Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 14 - Evidence

OTTAWA, Thursday, April 30, 1998

The Standing Senate Committee on Transport and Communications, to which was referred Bill C-9, 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 10:35 a.m. to give consideration to the bill.

Senator Lise Bacon (Chairman) in the Chair.


The Chairman: Resuming consideration of Bill C-9, An Act 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.

Our first witness this morning is Mr. Joe D'Abramo from the City of Toronto.

Welcome Mr. D'Abramo.

Mr. Joe D'Abramo, Senior Planner, City of Toronto: Thank you, Madam Chairman and honourable senators, for the opportunity to appear before you today on the matter of the proposed Canada Marine Act. I am a senior planner with the City of Toronto advising on issues involving the city's waterfront.

Unfortunately, a special meeting of Toronto City Council is currently in progress to discuss this year's budget. As a result, members of council were unable to attend today and I have been directed to present this submission on behalf of the City of Toronto.

I also have a letter from Councillor Pam McConnell which she has requested that I read to you. It is a follows:

Dear Senators:

I am grateful to the Senate and the Standing Committee for taking the time to carefully review Bill C-9, the Canada Marine Act.

Because of a crucial debate on the first budget of the new City of Toronto, I am unable to appear before you today. However, I have grave concerns about Bill C-9, and I have asked Mr. Joe D'Abramo of the City's Planning Department to present my concerns to you.

Bill C-9 makes many changes that affect the efficient and effective management of significant national ports. None of those apply to Toronto. Toronto's port activity is, from a national or even regional point of view, insignificant. Less than 7 per cent of the volume is international; its total volume is less than that of the port at Goderich.

Bill C-9 accomplishes only three things in Toronto.

1) Bill C-9 creates a Port Authority that replaces the existing Toronto Harbour Commissioners. In so doing, it significantly reduces the role of the municipality in managing the port lands. City Council now appoints three of the five commissioners. Under C-9, Council would appoint one out of seven members.

2) Bill C-9 gives the Port Authority the power to develop land use plans for the lands under its control. The legislation currently governing the Harbour Commissioners restricts its land use planning powers to port related activities. Bill C-9 thereby enables the Port to engage in land use planning in areas previously restricted to the municipality. With some of the most valuable real estate in the country ringing the Toronto waterfront, this extension of powers is disquieting.

3) After Toronto was included in the lists of ports to which C-9 applies, the Bill was amended to specify that a Port Authority can run an airport. It is hard not to read this as a direct effort to reduce municipal control of the airport.

Members of Toronto Council view the reduced role of the municipality, and the enhanced powers of the new authority, as undermining our capacity to ensure appropriate development on our waterfront. While it may not be the intention of the Minister, C-9 as it is now written enables the Port Authority to rezone and redevelop waterfront lands into super-high-density projects complete with their own airport. That open-ended authority is a problem. There are appropriate functions for Port Authorities. Bill C-9 should restrict them to those functions.

The Minister of Transportation has assured Members of Toronto City Council that Bill C-9 is meant only to improve the efficiency of the port. It is not meant to undermine the City's planning authority, nor to delve into enormous development projects, nor to seize control of the airport. Unfortunately, that is not the Bill he has put before the Senate. The Bill you have before you today creates all of those possibilities, intended or unintended, and creates a situation ripe for conflict.

The Minister has suggested that the letters patent could constrain the Port Authority from engaging in activities unrelated to port activity. Unfortunately, the Minister has given no assurances that the City will have access to a process that prevents the Federal Government from drafting or amending letters patent that plunge the Port Authority into precisely these conflicts with the City.

I ask the committee to take the Minister at his word. He has said he does not intend the Port Authority to engage in large-scale land development, in contravention of the land use plan established by the City. Send him back a Bill that is amended to prohibit those activities. I urge the committee to make the following recommendations to the Senate:

1) Restrict the land use planning powers of the Port Authority to those directly related to marine uses.

2) Expand the number of municipal appointees to a level that provides the City with a proportion equal to what they now enjoy on the Toronto Harbour Commission.

3) Establish a binding municipal approval or appeal mechanism for any letters patent put forward by the Minister.

I appreciate your taking the time to listen to my concerns on this matter and I look forward to your favourable response.


Pam McConnell Councillor -- Don River City of Toronto

The Chairman: Have you a copy of that for the committee?

Mr. D'Abramo: Yes, I have.

City council adopted a motion opposing Bill C-9, the Canada Marine Act, and reaffirming the position held by the former City of Toronto at its meeting held on February 4, 5 and 6, 1998. City council perceives the repeal of the Toronto Harbour Commissioners Act and the establishment of a new port operator known as the Toronto Port Authority as a federal takeover of the city's waterfront lands. To be clear, this is not an issue of land ownership only. The city is concerned about local control and local accountability of its port operator.

The city has five general areas of concern with the implementation of the Marine Act.

First, the city's substantial municipal involvement in the development of the waterfront lands is unrecognized in the proposed act.

Second, there was a lack of consultation with the city over the matter of listing Toronto on the Schedule of Port Authorities.

Third, the Canada port authorities structure introduces changes that diminish the city's role in operating the port.

Fourth, the Port of Toronto does not qualify as a Canada port authority by the criteria listed in the proposed act.

Fifth, the proposed Canada Marine Act may conflict with the city's land use planning authority.

In the years prior to the creation of the Toronto Harbour Commissioners in 1911, there was great interest in developing the waterfront, especially the Ashbridge's Bay area, which was then owned by the city.

A map has been given to committee members. If you look to the right side of the map, the area extending into the lake is now known as the industrial area of the port. It, at that time, was known as Ashbridge's Bay. Ashbridge's Bay encompassed the eastern part of the port area, covering over 1,000 acres, much of it under water at the time. However, there were two impediments. A maze of rail lines ran parallel to the shoreline; those lines were not grade-separated, and as a consequence they created difficult and unsafe crossing conditions. That deterred interest in developing along the waterfront, and there was debate over who should be in charge of developing the lands.

Part of the problem of developing the waterfront was resolved when the railway companies were ordered to elevate their tracks, thereby providing grade-separated crossings. With the impediment of the railway crossings gone, the potential for development of Ashbridge's Bay could be realized.

The public debate about who should develop the waterfront resulted in the choice of a harbour commission form of administration with the power to both operate the port and develop the waterfront lands. An arm's length independent board of harbour commissioners was viewed as the best choice. It was to be created by federal statute, since ports and harbours were, at the time, a matter of federal jurisdiction. For that contribution of waterfront lands, the city wanted some assurance of control over the new agency. The city requested that it be able to appoint a majority of the members. The concept of a semi-independent harbour commission was placed before the citizens in the municipal election of 1911. The question read:

Are you in favour of the control and development of Ashbridge's Bay and the waterfront in the City's interest by a Commission having a majority of its members appointed by the City?

The proposition was accepted and the city, together with the Board of Trade, petitioned the federal government for legislation creating a harbour commission having that dual role.

The Toronto Harbour Commissioners Act contains two sections that are unique. Section 7 provides that three of the five commissioners are appointed by city council. Other municipal harbour commissions, created by separate statute, have a majority of federal representatives. It is only the City of Toronto that has a majority of municipal representatives.

Section 15 of the 1911 act provides that the Toronto Harbour Commissioners:

...may hold, take, develop and administer, on behalf of the City of Toronto, subject to such terms and conditions as may, at the time the control thereof is transferred to the Corporation, be agreed upon with the council of the city, the area known as Ashbridge's Bay, together with the dock property and water lots owned by the city of Toronto in the harbour as defined by this Act, and all other property which may be placed under the jurisdiction of the Corporation.

This section establishes the interest and relationship between the city and the Toronto Harbour Commissioners with respect to the management and development of the city-owned Ashbridge's Bay lands as well as other waterfront lands.

In addition, section 17 of the act provides that any surplus profits of the Toronto Harbour Commissioners are the property of the city after payment of all expenses. It has been difficult to quantify the nature of surplus profits and, as a result, the city received surpluses in the amount of $204,580 in the years 1953 to 1955 only.

By agreement in 1914 between the city and the Toronto Harbour Commissioners, lands covered by water along the waterfront were to be reclaimed. The Toronto Harbour Commissioners were to carry out the work while the city agreed to pay for the costs. The city agreed to pay for the cost of bridges and road construction as well throughout the waterfront. In addition, the agreement provided that, upon completion of payments for the reclamation work, the city would be entitled to the use of the lands upon the payment of an annual sum of one dollar. Between the years 1927 and 1951, the city made payments to the commissioners amounting to $17,058,357.

The city also took the lead in establishing both the Island airport, now the City Centre Airport, and Malton, now Pearson International Airport. In 1937, the city, after studying the feasibility of establishing an airport on the islands, agreed to share in the cost of developing the two airports with the newly created Department of Transport. The city provided $1,282,395 toward the permanent improvements of the airport, and the Toronto Harbour Commissioners were asked to operate both airports for and at the expense of the City of Toronto. Accordingly, the THC Act was amended to reflect the situation.

In 1957, the city transferred ownership of Malton airport and all the improvements made to that time to the federal government and, instead of financial proceeds, asked the federal government to make improvements to the Island airport including the construction of the main lighted runway, construction of a hangar, and operation of the control tower.

The endowment of the city's waterfront lands, especially the Ashbridge's Bay land, and the initial development and eventual improvements to the Island Airport are proof of the vested interest the city has in the Toronto Harbour Commissioners' operation. As a result of the city's contribution, the Toronto Harbour Commissioners have been given the authority to hold, administer and develop land, as well as operate an airport. Because of the substantial historical involvement of the city in the creation and ongoing support of the Toronto Harbour Commissioners, any changes to the legislative authority governing the commission's operations should receive the support of city council prior to implementation.

In 1991, the city began studying a restructuring program of the Toronto Harbour Commissioners' operation. These discussions resulted from the endorsement by the federal government of the recommendations of the Royal Commission on the Future of the Toronto Waterfront, which began its mandate in 1988. The Royal Commission, which completed its study in June of 1992, examined the role and responsibility of the Toronto Harbour Commissioners' operation and concluded that the significance of the port operation in Toronto had diminished in relation to the other modes of transportation and other ports in Canada; however, the port should be maintained but operated as a regional port. As a result, the Royal Commission recommended that the Toronto Harbour Commissioners consolidate their marine terminal activities in one 40-hectare area.

At the centre of the restructuring plan was an agreement to transfer 314 acres of land in the eastern port area from the Toronto Harbour Commissioners to the Toronto Economic Development Corporation, or TEDCO, the single shareholder of which is the city, TEDCO was created for the purpose of developing industrial and commercial land in the city. However, because the Toronto Harbour Commissioners have always been reliant on the revenues from the land associated with the port area, it was clear that some amount of subsidy would be needed to sustain the remainder of the Toronto Harbour Commissioners' operation. A study was conducted by Booz-Allen & Hamilton to determine a fair annual subsidy to compensate the Toronto Harbour Commissioners for the loss in income from the land transfer. The study arrived at conclusions similar to the findings of the Royal Commission in relation to the significance of the port.

The study found that:

The Toronto Harbour Commission was created as a result of seaport activities. Over time, and as maritime activities became unprofitable, property operations became a significant factor in this and other ports. ...

As a seaport that has not developed a specific niche, the Port of Toronto will decline along with the entire Great Lake system. Without property operations, the THC will have to depend on other activities for growth and profits. ...

Following nearly two years of debate over the future of the Toronto Harbour Commissioners' operation, after consultation with federal officials city council adopted a resolution petitioning the federal government for an amendment to the Toronto Harbour Commissioners Act in April 1994. The changes were based in part on the recommendations of the Royal Commission and in part on the local debate on the future role and responsibilities of the Toronto Harbour Commissioners. Briefly, the recommended changes to the Toronto Harbour Commissioners Act involved changing the name to Toronto Port Authority; clarifying that the port authority is accountable to the city; requiring that the board members be appointed by the city; deleting the requirement for an oath of office; limiting business operations to four main areas -- port operations, finance and administration, corporate secretary and the Island Airport; requiring the submissions of annual operating and capital budgets and a strategic business plan to city council; and clarifying that the port authority is subject to the Planning Act.

The proposed changes were not implemented by legislative amendment, although the city and the Toronto Harbour Commissioners did enter into an agreement that reflected a restructured port operation whereby the business operations were limited to the four areas and annual operating and capital budgets had to be submitted. It appears that the federal government decided to wait until the development of national marine policy prior to making any changes to the Toronto Harbour Commissioners Act.

When the Canada Marine Act was introduced for first reading in the House of Commons in the second session of the Thirty-fifth Parliament as Bill C-44 in June 1996, Toronto was not on the initial Schedule of Port Authorities. Federal officials had indicated that Toronto could request Canada port authority status, but it would have to meet the four qualifying criteria. After reviewing the criteria found in Bill C-4, the city concluded that the Port of Toronto fit within the category of regional port. Consequently, work began on the study of various organizational structures, together with the Toronto Harbour Commissioners and TEDCO.

After second reading of Bill C-44 in November of 1996, there were eight ports listed on the schedule as Canada port authorities. Toronto was not one of them. Two days before Bill C-44 received third reading in the House of Commons in April of 1997, a motion was passed placing Toronto on the schedule of port authorities. However, as a result of the federal election, Bill C-44 was not passed by the Senate before the dissolution of Parliament.

After the federal election, the Canada Marine Act was reintroduced into the House of Commons on October 2, 1997 as Bill C-9. The Toronto port authority was once again listed on the schedule, along with Hamilton, Thunder Bay and Windsor. Again, the city was not advised of the listing on the schedule.

Between second and third readings, Bill C-9 was sent to the House of Commons Standing Committee on Transport. The committee held hearings but invited Transport Canada staff only. No public hearings were conducted. In the intervening time since Bill C-9 was introduced on October 2, 1997, no federal official approached the city to explain why the Port of Toronto had been listed on the schedule, nor was the city asked to comment on the change.

Converting Toronto to a port authority constituted under the Canada Marine Act without consulting the City of Toronto is unreasonable, in that the city has a vested interest in the THC operation. It also is inconsistent with accepted protocol in the creation of new federal legislation not to consult with affected parties.

Currently, city council appoints three of the five members of the Toronto Harbour Commission. The other two commissioners are appointed by the federal government; one member upon the recommendation of the Board of Trade. The Canada Marine Act will require a board with a minimum of seven, only one appointed by city council.

The city's three-out-of-five member representation relates to the initial purpose of the Toronto Harbour Commission. It was to be a port authority and a waterfront development agency. The Toronto Harbour Commissioners Act reflects the city's substantial investment in port operations. The lands which the city provided were to be developed by the Toronto Harbour Commissioners on the city's behalf.

Under the proposed Canada Marine Act, the port authority is an agent of Her Majesty for the purposes of engaging in port activities. The port authority requires the approval by the Minister of Transport of its letters patent. The minister nominates the majority of board members. The Governor in Council may make regulations for the corporate management and control of port authorities. The Minister of Finance may impose limits on the power of the port authority, or subsidiaries, to borrow money. The port authority is to submit audited financial statements and any other financial information as requested to the Minister of Transport. There is no tie to the municipal level of government.

The Canada Marine Act provides for the minister to issue letters patent of incorporation. The letters patent set out the limits of involvement of the port authority and its subsidiary corporations. The proposed act does not provide for any municipal involvement in the review or comment on the letters patent.

The "Canada Port Authority" designation is a ranking reserved for Canada's most significant ports. Under the act, the Minister of Transport may add or delete from the schedule of port authorities. The Canada Marine Act establishes four criteria that a Canada port authority, under Part I of the act, must satisfy in the opinion of minister. They are that the port is likely to remain financially self-sufficient; the port is of strategic significance to Canada's trade; the port is linked to a major rail line or a major highway infrastructure; and the port has diversified traffic.

With respect to current and sustained financial self-sufficiency, the Toronto Harbour Commissioners' operation has increasingly required the financial support of non-traditional port operations to maintain solvency. The key income generating operation for the Toronto Harbour Commissioners has been the commercial properties portfolio. The annual rents from these properties and the occasional sale of some of the waterfront properties subsidize the deficit operations.

A significant portion of the city's original waterfront lands have been transferred back to either TEDCO or the city since 1994. Because the Toronto Harbour Commissioners were reliant on the annual rent revenue from these lands, the city entered into an agreement to provide an annual subsidy to the Toronto Harbour Commissioners. While the Canada Marine Act does not provide for these lands to be transferred back to the Toronto Harbour Commissioners, there is some concern that the city will have little choice but to surrender the lands in some form unless it wishes to continue to provide an annual subsidy to an agency it does not control.

Alternatively, for the city to continue a subsidy to the Toronto Harbour Commissioners defeats the purpose and intent of the Canada Marine Act. The Canada Marine Act intends to commercialize port operations by creating a corporate board of private individuals with no elected or public officials or municipal employees. However, that corporate board will rely on the city for a subsidy. Under the terms of the subsidy agreement, the THC or the new port authority must submit each year an operating and capital budget plan as well as a five-year business plan for the city's approval. Under such a circumstance, the autonomy of the board of the port authority may be jeopardized.

In judging a port to be of strategic significance to Canada's trade, the key factors are the volume and the type of goods. In terms of volume, Toronto, averaging 1.8 million tonnes, ranks poorly compared to major Canadian international ports such as Vancouver and Montreal, which average 70 million and 20 million tonnes respectively. In terms of the type of goods, Toronto imports more than it exports, and the goods -- salt, sugar, cement, iron and steel -- are destined for local industry for the most part. The commodities handled in Toronto cannot be said to represent Canada's major import or export items.

An additional matter which complicates the financial viability of the port operation in Toronto involves the requirement that a charge on gross revenues be paid to the federal government each year by the Canada port authority. Currently, the Toronto Harbour Commissioners do not pay such a charge. Under the existing subsidy relationship between the city and the Toronto Harbour Commissioners, such a charge may result in the city's directly paying the federal government an annual charge on gross revenues. Should the Toronto Harbour Commissioners generate revenues insufficient to cover the surcharges to be paid to the federal government, an added subsidy will be required from the city.

One benefit to some municipalities coming from the Canada Marine Act is the requirement of payment in lieu of taxes. Currently, the Toronto Harbour Commissioners do not pay any realty taxes on property they hold and use. If lands are leased to the Toronto Harbour Commissioners, the lessees do pay realty taxes. However, if the proposed port authority operation is incapable of creating a profit, the city will never realize any moneys from the payment in lieu of taxes requirement.

Finally, section 48 of the Canada Marine Act requires the development of a land use plan by the Canada port authority. Such a plan must be completed within 12 months of the issuance of the letters patent and shall contain objectives and policies for the physical development of the real property the port authority will manage, hold or occupy. The plan must take into account relative social, economic and environmental matters and zoning by-laws that apply to the neighbouring lands.

Under the existing legislation, the jurisdiction of the Toronto Harbour Commissioners to regulate land use when the land use pertains to shipping and navigation has been recognized. When a proposed land use relates to other than a shipping and navigation use, the local zoning by-laws and official plan apply. However, section 48 of the Canada Marine Act has been drafted in such a way that the land use plan prepared by the port authority could apply to land uses other than shipping and navigation uses. This may lead to litigation if there are disputes.

The other concern with the land use planning authority granted the Canada port authorities relates to the issue of board membership. As mentioned earlier, the board cannot include elected or public officials. Its membership will be made up entirely of private citizens. The board will be making decisions on land use within the city that may supersede the municipal authority and there is no recourse of appeal to an independent body. This is a highly unusual and unprecedented situation, especially should these authorities acquire additional land or if there are any conflicts.

In conclusion, I would add that the city's concerns as presented here today could be easily addressed by removing the Port of Toronto from the Schedule of Port Authorities.

The Chairman: I have here a clipping from The Toronto Star of April 25 with the headline, "Stop fighting takeover of port, mayor urges". It says that the mayor is urging the city to drop its long and bitter opposition and is recommending support for the changes set out in the marine bill currently at hearings before the Senate Transport Committee.

Does this mean that city council has not yet discussed this matter with the new mayor?

Mr. D'Abramo: Yes, that is correct. A motion from the mayor with regard to cooperating with the minister on this issue has not been before council or voted upon.

Senator Roberge: Mr. D'Abramo, had we had a copy of your presentation, it would have been easier to follow. You were reading so fast that the translators had difficulty following you.

How many years have you been a planner for the City of Toronto?

Mr. D'Abramo: For over eighteen years.

Senator Roberge: Therefore, you have been at the core of all the things that have happened since 1991. A witness before this committee the day before yesterday mentioned the rape and pillage of the Toronto Harbour Commissioners' land. You were at the core of that situation.

What percentage of the land taken over by the city was used for port use?

Mr. D'Abramo: I do not have a percentage figure. We did take back from the Toronto Harbour Commissioners some 700 acres of land, most of which was in the port industrial district and would therefore be classified as industrial use. It was not all port related, but it was essentially all the land that the Toronto Harbour Commissioners then owned and operated as industrial.

Senator Roberge: Is it in industrial use now or residential use?

Mr. D'Abramo: It is still in industrial use. It has not changed.

We took over a portion of land along the north shore, just north of what is shown on your map as the Outer Harbour Marina. At the time we took that over, it was already agreed by the Toronto Harbour Commissioners that it would be made a parkland. Therefore, that was essentially already parkland when we took it over.

Senator Roberge: Did I understood correctly that you believe that Toronto has not enough volume to be a major port, and that you plan to utilize only 40 hectares for port usage?

Mr. D'Abramo: That was the recommendation of the Royal Commission on the Future of the Toronto Waterfront. Their studies determined that it is possible to concentrate the Harbour Commissioners' activities related to the port on about 40 hectares of land. That is now known as Marine Terminal 51, which is marked on your map as well. I believe they were saying that what the THC provides as services could be concentrated there. We do have other port users that are located on their own land elsewhere in the port.

Senator Roberge: Has any thought been given to eventually joining forces with Oshawa, for example?

Mr. D'Abramo: I am not aware of that.

Senator Roberge: How would you react to Toronto's joining forces with Oshawa and having one port authority?

Mr. D'Abramo: I could not comment on that right now. I would prefer to understand it better before I commented.

Senator Roberge: It may be interesting for the Oshawa representatives here to think about that.

Mr. D'Abramo: If you are asking me whether I think it is a good idea, I have not really thought about it.

Senator Forrestall: When the commission was here the other day, they said the land was worth $1.5 million per acre. Would you care to put a dollar value on this land? What is its value on the market?

Mr. D'Abramo: I do not as yet have an estimate such as the Toronto Harbour Commissioners have. We are in the process of determining the value of the lands which the city currently owns, but I do not yet have the figure.

Senator Forrestall: We were all a little shocked to hear terms like "rape and pillage". The Chairman cited five examples of miscarriage of justice on the Toronto waterfront, the first one having to do with that 29-acre plot. As far as I can gather, all that has been paid so far is $225,000. Do you know about this?

Mr. D'Abramo: It was not clear in their presentation which lands they were speaking of, but there was a piece of land that the Toronto Harbour Commissioners had leased for 999 years to the Canadian Pacific Railway for railway purposes. They later agreed to amend the lease and allowed them to use it for railway purposes and any other purpose. So Canadian Pacific Railways had the use of the lands for 999 years for whatever purposes they wanted. I do not know what the value of such land would be.

Senator Forrestall: I regret that there are not some elected officials here this morning who could come to grips with these issues. I have the impression that you do not really want to deal with them, and I do not blame you. You are a planner and a servant, as I guess we all are ultimately. My questions are not ones of planning; they are questions of process and what will happen with respect to Bill C-9.

The Chairman: I will have the letter distributed which Mr. D'Abramo read from the city councillor. There may be some explanations in that.

Senator Forrestall: I share Senator Roberge's concern with how quickly the witness read his presentation. The interpreter was having trouble keeping up with him. It was very difficult to follow the arguments without the written text in front of us.

Coming back to the land, there has been some concern expressed about the crossing to the city airport. The environmental assessment people are raising their eyebrows.

What happened to the idea of a tunnel?

Mr. D'Abramo: We are studying the issue of a fixed link to the airport and an environmental assessment proposing a drawbridge to the airport has been submitted to the federal authorities, and they are currently reviewing that environmental assessment. The mainland and the island are separated by 400 feet of water.

Senator Forrestall: Why was a tunnel ruled out? Was there a problem of access on the island?

Mr. D'Abramo: I believe the early studies examined the tunnel and concluded that the cost was too significant. It was about four times the cost of the bridge.

Senator Forrestall: Under other circumstances I would ask you in detail about Bill C-9 and how it would impact upon your city planning and the intentions of Toronto as an entity to proceed. Putting it simply, how will this legislation affect you? Will it be a disadvantage? Will it create difficulties for you or will it enhance your position?

Mr. D'Abramo: Certainly, speaking as a planner, one concern would be clause 48 in terms of the land use planning authority of this new port authority. It conjures up a situation that might suggest there will be a debate over who should prevail in terms of a plan for those lands. The question, of course, then becomes: What are the lands?

Senator Forrestall: That is a concern of all of us. The estimate came in of $1.5 million per acre. We are certainly looking at a significant amount of money. If a taxpayer in Ecum Secum, Nova Scotia, for instance, paid a little bit of that, he might wonder if he would ever get any of it back.

As someone who is not a partisan, elected person, I must say I share the same concern. It is a pillage and a rape, but I feel that it is pretty bad to have this kind of fight going on, with the rest of the country watching you fight this way, over what may not necessarily be your money. It may very well be the Canadian taxpayers' money; that has not been clearly established yet.

Senator Bryden: Mr. D'Abramo, did you tell the committee why Councillors Layton, Chow and McConnell were not able to come?

Mr. D'Abramo: Yes, I explained that at the very beginning. There is a special meeting of council to discuss this year's budget. They began actually on Tuesday and they are now winding up in the crucial voting stage.

Senator Bryden: Today?

Mr. D'Abramo: Yes.

Senator Bryden: If we rescheduled the meeting in order to give them the opportunity to appear next week, would they be able to come?

Mr. D'Abramo: I can certainly ask them.

Senator Bryden: We might take that under consideration, Madam Chairman, if you do not mind.

I certainly am not in the business of shooting the messenger, having been a messenger a number of times myself, but do you know what the position of the government of the City of Toronto is today on this bill?

Mr. D'Abramo: The current position of the City of Toronto is essentially that it opposes the passing of this bill.

Senator Bryden: They are opposed to it?

Mr. D'Abramo: They are opposed to it, yes.

Senator Bryden: As I understood it, Madam Chairman, you referred to a letter from the mayor saying he was not opposed to the bill.

The Chairman: The letter I read was from a city councillor. I referred to an article in The Toronto Star in which the mayor was asking them to stop fighting the take-over and urging them to support the bill.

Mr. D'Abramo: To explain where that came from, the council passed several motions, beginning with a motion stating that they were opposed to Bill C-9. It also passed a motion requesting the mayor to meet with the minister and any of the GTA ministers to discuss this issue. I believe the mayor is now reporting back, having met with the minister, and urging council to cooperate, I suppose. I cannot remember what exactly his words were in the article. Whatever proposal he might have has not been put before city council at this time, but council did request the mayor to meet with the minister.

The Chairman: Should we hear the city councillors at different times? They would not yet have discussed it with the city council and the mayor prior to coming here next week, would they?

Mr. D'Abramo: If it is next week that you want them here, no. You must wait until the next council meeting.

Senator Bryden: When is that?

Mr. D'Abramo: I believe it is in perhaps one or two weeks. I would need to check. I do not have that information with me.

Senator Bryden: When there are very significant matters to be discussed, sometimes special meetings are called. For my part, I would like to know. Being from the Maritimes it is kind of fun to watch the fight, but, on the other hand, this is a major city in our country. As Senator Forrestall said, the allegations made by the harbour commission are really quite serious. It appears to me, just from the outside, that at best the position of the city government is unsettled at the moment. You have a position taken once, but it appears as though that may be shifting with the mayor talking to others.

It would be useful for this committee if someone could appear before us and tell us what the position of the City of Toronto is in relation to the bill. It would be nice if it was the mayor, who seems to be the appropriate officer.

Mr. D'Abramo: You do have the current position of council right now. I think what you are asking is this: should council debate this again, you would like to know their position; but right now their position is clear; they are opposed to this bill.

Senator Bryden: Except for the mayor?

Mr. D'Abramo: I cannot answer that.

Senator Bryden: I will not pursue it.

The Chairman: Could the three councillors not have come here today and let the others deal with the budget? Could they not have come today, if it was that important to them?

Mr. D'Abramo: I imagine, Madam Chairman, that it is important. I can only suggest that. I did talk to them and they told me their preference was to be at the meeting of city council in order to be there for the voting on the city budget.

Senator Forrestall: Could our clerk make certain, when he checks back, that they understand that we want someone to come and address these five deficiencies and we want someone to respond to the very serious allegations of land grabbing. You can do all the block developing you want to do, but let us not do it at the expense of the nation and let us not make ourselves so ridiculous that our credibility goes down the river. I wish to ensure that someone comes and answers those five concerns, and there are three or four others as well.

I wish to find out the value of the land and who stands to gain. What does the City of Toronto stand to lose in terms of grants, grants in lieu of taxes or otherwise? It is very important that we understand that, because, as we try to sort out a way of resolving the problems, we must consider the Assessment Review Act.

You are the planner. You will know now that Bill C-9 grants exemptions; if you divest it, then you will, for instance, have a group of one, assisted by two friends, making all the environmental assessment reviews, and there will be nothing to trigger a public and open assessment of the work that must be done. These are serious problems and I hope they can come prepared to give us their best advice.

The Chairman: Thank you Mr. D'Abramo for your presentation.

The next panel of witnesses is from the City of Hamilton, Mayor Robert Morrow, Alderman Bob Charters and City Solicitor Patrice Noé Johnson.

Mr. Robert Morrow, Mayor, City of Hamilton: Honourable senators, we welcome the opportunity to be here and we thank you for your time. We consider this to be a very important issue for the future of our community and certainly for communities across the country.

Bill C-9 recognizes existing aboriginal or treaty rights of the aboriginal peoples of Canada. This bill directly affects the City of Hamilton, which has had proprietary rights over the harbour since before Confederation. In 1912, our predecessors brought to Parliament a petition asking that the government of the Dominion of Canada partner with them in creating a mechanism that would develop all aspects of Hamilton harbour.

The City of Hamilton has been vested with the rights over its harbour since our original charter in 1846, when we were incorporated as a city. This was confirmed by the Baldwin Act of 1849. The city recognized the shipping potential of the harbour and the constitutional powers of the dominion government over shipping and navigation. We saw the potential and the government agreed. That was the genesis of the Hamilton Harbour Commission.

The Hamilton Harbour Commissioners Act of 1912 provides in section 14 that the commissioners:

...may hold, take, develop and administer on behalf of the City of Hamilton ... the dock property and water lots owned by the City of Hamilton in the harbour as defined by this Act, and all other property which may be placed under the jurisdiction of the (Commissioners).

This is confirmed as the original intent of the legislation by newspaper reports in July of 1912, quoting the first harbour commissioner, Chairman Guy, and the local MP, Mr. Stewart, as, at different times, referring to "the Trust".

Section 16 of that act provides that any surplus profits after covering the costs of the commissioners' operations shall be the property of the City of Hamilton and shall be paid over by the commissioners to the city treasurer.

Our predecessors appeared before parliamentary committees on October 30 and December 18, 1963, when the government considered Bill S-38, legislation to provide for harbour commissions. Our mayor, Victor K. Copps, spoke in opposition to an attempt to repeal the 1912 act, similar to what you are considering today.

In 1951, we had asked the Hamilton Harbour Commission to manage our public bathing beaches and our act was amended to include, in the incorporated powers of the port managers, recreation, in order that they could run an amusement park for us on the beach strip.

In 1978, once again, we were before the Senate committee when Parliament was considering Bill C-6, proposed legislation respecting Canadian ports. Representatives at that time reminded the committee, as those before had so eloquently and with such passion, that the city enjoys a unique history in relationship with its harbour and how it is managed.

We also appeared before the House of Commons committee considering Bill C-44, a predecessor to this bill under the previous administration. The thrust of our position was to defend the provincial interest in all matters of a local nature, such as property tax and land use. At that time, the city had been exempted from the new legislation in one form or another.

We appear before you today, as we have in the past, to preserve our interests and rights as beneficiaries of this great trust.

With the inclusion of Hamilton in this proposed legislation, we appear on the same footing as our predecessors, harking back to the unique history and legal relationship of the harbour and the city. The relationship is demonstrated by the group that manages our asset and keeps the port viable for shipping. We can only hope to be as persuasive as they were. We believe our position is even stronger.

Some may wish to ignore, others may wish to forget, but we return to Parliament yet again to keep our history, ideals, rights and vision for this most precious of resources very much alive. All of the previous exclusions from federal harbour and port legislation have confirmed our status. We return to Parliament to preserve that status.

The special relationship the city has with its harbour is a matter of record. Some 86 years ago, a managing corporation was established to enable that organization to develop our harbour into a port of national distinction. The city deeded title to the harbour to the commissioners, subject to the legislation, in trust. We granted them $500 to set up shop and even during the depression years gave them annual grants from $10,000 to $12,000 to offset cargo fees in order to keep the dream alive.

For the past 86 years, the media have recorded the disputes and resolutions between beneficiary and trustee. By July 1912, we had resolved the first of many such cases. One may refer to this as an adversarial relationship. It is very clearly dynamic; there is no question about that. It has created and enhanced a thriving harbour of great beauty, despite a blight that the community continues to clean up with notable success. Nowhere can you find a clearer example of competing uses coexisting. This is our challenge, and on behalf of the city and its people we come to you echoing our forebears and forerunners.

There is a distinction to made here. While the harbour is a significant part of the St. Lawrence Seaway, since the Seaway was extended beyond Port Credit in 1958, both the Seaway and the port have both natural and market limitations. However, in respect of scenery and environment, the link between our harbour and the city holds enormous potential and is of real and vital importance to our future. That potential is limited only by human vision. We have one vision; another vision might be a restriction with uncanny depths.

The bill before you has swept our harbour into the bin with other national ports without recognizing our pre-Confederation status or unique legislation. Bill C-9 as it stands could lead us to litigation. We have been there before. Litigation could jeopardize the entire scheme of the national marine policy if it failed to recognize the special trust-interest of the City of Hamilton in our port. Such exposure to risk, not to mention the risk itself, is unnecessary and short-sighted.

Through the auspices of the office of the Honourable Sheila Copps, member of Parliament for Hamilton East, and through our own civic efforts, the City of Hamilton continues a lively and insistent dialogue with the current managers of our harbour. So we are not totally without a dialogue, even if it is sometimes unsatisfactory.

Perhaps we have not had sufficient time to meet the national time lines, but to call short these dialogues by passing this proposed legislation would be an egregious mistake. There would be no winners, consensus or resolution. Without meaningful discussions between the local and federal authorities, the same two parties that talked in 1912, there can be no resolution.

At this time, the current managers and harbour commissioners must be pushed every inch of the way to cooperate with us in achieving a vision that is very keenly held by the people of our community. They continue to worry that they will be sued personally for lifting the smallest finger to help at any juncture.

There would seem to be a concerted effort on the part of ports across the country to undercut and attack those who are trying to advance our communities and push forward civilization, as it were, instead of pulling it back. That is unfortunate. That concerted effort is expended at the expense of the people, of our democratic institutions and of communities like ours, which has laboured unstintingly to clean up its harbour. We are the traditional home of Canada's industry; we are Canada's national industrial capital. We have had both pollution and environmental desecration, and we have cleaned that up without help from this particular entity which is right in the middle of our community. On the contrary, at the very time when some improvement is needed, every effort is being expended and used on their part to prevent improvement and change.

I am sorry to have to say this but I can see this happening in other communities in Canada as well.

Over the past decades, you have been given the numbers, in dollars and cents, with which to calculate the respective financial contributions of the City of Hamilton and of the federal government towards the development and maintenance of Hamilton Harbour. There have been disputes about those numbers -- the omission of provincial grants, the accreditation of property taxes, as if it is a contribution and not payment for services of the community for fire suppression, roads, sewers, water, garbage, education, et cetera. Even with these errors, the city's position remains unassailable and its contribution decisive.

However, the picture is incomplete. The city is its people and its natural and legal assets. This issue is not resolved by reduction to numbers. Our approach to the harbour is one of totality, enveloping the total community relationships; it does not reduce matters to dollars and cents, but encompasses community acceptance. Since 1986, for instance, thousands of local residents have participated directly in the restoration of the Hamilton Harbour ecosystem. Children from 240 classrooms throughout the city are growing cattails in the west harbour. Industries, school children, and residents of all ages have joined together to restore the environmental habitat of the common tern. We enjoy a direct link to our harbour.

There are documents already before you, placed there by our predecessors, that estimate the financial value of the city's asset in the harbour. We are currently carrying on an in-depth review of the harbour investment as outlined in the legislation and supported by case law. We are also responding to our challenge in a dynamic environment that is specially tailored to Hamilton.

We would ask you to review the history and review the legislation. We ask that you help us to implement a plan for our harbour that will recognize its successes in the shipping industry of the Seaway, and that will also support the greening of our environment and the renewal of public participation in all activities on the harbour. Change is part of the dynamism. Change is inevitable. Shipping in our harbour should pay its fair stipend to the national port system as part of the Seaway. The rest of the harbour should meld more closely with the total community.

The harbour as it is currently managed must be redefined. This redefinition will be effected by the letters patent or by an amendment to the 1912 act. One way or another, we will have change. The provincial sphere must be protected. That has so much to do with appropriate planning for the future and the bringing to bear of the kind of vision that people of our community have for our waterfront and harbour areas. This must be done and can be done by a redefinition of port powers in the letters patent to ensure that they do not conflict with provincial interests.

We have offered our assistance in the drafting of the letters patent template for the ministry, but we have been turned away. We learned, with some anger on our part, that the harbour commission staff is very much involved in the development of the letters patent under the aegis of the Port of Vancouver. They have a direct pipeline into that. They are having their say, but the 320,000 people of our community are not having their say at the moment, and that must change.

While other cities and provinces may be interested in our ideas about the letters patent, we have not been included or even allowed to see the document that is under development which will so vitally affect our trust and our provincial spheres.

We come before you today, as we did in 1912, to make our position known and to make our submission. We respectfully request the following:

First, that you defer the inclusion of Hamilton in this act and refer the letters patent for the proposed Hamilton Port Authority to the minister and to the City of Hamilton; and that, upon resolution between the city and the minister of the key incorporation issues, including transfer of assets and in particular with regard to powers, that infringe upon provincial interests, if any, the letters patent be reported to the Senate for enactment.

Second, in the alternative, that you delete Hamilton from the bill entirely.

In the absence of some movement by the Senate on this issue, and without agreement on the scope of powers and assets -- and without discussion there can be no agreement, the trust will become a burden upon the new Hamilton Port Authority. All rights and liabilities of non-federal property are assumed by the new port authority under the bill and hence the port authority would be encumbered with the trust. Any deterioration of our trust would be tantamount to an expropriation, and the courts will be called upon to determine the price tag.

Our request of you today is to avoid this unnecessary upheaval and to maintain the integrity of the national marine policy and the constitutional division of powers.

I will add, in case you did not know, that there is a constant fight between community and harbour commissioners. The community is always trying to achieve its vision. I would hope you realize we have what I might refer to as the third-strongest economy in the country, third-lowest unemployment rates for years upon years. We are the only Canadian community designated by the United Nations as a model sustainable community. A great component of that is not only public involvement in planning for our future but the clean-up of the harbour. We have two beaches where kids swim in the summer. We have done some amazing things as a community, and that is ourselves at the civic level, the various organizations and jurisdictions, with the exception always of the harbour commission which chooses not to involve itself too much with anyone else. It has been an effort involving the environmental movement and all others with a stake in the future of our community. A great part of the reason for the UN designation was the clean-up and improvement and care given to Hamilton Harbour.

We have also made some progress because of the great assistance of the Honourable Sheila Copps, supported and encouraged by the Honourable Mr. Collenette -- particularly Ms Copps, of course, as one of our local members of Parliament. With their assistance we have been able to achieve some of the very small improvements we have been aiming for, such as the transfer of three water lots, which we are hoping to conclude tomorrow, right on the harbour in Hamilton. However, that is a small part of what should be done.

We want to clean up the gateway to the city. As you drive across the Skyway Bridge on the Queen Elizabeth Way, what you see is unsightly. It does not represent the real Hamilton, but nonetheless a great deal of what you see is harbour commission land. To get them to come close to even talking to us about it will be either the result of a successful war on our part or some wise action from Parliament Hill.

We would like that assistance. We would like the national presence there to be a positive one for our community, just as we are proud to contribute in every way to a positive national fabric for our country in all parts of Canada.

We lay this before you. We are thrilled to be here and we hope for a positive result. We are not here whining. We are here because we are achievers and workers and doers, and we have something of which we are very proud. Quite frankly, we are sick and tired of the odds thrown in our face by this little dictatorship that has had too much power. To add further to the difficulties facing a proud and vital community would be unconscionable, so we ask for your support.

Senator Forrestall: Who is the dictator?

Mr. Morrow: The harbour commission structure.

Senator Forrestall: You want to revert to the status quo prior to the introduction of the Port of Hamilton on the schedule of ports that could be divested? You want to go back and stay with the 1912 act?

Mr. Morrow: We want the city's powers under that act recognized. We are looking at the lesser of evils, quite frankly. Neither of the two alternatives is satisfactory, but it is better than some other possibilities.

Senator Forrestall: In the Port of Hamilton, what triggers an environmental assessment review? When do you advise the city that it had better take a long, hard look at the environmental aspect of this piece of work? What in your mind triggers the Environmental Assessment Act assessment?

Mr. Morrow: Our own determination to clean it up, which has been our practice.

Senator Forrestall: I regret that, but on the other hand I appreciate and understand your wanting to stay with your own. My fear is that, if you do, all the major ports will want that same kind of authority and power, and that might lead to short cuts being taken in the work done at certain harbours that do not meet even minimal standards. We have heard that sometimes little consideration is given to, say, a salmon breeding area upriver. I understand that you are exempted from the requirementa of the act under these circumstances. That concerns some of us, and it certainly concerns me a great deal.

Mr. Morrow: We contend that our act is unique. The historical context of it is unique. What is owed the city is a very real part of that.

Senator Forrestall: I will put the question slightly differently. What do you have in your city environmental structure, your laws, by-laws and regulations, that would trigger an environmental assessment?

Mr. Bob Charters, Alderman, City of Hamilton: Any work done in the harbour vicinity, in my understanding, comes under the provincial sphere at this point. It covers anything done with regard to the harbour except what is done by the harbour commissioners who can claim exemption or federal jurisdiction over anything to do with shipping and navigation. The city is in the process of building a waterfront trail along the harbour's edge. That is all subject to the environmental hearing process. We are putting in islands, increasing the fish habitat, and doing all the things that are required. Our concern is that the changes, as suggested, might allow us and others to not have to meet those requirements.

Senator Forrestall: There is no doubt about that. You would not.

This process should have happened in the other place. They should have consulted with not just the representatives of the so-called "national" ports in Canada but also with the municipalities, cities, and towns which house and host our national ports. It is important that your views be brought forward. Every major port badly wants new legislation, and that is understandable. However, our concerns must go far beyond that.

For example, not necessarily with the Port of Hamilton, but with a number of other ports where there are grants in lieu of taxes to regional municipalities, towns, cities, and counties, withdrawal of that as a result of the divestiture might leave the City Treasurer in one very bad spot. You have just finished setting your budget, and you have settled your assessment and levied your tax for the year. Now someone could come along and say, "By the way, you must do $4 million worth of dredging, and you will have to pay for that yourself." Where will you find that $4 million? Does it come from the city, the province, or where? Our concerns are widespread.

Mr. Morrow: What is jeopardizing our finances is the actions of our provincial government. The opposite of what you just said is true. We have never received grants in lieu from the Hamilton Harbour Commissioners. They have made a profit, which they were supposed to pay us but never have. The legislation is very clear with regard to profits. It is a successful port, of which we are proud economically, but they owe us big time.

Senator Forrestall: You want to stay where you were last year.

Mr. Charters: We believe that the two driving interests here can coexist in this particular port, and we are saying, "Please pay attention to that. Set us aside, and resolve those issues." We believe the recreation and planning concerns and issues the city has can be addressed, as well as the ownership issue. At the same time, you can still have a viable, operating port that maintains its status as the busiest port. From that perspective, we are saying this needs to be set aside and negotiated between the federal government and the municipality.

Senator Forrestall: Has Ottawa given you a written indication as to why they chose to list Hamilton?

Mr. Morrow: There has been no written indication. We follow things through the news and the local MPs.

Senator Forrestall: Paper trails are very important. It is a question to which you should have an answer for your written records. "Verbal communications are not worth the paper they are written on", according to a former distinguished parliamentarian with whom I must agree in this case.

Senator Roberge: Mr. Mayor, you mention in your brief that you are appearing before the court. Are you now in front of the court on this dossier? If not, do you have a legal opinion as to whether your rights are now being abused?

Mr. Morrow: We are not currently before the courts but we have been in the past.

Ms Patrice Noé Johnson, City Solicitor, City of Hamilton: The City of Hamilton has been before the courts with the harbour commissioners since 1930, I believe, with one of the earliest court cases where they established the trust and the relationship. In 1980, the judgment of Mr. Justice Walsh outlined the process that we must follow in order to claim the surplus profits. We are currently following those guidelines and attempting to get the records from the harbour commissioners to determine the surplus. Following that, there will be a tribunal of chartered accountants. The matter will not go to court unless there is a disagreement on the findings of the chartered accountants.

We are currently in the process, as was mentioned in the speech by the mayor, of doing an in-depth review of their finances with a view to determining the surpluses.

Senator Roberge:Are you referring to the surpluses, if any, over a number of years?

Ms Johnson: Yes.

Senator Roberge: What about your prior Constitutional rights as far as Bill C-9 is concerned?

Ms Johnson: Bill C-9 mentions that the port authority, once established with the letters patent, would take on the non-federal property. All of the property of the harbour commissioners is non-federal property because it was acquired either, originally, in 1912 or in the 1948 deed. Once the province and the federal government stopped arguing over who owned the bed of the harbour and decided the City of Hamilton owned it, then the City of Hamilton quit claimed it to the harbour commissioners in 1948. That would cover the entire bed of the harbour. That is the basis of our trust.

Senator Roberge: Could you tell me the present composition of the harbour board and representation from the city?

Mr. Morrow: There are three members, two appointed by the federal government, one by the city council.

Senator Bryden: Mayor Morrow, I appreciate the fact that you considered this matter sufficiently important to be here today yourself along with your aldermen.

We were told at our last hearing that The Toronto Harbour Commission is controlled by the city. The majority of their members are appointed by the city. Do you know why does the federal government have the majority representation on your commission?

Mr. Morrow: It is simply because the legislation reads that way. We have made counter suggestions over the years, but they fell on deaf ears.

Senator Bryden: When was it first established?

Mr. Morrow: In 1912.

Senator Bryden: Was it then two federal appointees and one city appointee?

Mr. Morrow: That is correct.

Senator Bryden: Given what you said, to continue with the status quo would leave you in the hands of this dictatorship to which you referred. The city and the harbour commission do not seem to be very comfortable bed fellows.

Mr. Morrow: I am taking the opportunity to describe what we have to go through.

The commissioners of all political backgrounds and stripes who are appointed seem to be brainwashed into believing that they can do nothing without being personally liable and subjected to the worst of punishments if they lift a finger to do the things that the community wants.

We are forced to look at the lesser of evils. For example, if we can have input into the decisions made respecting the letters patent, then we can do something. It is a very strange juxtaposition of good and bad.

At the very time we are asking for that, we hear that the letters patent have already been written by the port master.

This is a the national situation. We heard almost that same complaint during the Toronto presentation. There is an attempt to fight back at those who want to change their structure, and to resort to very unreasonable and undemocratic means to achieve their ends or to maintain the status quo. I, for one, will not sit back and take it. I think it is outrageous.

We are forced to respond to what the government is trying to do, and our two suggestions are there on the second to last page of our brief. We demand that we have access to the letters patent and have input into their development. We want to take it out of the hands of tiny groups of people who are controlling this very precious resource that is so important to the future of our community and our ability to contribute to Canada.

Senator Bryden: I am not asking for names, but when you refer to this "tiny groups of people", to whom are you referring?

Mr. Morrow: It may sound very conspiratorial, but from years of experience, I know this to be true.

Senator Bryden: I appreciate that. Are we talking about assistant deputy ministers in Transport?

Mr. Morrow: No. We are talking about people in the Hamilton Harbour Commission, the port master, the lawyers, and the strange ways in which the commissioners end up having to follow along, lock, stock and barrel.

Senator Bryden: Do they have a direct line to the department? Why would they have any more influence than you?

Mr. Morrow: We, obviously, have the support of our federal politicians, which is much appreciated. That has been the case in the past as well, but even they are being undercut for trying to be supportive. They use the law to deal with anyone who suggests any change. That includes ourselves and elected representatives at other levels. They go to great lengths to prevent the kind of real dialogue and real democratic interaction that should take place. Some of the improvements we have made have been made with their approval but, for the most part, they have been made in spite of them.

Senator Bryden: My next question relates to the first paragraph in your brief, which states:

The Canada Marine Act as proposed by the House of Commons recognizes existing aboriginal or treaty rights of the aboriginal peoples of Canada. This Act directly affects the City of Hamilton which had proprietary rights over the Harbour before Confederation in 1867.

Are you implying that whatever aboriginal treaty rights may apply to the lands of the harbour or the port, the propriety rights of the city supersedes those?

Mr. Morrow: Our solicitor wrote that, and that is the one line I did not understand either. I will ask her to explain.

Ms Johnson: The reference to the aboriginal rights contained in the Canada Marine Act was to demonstrate that the City of Hamilton had proprietary rights, as did the aboriginal peoples prior to the creation of the Dominion government in 1867. The City of Hamilton did have the rights, as did other bodies of people prior to Confederation.

Senator Bryden: Now I understand. You are putting yourself in the same position as Senator Adams and his people. You are not saying you would be competing with them, just that you also have rights.

Senator Adams: It is nice to see the Mayor of Hamilton again.

I believe a House of Commons committee studied how your city and harbour would be affected by these changes. Did you appear before that committee?

Mr. Morrow: Yes, I did.

Senator Adams: Will the harbour commissioners automatically take over? Will they be paid by they city or by the government?

Mr. Morrow: They will be paid from the harbour revenues.

Senator Adams: Recently we heard from witnesses from Labrador whose evidence was that the minister did not consult the people in the communities. They were not informed what costs would be incurred by those living on the coast of Labrador. The minister has turned it over to private interests for two years at a cost $20 million because he wants to reduce CN shipping costs to the communities.

I was under the impression that, in cities such as yours, the running of the harbour would be privatized, and that you would be given an opportunity to run it yourselves. Alternatively, you could turn it over to the harbour commissioners. What will happen in Hamilton?

Mr. Morrow: Much will depend on what happens here.

Senator Adams: Would you like to see the city controlling it?

Mr. Morrow: We would like to have more control. However, we are repeatedly shut out. As I said, you might want to monitor the extent to which similar authorities are doing the same thing across the country. It is a very serious matter. It is quite undemocratic.

Senator Adams: You mentioned that you are owed taxes which are never paid. With this change, will the city have more power to collect taxes from the harbour commission?

Mr. Morrow: We have never been paid, and we claim that we should. We are as proud as any harbour of our economic success. We are the busiest port on the Great Lakes-St. Lawrence system in several categories. We are a very viable operation. Thanks to the local community, we have been able to add to that environmental restoration and reclaiming for the people for recreational and other uses, but always after a huge fight and a huge effort that surely is not necessary in this day and age.

Senator Adams: The minister told us that, if there was a need for any upgrades in the next four years or so, the $125 million will be put aside. If you do not need to upgrade, can you claim the money they owe you?

Mr. Morrow: I would be first in line.

Senator Bryden: Right now, there is a three-member harbour commission. Under this bill, I think it will be seven people in the port authority, one from the federal government, one from the provincial government, one from the city, and four from the community. I have received no indication -- although some people who have appeared before us seem to think they will continue -- that the people who are there presently will continue to be there.

Under this regime, the city will have the opportunity to appoint one person directly. The province appoints one person directly. I would think the city would also have a large impact on the four community appointees, or it should have.

Mr. Morrow: We have been told that, but I fail to see how that will be done. Again, looking at the lesser of two evils, we think that would be worse than what we have now, which is why we are in the predicament of having to recommend these two options. We do not see this as being an improvement.

Senator Bryden: Your participation in the drafting of the letters patent would be some protection, in that it is like participating in the writing of the regulations under the act. That is the framework within which you work.

Mr. Morrow: If we can get in the door to do it, yes.

Senator Bryden: If you could do that, would you then be prepared to live with the make-up of the port authority, as far as how it will be selected is concerned?

Mr. Morrow: That could be, yes.

Senator Whelan: I have read about all the benefits that will accrue to you in the documentation that has been given to me. My one question is: Wouldn't the new CPA structure, with its public meetings and rigorous financial reporting requirements, avoid the problems which have arisen between the harbour commission and City of Hamilton?

Mr. Charters: It fails to recognize the surpluses that will be going to the City of Hamilton and it substantially changes ownership. We would argue that we can still resolve those issues before a tribunal, if and when we get the harbour commissioners to adhere to the previous judgments that have been rendered. At some point in time, the courts will enforce the past decisions. From that perspective, the new policy offers no improvement.

Senator Whelan: The other benefits are the rigorous reporting provisions, and the requirement to hold public meetings, openness.

Mr. Charters: That would definitely help, especially in the area of planning. The would at least have to expose their plans to the general community and ask for some kind of consent. We are still concerned that they have control over a large part of the port. Their uses have expanded to recreation. We do not believe the harbour commissioners should be in the recreation business. They operate a marina. They lose money on the marina. It is not a necessary part of a port.

Our position is that all the recreational aspects of our port, which are very clearly divided in Hamilton, should be at the city level, and we should then deal with the rest of the port and its significance as a national organization.

Ms Johnson: The act takes away from the City of Hamilton the access we now have to the books of the Hamilton harbour commissioners in order to evaluate, for ourselves, whether there is any surplus. We would no longer have that right.

Unless the powers of the port authority are limited to shipping and navigation, and not the provincial spheres, we will find ourselves in court yet again. We are there right now because the harbour commissioners are objecting to our official plan zoning by-laws. They are attempting to allow rendering plants in a location which the city does not feel is suitable.

Those issues will continue to resurface. When we go before provincial tribunals like the Ontario Municipal Board, the harbour commissioners argue that, because their land use plans are certified or signed by the federal government, they are somehow paramount, even though it has absolutely nothing to do with shipping and navigation. They go before a provincial arbitrator who, in some cases, may not realize the difference. We have had an OMB hearing adjourned in order to establish that this does not come under provincial jurisdiction.

That problem will continue. That is one of the reasons we are coming here today. Let us help draft the letters patent to narrow the differences and difficulties that we have endured with our harbour commissioners throughout the years, and let us have access to their books so that we may claim our right to their surplus profits.

Until a number of years ago, harbour commissioners were paid as trustees. It was then determined that there was sufficient surplus in the harbour commission accounts to pay them out of that. That surplus never comes to the city anyway.

Senator Johnstone: My question surrounds the word "deferred" in your request. You ask that we defer the inclusion of Hamilton in the act. Could you outline how this would be helpful or what you hope to achieve with this deferment?

Mr. Morrow: We are referring to the drafting of the letters patent. I will ask our solicitor to detail the advantages.

Ms Johnson: If we can sit down with the federal representatives of the minister, outline the areas where we feel there is conflict, and assist in drafting the powers appropriately, there will be less conflict. If the resolution can be placed in the letters patent, we can narrow any areas of conflict, and we can agree that the letters patent will narrow the scope of the Hamilton Port Authority. This will prevent problems in the future. We can help in drafting the appropriate powers and in giving the appropriate assets, if it is required for the City of Hamilton to transfer assets to the Hamilton Port Authority. We feel that, by drafting the letters patent, we can avoid a lot of problems.

The Chairman: Am I correct when I say that Hamilton would not become a CPA until the relevant provisions come into effect on January 1, 1999 at the earliest? This date could be delayed if a particular CPA is not ready at the time.

Ms Johnson: That is correct.

The Chairman: Thank you for your assistance.

Mr. Morrow: It was a pleasure to be here. You are all great contributors to our country and the day was made complete by seeing Senator Eugene Whelan's green hat.

The Chairman: We now welcome the Mayor of the City of Windsor.

Mayor Michael Hurst, City of Windsor, Ontario: I am very grateful for the opportunity to discuss the concerns of the City of Windsor, and other cities in the Province of Ontario, about the Canada Marine Act, Bill C-9, which is before the upper house.

Approximately six months ago, our municipality, and several other Ontario cities which have harbour commissions, requested a meeting with the Minister of Transport. That meeting has now been scheduled for later on this afternoon. We will discuss with the minister that we feel there should be some amendments to this bill.

This is in part because the City of Windsor believes that we do not meet the federal government's own criteria for Canadian port authorities, or CPAs as they are referred to, under Bill C-9. I will explain our position and I will offer what I believe to be compelling evidence of this, and I hope that you will see it as compelling evidence as well.

We wish to constructively point out what we feel are inconsistencies in assignments of authority proposed under the act. We also wish to remind you of the previously stated intent of the Government of Canada in regard to transportation policies in general, and divestiture of federal authority over certain transportation matters in particular.

We are pleased to offer a consistent, fair and, we would argue, appropriate alternative to the situation that would prevail if Bill C-9 were to be approved in its existing form. I wish to emphasize that this is is an alternative which has the full support of Windsor's port users, and that support, of course, is in writing.

We have some history to share with you. In the words attributed to that great American philosopher Yogi Berra, "it is déjà vu all over again". Some 35 years ago, in 1963, the City of Windsor went through essentially the same exercise. At that time, despite our comparatively modest port activities and capacity, we were about to be named a nationally important port. We appealed what we felt was an inappropriate designation to the same committee we appear before today. The Senate of Canada, to its great credit we would submit, heard us. The Senate agreed with our rationale and removed us from the federal government's schedule of national ports. Here we are, in 1998, and we find the Port of Windsor again being categorized as important to the national interest.

Honourable senators, I wish to inform you that we are immensely proud of the City of Windsor and we do take our rightful place as one of our nation's most progressive communities, but we strongly and respectfully disagree with Bill C-9 categorizing us as a nationally important port.

Let us make some comparisons. The Port of Vancouver, which under Bill C-9 would be a Canadian port authority just as Windsor would, has a yearly operating revenue of some $65 million. It directly employs more than 150 people. The Port of Montreal employs 350 people. It has operating revenues of approximately $55 million a year. As two large ports handling yearly cargo of tens of millions of tonnes, Vancouver and Montreal are properly designated as major, national ports. I do not believe that anyone can persuasively argue to the contrary.

Under Bill C-9, Windsor would be regarded in the same way, yet our harbour commission generally brings in just over $1 million a year and handles a fraction of the cargo levels. We have four -- that is correct, only four -- full-time employees, not the hundreds of employees at Vancouver and Montreal. Last year, 1997, these four employees worked for Windsor Harbour Commission, which had revenues over expenses of $620,000. However, there is more you should know. Of that amount, fully $450,000 came from a boarding fee of 25 cents per person to enter the Northern Bell Riverboat Casino. Unfortuneately, the Ontario government has not extended the option to purchase the Northern Bell. It must leave our city in June of 1998, and I am here to tell you, as the mayor, that it will leave our city in June of 1998. Its departure then means a huge and negative difference in our harbour commission's revenues. If the Northern Bell had left last year, the harbour commission's revenues over expenses would have been about $170,000.

The Port of Vancouver, $65 million a year; the port of Montreal, $55 million a year; the Port of Windsor, somewhere around $1 million a year; yet Bill C-9 would classify us as a nationally important port. In a remarkable irony, I would submit, the Windsor Harbour Commission, as it exists today, charges fees to its users but provides no services to them whatsoever.

With this in mind, it is difficult for us in the City of Windsor to understand how the Port of Windsor could possibly be included in the same Canadian port authority category as Vancouver and Montreal. You should know that originally we were designated a regional, local port. Our reclassification is perhaps flattering, but in logical terms it is thoroughly baffling to us.

Earlier on there was mention of the principle of divestiture. I wish to inform you that Windsor has been working in cooperation with the federal government to follow the national policy on airports. That policy allows Ottawa to cease operating regional airports, allowing local control to be established. In our case, a private operator is proposed to run Windsor Airport reporting to our city council. The Government of Canada also appeared desirous of relinquishing responsibility for some ports and harbours. Indeed, in 1995, just such a resolve was announced, but in December of 1997 Bill C-9, the Canada Marine Act, was given third reading in the House of Commons.

For the City of Windsor, and other affected Ontario port cities, such as Hamilton by way of example, local representation would be drastically reduced from one member in three to one member in seven. It is difficult for us to see how that could strengthen local control or be consistent with the federal government's own philosophy of increasingly assigning responsibility for certain transportation facilities to local governments. Moreover, should the federal government retain authority over our port and harbour, that, we would submit, would also invite another difficulty -- namely, a lack of coordination among the transport systems available in our municipality. Local control exists and is increasing over the operation and planning of virtually all other forms of transportation in our municipality.

Honourable senators, in an era when integrated transport systems are being encouraged and even mandated, Bill C-9, unless it is amended, would treat our port as an exception, which we must admit is not only puzzling but impractical as well.

The City of Windsor has a great deal of experience in co-ordinating transport. We own the Canadian side of the international tunnel to Detroit; we operate a municipal transit system and, as you all are well aware, we are responsible for roads and bridges. I believe you also know of our new role with respect to our airport. Nevertheless, Bill C-9 would allow a lone deviation from this otherwise cooperative transportation mix, the Windsor Harbour Commission.

The proposed act, with all respect, seems to assume that harbour commissions were all created at the same time and for the same purpose, albeit in different places. We all know, honourable senators, that that is not true. In fact, the various harbour commissions were created over the course of six decades by different acts of law and for many different reasons. Bill C-9 proposes, we would argue, a most inappropriate policy that assumes that one size fits all. Obviously, in our opinion, one size does not fit all.

Under this bill, a Windsor Harbour Commission would involve seven commissioners supervising only four employees. According to my mathematics, that is almost two supervisors for every worker, and only one of the seven supervisors would be appointed to represent the interests of the City of Windsor and the people of the city of Windsor. Contrast this with Montreal where seven commissioners would oversee 350 people. Currently, Windsor appoints one of three members, so we have a 33 per cent representation on the harbour commission. Under Bill C-9, as I believe was stated earlier, we would have a 14-per-cent voice.

In Windsor, although the harbour commission manages and regulates port operation, it does not actually operate a port facility. It would not be our intention, as a city, to operate a port facility and use the proceeds to subsidize other municipal operations.

The port, like the airport, would be designed to pay for itself, consistent with our federal government's policy of commercialization. As I understand it, one of the intended functions of a harbour commission is to act as a federal land development agency, encouraging new projects and the employment that comes with them. Those are certainly laudable goals. Do not get me wrong, of course our city views the Port of Windsor as a benefit to our community, our economy and certainly to our industry. However, as so many other municipalities across this great land, as a municipality, we already fund a separate, highly successful development commission. Our experience is that this commission offers a more inclusive variety of services, and is far better at attracting new commerce than a harbour development commission.

Events have convinced us that industrial promotion by the harbour group duplicates something which is already being done and, we would argue, being done very well by another, already existing agency. The removal of this unwieldy duplication is completely consistent with the stated and active policy of our federal government.

In addition, our city would contend to this committee that our harbour commission has had the unfortunate effect of actually inhibiting economic development in Windsor rather than enhancing it. Consequently, we fear that a successor to our existing harbour commission, the CPA, would only make an already frustrating situation even more frustrating.

I will provide some examples of frustrating circumstances. A lawsuit over a water lot has been going on between the commission and a private aggregate company in our community for 15 years. A trade of land involving our city, the harbour commission and a prominent private-sector developer to allow a major housing project has been in the works for seven years. Honourable senators, it is still not accomplished.

No doubt, as least some of you have heard about our new permanent casino. A marina is planned for the Detroit River nearby, which is just across the street. This is a joint venture between the City of Windsor and the harbour commission. Resolving the complications involved in arranging this have been so slow -- and I am going to tend to hyperbole here -- to the point of being painful.

These circumstances have occurred with the city represented by one out of three members on our harbour commission. Bill C-9 would have us represented once again by only one of seven members. In view of our experiences, we are not optimistic about progressing under such an arrangement.

An obvious requirement for being a Canadian port authority is the ability to be financially self-sufficient. Our city has grave concerns about the harbour commission meeting this requirement and therefore, by the federal government's policy, we would argue, Windsor does not meet the criteria for CPA and should be removed from the CPA schedule. Had it not been for our riverboat casino fees, the commission's revenue over expenses for the year 1997 would almost have been in a deficit position. Remember, the riverboat will no longer operate in June of 1998.

Under Bill C-9, the properties of the Windsor Harbour Commission would be subject to municipal taxes of some $360,000, based on the new market value assessment introduced by our provincial government. Based on present numbers, this would confront the harbour commission with a shortfall of approximately $200,000, at a time when Windsor is experiencing great progress. Our local economy is nothing but robust. We have had $7-billion worth of new investment in the past seven years. What might happen to the harbour commission if we have a downturn in our local economy? Moreover, under Bill C-9, federally controlled ports would have to pay a new tax of 2 per cent on their gross revenues, not just their net profits.

At the beginning, I promised a representative, consistent and fair alternative. We in the City of Windsor and our port users believe we have created exactly that. We have agreed on a made-in-Windsor solution and model which we believe is workable, supportable and for which a precedent was set 35 years ago when the Senate also listened to representatives of our city.

We need a small amendment, removing Windsor from Bill C-9's list of Canadian port authorities. We have brought with us documents which support our made-in-Windsor solution. I understand they have already been made available through the Clerk of the committee.

Let me give you a very quick overview. The City of Windsor and our port users suggest that, instead of a seven-member group as proposed under Bill C-9, including just one municipal representative to supervise only four employees, a commission of five people be appointed by our city council. We have agreed that two of the five members be either councillors or their designates, and the other three be appointed by users of the port. We suggest that the chairman of the local harbour commission be selected from amongst the members themselves. That makes a great deal of sense.

We propose that the cost of port operations be collected from the users of the harbour. Here again, this is consistent with the federal government's policy of commercialization. The budget of the commission would have to be approved by city council.

The proposed municipal harbour commission would have the authority to administer all day-to-day operational activities of the Port of Windsor.

Honourable senators, I am truly grateful for the opportunity to appear before you today. As circumstances have unfolded, this has been our first opportunity to directly convey our made-in-Windsor solution to you and through you to the Government of Canada. We hope you will favourably consider out request and that you agree with the amendment proposed to have us removed from that special schedule.

We feel we have proven that the Windsor Harbour Commission does not and should not qualify as a Canadian port authority under this proposed legislation. This is a move which we believe will benefit both our community and the users of the Port of Windsor.

We requested a forum for our point of view, and you have granted us a most distinguished one. We appreciate your consideration. On behalf of my council and the people of the great City of Windsor, I am sincerely grateful for your attention today. Thank you very much.

Senator Bryden: That was a very clear presentation.

If you are removed from the list of CPAs under this proposed legislation, you would become a local port; is that right?

Mr. Hurst: That is my understanding, senator.

Senator Bryden: Under Bill C-9, the intention is to transfer ports from the federal government to local authorities, and either private, for-profit or non-profit corporations. These ports would then be required to at least break even and look after themselves; is that your understanding?

Mr. Hurst: Absolutely, yes.

Senator Bryden: They would have no call whatsoever on the consolidated revenue fund of Canada; is that right?

Mr. Hurst: That is my understanding, yes.

Senator Bryden: With that understanding, you still want to be in that position. At the moment, are there any federal funds supporting the Port of Windsor?

Mr. Hurst: Are there any federal funds?

Senator Bryden: Yes. The port was built by someone. Who built it?

Mr. Matt Marchand, Policy Assistant, Office of the Mayor, City of Windsor: Senator, if I may, in 1957 it was incorporated by the federal government. In response to your question about whether federal funds are used for it, no, there are no federal grants, if you will, that are given towards the harbour commission. However, there is a subsidy based on the fact that they are not subject to municipal taxation under previous legislation; so there is an indirect subsidy.

Senator Bryden: They do not pay taxes to the municipality?

Mr. Marchand: They do not pay taxes to us as it stands now. Under the new legislation, they would, but they have been operating on a subsidized basis.

Senator Bryden: Under the divestiture, that subsidization would not necessarily continue, would it?

Mr. Hurst: That is correct.

Senator Bryden: The port would be able to pay its taxes, or grants in lieu of taxes, out of its own revenues?

Mr. Hurst: I suppose it depends on the final form of the model which is permitted in terms of having the port operate. Our position would be consistent with the position we adopted vis-à-vis our airport. City council was clearly on the record that that operation would stand on its own and be financially self-sufficient, and that it would not receive a local subsidy. We think that is certainly the wave of the future, and that it is the way to go. With the assistance of the private sector, we hope we will have a measure of success in that regard.

That thinking in our opinion should properly apply to the port as well. I think it makes very good sense.

Senator Bryden: You indicated you will be meeting with the minister. If you say to him that currently you have one representative out of three and in the future you will have one out of seven, he will tell you, no, in the future the community will have four out of seven.

Mr. Hurst: That is not our interpretation. I have heard that interpretation. As I understand it, the four will be chosen from the port user community. Once the four are determined, their names will be brought up for approval to the federal minister. I would argue in that situation that it becomes more or less a matter of federal appointment as opposed to local appointment. I do not believe we will have an opportunity to influence that decision to any significant degree. We see it as having our representation reduced from 33 per cent to 14 per cent.

Senator Forrestall: Would it be of assistance to you if, hypothetically, the taxation were on net as opposed to gross revenues? What sort of impact would that have? Would it make it easier for you to pay taxes? You will be taxed on gross revenues.

Mr. Hurst: Correct.

Senator Forrestall: What do you have to say about having net revenues as the basis of taxation? In the normal course of events, if you have business expenditures, you deduct them and pay taxes on your net and not on your gross.

Mr. Hurst: I do not disagree with the general, overall philosophy that has been expressed by the federal government. The notion of commercialization is entirely appropriate. Certainly, it would be better to pay taxes based on net as opposed to gross income, but there is a lot of merit in the notion of introducing some real commercial discipline into the operation of our port. I, in particular, have no concern about our ability to set a model that will allow it to succeed within the direction established by the federal government. I am very confident we can do that.

When we took over ownership and operation of the Canadian side of an international tunnel, we did not create a new bureaucracy. We basically assigned additional responsibility to people who already work in various departments at city hall. If we have a public works issue with respect to the tunnel, we do not do other than go to the public works commissioner and say, "This is your responsibility. Get some of your people to fix it up."We have not created a new bureaucracy. We have reduced the number of individuals in the direct, daily operation of that asset, and I think our operation is quite lean. We are pretty good in terms of doing the job we have to do, not only in this particular instance on behalf of the people of Windsor, but on behalf of the people of Canada. We have to remember that this is an international tunnel with an important role to play in the Canada-U.S. context.

Senator Forrestall: You can tell the minister some of the senators are as concerned about the bill as you are. Thank you for coming.

Mr. Hurst: Thank you.

Senator Forrestall: Very particularly, thank you for appearing here in your capacity as mayor and demonstrating that you do indeed attach importance to this matter. I think you serve your people well by doing so.

Senator Adams: Mr. Mayor, right now you have a casino. What sort of impact has it had on tourism? Do many casino players come from other cities?

Mr. Hurst: Senator, there are many people coming to the City of Windsor as a result of the casino. I have often suggested, believe it or not, that the casino industry has been a blessing to our community. Before the doors to our interim facility opened in 1994, visitation levels were around 2 million persons per year. We now exceed 8 million persons per year, 85 per cent of whom are from the United States of America. As you can see, we are getting lots and lots of visitation as a result of the success of our casino industry, thankfully.

Senator Adams: Which is why you like to control it. You really do not want the harbour commission to look after it.

Mr. Hurst: I am not bashing the harbour commissioners, not by any stretch of the imagination, but at a certain point in time it may make sense to consider a different way of doing things. I think the time has come in the case of the City of Windsor to look at a different model, one that is less bureaucratic and cumbersome, and that allows more coordination and cooperation. We will continue to be under the umbrella of all kinds of legislation. We will not do anything untoward to threaten our harbour or port. We will not do anything to threaten the international boundary that runs down the middle of the Detroit River. The reason I say that with such great confidence is that, becasue there are so many agencies and pieces of legislation that one has to go through before anything can be done, that guarantees that it is not just the mayor in 1998 talking. It guarantees that that type of statement is solid and will continue to be solid forever.

We put in a new shoreline on a part of our riverfront. The new shoreline was in the context of a new transient marina, to which I referred in my comments. The process for that is not yet completed, but over the last two and a half years we have dealt with, I believe, 14 or 15 agencies. We are on an international border, so in addition to local requirements and regional conservation authority requirements and the provincial Ministry of the Environment requirements, there are federal agencies involved, such as Environment and Fisheries, and the list goes on. Of course, the City of Detroit has requirements, as do the State of Michigan and the U.S. government. It is a very difficult proposition to do anything that could in any way diminish our harbour or the federal interest or in any way impinge upon the importance of the international boundary in the middle of the Detroit River.

Senator Adams: You have no problem in your harbour with ships coming in with cars built in Detroit?

Mr. Hurst: The majority of the commercial traffic seems to be related to aggregate, and that has to do with the fact that we have -- thank goodness! -- a very robust local economy.

Senator Roberge: Assuming your recommendations are accepted, do you have a written plan on how to pay back the federal government on its assets?

Mr. Hurst: No, we do not. That issue would have to be addressed in the context of discussing the model we are proposing.

I suppose we always need an opening when we are bargaining. We would be looking for something low. I am sure the federal government would be looking for something higher. That is just the natural ebb and flow. You are absolutely correct that that issue would have to be addressed.

Senator Whelan: Mr. Mayor, I am not a member of this committee, but I have taken an interest in this because of the number of ports in the Great Lakes area, where I live. There is no other senator for 3 million people. You have to go to Brampton before you can find another senator.

You heard my question to the mayor of Hamilton, so I do not need to repeat it. The new structure appears much better than the old structure, and of course it is two more than what you are proposing. You are proposing five, and they are proposing seven.

Mr. Hurst: However, I am proposing two of five be council representatives representing the community.

Senator Whelan: These would be council members?

Mr. Hurst: Yes, and three would be from the port users group.

I should point out that, historically, it has been difficult for the port users to strike a meaningful relationship with the harbour commission. I would argue that it is much easier to access local council and establish a relationship with local council. I say that, because we live in the local community. My phone number is published in the local phone book. Everyone knows where I live, and the same can be said of the members of council as well. Two of five is much better than one of seven. That is 40 per cent as opposed to 14 per cent.

On the issue of being more open, harbour commission meetings are open now. The fact of the matter is that no one attends them. If it became something over which a local municipality had greater authority, I would argue that the level of interest would necessarily increase, just by the nature of the local government structure. Will it enhance communication and exchange because they will be more public? They are public now. I argue that being more public comes with the model we are proposing.

Senator Whelan: Senator Bryden asked if you had any federal assistance. Was there any federal funding for the breakwaters in the city?

Mr. Hurst: I am not sure there was, Senator Whelan.

Senator Whelan: Were there not funds for the marina as well?

Mr. Hurst: Not for that particular marina. We were able to build a marina on the far east end of the city. In terms of shoreline protection, we did get federal support.

Senator Whelan: Did the Morton terminal get federal support?

Mr. Hurst: I am not sure. You know more than I do about this.

Senator Whelan: You mentioned aggregate, but another port facility is the huge grain elevator. It takes in oilseeds and ships out the soybean protein and canola protein. It bulk-ships product out of the Morton terminal as well.

I have not had time to study your figures on taxes and that type of thing. If I understand correctly, you will meet the minister today.

Mr. Hurst: Yes.

Senator Whelan: And the MPs?

Mr. Hurst: I think it depends on our time.

The Chairman: Thank you for your presentation, Mr. Mayor. Best of luck in your meeting with the minister.

Mr. Hurst: Thank you.

The Chairman: Our next witnesses are three councillors from the City of Oshawa.

Welcome to our committee; we appreciate your being here to make your presentation today.

Mr. Nester Pidwerbecki, Councillor, City of Oshawa: Thank you very much. We represent the City of Oshawa's council as a committee appointed by the City of Oshawa. We do not have our mayor with us, but we do have the deputy mayor, who is a part of this committee that deals with harbour and harbour commission-related issues throughout the course of the year. The mayor was not directly involved in this issue, but I am sure she has concerns about this issue as well.

The city has a significant interest in the future administrative structure and function of the Port of Oshawa and Oshawa Harbour. Since 1992, the city has completed a number of major planning studies involving the lands around Oshawa Harbour. The approved planning documents allow for the development of a mixed-use harbour that recognizes the continuance of the Port of Oshawa with its primary focus of activity on the east side of the harbour. The mixed-use concept allows for future residential, cultural and recreational opportunities to be developed on the west side of the harbour on lands no longer required by the Oshawa Harbour Commission for harbour purposes.

Certain lands on the west wharf and elsewhere in the harbour area, commonly referred to as the "caveated lands" and totalling 61 acres, were transferred from the city to the federal government at no cost in 1966 specifically for the use by the Oshawa Harbour Commission for harbour purposes. The city has a particular interest in these caveated lands as outlined in the attached map. Certain portions of these caveated lands have not been used for harbour purposes while other portions are vacant and not required by the port.

The city has also been active in other initiatives in the harbour area. The city, in partnership with other levels of government and various stakeholder groups, has been working to protect and restore the Second Marsh, a provincially significant wetland that lies just east of Oshawa Harbour.

The City of Oshawa wishes to advise this committee that the city has no objections to the passage of Bill C-9 in principle, but certain issues need to be further addressed. On November 18, 1996, Oshawa city council endorsed a number of recommendations regarding the Canadian Marine Act, Bill C-44, which were presented to the House of Commons Standing Committee on Transport and the federal Minister of Transport. From the perspective of the city of Oshawa, these recommendations remain applicable to the new Canada Marine Act, Bill C-9. A copy of the city's previous submission regarding the Canada Marine Act, dated November 25, 1996, is hereto attached for your consideration.

There are four issues that the City of Oshawa wishes specifically to bring to the attention of this committee.

The first issue is the matter of CPA status for the Port of Oshawa. The city does not consider the Port of Oshawa as meeting the required criteria set out in Bill C-9 for becoming a Canada Port Authority; nor does the city consider the CPA structure of port administration to be appropriate for the Oshawa harbour. The Port of Oshawa should remain identified as a regional-local port under national marine policy. In the event that the Oshawa Harbour Commission makes an application for CPA status, the federal government is requested to consult formally with the City of Oshawa in advance of giving consideration to such an application.

The second issue is the future port administrative structure. Since the Port of Oshawa is not identified as a CPA in Bill C-9, further clarification is requested in Bill C-9 -- or in related regulations or in another federal policy document -- in order to address transition issues and processes from the current OHC port administrative structure to any port administrative structure. This is an important issue for the City of Oshawa. The organizational structure of the Oshawa Harbour Commission does not lend itself to meeting national marine policy objectives related to community control of regional-local ports and public accountability. The continuation of the current form of federal agency status is not supported by the City of Oshawa.

The third issue is the City's interest and role in the future administrative structure. The city requests the opportunity to participate in any administrative structure for Oshawa Harbour. The city requests that the federal government acknowledge that the City of Oshawa is the most appropriate municipal stakeholder in the future development of Oshawa Harbour. It is further requested that the federal government initiate discussions with the city regarding the establishment of a port administrative structure for the harbour.

The fourth issue is related to the caveated lands and divestiture of surplus port lands. The city requests that the federal government acknowledge that upon the repeal of the Harbour Commissions Act and the disbandment of the Oshawa Harbour Commission, there are legal issues related to the caveated harbour lands that must be reviewed by the city. In addition, other harbour lands that are identified as surplus to the port function today and in the foreseeable future should not be controlled by any port authority. The question of their ultimate ownership is important and requires the city to be directly involved in any divestiture of these lands. As part of any divestiture process, the federal government is requested to allocate funding specifically for resolving environmental constraints in the Oshawa Harbour.

Along with that, we have attached some significant documents to show you the caveated lands to which we are referring.

I will ask Acting Mayor Bob Boychyn to continue with the presentation.

Mr. Bob Boychyn, Councillor, Acting Mayor, City of Oshawa: We recently received a copy of the submission made by the harbour commission to you on Monday afternoon. As we expected, they painted a very rosy picture in order to facilitate any future application they might make for CPA status.

We would like to present to you some numbers. The latest numbers available to the City of Oshawa are for 1994. It has been impossible to get additional updated information from the harbour commission, as they will not supply it to us.

Using 1994 figures, when you compare Oshawa with the various other ports in the Great Lakes, specifically Hamilton, Windsor, Thunder Bay and Toronto, you will note from the submission that Hamilton is in the range of 12 million tonnes per year, Windsor 3.5 million tonnes, Thunder Bay 13.8 million, and Toronto 1.6 million. The harbour commission, in its presentation, indicated that their tonnages are up approximately 73 per cent from 1994 totals. In 1994, their total tonnage was 110,000 tonnes, so 73 per cent will raise that to 190,000 tonnes. We do not believe that that qualifies them for CPA status.

The harbour commission proposed certain amendments to Bill C-9 that would permit them to cross-subsidize port operations from non-port revenue sources. However, extensive reliance on non-port revenue sources to maintain the port operations raises questions about the continued viability of port operations at Oshawa and, in particular, about the suggestion that Oshawa harbour qualifies as a CPA. Similarly, if the Oshawa Harbour Commission is intending to operate primarily as an economic development corporation, that raises questions regarding its future role.

The harbour commission's submission also referred to and quoted remarks of the assistant deputy minister of policy for Transport Canada who advises that the Oshawa harbour does not meet CPA requirements.

They also made a major reference to the fact that they won an OMB hearing between the City of Oshawa and the harbour commission. I think that should be qualified to the extent that several large sections of harbour commission lands would be down-zoned from the existing zonings, and the zonings eventually approved by the Ontario Municipal Board will subsequently be in line with the zonings recommended and suggested by the City of Oshawa. I think it is an overstatement for them to say that they won. In fact, the very use of the term "won" indicates some of the confrontational and adversarial role that has transpired between the City of Oshawa and the harbour commission. I do not think it is to the degree referred to by some of the earlier presenters, but nonetheless there is an adversarial relationship.

As well, because they place great weight on the fact that they now have appropriate zoning to permit development of the Oshawa Harbour Commission lands, we would like to point out that from 1958 to 1996 they had significant zoning to permit heavy industrial uses and practically anything they wanted to bring into that location. Consequently, we believe that it is economics, not the zoning, that has prevented any significant industrial development or activity at the Oshawa Harbour.

The second document contains some back-up material -- essentially a graph. Unfortunately, the graph only goes to 1992 and, while we were able to get additional information, it is for 1993 and 1994 only; moreover, we were not able to reproduce the graph.

There is some statistical information on Exhibit 4.9. Following that, there is a map of the harbour as it exists today. Then there is some statistical information and an analysis of financial statements for the Oshawa Harbour Commission.

I would refer you to page 5 of the coloured booklet. This coloured picture is an accurate depiction of how the harbour commission operates or is situated today.

I would also refer you to page 10, which is another coloured picture. This is a depiction of the plan the City of Oshawa has for the Oshawa harbour lands. On the left side of the page is the urban development concept for Oshawa Harbour; the pink area in the middle represents the lands we believe would be sufficient to meet the limited needs, as demonstrated by this statistical information, of the Oshawa Harbour Commission.

We do not want to wipe out the Oshawa harbour. We realize it has a local and regional use, as well as a part to play in our economy; however, we think it is inappropriate that the city council be expected to administer that as a division of council -- much like Windsor suggests with its airport. We also have recently acquired our local airport from the federal government. There were negotiations, and we worked out a compensation package at $1 in the event we choose to divest ourselves of any federal lands.

While we have a comprehensive plan, the evidence is clear that the Oshawa Harbour Commission does not meet the CPA status requirements. We appreciate the recommendations in the legislation. We merely request that there be some clarification of the actual divestiture process.

Senator Bryden: The area you have outlined in pink on page 10 of that document would be the port.

Mr. Boychyn: Those are the lands that we propose should continue to be used for port purposes.

Senator Bryden: At the moment that would be considered a local port.

Mr. Boychyn: Yes.

Senator Bryden: A local or regional port.

Mr. Boychyn: Yes.

Senator Bryden: It would be divested to whatever body you put together.

Mr. Boychyn: We are hoping that the Minister of Transport would divest it to the City of Oshawa.

Senator Bryden: I think there are more interests involved than that, but you are convinced that, that having occurred, the port could operate as a commercial facility.

Mr. Boychyn: Yes.

Senator Roberge: It seems to me that, as a city council, you would have more interest in residential-recreational facilities than in a port facility itself.

Mr. Boychyn: That is as a result of the underutilization of the existing harbour facilities. In 1994, they did about 110,000 tonnes, and the 73 per cent increase for last year still puts them under 200,000 tonnes.

If you look at the picture on page 10, you will notice on the left-hand side of the page that there is an area marked in pale blue called Lakeview Park. That is the premier park facility in the City of Oshawa. The land immediately to the east of the park, which we have shown as residential urban development, right now sits as a wasteland. Quite frankly, it is a disaster. We are trying to make the waterfront an economic, viable and vibrant community. We want it to help attract business, industry and culture to the City of Oshawa.

Senator Roberge: That brings me back to one of the questions I raised with the witnesses from Toronto. At that point, why would not you consider doing away completely with your port facility, give those operations to Toronto, and utilize that space for something else?

Mr. Boychyn: That is not how I understood your previous question to the representatives from Toronto. However, in our collective opinion, if Toronto wanted to absorb the harbour operations presently at Oshawa and move them all to Toronto, I do not think any of us would have any grave concerns.

Mr. Irv Harrell, Councillor, City of Oshawa: There is, however, a continuing and ongoing economic interest that must be served by this port and by the areas shown in pink. The port is designated in the region's official plan as a regional port, and it is certainly designated in the Oshawa official plan as the Oshawa Harbour and the Oshawa Port.

I do not believe the total transfer of the harbour facility to Toronto would meet the requirements of the Region of Durham, although it would certainly, in many respects, be received well by the City of Oshawa. It would be wonderful to be able to develop a residentially oriented, marina-focused harbour, but the reality is that industry needs to be served. That is why we did the study in 1995.

Senator Roberge: Maybe industry would find it more economical to be in one area as opposed to two.

Mr. Harrell: The distance between Oshawa and Toronto is a major transportation issue. At this point in time our city position, which is reflected in the documents we have put before you today, is that there is a need for a continuing presence on the east side of the Oshawa harbour to serve the city of Oshawa and the Region of Durham.

Senator Roberge: It may not be a matter of economics, but there is a need.

Mr. Harrell: A limited need.

Senator Roberge: Maybe we have too many ports in this country. Maybe we should reduce the number of ports.

Senator Forrestall: Nobody can do that.

Mr. Boychyn: We accept the recommendation that Oshawa not be given CPA status. As councillor Harrell indicated, there is a need for some commercial port facility. As a branch of our municipal government, we are prepared to provide that limited service.

I cannot disagree with your observations either.

Senator Whelan: From what I have heard in presentations here, it sounds like there is not a very close working relationship or a harmonious working relationship between the harbour commissions and the different cities that have made presentations this morning and earlier this week. That astounds me, as an old municipal politician who worked harmoniously with different groups for 16 years.

The harbour commission had nothing to do with this coloured booklet, did it? Did you do this on your own?

Mr. Pidwerbecki: It is a city proposal.

Senator Whelan: The harbours along Lake Erie and along the St. Clair River in southern Ontario provide a tremendous service. They keep the road graders and the big gravel trucks off the road. Barges bring in the aggregate for the tremendous construction projects in the area. With fewer rail facilities, it is a tremendous benefit to have a harbour.

Mr. Boychyn: Approximately 12 kilometres to 15 kilometres to the east of the City of Oshawa, Blue Circle Cement has a port on their private property. A significant percentage of the shipping coming into the Region of Durham does go to the Blue Circle terminal. We do not have any statistics on that because they are a private corporation, but they provide the facilities.

Senator Whelan: Did you get a federal improvement grant for your airport before the government turned it over to you? Has it been completely turned over to you?

Mr. Boychyn: In 1988-89, the federal government provided some funding, along with the province and the City of Oshawa, to upgrade, develop and improve the airport dramatically. It continued to be leased to the City of Oshawa for a number of years.

Just last year, we were able to conclude an arrangement with the federal government so that we became the sole owners of the Oshawa airport property. An arrangement is in place that in the event we sell any of the lands at the airport within a certain time frame, we have to repay the federal government a portion of the moneys derived from any sales. We think a similar arrangement should be appropriate for the harbour.

Senator Whelan: You are here mainly, then, to counteract the submission made by the harbour commission.

Mr. Boychyn: Yes.

Senator Whelan: Is it fully endorsed by the city council and the Chamber of Commerce?

Mr. Boychyn: Yes.

Senator Whelan: I live on the busiest waterway in the world, the Detroit River. More tonnage travels that river than travels the Suez Canal or the Panama Canal. I see the cement boats go by in that area, so I know the importance of shipping.

Senator Adams: There are numerous tanks along the west wharf lands. Is that property owned by the government?

Mr. Pidwerbecki: Several of those tanks that you are referring to have at this point in time been removed. One private oil company has tanks there.

With respect to any submissions we might receive in the future for development along the west wharf, we have been told that, on the day we can assure the company that they can start developing on their own, those tanks will be gone. A private individual owns that property.

Senator Adams: Will the city give them a guarantee or another property? Will they be moving out and taking their business elsewhere?

Mr. Pidwerbecki: The individual who owns that piece of property is prepared to develop it on his own if he gets the right to go ahead.

The Chairman: Thank you very much, gentlemen. We appreciate your presence here today.

The committee adjourned.