of there is salt. Toronto is a mixed-use port and very important to our city and the Greater Toronto Area.

Senator Roberge: You are saying also that the economics of carrying goods from the east coast to the west coast has an importance to Toronto and the Toronto area.

Mr. Parmelee: Yes, sir.

Senator Roberge: Now if ever the other vision were created, where would the port expand? Hamilton?

Mr. Parmelee: I am not sure what you mean by "the other vision".

Senator Roberge: The vision of the previous witnesses.

Mr. Parmelee: I do not know about that.

Where it would go? I am not sure Hamilton would have the space, but I do know that a lot of industry that might come to Toronto as we rebuild Toronto would certainly have to look seriously at that as a problem. These are extra things that we have to offer to businesses wanting to come in and do business with us here.

It is not just the port. You must understand that this port is intermodal and gives us the interface between trucks, rail and ships. More and more, that is where today's world is going.

We are very lucky. We have that infrastructure. We do not have to take taxpayer's money and build it. We must get our business plan running and use it. We are on our way already, so this is not a blue dream. We are going there.

Senator Roberge: Tell me a bit about the famous 600 acres. I am trying to understand. The municipal government took over 600 acres which belonged to the federal government.

Mr. Parmelee: Yes.

Senator Roberge: They were supposed to pay so much per year.

Mr. Parmelee: Yes, $6 million per year.

Senator Roberge: And they are paying only $2.3 million.

Mr. Parmelee: Under much duress.

Senator Roberge: I imagine you would have gone to court to get your payment.

Mr. Parmelee: It is very difficult. I sat in the boardroom during the seven years that all of this happened. It happened simply. Three city councillors voted to give the lands to themselves. The two federal reps, of which I am one, voted against it. I will show you in the minutes of the Harbour Commission where I voted against it 29 times and had the secretary record that it was illegal, a total conflict of interest, immoral, et cetera, but I do not want to cover the past. I have a vision for the future. Let us move on to where we will go in the future. It will be a long night if we start here tonight on some of the weird things the city has done to the Harbour Commission.

Senator Roberge: It has an impact on the financial structure. What are your projections for the port?

Mr. Parmelee: Our projection is that we will have the port, the airport and the facilities up and running with no help from the taxpayers, and, after a while, we will not need money from the City of Toronto. Forget the $6 million a year. We are on our way. We want to save the taxpayers.

Senator Johnson: I get a sense that these are transition times in Toronto at a number of levels, particularly affecting government.

Everyone who has spoken has been most enlightening. I have spent a lot of time at the harbourfront reading series and I have spent a lot of time at hotels there. I was at the CN board at the time of the transition of the land deals, so I have some knowledge of what you have been going through in that area for a number of years.

Mr. Parmelee, we have had two visions today of your port and how things could evolved in the future. What do you see in terms of a melding of views given what we heard before and what you are saying to us now? What does your business plan include that would incorporate some of the concerns of the witnesses we heard prior to you? I have a great deal of respect for both points of view. How could they be brought together so they serve the best interests of the city?

Mr. Parmelee:I have emphasized business too much because I told you I am a businessman. I live there and have been involved there all my life, so I tell you they can coexist. There is absolutely no reason they cannot coexist. We must work together.

The Harbour Commission does not run everything down there. There is an organization called Harbourfront. It has a board. There is David Crombie and his group. There is the Mega-City, and it goes on and on. We must work together.

The port of Toronto and the airport are only a portion of that. We do not intend to push anyone out, but we also do not expect them to push us out because we represent giving people jobs and building Toronto, which very badly needs to be rebuilt following the recession. Therefore, I believe in coexistence. You have hit it right on.

Senator Johnson: Do you find it difficult with all these layers of groups interacting? That is your challenge, obviously.

Mr. Parmelee: The layers are being removed. If this committee goes ahead with this bill, that will remove many of the problems for us. We are getting a new Mega-City in Toronto. I do not like big government, but anything is better than the fighting we have on city council.

All these things will come together and solve the problem. After all, this is heartland Canada. If we screw up in Toronto, it affects the whole country.

I am optimistic that we are getting on the right track. I heard things today about retreating to 1911 that scare me a lot. I do not like incinerators and I do not like casinos.

Senator Johnson: I am really glad. Thank you very much.

Senator Spivak: You are very wishy-washy in your opinions. I want to ask you a question, Mr. Joy. You mentioned that the whole operation could become self-sufficient.

Mr. Joy: Yes.

Senator Spivak: Because there would be more development. What sort of development are you talking about? Is there a detailed proposal to that effect?

Mr. Joy: There will be some expansion at the airport and a good deal of expansion at the port.

Senator Spivak: Do you mean expansion physically?

Mr. Joy: Expansion of business.

Senator Spivak: Will there be expansion at the airport because you will change it to a jet port?

Mr. Joy: We have the tripartite agreement is not disturbed by what is happening. There is a myth and there has been a lot of uneasiness. It has been said that there goes the tripartite agreement, but that is not the case.

The federal government required us to submit a business plan. We did that, and it was found to be very satisfactory by the federal government.

Senator Spivak: Will the business plan now come under the port authority? I do not understand the governance here.

Mr. Joy: The port runs the airport. This port, which currently is known as the Toronto Harbour Commission -- Mr. Parmelee and I sit on the board -- over the years has been very imaginative and a great advocate for the city. It is unfortunate that the city is not at times prepared to recognize what has happened in the past. This port runs the airport. It developed the airport at Malton, which is now called Pearson airport, so it has had a vision all its life. It has had a great vision of the future.

In running the Toronto City Centre Airport and the port itself, the commission's vision is reflected in its buying plan, and the government accepts that.

Senator Spivak: Had I the time to peruse the material, I need not have asked you these questions.

What I do not understand is the way in which the governance will work. If you want to expand the port and the harbour, are you subject to city bylaws?

Mr. Joy: We are subject to city bylaws. It is just that the city will not be sending any politicians to sit on the board.

Senator Spivak: You make a decision and then what happens?

Mr. Joy: People more directly related to port usage will sit on the board. I think they are the stakeholders. They are the people who should be looking at the future of the port.

Senator Spivak: Their decisions must be subject to city bylaws. In other words, the city must approve them.

Mr. Joy: Everything is subject to city bylaws.

Senator Spivak: You cannot expand the airport or the harbour without city council approval.

Mr. Joy: In physical shape, no, definitely not.

Senator Spivak: Or in any other shape.

Mr. Joy: We can bring in more business.

Senator Spivak: You can increase the traffic. As well, you must abide by the environmental bylaws for clean water, et cetera?

Mr. Joy: Absolutely.

Senator Spivak: Mr. Parmelee, you talked about land use. The previous witnesses said that is the key to what the city is all about. Now, how do you envisage the land use question? Again, who will have the final decision in terms of how those lands may or may not be developed?

Mr. Parmelee: What will become the Toronto Port Authority has only 85 acres of land. This is something you must understand. We have only 85 acres. The Toronto City Centre Airport has a total of about 230 acres. We do not have a lot of land. The city granted itself a total of 600 acres, so the main acreage is still in the hands of the city. We do not need that for our business plans. That has nothing do with us.

Senator Spivak: You are saying that all land use decisions on those 85 acres are yours and that they are not subject to city decisions or bylaws.

Mr. Parmelee: No, but they are subject to many other rules from the provincial government and the federal government.

Senator Spivak: What rules?

Mr. Parmelee: You missed one thing. How do we respond to the needs of these levels of government? We were told earlier, but we will have to review who is on the board. There will be a seven-man board. The first one will be a representative of the federal government. The next one will be a representative of the provincial government. The third one will be a representative appointed by the new Toronto Mega-City. The other four will be business people appointed on local recommendations from Toronto and approved by the federal government. Each level of government has sitting at the table every day a member of their government. It is a very transparent process.

Senator Spivak: When decisions are made with regard only to those 85 acres, not with regard to the 600, you do not have jurisdiction there. With regard to the 85 acres, then, those decisions are final. You do not have to go to any other authority about those decisions.

Mr. Parmelee: We must work with all of the other things down there.

Senator Spivak: Is the power of governance yours in that area?

Mr. Parmelee: It depends on what you want to do with it. In our case, we do not have any extra land. The land we have is needed for the port and the remainder is needed for the airport. We have no additional lands to do anything with. There is lots of land there, but it is not ours.

The Chair: Thank you very much, Mr. Joy, Mr. Parmelee.

Honourable senators, our next witnesses are from the Shipping Federation of Canada and the Canadian Shipowners Association.

Mr. Francis C. Nicol, President, Shipping Federation of Canada: Honourable senators, the Shipping Federation of Canada represents about 80 companies which own, operate or act as agents for about 350 steamship lines. These lines serve the needs of Canadian shippers and importers located in Eastern Canada. The vessels consigned to the care of our members transport the vast majority of commerce moving between ports in central and eastern Canada and ports overseas.

As major users of the services provided by Canada's ports, the three eastern pilotage authorities and as the main representative of ocean shipping using the St. Lawrence Seaway, the federation has a vital interest in the national marine policy proposed in Bill C-44.

We have been active participants in the consultation process. We testified before the House of Commons on two occasions in March, 1995, and October, 1996, before the Standing Committee on Transport. The federation is here today to express its support for the Canada Marine Act.

After years of drifting and after a piecemeal approach to Maritime affairs, Canada at last has embarked on a national policy. There are several important building blocks in the platform of this policy: the recently adopted Oceans Act; the ongoing revisions to the Canada Shipping Act; the new oil spill response regime; and user fees for Coast Guard services. In our opinion, the key stone to the whole policy is the Canada Marine Act. Although perhaps less than perfect, the proposed legislation will introduce much-needed and long-overdue reform.

I would now like to briefly address three main components of the bill. As the major users of the pilotage service, our members contribute about 75 per cent of the revenue generated by the three eastern authorities. I am pleased to inform the committee that the federation endorses the pilotage clause of the Canada Marine Act.

Over the last few years the federation together with the pilotage authorities and indeed the pilots themselves, have cooperated to resolve many of the problems that are inherent in the current Pilotage Act. This cooperation culminated in recommendations to reduce the deficits of the authorities, to expedite the pilotage rate-setting process, and to introduce a no-strike, no-lockout clause which would be brought into play during times of negotiations between the pilots and their employers.

All of these progressive developments, which would have been incomprehensible a few years ago, are now enshrined within the proposed Canada Marine Act and offer a solid basis on which a more cost-efficient and responsive pilotage service can be provided.

With respect to ports, members of the federation contribute as much as 70 per cent of the revenue earned by the major ports in eastern Canada. Although we believe that the national port system established by the act should have allowed direct user representation on the boards of the Canadian port authorities, nevertheless, we feel that the proposed regime in its present form is still acceptable.

We are particularly pleased to observe that the act embodies an important protection mechanism for users, namely, an appeal process which can be brought into play when unjust discrimination is deemed to be introduced in port fees.

Finally, with regard to the seaway, the federation believes that the bill provides an acceptable basis, both for the commercialization of the seaway and for the eventual bi-national management of the waterway.

Having said this, I would like to mention two areas of concern.

First, it is of paramount importance to our industry that international shipping interests are fairly represented with the new management structure after the passage of the bill.

Second, I would be remiss not to mention our surprise and disappointment to learn of a late amendment to the bill which enshrines the location of the headquarters of the seaway in Cornwall. I cannot help but wonder if this was a more cost-effective management move. Perhaps it would have been wiser to leave that decision in the hands of the new management structure when it was formed. However, again, the bill is acceptable in its current form and we support it.

In conclusion, considering the progressive changes introduced by the legislation and being aware of the prospect of a general election in the near future, we urge the committee to pass this vital piece of maritime legislation during this session of Parliament. It is very important to our industry.

I might add that the legislation provides for a review of the act during the fifth year of its implementation, and we hope that this committee will be involved with the act on an ongoing basis, not just in the fifth year, to assure that the concerns of users, and indeed Canada as a whole, are addressed.

I thank you for taking time to hear our views, and I would be pleased to answer any questions.

Ms Sonia Simard is with me today. She is my executive assistant and has been involved in several aspects of this bill as well.

Senator Roberge: I missed the beginning of your presentation. What is the Shipping Federation of Canada? I know what a pilotage authority is and the shipowners.

Mr. Nicol: The Shipping Federation of Canada represents international shipping. We represent the ships that carry the vast majority of our imports and exports. The Canadian Shipowners Association represents domestic shipping interests, and the pilotage authorities are Crown corporations.

Senator Perrault: I think your suggestion that there be a continuing review process to see how well things are going is a good idea.

Senator Johnson: It is in the legislation.

Senator Perrault: But even on a more frequent basis than that, if necessary.

Mr. Nicol: Yes, we should continue.

Mr. Norman Hall, President, Canadian Shipowners Association: As many of you are aware, my appearance here is a very last-minute decision. I was here yesterday afternoon watching, observing and following a discussion with the chair. It was suggested that perhaps it would not be a bad idea if Canadian shipowners were present for the hearings. I am here but with very little preparation.

Briefly, the Canadian Shipowners Association represents Canadian commercial ships in eastern Canada, the Great Lakes, the St. Lawrence, the East Coast and the Arctic. We have 11 member companies operating and owning 96 ships under the Canadian flag, with Canadian crew, and five ships operating under foreign flags and world-wide trade. We are primarily carriers of bulk commodities such as grain, ore, coal, salt and petroleum products, to name a few, while some of our members are involved in the movement of general cargo and the coastal container trade, particularly between Halifax and Newfoundland and Montreal to Newfoundland. We do look after Newfoundland. In total we move about 68 million tonnes of cargo per year.

Bill C-44 deals with some very key areas in the marine industry, such as ports, the seaway and pilotage, and it represents the last segment of former Transport Minister Doug Young's expressed desire to get government out of the business of running businesses.

It happened with the rail mode with the sale of CN and the elimination of the Western Grain Transportation Act and its annual subsidies of somewhere between $500 and $600 million a year, as well as certain other subsidies that were paid to the railways in various geographic regions in the country.

In the air mode, airports are privatized, and the air traffic control system was sold to a non-governmental group now known as NAVCAN. Now it is the marine mode's turn, not only in Bill C-44, but we are also feeling it with Coast Guard user fees, the Coast Guard having been transferred from transport to fisheries and oceans a little while ago.

We have no concerns with Bill C-44. As was stated yesterday by Captain Stark of the port of Vancouver, it may not be a perfect bill, but it is a good start and should be given a chance to work. No doubt there will be refinements as we move into the new regime for ports and the seaway.

On the question of pilotage, we have decided not to push for certain amendments we were supporting last fall during the standing committee hearings which were subsequently withdrawn. In our view, it is important that this bill be passed. If, as rumoured, an election is to be called next week, time does not permit a lengthy debate on the whole pilotage issue.

A provision in the bill calls for a complete review of pilotage by December 31, 1997. We certainly intend to aggressively pursue such a review, and hopefully a bill calling for revisions to some outmoded rules and regulations.

Senator Cochrane: My question is to the port authority here. What happens to smaller Canadian ports under this bill, those which do not have the local port authority status? It is my understanding that there are 500 of these.

Mr. Nicol: That is a very difficult question. The smaller ports are being sold off, those which cannot be made into port corporations, port authorities. They can be bought by local industries, by municipalities or by the province.

Senator Cochrane: Do you see any problems there?

The Chair: If you cannot answer, then do not answer.

Mr. Nicol: It is beyond my scope. I would say that Canada probably cannot continue to support hundreds and hundreds of ports that are of little or no commercial value. Turning them over to the private sector, offering them to municipalities and private industries, is probably the wisest thing to do.

Senator Cochrane: Let me talk about marine pilotage. Will this part of the bill work? What is likely to happen in the future if a pilotage corporation runs up losses, and what makes you think they will not do so?

Mr. Nicol: At the present time, only one of the pilotage authorities is in a deficit position. The other three are all in the black. I firmly believe that once the Laurentian Pilotage authority finally gets into the black, it will make sure that it stays there.

In the past, the pilots could bring a lot of pressure to bear on the authorities during negotiations, and quite often the authorities would give away larger increases than perhaps was prudent. Thereafter, they published a tariff to recover this money from the industry, and very often the industry would lodge an objection with the CTC and later the NTA and the authority would not get the money that it hoped it would have to pay the pilots. This created the deficits.

We are now in a situation where this has changed drastically. The pilots have accepted the fact that they have a monopoly to provide the service. In return for retaining this, the pilots have given up the right to strike. The legislation, I believe, imposes a final offer selection clause in cases where no such clause exists between the pilots and their employer.

With respect to the final offer selection clause, no strike clause governs the negotiations. This has taken away the pilots' whip, if you will. They no longer have the whip to drive up the negotiation rates. A third party would decide if there was a dispute in the negotiations, and we certainly would not have the large increases in tariffs that we expected to see and that we encountered in previous years.

Senator Cochrane: Will this continue under the new regime?

Mr. Nicol: No. With the final offer selection clause in position, the pilots will not have this power. They have agreed to forego the right to strike. That will allow the authority to establish a reasonable rate-setting process.

The industry, for its part, has agreed that the rate-setting process should come into effect as soon as possible. The appeal process should not be allowed to delay unduly the implementation of a rate. Hearings could be held later, and if it turns out that the increase was unjust, then the unjust part could be either turned back to the industry, or if it was just, then the authority would be allowed to keep it. The right to strike has been eliminated, and we have something that expedites the rate-setting process. Pilotage is in a much better position than ever before.

It is rather complicated. I am sorry if I have confused the issue.

Senator Cochrane: It is complicated.

Mr. Hall: I think we must be ever vigilant. The provisions in Bill C-44 do cover what Mr. Nicol indicated about the final offer selection process which does take away a certain amount of power.

We recently received a letter from the chairman of the authority looking for an increase of plus 5 per cent for 1998 and plus 3 per cent for 1999. Why? Because the government has said that there will be no more deficits, and you are not getting any more money from the government. The user must pay.

We have a slightly different situation in the case of the Shipping Federation of Canada. Those ships are foreign-flagged ships with foreign crews who do not know the river and they must take a pilot. That is understandable. No one objects to that. Our ships are Canadian flag with Canadian crew going up and down the St. Lawrence River every day, and we have been fighting for years to try to get rid of them. It is costing us $11 million a year for pilotage that we think is unnecessary, especially in this day and age with satellite navigation and everything else. We are spending a lot of money on the ships by installing electronic charts and satellite navigation. We are not getting any cost benefit for doing this.

What I object to is these constant increases. I am not blaming the chairman of the authority. The rule is the rule. As part of the deficit cutting, there will be no more funding of deficits. That is clear. What does he do? We get inflationary increases. Inflation is running at 2 per cent, and here we are looking for an increase in excess of 5 per cent.

Senator Cochrane: Who are "we"? You are a shipowner, right?

Mr. Hall: Yes.

Senator Cochrane: Who is doing all this work? Is the federal government putting all of this in?

Mr. Hall: Yes. The Department of Transport has the responsibility for pilotage in this country. As was mentioned, there are four authorities, one for the West Coast, one for the Great Lakes, one for the St. Lawrence and one for the Maritimes. There is no problem with any of the others, either money-wise or getting certificates. It is not a big problem in the Maritimes. In the Great Lakes, we do not use pilots and do not need them.

Senator Cochrane: You do not anticipate user fees going up, do you?

Mr. Hall: I mentioned that we received a letter from the authority seeking an increase of in excess of 5 per cent next year and in excess of 3 per cent for the following year. The process has changed under Bill C-44, assuming it passes, and I have no problem with the process.

All I am saying is with that, plus the Coast Guard looking for us to pay for ice-breaking, dredging and oil spill response systems, the pockets are not that deep.

Senator Cochrane: What do you envisage?

Mr. Hall: With respect to pilotage and money?

Senator Cochrane: Yes, with respect to dredging and all these things you just mentioned. It is something we have to look at.

Mr. Hall: That goes beyond pilotage. I do not want to prolong this hearing any longer than necessary. I could keep you here all night.

Bill C-44 is a transport bill. It deals with ports, the seaway, and pilotage. I think we should stick to that. If we get into dredging, that is related to the Coast Guard, which is fisheries and oceans.

Senator Cochrane: You cannot enact legislation as serious as this without envisioning what will happen down the road. You must have a long-range plan.

Mr. Hall: With respect to the ports, I think you have heard everything on the ports. We do not have to touch that issue. I think the ports will straighten themselves out in time. There will be a few anomalies, but it will work.

With respect to the seaway, the plan is fine the way it is. Mr. Nicol mentioned Cornwall. That can be addressed some day.

With respect to pilotage, I think in time the money side will be resolved. We are doing a major study now with the Department of Transport and the Transport Development Centre to look into the question of new types of training for pilotage and certificates for our captains. The pilots do not want us to have certificates. They want to run the show. There will be simulator training. We are spending a lot of money on simulator training. There is an ongoing study, and the bill does provide for a view of pilotage before the end of this year. We intend to go after that.

I know the Department of Transport is doing its work in this regard. We envisage this thing being solved, but it will not be solved tomorrow.

Mr. Nicol: Basically, we are paying for the sins of the past in the Laurentian region. The other three regions are financially self-sufficient and we do not expect to see big increases there. In the Laurentian region, there will be a couple of increases coming up until they become financially self-sufficient. Once they are in that position, I am sure the increases will be in the vicinity of cost of living increases.

Senator Cochrane: You are talking major ports, such as Halifax, Montreal and Vancouver?

Mr. Nicol: These are governed by other pilotage authorities. That was governed by the Atlantic region. I was addressing the Laurentian region. The Atlantic region is a little different. It is in the black, and I do not expect to see large increases in the Atlantic region.

Senator Johnson: Could you enlighten me, please, about the Cornwall decision? I am not familiar with why that was done.

Mr. Nicol: I have been informed that a provision in the bill states that the headquarters for the seaway will be located in Cornwall. This came as a surprise. It was a recent amendment.

Senator Johnson: It is in Ottawa now, is it not? That is interesting. I do not know why it was moved there.

Mr. Nicol: At the present moment, there is an office in Cornwall for the seaway. There is one in St. Catharines and one in St. Lambert. Headquarters is in Ottawa. There is already an office in Cornwall. It would not mean establishing another one. It seems surprising that one was chosen. I thought it might have been left to the new management structure to choose where the new headquarters would be located, that is all.

Senator Johnson: How will this bill specifically enhance the shipping business in Canada? Could you give me a couple of examples?

Mr. Nicol: I have already gone over the pilotage issue, so I will not go through that again.

Senator Johnson: I am interested in the business side. How will it enhance the business side in Canada or will it?

Mr. Hall: The whole purpose of commercializing the seaway is to hopefully find some savings in the operation of the seaway and then maybe be able to keep a lid on the size of the seaway tolls, which are the moneys collected by the seaway corporation to pay for the operation. We are hoping that by putting it in the private sector, the users, the customers, as well as the shipowners will do whatever they can to find economic savings in that operation and keep the St. Lawrence system competitive.

Our biggest worry is competition from the Mississippi River system and the railways now that they have a little more freedom than they had previously. That is the worry about the seaway. Hopefully the new system will make it far more efficient.

Mr. Nicol: Within the ports structure, we will have fewer layers of administration. The ports will have more autonomy, and we hope all of these changes will help them to develop more business. There will be less centralized control of the ports than there was in the past.

Senator Perrault: Mr. Hall said in his presentation, as was stated yesterday by Captain Norman Stark of the port of Vancouver, that it may not be a perfect bill, but it is a good start and should be given a chance to work. I agree with that. There is overwhelming support for Bill C-44 on the West Coast, which is the largest port now on the west coast of North America. It is an extremely successful port.

Since we introduced the same principle into the airline business, we have an airport authority out there that is taking off literally and figuratively as an aircraft site. Hence, I have no doubt that we are moving in the right direction. The fact that we can review this bill from time to time and add and change it if necessary is all for the good. I think we should get this thing passed.

The Chair: That is a statement, not a question.

Senator Anderson: I have a comment to do with pilotage. I heard this morning at a meeting I attended that it will cost $1,100 for a 60-second pass under the new Confederation Bridge for a boat partly loaded with potatoes going from Summerside to Charlottetown to unload and pick up more potatoes. This sounds to me like an exorbitant price, but I do not know anything about pilotage fees.

I notice in some of the information we were given that concerns have been expressed by users about the cost of marine pilotage and that the continuing losses of at least one of those authorities have led to proposals in this bill to make changes in the Pilotage Act. Now is that up or down?

Mr. Nicol: I certainly think, as I have said a couple of times, that the clauses on pilotage will certainly improve the situation. With regard to the new compulsory pilotage zone being considered for the Confederation Bridge, the minister will take comments on this area. I believe several organizations have made comments, including the Shipping Federation of Canada. They have protested the cost. The minister's appointee will make a decision on that in conjunction with the pilotage authority.

When a new structure comes up or a new port is built, then the pilotage authority is charged under its mandate to look at whether compulsory pilotage is necessary for that area. I suppose they have looked at the new bridge and considered that this is perhaps dangerous. We do not agree with that, but they have considered that maybe it posed a threat. The first reaction of the pilotage authority was to initiate compulsory pilotage in that particular sector. It is not confirmed at this moment. There will be hearings at some time and a decision will be rendered. Industry does have some input into the decision-making process there.

Mr. Hall: We are doing exactly the same thing. We disagree with this decision. That is a pretty decent structure, and we do not think suddenly there should be second thoughts about compulsory pilotage.

Senator Cochrane:How many shipowners do you represent?

Mr. Hall: We have 11 companies. That is all there is really in Eastern Canada. Irving Oil does not belong to any association. They are on their own.

Senator Perrault: Are they with Bermuda?

Mr. Hall: Right.

There are 11 companies in eastern Canada. The reason we are not in western Canada is that there are no ships, per se, on the west coast. There are tugs and barges, and we do not represent tugs and barges. We represent regular ships that go up and down the seaway or go to the east coast. There are 96 Canadian-flagged ships. The average size is about 25,000 tonnes of cargo each time, and we have container ships serving Newfoundland.

Senator Cochrane: Is this with pulp and paper?

Mr. Hall: All trades. Pulp and paper are foreign-flagged ships going overseas. Ours is container trade going from Halifax to St. John's or Montreal to Corner Brook.

Mr. Nicol: In bygone days, I used to operate ships out of Botwood in northern Newfoundland.

Senator Cochrane: Central Newfoundland. That is from the Krueger mill in Grand Falls.

Mr. Nicol: That is from Grand Falls.

The Chair: Thank you very much Mr. Nicol and Mr. Hall for your testimony today.

Our next witnesses are officials from the department. Do you wish to add any comments on the bill?

Mr. Neil MacNeil, Executive Director, Harbours and Ports, Transport Canada: No.

The Chair: You are ready to answer questions?

Mr. MacNeil: Yes.

Senator Roberge: Mr. MacNeil, yesterday you were telling us that you have received letters of intent signed by 100 of the smaller ports. The crux of the discussion is the smaller ports. There are 572.

Mr. MacNeil: Yes, sir.

Senator Roberge: You said that you are negotiating with another 172, but nothing has been signed.

Mr. MacNeil: Of the 572, 16 will become Canadian port authorities. Sixty are listed as remote. I think 49 have been transferred to fisheries and oceans. One hundred have been "deproclaimed", which means they are no longer listed as federal harbours. There is no port activity there. We have another 100 ready for "deproclamation" this summer, which requires Canada gazetting.

Senator Roberge: How many?

Mr. MacNeil: One hundred were done last summer and we are proposing to do another hundred this summer. The remainder are up for divestiture, about 272, of which we have letters of intent for 100.

Senator Roberge: Those which were deproclaimed, there are one hundred plus another hundred coming up. Are there no activities or pleasure boating there?

Mr. MacNeil: They are called "public harbours", which means they are an open bay or a body of water. There is no physical structure called a port. Instead of being listed under the Public Facilities Act, the federal responsibility will rest with the Canada Shipping Act to provide safety and security of travelling for vessels on the water.

Senator Roberge: With the 100 for which you have had letters of intent, that leaves 172, roughly.

Mr. MacNeil: Correct.

Senator Roberge: You are in negotiations now with some of them in order to have a divestiture program or deal with the municipality in a joint venture, and things of that nature.

Mr. MacNeil: Our policy requires divestiture to local interests. It does not mean that we divest to a province. No one has a first right of refusal. We try to broker whether the current users along with the community will come together to form a non-profit corporation to run the port, correct.

Senator Roberge: How many of that 172, in your estimation, will make a deal? You are in negotiations with some of them now?

Mr. MacNeil: I would say all of them. We have six years to divest. I think we have a fund of some $125 million, and the objective is to divest all of them. It would be unseemly to say we would do less than all we are proposing to do.

Senator Roberge: And if you cannot divest?

Mr. MacNeil: We will hang on to them. They are the responsibility of the federal government. We will have to seek an extension for the program. However, the plan is for a six-year program.

Senator Roberge: If they are not divested, then at that point they go back to the ministry.

Mr. MacNeil: They remain with the ministry throughout the six years, and if we do not have a client to divest to, then they are still the responsibility of the federal Crown.

Senator Perrault: Can you tell me the status of the North Fraser Harbour Commission?

Mr. MacNeil: The North Fraser and the Fraser Harbour Commissions were evaluated. Our proposal, senator, is that we proceed to an amalgamation as one Canadian port authority.

Senator Perrault: What is the time schedule for that?

Mr. MacNeil: Within the next six months. The bill provides that following Royal Assent we have 150 days to proclaim the bill, and this summer we hope to negotiate an amalgamation.

Senator Perrault: Both of those have done very well. Do you think it is in the general interest to amalgamate?

Mr. MacNeil: Without a doubt. Both the Frasers are Harbour Commissions. They compete with a Crown corporation called the Vancouver Port Corporation. We would like to create one set of rules and one level playing field for both of those harbours.

As Captain Stark said yesterday, we want the private sector to compete, not two federal Crowns competing against each other. We want the private sector and the terminal operators to compete.

Senator Perrault: Will the Fraser and the North Fraser have the same status legally as Vancouver?

Mr. MacNeil: That is the proposal for the Canada Port Authority.

The second reason is that the Fraser has two arms, the main Fraser and then the north arm which is the North Fraser. It is the same business almost, mostly logs and forest products. There is a requirement in the Fraser to do significant dredging and significant environmental management. We think we can do that much better and more cost effective under an amalgamated Fraser.

Senator Perrault: Are there any other major changes in that B.C. list? I speak as someone from B.C., of course?

Mr. MacNeil: Our proposal is to create five Canadian port authorities on the coast -- Vancouver, Prince Rupert, the Fraser, Nanaimo and Port Alberni. We are in the process of divesting the other 70 public harbours.

Senator Perrault: How will they be divested?

Mr. MacNeil: Through the public divestiture program to local interests, our number one issue on the West Coast is aboriginal claims.

Senator Spivak: What about the Coast Guard? Will they still retain authority over all of those decommissioned ports or waterways or harbours?

Mr. MacNeil: The Coast Guard is now the responsibility of the Department of Fisheries and Oceans.

Senator Spivak: They will still retain authority for their functions under the federal authority?

Mr. MacNeil: Through the Coast Guard and the Department of Fisheries and Oceans, yes. It is not addressed in this bill.

Senator Cochrane:In regard to these 172 ports, and they have six years to take this deal. If not, the federal government remains and has sole jurisdiction.

Mr. MacNeil: Sole ownership and responsibility, yes.

Senator Cochrane: Where is this specifically mentioned in the bill? I would like to have that written down so that I can have some confirmation on it?

Mr. MacNeil: Can we defer that for a minute? I will ask our legal counsel to quote Part II of the bill for you.

Senator Cochrane: I would like to ask you about this $125 million transition payment given to the courts.

Mr. MacNeil: Yes.

Senator Cochrane: Can you tell me exactly how it will be spent? Is a certain amount to be given to each port right away?

Mr. MacNeil: No, senator. It is not broken down by region. It is done by each port negotiation. If we were to divest the port of Stephenville to local interests, we would first conduct four major project studies. We would study who owns clear title to the land. We would study the engineering facility to see if they are structurally sound. We would look at environmental studies and the business case.

Before we transfer a port to a local entity, we want to be transferring a financially viable operation that does not require a large capital infusion. If it does require a capital infusion to improve the facilities, a draw is required on the port divestiture fund. If Stephenville needs $500,000, that would be the bid. If it needs $5 million, that would be the bid to do the transfer.

Senator Cochrane: I am also concerned about the port of Botwood, the port of Corner Brook and even the ports in Prince Edward Island because I understand we have four of them there.

Mr. MacNeil: I am from Cape Breton.

Senator Cochrane: Then the port of Sydney and all of those.

Mr. MacNeil: We are meeting with local communities. Our process is to deal first with our current tenants and then the community to see if there are interests in taking over the management and the ownership of the port. First we do these four process studies. We exchange information. We ask the local entity to form a corporation under the provincial act, and then we begin the transfer process.

Senator Cochrane: If this cannot be done over a six-year period, it falls back into the federal government's jurisdiction.

Mr. MacNeil: It remains in the federal jurisdiction.

Senator Cochrane: Is there a divestiture amount of money similar for airports and this new airport program?

Mr. MacNeil: Yes, there is, but I am not familiar with the amount or the process. I am solely involved in port divestiture.

Senator Cochrane: Can someone within your department obtain that information for me?

Mr. MacNeil: Yes. I give you an undertaking to get it to you through my colleague, the ADM of programs and divestiture, who is responsible for small airport divestiture.

Senator Cochrane: I appreciate that.

Mr. MacNeil: Madam Chair, perhaps I could respond to the previous question. In Part II of the bill, clause 61 states:

(1) The Minister may enter into agreements in respect of

(a) the disposal of all or part of the federal real property that formed part of a public port or public port facility by sale or any other means;

(b) the transfer of the administration and control of all or part of the real property that formed part of a public port or public port facility to Her Majesty in right of a province.

Mr. Barrie LePitre, General Counsel, Legal Services, Transport Canada: The subclause that Mr. MacNeil is referring to in Part II of the proposed Canada Marine Act provides the general authority for the minister to enter into agreements with either local entities for the transfer of these ports and port facilities or with provinces for the transfer of administration and control. Clause 61(1)(a) relates to sales to local entities, and clause 61(1)( b) refers to transfers of administration and control to the provinces.

Senator Cochrane: Does that subclause specifically refer to the six-year time frame?

Mr. MacNeil: No. That was announced in the national policy statement of December 1995. The national marine policy was the policy of the Government of Canada. It does not state that in the act.

Senator Cochrane: I would like to have that as well.

Mr. MacNeil: The policy?

Senator Cochrane: Yes.

Mr. MacNeil: It was sent to all members of Parliament in December, and all senators, but I will undertake to get it to you again.


The Chair: We will now examine Senator Cochrane's letter requesting that the committee hear from about 48 other groups or individuals, if the total is correct.


The House of Commons committee heard the Government of Ontario on October 7 and the Manitoba minister on October 3.

You have before you the letter that was sent by Senator Cochrane. I am in your hands, senator, as to how you wish to proceed with it.

Senator Cochrane: As I said at the beginning of the meeting, Madam Chair, we did not hear from those witnesses. They appeared before the House of Commons, but the senators did not have an opportunity to raise those questions with those people. Also, many other witnesses may wish to be heard who did not have a chance to appear before the House of Commons committee.

My other concern is that the Senate is not being given time to review thousands of pages of testimony before the House of Commons. I know I have not had a chance to look at them and to review them. We may want to recall some of those witnesses.

Senator Johnson: Is this a motion that you are putting forward?

Senator Cochrane: I move that we hear those witnesses.

Senator Spivak: I would like to add to that list the name of David Crombie, Commissioner of the Waterfront Regeneration Trust. In view of the fact that this seems to be the only area where some controversy was raised, I think he would be important to hear.

The Chair: Do senators agree with calling, well, maybe 50 groups or individuals to appear before the committee?

Senator Spivak: Sure.

The Chair: Should we take a vote or debate the issue first?

Senator Perrault: What is the view of the chairperson?

The Chair: I am in your hands, senator.

Senator Perrault: You have the wisdom to guide us in constructive ways.

The Chair: I think we asked all the questions we could ask. I do not know, but some senators did not understand or did not want to know more about the bill. It is for them to decide if they want to hear more witnesses.

Senator Perrault: There were 145 witnesses heard in the other place. When you add to that, this must be the most widely discussed piece of legislation.

Senator Johnson: The copyright legislation was widely discussed as well.

Senator Spivak: I could not be here the last two days. Of course, we are missing Senator Forrestall, who will be back tomorrow.

The Chair: We are missing Senator Adams.

Senator Perrault: We never achieve perfection.

Senator Spivak: There are questions here that I and other members of the committee have not had a chance to discuss. However, it is in the hands of the majority.

Senator Perrault: A journey into faith like everything else is.

The Chair: Shall we take a vote?

Senator Perrault: How long will this process take? Does calling witnesses mean another week of study?

The Chair: Fifty people is a month of study, I guess.

Senator Perrault: It will be well-aged legislation.

Senator Spivak: I do not think that is correct. We understand there is a need to call an election. I am only interested in hearing one person.

Senator Cochrane: This is such an important bill. Why do we have to deal with this now?

The Chair: They are all important.

Senator Cochrane: Can we not wait until we come back after the election? The ports will still be there when we return. What is the hurry? The ports and the port authorities will all be there, and everything can be done after we hear from the people we should hear. What is the rush?

Senator Perrault: It is not a rush. You cannot call it much of a rush given the number of witnesses who have been heard.


The Chair: Senator Mercier, are you calling the vote?


Is the debate over? I will call the vote.

All those in favour of Senator Cochrane's motion inviting a list of witnesses to appear before the committee?

Senator Spivak: Wait a minute, the whole list?

Senator Roberge: That is the motion.

Senator Spivak: I do not think you said that, Senator Cochrane.

In her conversation, Senator Cochrane said there "might be".

The Chair: In the letter, Senator Spivak, it is the whole list.

Senator Spivak: Perhaps she would like to alter her motion.

The Chair: It states that the following list of suggested witnesses shall be considered partial.

Senator Spivak: Very well. We can vote.

The Chair: All those in favour? All those opposed?

The motion is defeated.

Honourable senators, I am again in your hands on how to proceed with the bill.


Senator Pépin: Madam Chair, I move that Bill C-44 be adopted without amendment and that you be authorized to report it to the Senate.


The Chair: Is there any debate on Senator Pépin's motion?

All those in favour of the bill? All those opposed?

I declare the motion carried.

Honourable senators, I shall report the bill to the Senate without amendment.

The committee adjourned.

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