Proceedings of the Special Senate Committee on the
Pearson Airport Agreements
Evidence
[English]
Ottawa, Thursday, July 13, 1995
The Special Senate Committee on the Pearson Airport Agreements met this day at 9:00 a.m. to examine and report upon all matters concerning the policies and negotiations leading up to, and including, the agreements respecting the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport and the circumstances relating to the cancellation thereof.
Senator Finlay MacDonald (Chairman) in the Chair.
The Chairman: Come to order, please. This morning we have a very key witness, the Honourable Doug Lewis, who was Minister of Transport from February 1990 to April of 1991 during the period of great activity, and Mr. Lewis, we are delighted that you accepted our invitation to appear. We appreciate that very much.
As you know, we have been swearing all witnesses and before you make your opening statement, I wonder if you are prepared to take the oath.
(Mr. Doug Lewis, Sworn:)
The Chairman: If you have a prepared statement, Mr. Lewis, we would be delighted to have it.
Hon. Doug Lewis, former Minister of Transport: Yes, I do, Mr. Chairman. I will go through my statement and actually be prepared to answer questions when I am finished.
I have been asked by the chairman of the committee to review briefly the background of the administration of airports in Canada by the Progressive Conservative Government and the need to fix Pearson, and the approach which the government of the day took to that challenge.
My presentation is going to be non-partisan. I don't come before you with great reams of paper. The chairman provided me with some documentation to put me back in the context of where I was during the time when I was Minister of Transport.
I would say that it is difficult to discuss this issue without touching on politics. Now, that is not so much Liberal, Conservative, Reform, NDP, Bloc Quebecois politics, but the political pressures of the day, not from politicians, but from people -- and I'll get to that in a minute -- and how we as a government responded to those pressures. I think that the government's decisions and actions will be better understood if the committee understands the environment within which we were working at that time.
I was appointed minister, as the chairman said, in February of 1990, and from the day I was appointed to the day I left, there was hardly a day when it wasn't brought to my attention that there was a need to "fix Pearson". During my tenure as Minister of Transport, the Pearson file was always on my desk and always on my mind. Aviation issues took about 50 per cent of my time as Transport Minister, and Pearson, the Airport Transfer issue, and the initiation of "Open Skies" were the major files.
The decision to transfer the operation of the airports in Canada from the management of Transport Canada had its origin in the report of the Airports Task Force on the future of Canadian Airport Management. I'll quote just briefly from the report:
opportunities exist for improving local economic development, encouraging entrepreneurship, enhancing financial viability, as well as for realizing the benefits from commercial initiatives.
The problems can be broadly summarized as:
(a) large and growing financial deficit which creates a burden on the Canadian taxpayer;
(b) limited responsiveness to local and regional needs because of the centralization of the system;
(c) inefficiency of the system due to extensive government involvement.
In April, 1987, the Transport Minister, John Crosbie, announced the new government policy to allow provincial, regional or local authorities to assume the management of the country's airports. The objective of the policies was to made airports serve local community interests better and to allow the national airport system to operate in a more cost efficient and commercial manner.
In the announcement of the policy, the transfer of ownership to private business was not envisaged, but it was stated that leasing proposals would be considered as a transfer of ownership.
I mention the airport transfer policy because it was really the foundation for the government's approach to the management of airports, and an understanding of that policy is fundamental to an understanding of the government's initiatives with respect to Pearson. I don't think the committee needs for me to go any further on developing that policy, because I understand that you have had extensive briefings on the matter, but I think it has to be put in the context of what I was dealing with.
The soundness of the policy is evidenced by the fact that today's government has gone much farther in announcing its determination to turn over the country's airports to local authorities. I commend this initiative, and I wish the minister well, but I must say that for reasons which I will discuss later in my remarks and probably will be elicited in questions, I wish him well, but I think he has got his work cut out for him.
As I stated earlier, I became Minister of Transport in 1990. The previous summer, the Honourable Benoît Bouchard had announced that the government would develop Pearson airport as the key airport in southern Ontario. This meant basically new runways and a refurbishment of Terminals 1 and 2.
Now, because of past political, and I mean small "p" political controversies, planning for continued airport growth, I'm talking about environmental assessments, zoning, engineering studies, had all been delayed for several years. It was always a case of which comes first, the chicken or the egg, and I decided I wasn't interested in a lot of discussion of which would come first the chicken or the egg, that we would proceed with both the chicken and the egg to get it done.
We had to make decisions, some of which are still in play: how to proceed with runway development, how to pay for it, how to proceed with terminal renovations and refurbishment, and how to pay for it.
Now, I want to put you, if I may, in, I want to give some perspective to the economic impact of Pearson. It ranks third among North American airports as an entry point to the North American continent. It goes without saying that it is a vital hub to domestic air travel. It is the key hub for our two largest airlines. As well what happens at Pearson affects airline travel throughout Canada. There was a percentage which I had in my head at one time. But if a flight is delayed to Pearson, it just backs up all across the country.
And these were difficult times in 1990, 1991 as far as the airlines were concerned, and the unreliability of Pearson as a hub was a serious concern to both airlines. An economic impact study which was prepared by James Hickling Management Consultants points out this about the economic contribution of Pearson to the local and the provincial economy, and that is the national economy.
-in 1987, 33,785 individuals held jobs that were directly connected to the airport; 13,750 were with businesses situated on the airport site, and an additional 22,209 jobs in 1987 resulted from the economic spin-off directly connected to operations at Pearson.
In other words, Pearson represents 56,000 jobs. It is an important economic engine.
It was vital to the federal government, any federal government that Pearson be maintained and improved as a viable entity for transportation and for economic reasons.
When I took over as minister, I decided to find out exactly what the problems were with Pearson. Well, it wasn't hard to figure out.
At that time Terminal 3 was still under construction. Terminal 1 was in a sorry state of repair, and it was bursting at the seams. Most of the systems -- the fire sprinklers, the elevators, the parking garage -- were all outdated. They were great when it was open, but they were outdated.
Terminal 2 was tired, taxed to capacity, and as well the major tenant, Air Canada, wanted to renovate Terminal 2 because it was obvious that it was going to compare badly with Terminal 3 when Terminal 3 was finished. When Canadian moved out of Terminal 1 into Terminal 3, there would be pressures on Air Canada.
Terminals 1 and 2 were designed to handle 12 million passengers a year. In 1990, they processed 20 million passengers, and these numbers don't show the parking garage falling to pieces, the traffic jams, the congestion at customs, and the luggage piled out in the rain because two jumbo jets arrived at the same time.
At the same time as we have evidence as to the economic impact of Pearson, we have ample evidence as to the delays at Pearson as a reason of the inadequacies of the runways. The evidence here is both statistical, which you can get reams of, and it is anecdotal. The one I picked up was February 2, 1990. Twenty-one flights were delayed a total of 1,116 minutes. The average airplane at Pearson in 1990 carried 57.7 persons. That is a tremendous waste of time. I received regular reports about the delays at Pearson. In May, 1989, there were 26,000 minutes of delays. That is more than 700 flights. That is the statistical.
The Board of Trade was kind enough to mount a letter-writing campaign in 1989, and I'll leave them with you, sir. I have got a bundle of them. I just picked up two. Here is a letter from Northern Telecom dated June 16, 1989, to Peter Hermant, President of the Board of Trade of Metropolitan Toronto.
Most striking, perhaps, is the impact on productivity. We estimate that our employees who must travel through Pearson are planning in about two hours extra for every flight in order to allow for delays due to air traffic congestion --
This is air traffic. This is runways.
-- In an average week, 400 or more Northern Telecom employees will fly in or out of Pearson as part of their duties. That means the company is having to swallow in excess of 800 hours of dead time a week as our employees are delayed on the tarmac or in the terminals. That is in addition to the time it takes to get in and out of the airport via ground transport -- as much as 30 minutes despite the fact that our office overlooks the southern boundary of the airport.
The other one is --.
Senator Hervieux-Payette: Can we have the names and the dates of the people? I don't know these people.
Mr. Lewis: Sure. I'm sorry. This is a letter from Northern Telecom to Mr. Peter Hermant, President of the Board of Trade of Metropolitan Toronto. They mounted a letter-writing campaign and asked their members to tell them what they thought of Pearson.
Senator Hervieux-Payette: And the date and who wrote the letter?
Mr. Lewis: I'll leave it all with you. I'll table it.
Senator Hervieux-Payette: Okay. Thank you.
Mr. Lewis: Certainly. I don't want to go through everyone of them. But it is just a litany of problems with Pearson.
Then, just one more letter, if I may, Mr. Chairman. A letter from the law firm of Smith, Lyons, Torrance, et cetera, once again to Mr. Hermant, and it says:
Our law firm was involved in 1987 negotiations to provide financing of a new newsprint mill being constructed in the United States. All of the negotiations took place in Toronto, and not New York, because all the banks, including major U. S. banks, are located here, and it was considered convenient and efficient to conduct such negotiations in Toronto. However, financing of another major project by the same group, also in the U. S., is now being arranged in New York -- because it is easier for the principals to attend meetings there, rather than Toronto because of the problems at Pearson airport. Private planes, which the principals require for their business in remote areas, are no longer permitted to land at Pearson on a regular and convenient basis.
There is just a litany of these. I will be glad to table them, Mr. Chairman, for the committee's perusal.
People felt that Pearson was out-stressed, unsafe, unreliable and an embarrassment to Canada, and that is confirmed in these letters. As well, we received direct complaints from provincial members, opposition parties and municipal governments.
I think it is incumbent on a government to respond when the voters demand action, and when a situation is causing serious economic damage. So we decided to act. We made it a principal to make sure that when we made decisions about Pearson, it passed an urgency pass. If it didn't fix the problem quickly and properly, then they weren't much interest to me and I went onto the one that was closest to being able to get it done.
Secondly, there was an aggressive lobby in 1989/1990. I know that word "lobby" connotes a whole bunch of suits running around and putting the arm on ministers. That is not the lobby I'm talking about. The lobby I'm talking about is this lobby, this lobby where all the business groups wanted something done, they all had their favourite idea, lease the terminal, sell the airport, contract out this service or that, and it was pretty extensive.
So we had four options. We could pay for it from the government's resources using general taxation. We didn't have any more money then than we have now.
Two, we could have imposed user fees, also called a passenger facility charge. That wasn't a very popular idea at the time because it would have been right on the heels of another popular idea called the GST, and it would have been seen as another tax, and it would also have been very steep, and it would have potentially had a major impact on air traffic.
The other thing was we couldn't very easily put a PFC in place at the same time as we have got Terminal 3 coming on stream with a private operator, because you would then be asking the airlines at Terminal 3 to help pay for renovations at Terminal 1 and 2. They were already high enough as it was.
The third option, as it were, was to transfer the airport to a local airport authority. Now, as I indicated to you we have been working for some time to transfer airports, specifically during my term as minister, before my term, during my term, after my term, to transfer the airports at Vancouver, Calgary, Edmonton, and Montreal -- Dorval, Mirabel -- to local airport authorities.
I would point out to you that discussions had been ongoing for some time among the municipalities in the greater Toronto area as to the possibilities of forming a local airport authority. We were always open to that idea. But I will tell you something, they didn't appear to be progressing very quickly at the time, and the time that I am talking about is 1990. I understand they made some progress lately, and I am pleased. But I'll be frank with you. The whole airport transfer initiative was going very, very slowly. After more than three years, none of the initiatives were anywhere near fruition. Areas such as Thunder Bay, Winnipeg, Ottawa wanted to get into the mix, but they couldn't even get into the mix because we were still dealing with the big four. And I was getting pressured by group, local groups of all political persuasions in those four areas because they were having a terrible time getting the officials to move on the files, and I sympathized with them, because I was having the same problem as the minister to get the Transfer files moved forward.
It was a constant problem, and that, plus the fact that the municipalities and the GTA, that is the Greater Toronto area, were having their problems resolving how they would work a local airport authority. It just didn't seem like a viable alternative. For that reason we gravitated towards a lease of the two terminals, a Build, Own, Operate design.
It's not really a new idea because you have leases at airports all across the country with hundreds, probably thousands, of entrepreneurs. This had some advantages. It was low cost to the taxpayers. It promised a speedy resolution to Pearson problems. It allowed for a continued regulatory oversight and ownership by the crown, and safety and security would still be controlled by the government. Besides it had worked with Terminal 3, while Terminal 3 was opened in the latter part of my tenure, I believe.
There is something that has been lost on everybody here. Terminal 3 didn't cost the Canadian taxpayer a dime. People go through Terminal 3, zip, and they're happy to do it, and there are people who will tell you, "I always fly Terminal 3 if I can. I don't want to go into Terminal 1 because of the difference." That point seems to have been lost on this whole, during this whole discussion.
So, we took the decision that we would announce that we would entertain request for proposals from the private sector to lease, renovate, and refurbish Terminals 1 and 2. We made that announcement in October of 1990. The next day I gathered all the known developers with an interest in this particular proposal in my office in Ottawa, and I advised them of the urgency of the situation. We had to take a facility that was a going concern, and which serves many important functions at once, to find those areas that are best for private management, and somehow divide them from the rest of the airport. We had to consider the interests of employees, businesses and millions of travellers. I indicated to the developers that the cabinet had encouraged me to fast-track the project in order that the renovations could take place as quickly as possible. I also said at this point it becomes a matter for the officials in the Minister of Transport and Treasury Board.
My staff and I were very conscious of the problems that could arise if we were seen to be too attentive to the concerns of any one developer from the outset. Our attitude was that it was now a job for the bureaucrats to get the best deal they could as quickly as possible for the government of Canada.
The delay in reaching a decision as to which developer and then finalizing the contract with the developer is in my mind attributable to two things. One: The complexities of the transactions, and two: The desire of the officials to get the best deal complicated by their wish not to part with Pearson under any circumstances.
Throughout the winter of 1991 we had a number of meetings with cabinet colleagues to discuss policy issues within the issue, and this I'm speaking of foreign ownership, whether or not an airline should be allowed to be involved in participation, things like that.
It was always in everybody's interest to get on with the renovations and refurbishing of Terminals 1 and 2. If you take a look at Friday's issue of the Toronto Star, not a newspaper I quote with great regularity, but they have an excellent person on the Transport file and people. That is one file where I think they are right on top of things. That issue is still before us, and the runway issue is still before us, at the very least, and also refurbishment.
As that increase in traffic that is referred to in that article continues, we still have the challenges of renovation and refurbishing before us. I'm quite frankly hardened by the fact that an effective operating authority appears to have been achieved by the municipalities in the GTA, thanks to the leadership of the Toronto Board of Trade. I understand that there are negotiations going on with respect to a lease for Terminals 1 and 2.
As well, Minister Young has declared his intention to turn as many airports as possible over to local airport authorities. The policy that we initiated in 1985 is therefore still in place and being strengthened.
I would urge the minister and the government of the day as a Canadian from Ontario, one who is interested in Transport issues, to get on with the transaction and speed up the process in order that this great economic engine can continue to flourish for the benefit of the entire country.
Mr. Chairman, those are my comments. I would be pleased to take any questions that the members of the committee may have.
The Chairman: All right. Now, I should indicate that those who wish to question the witness, I think I have one. Senator Hervieux-Payette.
Senator Hervieux-Payette: Yesterday we were, and the day before, we were examining the process by which, you know, you would decide to go not with the policy of the local airport authority, and in your remarks you were talking about the cabinet giving you instruction for a fast-track approach to the project. So I would like to know what kind of document was prepared, and what were the contents, and what were the grounds? I mean, you certainly have not prepared -- you have prepared in order to get the approval of cabinet, you prepared a document asking certainly your colleagues not to respect the LAA approach, and the official policy at the time, but since you are saying there was emergency, I mean, what was the content of that document, and how did you decide to develop the project, develop a request for proposal, and also at the same time, I mean, deal with the question of the environment?
Mr. Lewis: I'll do my best to answer that question without having had a chance to review whatever documentation there was on the file, senator.
The Cabinet agreed with the theory of going out for requests for proposals, and we went out and sought them. That was the announcement that I made in 1990. At the same time there was an environmental assessment hearing process going on, and we made the decision, as I remember, to proceed with the request for proposals at the same time as the environmental assessment hearing was going on. It is as I explained earlier, if you spend a lot of time debating which comes first the chicken or the egg, in this situation you end up never getting anything done. I saw no reason why the two couldn't proceed side by side.
Senator Hervieux-Payette: I may not be an expert in environmental assessment. For me, I mean, it seems it is a pretty complicated process and usually you have to submit the project before you do the environmental -- how can they assess the impact of a project that does not exist?
So, since you were telling us that this -- there was supposed to be build, own and operate, and I don't know what, because, I mean, I don't know about the -- what would be changed before and after. I mean, what is now in place and what should have been done by the Terminal 1 and 2 proposal, I mean, how it was modified. Since that proposal was not being examined by the environmental assessment, how could you get a decision on that and the recommendation from that process if there was no project in front of them?
Mr. Lewis: Well, I think it's fair to say that whether or not you have a project in front of you, if you have increased airline traffic and the runways were not sufficient to handle what we had then, that you had to have an environmental assessment of the impact of additional runways on Pearson. That would go forward whether or not you had a particular proposal. We separated the, as I remember it, the terminal proposals from the runway proposals and pushed them all along.
Senator Hervieux-Payette: But --
Mr. Lewis: And any project that eventually turned up would have to meet the demands of that environmental assessment.
Senator Hervieux-Payette: Of course. But you have to give, at that time -- I mean, for instance, the assumption that not only just the new runways but, at the same time, the automobile traffic. I mean, there is the noise caused by the -- so I guess it's a very comprehensive evaluation.
In order to do that, you need to table, before the environmental assessment board, your projection. So since there was -- it seems to me that there was nothing in the -- there was no document that was prepared, except for the request for proposal that was outlining -- I haven't seen -- the request for proposal document was given to us and we don't see much in it that could really -- I mean, I think what they ask before these tribunals, I mean, is a lot more information. They want details. They want plans. They want....
I mean, I was for a short period of my life with an engineering firm, and it seems to me we went through one project in Peel to build, own and operate an energy from waste plant, and the process took a year and a half, and we had to table all the plans and everything that was going to modify the environment before, I mean, we could -- and this was a process that cost the taxpayers at the end, because the price was higher, millions of dollars.
So I just wonder how you could do the same thing simultaneously when the project was not being developed and there were no plans.
Mr. Lewis: Well, we took the decision to do it, and it was based on the requests of all of these businesses and people to take action. So we fast-tracked on two tracks and kept the environmental assessment going, and at the same time went out for requests for proposals, because something had to be done.
Senator Hervieux-Payette: So was there -- when you left the portfolio, I mean, was there a decision from the -- when the decision was made, and you were still in cabinet, I mean, was there a recommendation, and the hearings had been done and there was a final approval of the project, Terminal 1 and 2, by the environmental assessment board or tribunal? I don't know what you call it.
Mr. Lewis: I don't know the answer to that. I'd have to have all the documentation at my disposal to give you an answer.
Senator Hervieux-Payette: Okay. Well, I'll come back.
Mr. Lewis: Sure.
Senator Lynch-Staunton: Could I ask a supplementary, Mr. Chairman, on that, for the sake of clarification?
Is it not a fact that the environmental review, the mandate of those doing the environmental review, was to be limited to the impact of one or more runways?
Mr. Lewis: I believe it was a runway. There was a --
Senator Lynch-Staunton: It was a runway, yes. It was a dispute between a runway running in a certain direction which was being opposed, and supported by immediate residents. Whatever the result of that study, which has now been -- it was issued one year or two years ago, the government felt an urgency, whether through the private sector or through taxpayers' dollars, to go ahead with the renovation of 1 and 2 which had nothing to do with environmental review.
Mr. Lewis: I believe that's the case, but I don't want to state categorically that's the case. But there was a definite, urgent need for more runways, which there still is.
Senator Lynch-Staunton: And now there's one actually being --
Mr. Lewis: And there's one being --
Senator Lynch-Staunton: -- under construction.
Mr. Lewis: As I understand it, it's a north-south runway to take care of, I think -- and I'm going from memory here -- those bad days when --
Senator Lynch-Staunton: There are certain days when the winds --
Mr. Lewis: Yes.
Senator Lynch-Staunton: -- are in such a direction that they can only come in in that direction.
Mr. Lewis: Yes. But won't do anything to help the open skies situation which we fought for to bring on stream because we needed more capacity at Pearson.
You see, while the international flights are coming in,we now -- you're now able to fly, you know, like I did the other day, to Atlanta, Georgia, quick like that. That was never possible: you always had to fly to a hub and fool around.
If that builds, we still need more capacity, and I think the environmental assessment was specifically to runways, but I don't want to categorically say that because I think there are other -- there are traffic problems that impact on that.
Senator Hervieux-Payette: Well, I guess it's a provincial -- I don't know. Was it provincial or federal legislation at that time?
Senator Lynch-Staunton: A federal set up task force.
Senator Hervieux-Payette: For the environmental process?
Senator Lynch-Staunton: Yes.
Senator Hervieux-Payette: Because I thought that you were -- I mean, during this period, I mean, you were committed to hear from that environmental review process their findings, you know, before you would go ahead with the request for proposals. Because this would -- certainly, I mean, when you make the decision to make new runways, of course you're bringing in more traffic. But the runway is still not there today. And maybe -- I don't know, I haven't received any Board of Trade letter lately, but maybe other politicians have, so -- I mean today; I'm talking about today.
Mr. Lewis: I could arrange for it. Gerry Meinzer will send that.
Senator Hervieux-Payette: Well, you'll have to bear with me, let's say the fact that I was in Montreal and certainly we would welcome more traffic at Mirabel any time, I mean, you can transfer the flight. It's an invitation.
Mr. Lewis: You've got to have the immigration to have the flights.
Senator Hervieux-Payette: No problem. But at the same time, it's important to understand that since Terminal 3 was not built -- I mean, if I go back in history, I can understand that people were anxious to have access to the airport, the new airport, that there were too many people, and I think you explained that very eloquently, from my recollection of the last two days.
I mean, now we're up to around 21 million passengers, so it's one million more than when you were there. So we are four years later and the number of people has not increased at the same speed lately. I mean, probably it has something to do with the economy.
Senator Lynch-Staunton: No. It's just --
Senator Hervieux-Payette: Well, it may be the economy because, I guess, from what I can see in Vancouver, I mean, the economy is moving west a little bit these days, and the projections of experts are not always -- I remember when the oil prices were supposed to be at $100 a gallon, so I just say experts sometimes give some projections that are not necessarily realized.
Senator Jessiman: A barrel, not a gallon.
Senator Hervieux-Payette: Well, it was a gallon at the time because, I mean, we didn't have litres at the time.
But just to go back to that process, I think, you know, you -- I understand from the emergency, was there anything in your cabinet document authorizing you, or was there a cabinet document authorizing your decision by the cabinet that you prepared and you have demonstrated why we would have to go ahead with the privatization and not go through the, let's say, process that was going on in the rest of the country, I mean, demonstrating that there was emergency, and also that local authorities were not, in fact, agreeing to get together to operate the airport?
I mean, did you get, for instance, a final answer? Did you manage to contact them to make sure that there was no possibility to go that route which we felt yesterday, by talking to Mr. Emerson, was a very successful route in Vancouver?
Mr. Lewis: All right. Let me try to separate things. First of all, on the environmental thing, I, to the best of my recollection, had lots of criticism that no action was taking place. But if I had any criticism or suggestion that you might do one thing before you did another vis-à-vis the environmental assessment, it would have only been from those individuals with an interest in not having any runways at all.
That would have been their natural way of criticizing that. As far as the GTA is concerned, I met with the mayors, representatives of the GTA in Toronto after that announcement and ---
Senator Hervieux-Payette: Which announcement?
Mr. Lewis: The announcement that we would go forward with requests for proposals.
Senator Hervieux-Payette: Do you mean before, or just after?
Mr. Lewis: I met with them after the announcement. And I'm reading from documents which I understand have been provided to the committee. I got a look at them today. I was only interested in one document. There may be others that support this further. On December 7, I met with provincial ministers Grier and Philip.
Mr. Nelligan: What year?
Mr. Lewis: I'm sorry. That's a good point. December 7, 1990. I'm reading from the memorandum prepared by Chern Heed, the airport general manager, and sent to Mr. V. Barbeau. I met with them just to discuss the Pearson situation, and here are some of the -- I'm just excerpting from this, and I can assure you I'm not lifting anything out of context.
The context of the meeting was: What's going on with Pearson. And, from the notes:
The minister then related the past two years' history of attempting to 'Fix' the Pearson problem and Pearson's unique position in Canada and North America. He stressed he couldn't wait, wanted their input to RFP, but clearly did not rule out an LAA but recommended a parallel approach.
And then on the next page:
The minister indicated he would have to look at whatever they were considering, however he had no confidence that GTA Council could get together on this matter. He also indicated that even if runways don't proceed, Terminal redevelopment must proceed.
So I met with them. I said, "Look, if you can come up with a GTA, be my guest." But there are -- an "LAA," I'm sorry, for the"GTA" -- there are problems in getting municipalities together. Let me give you an example.
I went out for a meeting with the Calgary people. I was constantly going to meetings to put fires out, because they were annoyed with what wasn't happening. So I went out to a meeting with the Calgary folks, and I think there was the main airport and, as I remember it, two or three other airports. And the composition of the representation on the LAA was discussed. Okay? And I sat there listening, and there was a bell ringing in the back of my mind and I said, there's something wrong here, and I realized what it was.
They were going to have an LAA with representation from Calgary, and this poor reeve sitting down the table, the day after they announced the LAA was going to be saying, "Wait a minute. I've got an airport in there and it's in my municipality, and people are going to be after me to see what -- you know, they want some say in what happens in the LAA, and they were not."
So I said to my staff, "You'd better go back ... " I don't know what the result was, but I said, "You'd better go back and sort that out, because that municipality is going to, down the way, want to have a say in that LAA."
That, plus the economic impact of an airport is so great. There are so many tugs and pulls and shoves in it from municipalities that it's not easy to get together. And anybody can tell you today, you know, they're looking at the GAA now as to what their representation should be in the administration of municipal government in the Greater Toronto area. It's not an easy one to get together, and it wasn't together then. It is now. I'm happy. Go ahead with an LAA; get on with it.
But we couldn't sit around -- I was going to be able to get away with that, telling Northern Telecom, you know: Just sit tight. We'll get you an LAA and then we'll do this and then that. It just wasn't going to sell, because there was so much pressure to fix Pearson.
Senator Hervieux-Payette: Okay. I will come back.
The Chairman: Senator Tkachuk.
Senator Tkachuk: Thank you for coming, Mr. Lewis. I have a couple of questions. You mentioned the local airport authority and the problems that you were having. We've had a couple of days of discussion, now, about the two terminals and the local airport authority. And even if you had, even if they had, the private developers had, completed their contract and built and refurbished Terminal 1 and 2, a local airport authority could still be formed; could it not?
Mr. Lewis: Certainly. Because I think the local airport authority in the Toronto area takes into consideration Buttonville, Brampton, I think, was involved in it, the Island airport, the administration of all those airports and how would they coordinate them to process air traffic. So it would have just been fitted into a local airport authority. It wouldn't preclude it, by any means.
Senator Tkachuk: In the formation of the local airport authority, what you do, for example in Calgary or Vancouver, is the local airport authority would run the airport as a -- could you just sort of, maybe you could tell the members here as to what the difference was between what a local airport authority was doing and the fact that there were two terminals that were going to be leased by a particular contractee at the time that we -- at the time you were on the watch, we didn't know who it was, but there is confusion here and it continues to be said we're talking about the Toronto airport, when we're not really talking about the Toronto airport. We're talking about two terminals. But maybe you could just sort of enlighten us on that.
Mr. Lewis: Yes. I think -- let me give you an example. I think the whole -- I'm not saying that management of Canada's airports by Transport Canada wasn't right at some time. I just think airports had advanced beyond being run by bureaucracies. That's not to say there aren't capable people. But bureaucracies are on the scene. And Vancouver had a pretty good idea -- the people that are involved in Vancouver had a pretty good idea what they wanted to do with Vancouver. They, as I understand it, the last time I was out there they were in the process of doing it.
While Transport Canada will tell you there was a big kerfuffle on the passenger facility fee, I don't think there was as big a fuss as -- you know, I go to Cuba a lot and I pay 12 bucks at the airport. So you pay 12 bucks. It's part of -- you don't not fly to Cuba because it costs you $12 at the airport, or not fly to Vancouver; it's just a cost. And they're going ahead with their renovations.
There would be no reason why -- I didn't separate the operations of an airport by an LAA or by the operators of Terminal 3 and operators of Terminal 1 and 2. I didn't -- they would all fall under the same management, as far as I was concerned. So I don't see it as -- I didn't see it as a big deal. I just want something to take place. I think there were discussions, "Can we get in on the request for proposals?" and I said, "Sure. If you have your act together, put in a proposal."
Well, they never got to that point, and now they're negotiating. I think the proof of the whole pudding is going to be what kind of a contract the GTA, LAA comes up with vis-à-vis the contract that was signed. That will be interesting.
Senator Tkachuk: You mentioned during your opening statement that there was -- that you thought, or you believed -- and I don't want to misquote you on this, so I'm going -- these are my words of what I interpreted -- now, you take it -- as to the bureaucracy themselves and them being, there may be foot-dragging a little bit as to the local airport authorities, and you mentioned specifically the Toronto airport.
Mr. Lewis: I know. My experience was with the local airport authorities strictly, at that point. And it was just that it took so long to get the negotiations done. I know a lawyer should never ask a question without knowing the answer, but I'll ask a question that might be instructive. I'd be interested, if I were the committee, on this particular issue, in knowing what the progress of the local airport authorities in Thunder Bay, Winnipeg and Ottawa are.
Now Ottawa, I think they've formed an advisory board. But take Thunder Bay. Comuzzi was on my case all the time, I mean, and so I approved renovations of the Thunder Bay terminal because they have, is it the 1995 Summer Games, or something? I said, "I've approved the terminal renovations," and they set up an advisory board to sit with the transport people to run it. But I don't know whether a local airport authority is running the Thunder Bay airport today, but I know that in 1990 they were sure as heck keen to do it. That's the proof of the pudding. Maybe that file will get rushed along now.
Senator Tkachuk: The name you mentioned, is that a Member of Parliament?
Mr. Lewis: Yes. Joe Comuzzi, from Thunder Bay.
Senator Tkachuk: You discussed the importance of Pearson at the -- the importance of Pearson to Southern Ontario and to the country and to North America. But I want you to tell me a little bit about, when you made your decision to proceed because of what you saw as public pressure and political pressure to deal with the situation at the Pearson airport, you met with -- you mentioned you met with a number of potential developers shortly after the discussion, or shortly after the announcement in 1990. We're talking, I believe two years, before the RFP.
Mr. Lewis: It would be October of 1990.
Senator Tkachuk: October of 1990. Did you make any effort to let people know? You must have made an effort to let the sort of business committee know you were looking at doing something like this and they'd better get their act together.
Mr. Lewis: I know this may sound strange, but I don't think there was any necessity to do that. This was such a big project. There had been demonstrations of interest from people. If you decide you want to get in on this game, you've got to, you know, be pretty serious about it.
So I think the department knew who the serious players -- I have in mind there were five, maybe three, but it wasn't -- like, we didn't hire a hall, you know. We knew who had -- because to be interested, you had to have some discussion with Transport before, as you were going along, to decide whether it made any sense. And so we never had -- nobody ever complained to me they were left out of the discussions, and it was simply -- it couldn't have been more than a half-hour meeting, anyway. I simply laid it out to them what we wanted. I don't think -- what was to be in the request for proposals wasn't even defined at that time.
And, you know, if they had suggestions, we welcomed them. But what we made clear was, over to the accountants, over to the bean counters, you know. This is not anything -- we had some policy issues: foreign ownership, whether Huang and Danczkay would be allowed to bid, and whether an airline would be allowed to be part of a bidding team. Because we were conscious that we wanted -- we didn't want to get into anything like that happens in some airports in the States, where gate control was, you know, a real monopoly. So we had some policy decisions there. But as far as the requests for proposals was concerned, we were developing it.
Senator Tkachuk: Was there some pressure from Air Canada to be involved in the --
Mr. Lewis: I wouldn't say there was pressure. But I believe there was an interest in them getting involved with Paxport. This is strictly from memory, senator. That's fair enough. They had a pretty substantial interest in what went on at Terminal 2. I believe their contract was ongoing for the renovations at the time. So that was understandable, perfectly above-board.
Senator Tkachuk: After the announcement that you made in 1990 -- we have heard, really, since 1993 -- we heard a lot about lobbying going on, and you've mentioned the public lobbying that's been going on. Did you have a lot of the guys in suits, too? Or, I should say, the people in suits.
Mr. Lewis: People in suits. Yes, I mean, I think it's fair to say that lobbying is a fact of life and it's not -- it's always painted in sinister terms by my friends behind me. But it's a fact of life. I had a Conservative tell me on Monday night that he had lobbied to get the government to change, the cabinet to change the decision on, the recent CRTC's decision, on videos because he believed in competition.
He made no bones about it. He said, "Here I was, a Conservative, lobbying for Liberals to do something, you know, to make competition, because I believe in it." So, I mean, lobbyists put issues into perspective. I mean, nobody, no government, whether it's Liberal, Conservative or whatever, wants to be beholden to lobbyists on things. After all, look, this Pearson thing is not something, you know, it's not something on the back roads somewhere. This whole thing was in a -- we were in a fishbowl from the start.
So, I mean, it's obviously on the face of it that you had to be very careful. And that's what we told them, "Up till now you've been lobbying us to get things going along with your friends from the business community and everybody else. Now we've got it going, it's over to the bureaucrats," because it became a bureaucratic function after that. Because it's got to be supportable. They didn't need a lobbyist in a suit, but they sure as heck needed a persuasive chartered accountant, you know, to do the numbers and prove to the government they were going to get the return that we wanted from Pearson. Because Pearson, remember, is the biggest revenue-producer of all the airports, and we couldn't forgo that revenue in the future.
Senator Tkachuk: You mentioned the announcement and about going the leasing route for Terminals 1 and 2 in 1990, but the RFP didn't take place for quite some time after that, I think March 11, 1992. That, to me, is a long time. Now, after discussions with some of the bureaucrats yesterday, I can see maybe it being a long time, it not being a long time -- you know what I mean -- but it does seem like a long time. Could you tell me what caused this process to take 17 months to prepare a document to call for proposal?
Mr. Lewis: I just don't think the bureaucrats wanted to part with any airport, and specifically with Pearson, in terms of management and control. Now, it's a very blunt statement. I can't prove it. But it just seemed -- finally I figured out, I had to start setting deadlines. So if Calgary said, "We've been promised a meeting some time in the next three months," I go back and say, "Okay. Give them a meeting. When is the meeting going to be?"
I had to keep doing that. I have no -- I have the utmost faith in the ability of the bureaucrats I was dealing with. Ability was no question, integrity. I just don't think they were anxious to give up their turf.
Senator Tkachuk: Nor would they be.
Mr. Lewis: No. And the proof of the pudding is going to be in how fast Doug Young is able to get the other airports devolved. And like I say, go and look at what happened to Thunder Bay. I don't know. I lost track of it. But I know they wanted very badly to run their own airport, and it just seemed like the file never got moving. I don't have any -- I can't pinpoint anything. I don't have the documentation to do it, but it was just we constantly had to move that file on.
Senator Tkachuk: Okay. That's it for me right now.
The Chairman: Senator Kirby.
Senator Kirby: Thank you, Mr. Chairman. I wasn't going to begin with this, but I might as well pick up on the points that Senator Tkachuk was just raising, Mr. Lewis. This is kind of a strange version of ministerial responsibility. But if I can paraphrase what you're saying, you're saying that a significant source of the problem of the delay with Pearson you blame on the bureaucracy. Quote -- and, I mean, I've written down two or three quotes you've given; I may be off by a word but I'm not off by much -- "The bureaucrats did not want to part with Pearson under any circumstances," I guess summarizes your viewpoint.
I guess I have a couple of problems. I always thought ministers ran departments. Maybe there's obviously something that I'm missing here, and you may want to comment on that because, I mean, I'll tell you any other time I've heard ministers attempt to -- certainly in Question Period -- any time ministers attempt to blame the bureaucracy, the answer doesn't go very far or the position doesn't go very far.
I also guess I'm a little bothered by kind of a blanket condemnation of the bureaucracy when you, yourself, admit (a) you can't prove it, and we're not really sure who you're talking about. And (c), I guess I have a problem because, by your own admission, LAAs in other places were proceeding, and it's my understanding that LAAs constituted, quote -- I'm using your quote now, not mine -- "the bureaucrats giving up control of an airport."
So I have some difficulty with your laying a substantial amount of the problem on the bureaucracy, when the evidence would suggest that it was proceeding okay in other areas, and it's not -- you're not willing to tell us, either, who they were or offer evidence to that effect. And finally, historically ministers run departments. Do you want to kind of comment on those issues? At least, I thought they did. They used to claim they do.
Mr. Lewis: Well, ministers run departments and they're certainly responsible for them. I prefaced that by saying it's my personal opinion and I, as far as --
Senator Kirby: A personal opinion you formed when you were minister; right?
Mr. Lewis: That's correct.
Senator Kirby: Okay.
Mr. Lewis: It was not a blanket condemnation of bureaucrats, because I was careful to say that I never at any time questioned their ability or integrity. I had good work from the bureaucrats in all areas of transport. It's just that I don't think they were very keen to give up any turf and I think, in retrospect, if you took the chronology of the devolution of the airports in Montreal, Calgary, Edmonton and Vancouver, I think you'd find it took an interminably long time.
Then I think you can back that up by seeing how far they've gone on others. I would challenge, senator, if I may: I said the local airports authority devolution was proceeding but it was proceeding very, very slowly.
Senator Kirby: But it was working?
Mr. Lewis: No. I'm not saying it was working, because we didn't have any devolved. It was about a five-year process from start to finish. So working, I don't say that's working. I mean, it's proceeding, but I'm not saying it's working. Because I had pressures to get it done from the people who wanted to do it.
Senator Kirby: In places other than Toronto?
Mr. Lewis: Yeah, yeah, and --
Senator Kirby: I'm sorry.
Mr. Lewis: The last thing. I've been very up front. I don't have the evidence at my disposal. It may be there in the documentation; I don't know. I just, you know -- that was my gut feeling.
Senator Kirby: Then, can you help me with the following? You said that the process -- you've now said the process was slow everywhere. Not --
Mr. Lewis: Very much so.
Senator Kirby: Okay. And yet you clearly took a strategy, a policy, however you want to call it, actions at Pearson that were uniquely different from the other four. Now, originally in your testimony you kind of suggested that you took a different position at Pearson because the LAA process was slow and the bureaucrats were slow. You've now said that the LAA process was slow everywhere. Why did you single Pearson out to treat it differently?
Mr. Lewis: I don't agree with your suggestion that I "now say." I always say the LAA process was taking --
Senator Kirby: Oh, I'm sorry. I meant "now" as in your answer to the question.
Mr. Lewis: Okay. All right. I'm sorry.
Senator Kirby: I didn't mean to suggest you were changing your mind.
Mr. Lewis: All right. I appreciate that. I don't think we ruled out the GTA or a local airport authority participating. I read from the notes, "The minister indicated he would have to look at whatever they were considering, or we had no confidence that the GTA could get together on this matter." And also that I couldn't wait. I wanted their input to an RFP, but clearly did not rule out an LAA, but recommended a parallel approach.
Senator Kirby: I'll come back on that. I think you misunderstood my question.
Mr. Lewis: I'm sorry.
Senator Kirby: I guess my question was ... take Vancouver as an example. In Vancouver, you didn't call for a refurbishing of the terminal, or indeed in Montreal, given what's going on at Dorval by private sector hands while simultaneously negotiating with an LAA. What you opted to do was proceed, however slowly and for whatever reasons, with the development of an LAA.
So, clearly, there was something different in Pearson in that even if I take your words of a minute ago, Mr. Lewis, where you were going to go on a dual track, it was not a dual track elsewhere where you were being slowed down. What made Pearson different?
Mr. Lewis: Well, you picked up on Vancouver. The LAA was in process in Vancouver. It was a known entity. They had their act together. They were proceeding on negotiations. Okay? The same in Edmonton and Calgary, and the same in Montreal. Those were defined groups, as I said. In Calgary they were still putting some of the pieces together, but the process was going forward, and there wasn't the urgency in the Vancouver airport, that I remember. I guess, going quickly through it, Calgary was in good shape in terms of runways and terminals. So was Edmonton. I think Edmonton, if anything, is underutilized. Vancouver could see a need. Montreal, there was not the same urgency.
The urgency was at Pearson, and we said, "Look, we're going to have requests for proposals. We don't preclude a local airport authority, but we're going to go forward with a request for proposals."
Senator Kirby: You said there was urgency. This is really the point I had intended to start at. You said there was urgency, and in your comments you gave a description of all the factors that had created the urgency. I guess I'm kind of puzzled about one thing, because you said repeatedly in your opening comments how important it was that the runway issue at Pearson be solved.
Mr. Lewis: Yes.
Senator Kirby: I guess I've always kind of thought if you didn't solve a runway problem, I didn't know what help it was solving a terminal problem, because I kind of thought you needed the runway in order for people to be able to use the terminal.
Mr. Lewis: No, not necessarily, because as your parking garage falls down, as you can't get through Customs, that has -- you know, you still have the --
Senator Kirby: You need to solve them both?
Mr. Lewis: Yeah.
Senator Kirby: But I guess my question is, since -- and, indeed, even in the quote -- and I didn't write it down -- but in the note you read us you talked about fixing Pearson. I guess I don't understand why one would proceed to fix the terminal problem when you were -- were not, with the same urgency, fixing the runway problem.
Surely you needed, as you say -- I admit you've got to do both. I guess I'm trying to understand why there was this sudden urgency to deal with the terminal, when one doesn't get the sense, from your comments -- unless maybe the bureaucrats were slow on the runway problem, too -- but one doesn't get the sense that there was the same urgency attached to fixing the runway problem. And yet, clearly, the example you used in your opening remarks talked about a thousand and some odd minutes of planes being stacked up on some given day.
Mr. Lewis: Yeah.
Senator Kirby: Certainly, as a guy who used to circle over Toronto, I understand the runway problem. I guess I don't understand why the terminals were singled out, given the other factors that needed to be solved, to use your words, to fix the Pearson problem.
Mr. Lewis: Let me read from another letter. This is from Atlantic Packaging Products -- and it's part of the letters I'll table with the committee -- dated May 29, 1989, and it's addressed to the Board of Trade of Metropolitan Toronto.
"The most serious complaints are: the line-up of cars or taxis getting to the Terminal 1 at certain periods is of such length that flights can easily be missed. Scheduled times of departure are rarely adhered to. The crowds waiting for passengers, arriving passengers, are not only impossible, but dangerous to get through, especially at terminal 1.
It's both difficult to obtain a cab on arrival, and dangerous. Line-ups in Customs and Immigration when several flights arrive from outside of Canada, both terminals are ridiculous." (not checked)
I mean, that's in these, too. We had to do something to fix it.
Senator Kirby: So, effectively, what you did was you separated the fixing into two pieces. Is that the situation?
Mr. Lewis: The runways and the terminals.
Senator Kirby: And you were prepared to proceed with solving one even if the other was slowed down for whatever?
Mr. Lewis: I had to take that approach, senator. I had to say: Let's push all the problems, try to coordinate it as best as possible, but get movement on the files.
Senator Kirby: By the way -- just an interesting aside -- did you push the runway issue, since you were concerned about moving the files collectively, you just said? Did you push all of them simultaneously, I mean, or equally hard, or whatever?
Mr. Lewis: To the best of my knowledge, yes.
Senator Kirby: Can I just ask you? You just mentioned Air Canada. I wonder if I could just ask you a couple of questions about Air Canada. I thought, on reading through the voluminous material with which we've been provided -- and therefore I can't remember all these things exactly -- I thought back in the late '80s, '88, '89, somewhere in that sort of time frame, that there had been some kind of a letter of intent signed between Air Canada and the department which would essentially renew Air Canada's lease and extend Air Canada's lease on Terminal 2. Do you know anything about that?
Mr. Lewis: I, from memory strictly, I believe that was -- had been done. I think it was -- 40 years sticks in my mind, and it was tied in with Air Canada promising to do the renovations, which they did at Terminal 2.
Senator Kirby: And so Air Canada had a lease on the terminal. Presumably it was their terminal?
Mr. Lewis: Yeah.
Senator Kirby: Was it their terminal? I mean, who actually -- you actually owned it -- sorry, Transport Canada actually owned the terminal?
Mr. Lewis: That's correct.
Senator Kirby: And so it was leased. Was Air Canada --
Mr. Lewis: They were the major tenants. I guess that's the best description.
Senator Kirby: Did Air Canada have any view on the privatization question, that you know of?
Mr. Lewis: I think I referred in my remarks to policy questions that had to be decided, senator. One of them was, would airlines be allowed to participate in the consortium that bid on the renovation of Terminals 1 and 2. I don't remember the resolution of that policy, but it was a question we had.
Senator Kirby: Did they have any view on, if you had to give priority to the terminals or the runway, where the priority ought to be? Because it's my understanding that their view was that they might as -- unless you did the runways, the terminal was not a --
Mr. Lewis: I can't remember. I'm not saying they didn't, but, you know, my attitude was push both files, get them both moving.
Senator Kirby: By the way, did you think that the other one was being slowed down by the bureaucrats, too, the runway issue? Or just the terminal issue?
Mr. Lewis: No, I didn't have that feeling about the runways. I couldn't see why we weren't moving ahead a little faster with runways. But I didn't have that feeling.
Senator Kirby: Can I just talk to you a bit about the LAAs that you had. In the other LAAs that exist, as I understand it, the -- when an LAA takes, effectively, possession of the airport, they take possession of all the facilities that are attached to the airport; is that correct?
Mr. Lewis: Except Security and Customs and --
Senator Kirby: Things that are essentially, "security" or "safety in nature"?
Mr. Lewis: Yeah, yeah.
Senator Kirby: You said -- I found kind of strange proceeding on a double track in the sense of saying to the GTA, in the thing you quoted a few minutes ago, that you'd proceed on two parallel tracks. Because, like, what's left over if you've already -- if somebody already has the terminals? I mean, what does an LAA get, number one, and what real control and influence do they have?
I know a number of the municipal politicians of the day in the GTA were certainly of the view that if you had proceeded to turn T1T2 over to the private sector, that in fact an LAA was in effect ruled out automatically simply because -- not by policy reasons, by practical reasons -- there was no sense having an LAA if you didn't control any of the terminals. Were those discussions ever held?
Mr. Lewis: I wasn't -- I don't remember participating in that particular discussion, but I believe I referred earlier to what was going to make up the LAA in the Toronto area. All right? It was going to be Pearson, obviously. Brampton would be involved. Buttonville, the Island airport, and then there was a question would that involve Hamilton.
Those questions hadn't been defined, and I took the attitude then that you could wait a long time for them to get that defined in their mind and it was unreasonable to delay the refurbishment of Terminals 1 and 2 while we waited for that.
Senator Kirby: And so did you actually envisage, at the time, it would have been possible to have an LAA without the LAA having control of any of the terminals? I mean, did that make sense?
Mr. Lewis: I believe so, because they wanted -- you know, they had to coordinate what happened at the Toronto Island Airport, Buttonville and/or Hamilton, Oshawa, Markham perhaps.
Senator Kirby: And to the best of your knowledge, the municipal politicians, they weren't arguing with that thesis? They were prepared, if they'd been able to get their act together, is the way you described it, were they prepared to accept the notion that there would be an LAA in Toronto without any terminals?
Mr. Lewis: Well, I don't -- I think it's fair to say they weren't happy that we would go ahead. But I made it clear to them, look, I can't be seen to be waiting around while you get your act together. If you get your act together, we'll entertain it. Obviously, I had no particular axe to grind as to how the thing got fixed. I just wanted it fixed.
Senator Kirby: And the airlines, did you get a view of the airlines on this question or, indeed, of the Canadian Air Transport Association, et cetera? Like, I guess -- I understand you desired to solve problems. That, I understand. What I'm trying to understand, though, is whether or not a solution which contemplated the dual track was, in fact, a serious option, whether the airlines thought it was a serious option -- after all they used it -- whether the Canadian Air Transport Association thought it was a serious option, whether the local municipal officials thought it was a serious option, or whether the real strategy was: We've decided to privatize T1 and T2 and we'll just keep talking to everybody else and kind of bring them alone, but the reality is that there won't be an LAA. Because once you finalize T1T2, it doesn't make business sense.
Mr. Lewis: No, I go back to the composition of an LAA in the Greater Toronto area, and it has more components than Pearson. The Island Airport, Oshawa, Buttonville, Hamilton, yes, no, Brampton, has all those components. So it would have been very viable, I think. You also have to remember I'm not -- they had their eye on the revenue from Pearson, I think it's fair to say.
Senator Kirby: "They" being?
Mr. Lewis: The other municipalities -- the municipalities of the GTA thought that there would be revenue from Pearson that could be used to develop other airports. I think that's, you know -- you would have to ask them, but I think that that's a fair assumption, too.
Senator Kirby: And Pearson was making a profit?
Mr. Lewis: Pearson was making a profit, yes.
Senator Kirby: Am I correct?
Mr. Lewis: Yes.
Senator Kirby: And therefore, in fact, the government would lose the revenue from the --
Mr. Lewis: No, no. Not necessarily. No government -- I would suggest the present government will have the same situation when they deal with the LAA. They're going to have to recoup the revenue that they're getting now from that asset. They're going to have to have an add-on, and no government would want to face the people and say: We just gave away the revenue from Pearson.
Senator Kirby: It's sort of like selling liquor stores. You're going to have to make sure you keep the profit, in spite of the fact somebody else may own them.
I wonder, Mr. Chairman, if I might just ask one last question, although we may have a second round, I understand.
In establishing, "the rush to fix Pearson", was there ever -- and you gave some illustrative examples, I understand that -- was there ever any sort of study-type analysis by the bureaucracy or some outsider done to, (a) clearly establish the extent of the problem, other than the anecdotal evidence in letter- writing campaigns?
I mean, historically governments -- you can make an argument that governments, if anything, have been not all that sensitive to letter-writing campaigns. Is there a document somewhere that would say: Look, we did a detailed analysis of the area and, or the problem with Pearson, and (a) here are some quantifiable measures of the significance of the problem, and (b) here's what needs to be done about it?
Mr. Lewis: I don't know. I haven't had access to the brief --
Senator Kirby: I meant when you were minister, obviously.
Mr. Lewis: I don't remember. That was some five years ago.
Senator Kirby: Right. Okay. So the evidence, as best as you can recall -- and I understand it was five years ago and it's difficult -- as best as you can recall, the evidence was the kind of letters you talked about and otherwise, kind of anecdotal, about planes stacking up and that sort of thing?
Mr. Lewis: Listen, everybody was on my case on that one. No other issue did I spend as much time on it and did I have as much communication from people as fixing Pearson.
Senator Kirby: Thank you, Mr. Chairman.
The Chairman: Senator Bryden.
Senator Tkachuk: I just wanted to clarify.
The Chairman: We'll get back to you. Let Senator Bryden go ahead.
Senator Kirby: Could I just make one comment? This isn't a question to the witness, Mr. Chairman. In light of the discussions around the Toronto LAA and what various municipal governments thought at the time, I think we should probably at some point have a witness or two who were party to those negotiations from their perspective, to understand --
Senator Tkachuk: We did, yesterday.
Senator Kirby: From the Toronto one. Just the parallel track issue, that's all. I knew we had one yesterday, sir. Thank you.
Senator Bryden: Mr. Lewis, thank you for coming and spending this enjoyable morning with us. As you had commented -- and maybe you got a chance to be briefed a little bit -- we have had a lot of evidence in relation to the general government policy that was developed in 1986 and '87 in relation to local airports authorities, and it's been in the context of that, that we -- that at least I've been proceeding.
You indicated in your statement that you were under constant political pressure in your ministry, and you made it clear that was a small "p", political pressure, and that "every day it was brought to my attention that something needed to be done with Pearson", and could I ask you, by whom?
Mr. Lewis: Well, I believe I said in my remarks, by members of the travelling public, by business, by opposition politicians, by provincial politicians. There was just the general tenor of the comments vis-à-vis Pearson.
Senator Bryden: Was it also by potential developers?
Mr. Lewis: I -- yes, yes, there's no question about that. One thing I would say, senator -- and I think any transport minister would say this -- transport has, in my experience, when you take solicitor general, minister of justice and transport, transport has a host of interest groups that come at you all the time, whether it's the airline pilots, the airlines or the Seaway, and we discovered this right off the bat. So I said, all right, you know, we've got a lot of interest groups: we shall try to organize so that we'll meet with them.
So I had a very extensive program of meeting people on all sides of every issue, and that would include people interested in the development of Terminals 1 and 2. It would have been just the normal course of business. There's more in that portfolio than in many of the portfolios.
Senator Bryden: In fact, there was a constant communication to your office from Paxport from the time you became minister until the RFP was....
Mr. Lewis: I wouldn't single them out. I mean, there would have been Paxport, Claridge -- there was another -- Huang and Danczkay, I think were interested. So I wouldn't say that there were any more letters or correspondence or meetings with any one developer than another.
Senator Bryden: There was Canadian Airport Limited, too?
Mr. Lewis: Yes, I believe so.
Senator Bryden: Who is Canasia House?
Mr. Lewis: I don't know that.
Senator Bryden: The reason that the Paxport one, I guess, may be of some interest to us is that they, of course --
Senator Tkachuk: Mr. Bryden, are you reading from documents?
Senator Bryden: No. Those names have just come up.
Senator Tkachuk: Where did they come from?
Senator Bryden: Those names are from the briefing book that was provided to us. I thought that was --
Senator Tkachuk: When was that?
Senator Bryden: Last night.
Senator Tkachuk: I don't have a briefing book.
Senator Bryden: It was provided to me by the Leader of the Government in the Senate last night at the same time it was provided, as I understand it, to the leader of the opposition in the Senate.
Senator Tkachuk: Mr. Chairman, why don't we have it?
Senator Bryden: It's my understanding that the book that I have that was provided to me and to the office of Mr. Kirby and the office of Senator Hervieux-Payette, was that four such books were provided to the office of the Leader of the Opposition.
Senator Tkachuk: Provided by who? Who prepared them, the books? Do you know?
Senator Bryden: I presume it would be whoever prepared the original Transport --
Senator Tkachuk: The Department of Transport? It came from your leader's office and not from our clerk's office?
Senator Bryden: No.
Senator Tkachuk: Well, it should have come from our clerk's office, you would think, if it came from the Department of Transport. I thought we asked for documents.
Senator Bryden: All I can tell you is what I know. I have this document. It's my understanding it was provided to the leader of both --
The Chairman: The Department of Transport provided documents yesterday at a late hour, and they were not in both languages, and the clerk could not receive them, and they could not be distributed the committee.
Instead of that, the Department of Transport made them available to the office of the Leader of the Government, Senator Fairbairn's office and to the leader. And they were distributed by her office to all senators. The Conservative senators on this side, upon my instructions, have not received the books because they are not receivable; they're not in the official languages.
If Senator Hervieux-Payette is prepared to accept a document from the Department of Transport in unilingual English, I would like to hear her response.
Senator Hervieux-Payette: First of all, I didn't receive it from the Department of Transport; I received it from the Leader of the Senate. And these are background documents. They are not prepared by the clerk. They are not documents prepared by the clerk. I received them this morning. They are in both officials languages, and I would be satisfied with --
Senator Tkachuk: They are in both official languages?
Senator Kirby: No, documents received from the clerk. The briefing note that we get. Everybody gets it.
Senator Hervieux-Payette: The briefing notes that we get every day, they are in both languages, and it's okay with me.
The Chairman: But that's not the document you're referring to?
Senator Bryden: No. I'm referring to the document that was made available to --
The Chairman: Yes. But that's not the process. We can't -- the clerk can't receive that or distribute the documents.
Senator Bryden: Well, Mr. Chairman, I don't -- I'm just a country lawyer here. I'm new. I'm just going by --
Senator Jessiman: No, you aren't.
Senator Tkachuk: Don't put that on. Don't put that on, Mr. Bryden.
Senator Bryden: I'm just doing the best that I can.
The Chairman: Those documents were, those documents were sent from the Department of Transport through Mr. Rory Edge, of the Department of Justice, who is instructed to deal strictly with the clerk of the committee and to present all documents in both languages. And the clerk cannot receive those documents in one language. None of our senators have received those documents. We have received them, but we have not, technically, accepted them because of that. They're in a box over in the corner.
Senator Tkachuk: I will say, with the --
Senator Jessiman: Factually. Not just technically. Factually, we have not received them.
Senator Tkachuk: I would say it would be passing strange for the Transport Department to be issuing documents in the middle of the night, in the evening, because Mr. Lewis is coming, while in testimony two days ago they were having a real difficult time getting any documents to us.
Senator Bryden: Well, I don't know why we're being yelled at here --
Senator Tkachuk: And to the Government Leader of the Senate.
Mr. Nelligan: May I say something, Mr. Chairman?
The Chairman: Mr. Nelligan.
Mr. Nelligan: I think there has been a misunderstanding of procedures. I was advised at about 6 o'clock last night that a single copy of a binder including documents which might relate to this witness and the next witness had been delivered by Mr. Edge -- I wasn't sure at what time, but it was apparently late in the afternoon -- with the request that it be distributed to all members of the committee.
It was explained to me by the clerk that under the rules, he, of course, was required to distribute in two languages, and it would be physically impossible to translate. And there was a further, technical, problem, that the printing facilities in the building were no longer available and therefore they couldn't reproduce them.
My concern was that since these documents related to the activities of the two coming witnesses, that I could not, in all fairness, have them distributed to the committee without also allowing the witnesses to refresh their memory on these documents.
However, I was asked by the Leader of the Opposition in the Senate that I should not give copies of the documents to the witness until they were distributed to members of the committee. And I was -- I agreed. But I was very concerned that we have to have witnesses as fully briefed as possible before they come in front of us.
Later last night I was advised that someone had prepared additional copies and that they had been distributed to members of the committee. I advised Mr. Lewis on the telephone that these documents were available. But, of course, his concern was that he didn't have time at that late moment to review them, and I gave him a copy of those documents when he came in this morning.
I think the misunderstanding is that the Department of Justice was not aware of the technical requirements, and that this came on rather suddenly, and I may say that we hope to have a meeting with their representatives tomorrow morning so that the procedure on making these documents available is more clear-cut and we can get it done.
I think it's been an unfortunate misunderstanding here. But as I understand it, the documents which are available to you now are not part of the official record yet because they don't comply with it. But, of course, Mr. Lewis can bring in any documents he likes, and I suppose you can get documents. But I think we should all agree that, wherever possible, a witness should have an opportunity to see any papers before he is examined on them.
Senator Tkachuk: What I find passing strange, counsel, what I find passing strange, is that there was the manager of the airport, Barbeau, was here for Transport Canada, the assistant deputy minister. I have no documentation or letters or correspondence that he may have written during that period of time that he was on the watch, and, gee whiz, the night before Mr. Lewis gets here, the Department of Transport, who are fully cognizant of what we're trying to do here and who are fully cognizant of the propriety of having it in both official languages, would at night make sure that the Leader of the Government in the Senate got a copy of the documents. Got a copy of the documents!
Mr. Nelligan: That will be part of the discussion we have tomorrow morning.
The Chairman: Any member of the Department of Justice or the Department of Transport who sends a document over to be circulated to a committee, whether it's three weeks in advance or on the eve of a witness, who does that in one language, should be sent on a refresher course, at the very minimum.
Senator Tkachuk: That's right. I agree, Mr. Chairman.
The Chairman: That is a classic example of an insult to the committee and the process that we're working under.
Senator Bryden: Mr. Chairman, could we have your direction as to how we should proceed, because I --
The Chairman: You have a right. You can quote -- if you wish to, you can quote from that document. We will not acknowledge it. You can quote anything you want from it, because we have no intention of hiding anything; but we're not accepting it.
Senator Kirby: Mr. Chairman, as you know, I wasn't here yesterday so I've sort of been -- you and I discussed this earlier; in fact, you told me about the problem earlier this morning. Let me, just for the record, tell you what I was able to find out between our conversation at eight and the time we reconvened at nine.
It's my understanding that effectively what happened was that this material was prepared, as counsel has said, was sent to the clerk. The clerk, correctly under the rules, could not officially accept this material because it was not in both languages. That the material -- the suggestion was then made, and it's my understanding that there were consultations and, indeed, an agreement between the Government Leader in the Senate and the Leader of the Opposition in the Senate, namely Senators Fairbairn and Lynch-Staunton, that the way around this problem for today, recognizing that counsel was going to meet with government officials tomorrow, the way around this problem for today and to avoid the clerk not being able to distribute it, was to have the material given to the Government Leader in the Senate, who made copies, gave it to the Leader of the Opposition in the Senate with the understanding that that material would then be given, in a sense, from a party leader to members of the party: four in your case, three in ours. That avoided the problem of, in fact, the material being formally distributed by the clerk.
Now, that's what I was able to find out between eight and nine this morning, and it struck me as if, effectively, what must have happened is sort of a practical response to a problem was generated in order to, (a) get the material to people, and (b) not violate the rules that the clerk couldn't distribute it. And it's my understanding that that practical solution was reached under agreement by the offices or, indeed, the leaders of both parties. That's what I've been told.
The Chairman: That's not the facts of the case, and besides that, your reference to a practical solution involves setting a precedent that is unheard of before any parliamentary committee.
Senator Kirby: Just so we're clear. I was just trying to explain to you. You had asked me a question this morning. I was just trying tell the committee members collectively what I'd found out in response to your question this morning. I wasn't either supporting it nor defending it. I was just telling you what I had heard, what I found out.
The Chairman: I'll take a motion now that all relevant documents received by the clerk of the committee be deemed to be filed as exhibits before the committee, and that exhibits be made available for viewing by senators, research staff and the general public at reasonable times.
Now, do I have a mover for that motion?
Senator LeBreton: I'll move that.
The Chairman: That's fine. Seconder? That's passed. Now, that document that you received will be included as soon as it's receivable by the clerk, in both languages.
Senator Kirby: Mr. Chairman, as I understand your resolution, that just verifies what the procedure has always been, namely, that any documents received by the clerk, (a) are available in both languages, and (b) -- I mean, the public viewing is not a --
The Chairman: That's right. It's an automatic motion.
Senator Kirby: Isn't that essentially what we've always done?
The Chairman: Yes.
Senator Kirby: Just so we're clear. These binders were never received by the clerk. I mean, I just think we ought to establish that point.
The Chairman: Yes. But we're saying it's filed as exhibits.
Mr. Nelligan: May I raise a further problem? We might as well resolve these things now. In the course of our inquiries, we receive papers from various persons who in good faith have made them available to us. We are preparing an index of those documents which we would like to make available to all members of the committee.
Senator Kirby: Say that again.
Mr. Nelligan: I say we're preparing an index of these documents that have come in. Most of these documents, of course, are, if relevant at all, are of very minor interest. However, I don't feel that we should eliminate them simply on my decision that they may not be of interest. They may follow something else. But until they become clearly relevant, I think there is a physical and economic problem about translating them to become part of the official record.
So I am simply -- as someone who is outside the normal process here -- suggesting, is there some way that these documents, before they become part of the official record, be available to members of the committee --
Senator Kirby: As the binders?
Mr. Nelligan: Yes, In their original state, in either language, without having the entire bureau of translation in the government spend the next two months translating 120,000 pages of material.
I'm in your hands as to the procedure. I can't advise you; I'm not an expert on Senate procedure.
Senator Kirby: Can I make a suggestion, Mr. Chairman, that that issue initially be discussed by the steering committee, which is you and me, and then we can try to come back to the committee next week with a -- I'm sorry, when we come back in ten days with a resolution to -- that counsel and you and I and the clerk can discuss that question?
The Chairman: I accept that. I don't want to hold up the hearing.
Senator Tkachuk: I don't want to hold up the hearing, but maybe you can answer, clerk. I'm not sure, sir. The document that Mr. Lewis has, is that like documents referring to him?
Mr. Lewis: I don't have any documents.
Senator Tkachuk: No, the little binder. Is it all your stuff? Like, your letters or letters to you, et cetera?
Mr. Nelligan: The binder, if I can say, because I have looked at the material, the binder is perfectly appropriate material.
Senator Tkachuk: I'm sure.
Mr. Nelligan: It will be of assistance to the committee in an indirect way. It relates to the evidence that Mr. Lewis has given today, and it's merely a question of the correspondence which he had with various people relating to the question of Pearson airport, and I think the covering letter from the Board of Trade that he mentioned is there, that kind of thing.
It gives help on the chronology of matters, things of that kind. Unfortunately, of course, the Department of Justice has been hard-pressed getting started, and I gather they went to special pains to get this. But we didn't get it in time to organize it.
Senator Tkachuk: Would they have gone to special pains to ensure that we had the same kind of material for our witness this afternoon? Is that in that binder?
Mr. Nelligan: Yes.
Senator Tkachuk: So we're covered for both witnesses today?
Mr. Nelligan: Yes.
Senator Tkachuk: That would have been covered?
Mr. Nelligan: Yes.
Senator Kirby: The point you're trying to make is, which I assume it is, by innuendo, that the only information that was in the binder is related to --
Senator Tkachuk: Don't attribute things to me.
Senator Kirby: In fact, as I understand it, it's related to both. I haven't read the binder --
Senator Tkachuk: Don't attribute, sir. I just asked a question which was a legitimate question. I, frankly, don't trust the Minister of Transport, and that's that. I can ask the question.
The Chairman: All right. Order. Who was questioning the witness?
Senator Kirby: Senator Bryden was.
The Chairman: Senator Bryden.
Senator Bryden: Mr. Chairman, before I continue, really,and I --
The Chairman: Incidentally, Senator Bryden, if you're using that material, which you can, it's been made available to you by an unknown source, let's say, just tell us where it's coming from as you go along. That will help.
Senator Bryden: Oh, certainly. But can I just preface it by saying I certainly do not want to put any witness, albeit an experienced lawyer and a former cabinet minister, at a disadvantage because he did not have some idea what he was going to be asked or where some of the questions would be coming from.
Similarly, although this inquiry is not ours, we have really tried to be cooperative and make sure that the playing field is level. And before I proceed, I surely hope, if it's useful, if what people are saying, we want the time to get this all translated, do it all right, or everybody to brief themselves on what's in here, then please tell me. Because I really do not want to proceed if I seem to be proceeding with some sort of unfair advantage or with some sort of bias, because we have tried very, very hard to be cooperative, as I think we demonstrated yesterday.
I would take the direction of counsel and the direction of the Chair before I do proceed. Because these are very significant issues that we're dealing with. Senator Tkachuk said we didn't have copies of documents from the assistant deputy minister, but part of the reason for that is, he's reporting up the line, and ultimately we talked to, today, the two people, the deputy minister and the minister, who have, while they may not be in charge of the department, at least have the responsibility for the department.
One other comment I would make, and that is in relation to the way that we are proceeding. One of the reasons, as far as I can tell, that we are in this fix is because we are scheduling far too tightly. I do not think that, in fairness, to do a thorough job in examining Mr. Lewis, talking with Mr. Lewis and giving him full opportunity of reply, that that can be done between now and 12 o'clock.
But yet we're scheduled to have another witness -- or, not 12 o'clock, 11:30 -- we are scheduled to have another very important witness at 12:30. And for us to be able to do our jobs, we should be in a position that we get the material in time that we don't go through this unfortunate situation where in order to proceed and not disturb Mr. Lewis and Mr. Shortliffe's schedule, or the guy who came in from Vancouver yesterday, that we're bending the system in order to proceed.
Senator Jessiman: I would agree with what the senator is saying. I don't think we do get the material in time. Even if we had that booklet last night, that wouldn't have been sufficient time. And some of the other material that we get, I know everyone is working under a lot of pressure, but I agree completely that I get this material and I try to read it, but there isn't time.
Senator Bryden: I think some judgment is going to -- and I don't know who it is -- as to the significance of the evidence in relation to the issues, in relation to the witnesses that are there. I have an advantage. The advantage is that I'm an hour ahead on my time clock, I wake up early in the morning, I went to my office at a quarter after six and the binder was on my desk. So I had the opportunity to look at it. That's the advantage that I have.
So, Mr. Chairman, I don't know what I am asking you, but I'm really saying I want to proceed, but I only want to proceed if I'm not prejudicing this hearing or the witness. Fine. If there's any indication of that whatsoever, then let's wait.
The Chairman: The witness doesn't have to answer any questions on which he has no knowledge and has not been presented with the evidence beforehand. So you can proceed any way you wish, senator. You've been brown-enveloped, so go ahead. No problem.
Senator Bryden: Well, you know that's -- I remember, Mr. Chairman, our meeting when sweetness and light was still in place and we were going to proceed with civility and politeness, and so on.
This is not a brown envelope. It's a white book. So what you mean by brown-envelope, I assume that you got a brown envelope in the form of a white book. You have one, and you have one?
Senator Jessiman: We do not.
Senator Bryden: You chose not to look at it, or your party chose not to look at it.
Senator Jessiman: I think this situation is unfortunate. But I agree, I would like to think that we will get, any maybe we've got it and I haven't seen it, a list of the witnesses in the next, say, two months or whatever period we've got, when they're coming, and get some material in respect of what they're going to talk about, if there's material, at least a week in advance, if that's possible.
Senator Kirby: I agree with that. I support that. I think we had a bit of a growing pains problem, and I was frankly attributing that whatever solution was worked out between the two leaders last night to the solution of a problem. But just to point out, Senator Jessiman, I absolutely, strongly agree with you that getting stuff when you get into the office early in the morning is, however interesting, not appropriate timing. I agree. But I think, in fairness, we now have -- next week we're not sitting and I'm assuming, and I'm looking at the clerk and the counsel when I say this, I'm assuming that the lag problem can be corrected and we will then get ahead of the game. At least, that would certainly be my intention.
Senator Jessiman: Mr. Chairman, I assume we know who we're going to examine a week from now.
The Chairman: Let me make my annoyance clear. I have been -- and I'm expressing a personal opinion -- losing patience with the ability to get documents from the relevant departments. The bureaucratic process has been set up through which all of these things are channelled. This is frustrating enough. But in this case, the night before a witness appears, the Department of Finance official who is responsible for liaison with the clerk, presents a document relevant to today's hearing which is not receivable by the clerk because it's not in both official languages, which is a clearly understood process.
That is the source of my annoyance. I was going to hold back on this until it was brought to my attention that material was being used. I do not know what's in the book. Neither does the witness. Neither does any one of my colleagues on this side.
Senator Kirby: Mr. Chairman, can we just clarify one word you used a couple of times? You said the material -- I'm not talking about this hearing, I'm just talking about in general -- material is not receivable by the clerk. I guess I'd like to ask the clerk.
It's always been my understanding that anything is receivable by the clerk. It is not distributable by the clerk unless it is in both official languages. That has been my understanding, and I ask the clerk the question: Am I correct on that?
The Clerk: Honourable senators, to date we've been receiving, I guess unofficially, a number of documents. We make a point not to distribute anything until it's in both official languages.
Senator Kirby: Right. So it's the distribution issue that's at stake, not the receivability issue. All right; fine. Not being a lawyer, but if we ever get into a legal-type argument, I think we ought to be clear: you can receive whatever anybody sends you in whatever language; you just can't distribute it unless it's in both languages?
The Clerk: I was hoping that the motion that the chair proposed would formally allow us to take possession of documents, if we can call it that.
Senator Kirby: But not this. Right. Which is what I meant by being receivable but not distributable. Okay. I'm sorry, Mr. Chairman, you also said Rory Edge is with the Department of Finance. I don't know who Rory Edge is, but I'm surprised if he's with Finance.
Mr. Nelligan: Mr. Edge has been the person nominated by the Department of Justice.
Senator Kirby: I'm sorry. The Chairman said Finance, and I just thought we ought to clarify the record.
Mr. Nelligan: He's not Finance. He's Justice.
Senator Kirby: I just thought we ought to clarify the record.
The Chairman: Now then, in keeping with your suggestion, I'm sure that Mr. Shortliffe will be agreeable to meeting us on another day, if it's your wish. If you feel inhibited by time constraints, if Mr. Lewis is agreeable, we'll continue with Mr. Lewis this afternoon, if that's your wish. We can make this determination at the close of the morning's hearing. Is that all right?
Mr. Lewis: I'm sorry. Do you intend to continue through the afternoon with me?
The Chairman: Well, this was suggested, if you were available, Mr. Lewis.
Mr. Lewis: For the purpose of?
The Chairman: They feel that they haven't sufficient time to question you this morning.
Senator Bryden: Well, just in fairness, I don't know. I mean, it may be that this goes like that. On the other hand, I can ask very short questions, but I can't control the answers. I mean, we --
Mr. Lewis: If I may, as a fellow country lawyer and the witness in question, make this comment: I came here to try and do the best job I could. Counsel, in advising me of the change of time -- I was in for 9:30; it was nine last night -- advised me that this book was in existence. I said, well, I've got my -- what I want to say, fixed in my head. I know the documents I have. I don't want to scrap everything and get into another book at this present time and be, shall we say, examined on the book, because a witness can be made to look foolish or have a bad memory by the fact that the book is in front of the committee and they've had it. I'm sure you can appreciate that, senator.
So I said, look, I don't want to see the book. When I came here, counsel showed me the book. I said, there's one thing I want to know. Do you have anything in there vis-à-vis the government's attitude on an LAA for the GTA? And he showed the index, picked it out, and that's why I've been able to quote from one document; and that was the only one I was interested in. I don't know what the other documents are.
I'm sure that the senator would not take advantage of that lack of knowledge in asking me questions, as long as the committee understands that I'm at a disadvantage in not having the book. And I share the annoyance of all members of the committee, I'm sure, that you get this thing plunked on you at 5 o'clock when the hearing is the next day. I mean, Transport has got enough people that they can produce this documentation more quickly for the committee's benefit, and the witnesses, than to do it the day before.
So, why don't you ask the questions, sir, and I'll do my best.
Senator Bryden: Maybe the present minister has no more control over them than you do.
Mr. Lewis: Well, I hope you'll ask him.
The Chairman: Go ahead with the questions, Mr. Bryden.
Senator Bryden: It sort of put us in the position where basically the witness is now in the position to say, well, I don't know what you're reading from or, I don't know, I didn't prep myself on that.
So it's going to be -- then one other point that needs to be made here -- and I know it's fun to beat up on transport ministers present and past -- but the fact is the departments who are trying to provide us with the material, with these thousands and thousands of documents, are not scheduling the appearance of the witnesses, I don't think. I mean, there's some cooperation, I believe, but nevertheless, when somebody is supposed to appear, they're supposed to supply the documents for that person; and the fact that they have to go through a huge number to get there, I don't think -- whereas in other instances it's not required. I mean, the guy from Vancouver, we didn't need much stuff to prepare for. So anyway, am I supposed to proceed here?
The Chairman: Yes. And it should be made clear that it's this bureaucratic process to which I refer who are, in the main, responsible for making these witnesses available. You all received a memo from me indicating that if you want any witnesses called, all you have to do is let us know and we will call the witness. But so far, those witnesses who have appeared, have appeared because they have been, "cleared" by the government to deal with some particular issue that we're dealing with that day -- policy, process, whatever it happens to be. That's the way it's been working -- Mr. Lewis excepted.
Senator Kirby: Mr. Chairman, is it my understanding that in fact it was worked out who the witnesses -- it was worked out between our counsel and the government; is that correct?
Mr. Nelligan: We asked them the type of person we wanted and they provided them.
Senator Kirby: So from your point of view, the witnesses we've had covered adequately the topics that you wanted covered?
Mr. Nelligan: On the question of early policy, we know that some people will be able to contribute to it, who will come into the historical narrative at a later date.
Senator Kirby: Okay. Thank you. But today, you're happy with the witnesses?
Mr. Nelligan: Yes. Oh, yes, yes.
The Chairman: Okay, Senator Bryden. Try it again.
Senator Bryden: Okay. The appointment: you were appointed in February, on February about the 22nd, I guess, of 1990.
Mr. Lewis: Yes.
Senator Bryden: And the reason I raised the issue of you being contacted by Paxport is not simply to pick them out of the air, but because they ultimately ended up being the successful bidder.
Mr. Lewis: In conjunction with Claridge, as I understand it. Claridge came in at the end. They were the successful bidder, and the final contract was with Claridge and Paxport.
Senator Bryden: Yes. When Paxport didn't have the finances to proceed on their own, I think, or whatever.
Mr. Lewis: I don't know that.
Senator Bryden: So you were appointed on the 22nd, and -- this is just to indicate the contact, I guess -- on the 26th Paxport sent to you, the new minister, their unsolicited proposal from September the 5th, 1989, with a covering letter from Mr. Hession?
Mr. Lewis: It could be.
Senator Bryden: And that's in this package that nobody has, except me.
Mr. Lewis: Right.
Senator Jessiman: Your two cohorts have a copy; so it's not just you.
Senator Kirby: One may be in my office. Other than seeing it, I mean, I haven't looked at it at all. I know it's physically there.
Senator Tkachuk: Mr. Chairman, I mean, I don't want to speak for Mr. Lewis because I'm sure he can handle himself extremely well, no matter what Mr. Bryden has. But we're here, put at a very -- we're at a very strong disadvantage because he's quoting from letters that are coming from contractors and who knows how many other people that Senator Bryden will have, writing, you know, and there'll be this said and this said. We don't have anything here to show us that what you're saying is -- you know, I don't even know if you got the right letter. I don't know who wrote that letter.
Senator Bryden: Get the book from your leader, for goodness sake.
The Chairman: Just a minute here, Senator Tkachuk. Go ahead, Senator Bryden. Just give the reference to the letter, the date and so on.
Senator Tkachuk: My view is that it should -- you know, this should be a fair game, equally distributed, which was the rules set up by the chairman and the co-chairman and the clerk, and we should all deal from the same deck -- words that a country lawyer would understand, senator. But I'm not dealing from the same deck as you, in asking Mr. Lewis any questions. So I've got a real problem with this.
The Chairman: All right. Just hold it. Just identify the document and proceed, please; that's all. Eventually you'll have it when it's translated. I'm not going to dignify it right now by distributing it.
Senator Tkachuk: Okay.
The Chairman: Just refer to the document you're quoting from, that's all.
Senator Tkachuk: Proceed. I made my point.
Senator Bryden: Okay. Anyway, once more into the breach. And then on the 31st of May of 1990, Mr. Hession wrote, on behalf of Paxport, concerning -- expressing concern over allowing foreign companies to compete if there was a competition for private investment. And then, once again, on June 19th, 1990, Mr. Hession wrote to you, minister.
Mr. Lewis: What was that date, again?
Senator Bryden: June the 19th, 1990.
Mr. Lewis: June the 19th, 1990.
Senator Hervieux-Payette: Does this mean that the policy that you just stated, that we will get the letter from Mr. Lewis that he's tabling today, in three weeks' time because of translation?
The Chairman: Yes.
Senator Hervieux-Payette: Fine. So, then, I guess you should ask for more people to translate, because this book also is going to take some time, and I don't mind to do a lot of job-creation for students this summer to translate all this material. But one thing that is for sure: we don't know about the whole transaction. We were not in office. I was working in Montreal. I was, myself, privatized.
So, I mean, if we're going to do our job, I guess -- and people are taking the pretext today that French is not available, that's why they're not reading it, and of course I feel personally, I mean, involved because I'm the only one here that really has to speak, work and be at a disadvantage in terms of the language. I'm the one being disadvantaged. I should be the one that is being offended by the way things were. So yesterday I should have been offended because I received the Vancouver airport document. And I don't want this issue to become, you know, a language issue at this point in time with what is going on in Quebec.
If you want some people to be mad, I will be mad because I don't want this to be a pretext not to look at the core of the subject that we are studying. I have accepted to spend my summer here. I'm going to do my work. I am bilingual and I can read documents in English, and if I was not able, I would not be here. So just to say that from now on -- I mean, if we're going to have the document, well, you take the measure, you are the chairman -- and Mr. Nelligan -- and you ask the document to be in both languages no matter what the pile high is, and we're not going to delay these hearings. Because otherwise we'll be here next year.
I think, you know, they can translate the hearings in the House of Commons from day to day, having heard hearings all day, and we have pages and pages of translation. So I don't want to be -- to have this language policy to be something that will slow down the process, because I am not, actually, I mean, very happy with the way it's being treated.
I know that you always want to be nice, but it will appear to be something that, you know, is going to be costly. I've heard that $298,000 for our committee was a big cost. Well, I can tell you that translation now will be half a million dollars.
The Chairman: It's not the cost to the committee. As a unilingual Nova Scotian, I am particularly sensitive that all documents presented to my former committee, which was transport, and to this committee be in both officials languages, which is the way it's supposed to be.
The Government of Canada has translators. When we ask for documents, we expect to receive them in both languages, and we have not. Now, let's drop the issue now. It's not, as you say, a language issue. It's a parliamentary issue.
Senator Bryden, try it again. This sounds like the second act of Les Misérables.
Senator Bryden: Mr. Chairman, in fairness, you should go back to our beginning meeting. You'll find on the record a quote from us entering with Alice in Wonderland. And I take credit for that, along with your Les Misérables .
Senator LeBreton: I'm getting to feel like Alice.
Senator Bryden: In any event, I'm going to raise reference to these two letters. The copies are here, and I'm not going to read them because there's just one question that comes out of the three letters.
First, I just wanted to establish that you had been contacted very early by Paxport to get a copy of their unsolicited proposal, and I think everybody --
Mr. Lewis: No, no. Not to get. To give.
Senator Bryden: They gave you. Yes.
Senator Jessiman: May I interrupt you again. I'm sorry about this. I haven't interrupted that much in the last couple of days. How do we know the person that's put that book together has given us all the letters that the witness here -- has someone taken an affidavit?
Mr. Lewis: Is there a letter of transmittal? That would be helpful.
Senator Jessiman: Yes. You know, I don't know if someone in Transport just said, "Well, that's a good letter. That'll be embarrassing to Mr. Lewis, and we'll take that letter and that'll be embarrassing, and we'll leave all the other ones out." I don't know that. Does anyone know who prepared that booklet?
Senator Bryden: I take it it was prepared in the same manner that this other booklet was prepared, which we've all been using, including the senators on the other side, and counsel.
Senator Jessiman: Have they just taken all -- have we got all the documents?
Mr. Nelligan: May I just say, so you'll understand: The briefing book was a collection made by the clerk and his staff based on public documents to which everyone had access, the Library of Parliament -- excuse me. And they were all basic documents which we thought were of general assistance. Of course, then it was an easy task -- not an easy task, but a straightforward task to have the necessary ones translated.
In our discussions with the department and their advisers at the Department of Justice, they have expressed, and we have understood, that it is a very difficult task to identify the relevant documents. We indicated to them that this first week we would be dealing largely with the matter of policy and procedure, and they were grateful for that because they then could concentrate in the first instance on getting policy and procedure documents available for us.
The procedure of transmittal to us of the documents, I think requires further clarification, because what we've been wanting to get is not all of the documents but basically lists of the documents so that we can look at the ones we think would be helpful. In attempting to provide us with documents, it appears that someone collated a book of documents over the last few days which related to this witness.
We do not know who that someone is. I have not had an opportunity, because I've been in the hearings, to discuss with anyone what the parameters of selection were, and that is one of the reasons for our discussion tomorrow. I may say that in looking at them, it would appear, at least superficially, that they have been selected in an impartial and normal manner.
I had certain questions I was going to ask them: Are these all the documents relating to LAAs? -- things of that kind -- and I hope to clarify that. But all I can say at this point, without condemning anyone, is that we're in the early stages of the process. I think they thought they were being of great assistance to us yesterday when they gave it to us. But the timing wasn't ideal.
Senator Bryden: I'm perfectly prepared to do this in the normal fashion, that is, to get the affidavits and introduce each document one at a time and have the witness observe them and file them, and so on. But that's a long process.
I would take it, also, the witness is in a position, if there are ones that are left out, or whatever --
Senator Tkachuk: Five years ago, do you remember how many letters you got? Anyway, go ahead.
Senator Bryden: Anyway, after the initial gratuitous letter to you, as a minister, in sending the original 1989 proposal, in the letter it urges that you consider the proposal. That's not surprising.
The next letter, on June the 19th, 1990, expresses a particular concern that the -- if and when the department, or the government, issues an RFP, that it exclude foreign competitors. And then the following letter, on June the 29th, 1990, from Mr. Hession of Paxport, does the same thing and sends a quote from -- the British Airports Authority are wanting to get into the act. My question, then, is this. Did the eventual RFP exclude foreign- controlled entities from bidding?
Mr. Lewis: Well, let me preface my question with a comment or two, if I may, with respect to the briefing book. You've picked out Paxport letters, and that's fair ball. There are also letters -- I just briefed through them -- there are also letters on this issue, on the whole request for proposal from Canadian Airports, Canasia House and Air Canada. Air Canada, interestingly enough, recommends that we select Paxport.
I believe I found a letter here -- just quickly -- and then there's a letter from Airport Development Corporation. So there are a lot of letters from other people with an interest in developing.
Senator Tkachuk: I'm sure Mr. Bryden will get to it.
Mr. Lewis: I can't remember, quite frankly, whether the final request for proposal that was put out excluded foreign ownership. I don't remember. I don't remember that particular issue. But I do remember, in my comments, that I pointed out this is one of the issues that was to be dealt with that I remember as a -- remember when I said we turned the development of requests for proposals over to bureaucrats to develop. I said there were still policy issues and I believe I mentioned, (a) whether airlines should be involved in consortiums, (b) foreign ownership, and (c) whether Huang and Danczkay, the owner of terminal -- the operator of Terminal 3, would be allowing to participate.
I think that question of what was in the final RFP could be better answered by either a bureaucrat or perhaps the minister at the time.
Senator Bryden: The minister when the RFP was put out?
Mr. Lewis: Yes.
Senator Bryden: And you weren't --
Mr. Lewis: No. I made the announcement, senator, that we would call for RFPs. Somebody mentioned how long it took to get that RFP proposal put together, and it took a considerable amount of time to get that together. So I was in Sol. Gen. by then.
Senator Bryden: You ceased being a minister?
Mr. Lewis: April, 1991.
Senator Bryden: Minister of Transport, I should say. I'm sorry.
Mr. Lewis: April, 1991, I believe.
Senator Bryden: But I can only get the information from the people in pieces. But anyway, if you -- those letters were in fact sent and you can verify them, and that was the issue that was being raised. And we'll get the answer as to whether there was an RFP from the next minister.
You made an interesting comment about Air Canada, that Air Canada was supporting Paxport's proposal?
Mr. Lewis: That's correct. I haven't had a chance -- just in briefing, flipping through this, from Pierre Jeanniot, June 1, 1990. Among other things, and I don't think I'm taking this out of context,
I recommend you select Paxport as the developer to work with Transport Canada and Air Canada to realize your vision for Pearson.
Senator Bryden: Yes. And that letter is there?
Mr. Lewis: Yes.
Senator Bryden: There's an earlier letter, as well, from Air Canada that proposes that the development be done by Air Canada and the Department of Transport.
Mr. Lewis: Yes, I saw that, too. It's a little -- "I am convinced that a mutually acceptable arrangement can be worked out between Air Canada and Transport." It's like I said earlier, everybody had their own favourite ideas as to how we do it.
Senator Bryden: Sure. But there's a progress here, Mr. Lewis, I believe, in relation to Air Canada. As I looked at these documents, and as I looked at the evidence that was given before the House of Commons committee by Air Canada in relation to this issue, by Air Canada executives and people who were involved before, there was one stage early on in the process where in fact Air Canada was advocating a development that they and Transport could do together. As a matter of fact, they had just done a huge amount to Terminal 2, $125 million, and it was working great, and so on. Is that correct, that there was that stage? Air Canada did take that position at one stage?
Mr. Lewis: Yes. But as you pointed out, then in another letter they wanted to work with Paxport.
Senator Bryden: That's so.
Mr. Lewis: I just knew they were interested in developing the terminals.
Senator Bryden: And so the next stage was -- what was the name of the person who signed that Paxport one?
Mr. Lewis: Pierre J. Jeanniot?
Senator Bryden: Yes, Pierre Jeanniot. So that was another stage with Air Canada. Are you aware that before the RFP was in fact released, according to the evidence given by Air Canada in front of the House of Commons committee, Air Canada was asking a delay of two years?
Mr. Lewis: No, I'm not. By then I had left the portfolio. As I said, I was just involved in announcing we were going to go for a request for proposals.
Senator Bryden: Okay. Just to follow -- I can only do the period that you're involved, of course. In October, on October 18, 1990, do you recall meeting with Paxport, and perhaps others, to discuss the upcoming RFP?
Mr. Lewis: I would like to be sure of that date, again.
Senator Bryden: Where I got the date, it's referred to in an October 22nd, 1990, letter from Paxport thanking you for the meeting on that date.
Mr. Lewis: It's my recollection -- right, I met with all of them.
Senator Bryden: Yes.
Mr. Lewis: Okay. "Notes from the Honourable Doug Lewis meeting with developers." That was the day after the announcement. So the announcement probably was the 17th of October. On the 18th of October I met and laid down the ground rules.
Senator Bryden: Right.
Senator LeBreton: Which you said in your opening statement.
Mr. Lewis: Yes. So when is this Paxport? I know everybody who had declared an interest and wanted to play.
Senator Bryden: Yes. But I'm really ---
Mr. Lewis: You're focusing on Paxport.
Senator Bryden: Sure.
Mr. Lewis: And I can appreciate that. But I want it to be very clear in the committee's minds: everybody was on the scene then that was interested.
Senator Bryden: And then, once again, it's the -- I'm trying to follow the pressure that you were under and where the pressures were coming from, if there's other pressures from other sources.
Mr. Lewis: As far as I was concerned, there were absolutely no pressures from all these people who had an interest in doing it. There was a heck of a lot of pressure from people who wanted it done and, look, this was a fishbowl existence. You'd be crazy to favour one or the other. You know, they all made their pitch.
Senator Bryden: Well, if there wasn't much pressure from the people who wanted to do it, then, once again, on October 22nd, 1990, Mr. Hession writes on behalf of Paxport suggesting that a six to eight-week time period for the RFP reply would hasten the process and the decision. Do you remember --
Mr. Lewis: I don't remember that comment, but --
Senator Bryden: Just to make sure that people have it, it was a letter of October 22nd, 1990. So that would have been a period of six to eight weeks.
Mr. Lewis: Well, when was the RFP actually put out? Can you perhaps help me?
Senator LeBreton: It was 1992.
Mr. Lewis: 1992. Well, then, that didn't have much effect.
Senator Bryden: No, it didn't, because the RFP was extended to 95 days instead of the 60 days that Paxport was asking for.
Senator LeBreton: Seventeen months later.
Mr. Lewis: I think you're referring to the time for replying to the RFP. By that time, everybody had to have their act in order and should have been able to move on that time frame. I don't find anything, any untoward problem about that, because I'm sure there was constant discussion as what would be in the request for proposals was developed. So there were no surprises, I would think, in the RFP. You'd have to ask them, but I don't think there were any.
Senator Bryden: Mr. Lewis, in regard to that, that everybody have a chance to be into this, was there a request for expressions of interest on this project, as there was on Terminal 3?
Mr. Lewis: I want to be clear on the semantics here. We announced that we were putting it out for request for proposals, and that we would formulate -- however, the government still has a lot of work to do before we are even able to release a request for proposals. So, we made it known. It was known in the industry that we were -- we made the formal announcement, and we've talked to them and said, you know, "We've got to develop what the request for proposals will contain. Be players." And then I left and went to Sol. Gen.
Senator Bryden: Interestingly, the discussion of the building of a Terminal 3 had been going on, the evidence was given yesterday, from 1970, 1980 and it heated up at various times and everybody, allegedly, in the world knew that this might happen. And yet in Terminal 3's instance there was a two-stage process that allowed four months for expression of interest and another -- six months, I think, for expression of interest, and another four months to reply to the RFP.
Why -- in addition to the answer given by my honourable friends over here -- why was the process different, in this much larger project, than in Terminal 3?
Mr. Lewis: I'm not in a position to answer that, senator; it took place well after I had left the portfolio. On specific questions during my time as Minister of Transport, i.e., the question of why not an LAA for the GTA, I was able to give you an answer. But on that one, it was past the time when I was a minister and I'm not in a position to answer.
Senator Bryden: Just in relation to another issue, because the issue of the environmental assessment panel for the Toronto airport has been raised by other senators, and on April the 18th, 1991, Mr. Hession, on behalf of Paxport, wrote to you expressing his dismay with the department's recommendation to delay the proposal call to develop 1 and 2 until Transport Canada was satisfied with the progress of the EARP. Now, do you recall that letter or the discussion?
Mr. Lewis: What date did you give on that?
Senator Bryden: That was on April the 18th, 1991.
Mr. Lewis: April 18th, 1991?
Senator Bryden: Yes.
Mr. Lewis: Was I still the minister?
Senator Jessiman: Three days before you left.
Mr. Lewis: That's the date of the letter being sent from Mr. Hession?
Senator Bryden: Yes.
Mr. Lewis: Have you got a stamp on it as to when it was received? Some of these have stamps. I don't remember receiving it. I certainly couldn't have acted on it.
Senator Bryden: If you don't recall it, fine. We can look at it, look it up.
Mr. Lewis: No, I don't recall.
Senator Bryden: I know it was close to you going, but it was addressed to you and not to your successor. Probably it was passed over to your successor.
I'd like to look now at the issue of the environmental impact study. There are some issues that are raised. You had indicated that it was your decision that the two, like the development of the private sector, development of T1T2, or an RFP could be called at the same time as the study was going on. Was that a change of view from your initial position? Wasn't your initial position, as minister, that the environmental impact study and the runway analysis had to be completed; otherwise, you don't know how much traffic you've got, how could you call for proposals if you didn't know the EARP and your runway situation?
Mr. Lewis: Not to the best of my knowledge, senator. My experience with environmental assessments was they took an awful long time, and I didn't see why the development of a request for a proposal couldn't go along in tandem with that, and we made every effort not to any way interfere with the environmental assessment procedure.
To the best of my knowledge, both during my term and after, there was never any suggestion by anybody that we had interfered with it, and they came down with a favourable conclusion. Now, that's hindsight, but I make no apologies for pushing as many things forward as I could to develop the airport without making sure that the tracks didn't cross.
Senator Bryden: The issue of the Toronto, the Greater Toronto Airport Authority, you indicated that there -- I think I understood you correctly -- that there was difficultly in them getting together in order to act.
Mr. Lewis: That's correct.
Senator Bryden: There's some indication in the documentation that we have here that virtually all of the heads of the municipalities made representation to you, as minister, asking that the same local airport authority provisions and the devolution that applied to Vancouver and the other airports, that assistance be given to them to form an authority, because that was the most appropriate way to develop the Pearson airport.
Mr. Lewis: Well, that's easily said, senator, but not so easy to have happen. I think when you call someone from the local airport authority that's been formed, it would be interesting to get a chronology of when those discussions started and their evolution of them. Then, we'll see just exactly how quickly it came to fruition.
My memory is that Hazel McCallion at the time had some pretty definite ideas as to who was going to be on any local airport authority that affected her airport in Mississauga. And if you've met Hazel, you just don't steamroller Hazel very easily. I think we can all agree on that. She's a very, very capable politician. And so you've got her saying that, and then you've got somebody from over in the Oshawa area who's going to say, "I want to vote, too." So now you've got two votes, one from Mississauga where the airport is and one from whatever township has the Oshawa airport.
I mean, fitting that all together is not very easy. As a matter of fact, I would suggest to you that an interesting, on that particular subject -- take the viewpoint of the borough of Etobicoke. Do you know that within that particular borough -- I met with them once, and they've got a development package that they handed to us, and on the front it's got Pearson airport, and the first person up is somebody complaining about runway development at Pearson airport.
You can get different opinions in the borough of Etobicoke depending on what ward the councillor represents, i.e, how close to the airport, and yet when you show them where the people live who work at the airport, you find an awful lot of them live in Etobicoke, Mississauga. So, I mean, it's not all that easy to say, "Yep, should have come together just like Vancouver or Calgary or Edmonton." It didn't, and for those reasons.
Senator Bryden: But at the time, and maybe it's before, you were before this time, clearly before the RFP was called, there was no urgency.
Mr. Lewis: I'm sorry; there was always an urgency.
Senator Bryden: Well, according to the principal user of the two terminals, Air Canada, they had asked for a two-year delay.
Mr. Lewis: I don't have that in my -- I'd have to see the letter, I'd have to see the context of the letter, and I think that that particular point should be in context with this, with these letters.
Senator Bryden: I'm sorry. That's not in the letter. It's in the records of the House of Commons committee. So it's public record and we can make it available to you.
The other people that you indicated that you were getting a great deal of pressure from to do something with Pearson was business, in the industry, and that came clear from your statement. But the Air Transport Association of Canada, in a letter -- no, I'm sorry, it is not addressed to you. It's just after you leave, so you missed that one. But they expressed a concern --
Mr. Lewis: It wouldn't be in this book, then.
Senator Bryden: No, it's not in your book.
Mr. Lewis: Then, that's a letter that you have that I don't have. I don't know whether other members of the committee have it.
Senator LeBreton: What book are you reading from now, Senator Bryden?
Mr. Nelligan: If I may explain, senator. That may be in Mr. Shortliffe's materials, and because I only had one set, I gave the Shortliffe material -- at least, I hope Mr. Shortliffe saw it this morning -- I sent it to him, and this morning I gave the Lewis material to Mr. Lewis.
Senator LeBreton: So, they've got both?
Mr. Nelligan: It was all in one book.
Senator LeBreton: I see.
Mr. Nelligan: I had to split the book so I could inform my witnesses.
Senator LeBreton: I see. So he's got the whole book. We had to split the book between the witnesses. Meanwhile, we have no book.
The Chairman: Mr. Lewis, is it convenient for you to stay over for this afternoon?
Mr. Lewis: Sure, if it will assist the committee. I don't know how many more, how much more you have in the way of questions, or I can stay a little. Whatever. I'm at your pleasure.
The Chairman: All right. Thank you very much. We'll adjourn now for lunch and meet again at 12:30.
Ottawa, Thursday, July 13, 1995
The Special Senate Committee on the Pearson Airport Agreements met this day at 12:30 p.m. to examine and report upon all matters concerning the policies and negotiations leading up to, and including, the agreements respecting the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport and the circumstances relating to the cancellation thereof.
Senator Finlay MacDonald (Chairman) in the Chair.
The Chairman: Mr. Lewis, we are very grateful to you for agreeing to the wishes of the committee to hear more of your testimony and to give us the afternoon in doing it. So before we proceed, is there anything you'd like to add before we begin questioning?
Mr. Lewis: Yes, if I may, Mr. Chairman, two things: One, I have just had a brief chance to look at this book that was prepared for the committee, and two comments. One: You will notice there is a very big thick proposal from Paxport at the start, with their letter of February 28. If you turn to the letter of Canadian Airports, it says:
I have pleasure in presenting to you the outline proposal from Canadian Airports...
There is no enclosure. I think that it would be instructive if the committee had a letter of transmittal explaining exactly what Transport has sent to you.
The second point is I was asked if I felt I was at a disadvantage by not having a chance to review the book, and I made the point that everybody comes before a Senate committee or a parliamentary committee trying to do the best job they can as a witness. I would have preferred a chance to read it to help me in my answers.
There was an issue earlier today vis-a-vis the GTA, the greater Toronto area, and the local airport authority. What I was interested in, the one piece of documentation I was concerned about, was, had I conveyed in writing or is there evidence I had conveyed in writing to the local airport authority group or the GTA my feelings about their participation. So I read from that letter.
Had I had time to go to the next letter, not in numerical sequence -- I don't know why, because these notes are dated December 11, 1990. If you go to a letter dated December 3, 1990, from Mr. D. A. Lychak, City Manager of the City of Mississauga. I want to read just from the first page of that. This is a letter to the heads of council who would be meeting with me:
Given that there will be little time for the Heads of Council to meet prior to the 8:00 a.m. meeting with the Minister of Transport and given that it would be impossible to bring a unified position to the Minister, since we are in the very early stages of our LAA analysis, the Technical Advisory Committee has identified a number of issues which it believes should form the basis of discussions...
And then further on in the letter, on the last page, they're talking about getting the local airport authority together.
The commitment to a Task Force process --
This is on the local airport authority.
-- is not a final commitment to a Local Airport Authority. Rather, this immediate commitment will give the Heads of Council and all of the Councils in the GTA and surrounding areas, the necessary information through the base case study process to make learned and responsible strategic decisions for airport operations in the future.
That substantiates what I believe I told the committee, that is, the local airport authority agreement was not there when I was talking --
Senator LeBreton: What's the date of the letter again?
Mr. Lewis: The date of that letter -- it's from D. A. Lychak, chairman of the GTA local airport authority, technical advisory committee -- is the 3rd of December, 1990.
Thank you, Mr. Chairman.
The Chairman: Thank you very much, Mr. Lewis. Senator Bryden, you were continuing.
Senator Bryden: Yes, please. I tried to organize myself a little bit so it would be as brief as I can be.
Your reference to the fact just now that there were still formative stages in the local airport authority for the greater Toronto area, did you see that as an impediment to operating through the government's policy of devolving airports to local airport authorities?
Mr. Lewis: Very much so.
Senator Bryden: Apart from the fact that there were a lot more municipalities involved, why was it so much more of a -- was it more of an impediment other than the size than would have existed in relation to any of the larger cities, Toronto, the Montreal situation?
Mr. Lewis: I already had meetings with representatives of those local airport authorities. They were already engaged in the process of negotiating with the Department of Transport. That was under way, and as I said, it wasn't going as fast as I wanted, but there were certainly formed and getting their act together.
Senator Bryden: The Toronto one was not as far advanced?
Mr. Lewis: By their own admission.
Senator Bryden: Is it fair to say they were working at it?
Mr. Lewis: That is proof in that letter that they were working at it, that:
...we are in the very early stages of our LAA analysis...
Senator Bryden: I guess the point is you decided, then, that is, the government, to treat the Toronto airport, the Pearson airport, as an airport quite different from all the others.
Mr. Lewis: Not necessarily, because I made the point in that meeting, as I referred to the notes, that we weren't ruling out a local airport authority, but we had to make progress.
Senator Bryden: There was a meeting on the 7th of December, 1990, between yourself and the heads of the various councils.
Mr. Lewis: That is correct.
Senator Bryden: And I guess the mayor of Toronto is reported to have said to you, or said at the meeting, "If you lease T1 and T2, what's left for a greater Toronto airport authority?"
Mr. Lewis: He also went on to say the revenues from T1 and T2 are needed to make future investments.
Senator Bryden: Isn't that fair? Isn't that a fair comment?
Mr. Lewis: I don't have any trouble with Mr. Eggleton taking that position vis-a-vis the City of Toronto, but we were dealing with a federal asset, and the revenue from Pearson was substantial and was used to make improvements to all other airports. I think in any final deal you will find that the government takes the position that there are going to be revenues to the federal government from Pearson, T1 and T2, just as there are from T3, as I understand the contract. The government can't give up that revenue, or it can't not get a return on its investment for the investment it has in the whole Pearson plant.
Senator Bryden: We heard yesterday from the CEO of Vancouver that they pay, sort of base, something like $35 million to the Government of Canada.
Mr. Lewis: Mm hm.
Senator Bryden: And then there were also all kinds of other possible sources of revenue. We didn't pursue it. But there is over-rides on volume and so on. So the fact that there is a local airport authority running the facility doesn't mean there is no revenue going to the federal government, does it?
Mr. Lewis: No. No, I wouldn't have suggested that.
Senator Bryden: You have said that one of the reasons that you did not proceed under the normal government policy of devolution to local airport authorities was because they were at an early stage and it was going to take too long, and there is quotes in here from you. I don't need to quote.
You also indicated that, "But we're not saying we don't want a local airport authority. We want to two-track this. We want to privatize T1 and T2, but that does not stop you developing your local airport authority."
My question is: Is it not the case that most of the revenue that is generated in the Toronto airport is generated through T1, T2, and T3? And if T1, T2, and T3 are already in the hands of public developers, where is a local airport authority going to get the revenue do all the things that Vancouver has done?
Mr. Lewis: Well, Vancouver, once again I bring you back, sir, to the fact that the local airport authority that they're talking about involves several municipalities and more than one airport. You have got the island airport, you've got Buttonville, and you have got Brampton, Navy, Markham, Oshawa. Just what were you going to include in the airports in the local airport authority? There was some discussion whether Hamilton would be in or be out. So it wasn't that well defined at this time. Okay? Still have a local airport authority, and there could have been some deal worked out with the federal government to hive off part of the revenues to the local airport authority, sure.
Senator Bryden: Once again, it is your opinion that there was such urgency to do something with T1 and T2, even though I believe T3 had already opened --
Mr. Lewis: Not at this point, I don't think.
Senator Bryden: Not at this point, but close. That you could not wait for the Toronto area to get together.
Mr. Lewis: That is correct.
Senator Bryden: In relation to the environmental assessment review panel, and once again, without going in and taking a great deal of time, early on in your ministry, in an interview that is quoted in here, you --
Mr. Lewis: Where, sir?
Senator Bryden: That is quoted in this book. Did you want to look at it?
Mr. Lewis: If I am going to be -- is it in this book here?
Senator Bryden: The one that you -- the one that I am the only one that has a copy of.
Mr. Lewis: Yeah.
Senator Bryden: Okay. On October 22, 1990.
Mr. Lewis: Okay.
Senator Bryden: And this is reported in the Globe and Mail , October 22, 1990, under the headline "Pearson Priority, Lewis Says."
Mr. Lewis: Right.
Senator Bryden: You are quoted as saying, "The federal government would be unable to determine the passenger levels at Pearson until the summer of 1991 when it would receive an environmental report on runway expansion.
Mr. Lewis: Mm hm.
Senator Bryden: Did you receive an environmental report on runway expansion?
Mr. Lewis: Not during my term as minister. I left in April of 1991.
Senator Bryden: Do you know whether the decision to go ahead with the privatization of T1T2 was made prior to receiving the environmental report on runway expansion?
Mr. Lewis: First of all, I would like to rephrase the word privatization of Terminals 1 and Terminals 2 because privatization infers change of ownership. There was never any intention to change the ownership. The intention would have been to lease and to allow the tenant to make those changes.
Now, every government has the right to change its mind. We made a very definite decision that we would ask for requests for proposals. Then the determination of what would go in the request for proposals took what, 16 months? So it took beyond the date when I believe the environmental assessment came out. But what we did was get both moving. I mean, one way of doing it would be sit and say, "All right, we will wait for the environmental assessment, and then we will do it." We didn't do that. We pushed the two together.
Senator Bryden: So far we have gotten two situations where government has exercised its right to change its mind. One, to move off the 1987 preferred policy of devolution to local airport authorities.
Senator Jessiman: Not so.
Mr. Lewis: No, I don't think so.
Senator Tkachuk: Don't put words -- you do that all the time, Senator Bryden. Leasing was always part of the policy.
Senator Bryden: The witness can answer. I think Mr. Lewis is perfectly capable of looking after himself.
Senator Tkachuk: We have the documents. Quote from the documents.
Senator Jessiman: Why are you saying it's different? They're leasing part of the airport, and that is part of the policy.
Mr. Lewis: If I could, I believe Mr. Crosbie, in his announcement, item 7, said transfer of ownership to a private business is not envisaged, which I just suggested, at this time by the government, but leasing proposals may be considered. So it was always in there.
Senator Bryden: I think the way I put my question was that the preferred policy in 1987 was devolution to local airport authorities. And it was established. I am not questioning it was established.
Mr. Lewis: You are using the word "preferred", sir. I don't see it in here as part of the policy. It doesn't foreclose, as I just pointed out to you. The leasing proposals may be considered.
Senator Bryden: We have established that the leasing proposals are not inconsistent, at least, with that policy.
Mr. Lewis: Thank you.
Senator Bryden: The other one now is that it's my understanding that initially, you did not proceed with the development, the call for proposals on T1T2, until after the environmental assessment review panel; that initially, that was required to assess not only whether the runway could be built and therefore the passenger level. But nevertheless, at some point, that decision was changed.
Mr. Lewis: No, no. I am not sure that it was. We at all times -- I'm sorry, we didn't change any decisions. The content of the request for proposals still had to be determined. That is what took the 16 months. So we didn't -- we made the announcement we were going to make a request for proposals, but we did not say, "And here is what you've got to -- here's the conditions you've got to meet." We said they have to be developed. So there was a developmental process which we put in train.
Senator Bryden: And Mr. Lewis, during your term as minister, you did not ever take the position that the proposal for development could not be taken forward until the EARP was completed and the decisions were made as to what was happening with runway developments.
Mr. Lewis: Would you say that again, please?
Senator Bryden: That there wasn't a time when you were minister where your position was that you could not proceed with the development of T1 and T2 or the calling for proposals until such time as you knew whether the new runway was going to go, how much runway capacity you would have, and that depended on the environmental assessment panel.
Mr. Lewis: I don't think I was ever called upon to make that decision because we knew the environmental assessment was in train. We wanted to get the development of the request for proposals in train. If somebody had come to me and said, "We've got the request for proposals. Everybody agrees. This is what they should include. We want you to go ahead and distribute this," then the question would have been, "Well, wait a minute now. Would this be seen to be disrupting the oily process of an environmental assessment?" That would have been a decision for another day. I was never called upon to make it. It would appear to me as though my successor wasn't called upon to make it either because the environmental assessment decision came down before the finalization of the request for proposals.
Senator Bryden: The local authority approach -- you had quoted from the Board of Trade letter on June 18, 1991 -- encouraging you to --
Mr. Lewis: I'm sorry, I wasn't the minister at the time.
Senator Bryden: No?
Mr. Lewis: Not 1991.
Senator Jessiman: April, '91.
Senator LeBreton: April 21, 1991.
Senator Bryden: How about February 15, 1991?
Senator Jessiman: He wasn't minister then either. Sorry, he was.
Mr. Lewis: Yes, I was.
Senator Bryden: You were. Sure about that?
Senator Jessiman: Positive. Sorry about that.
Senator LeBreton: April 21, 1991.
Senator Bryden: I'm sorry, the first date was wrong. My first date was January 18, 1991.
Mr. Lewis: Okay.
Senator Bryden: The first letter. It was from the Board of Trade. I think you referred to it this morning -- if it's the same letter, and I think it is -- where they were urging action to make improvements on the airport. And the last sentence of sort of the last body of the paragraph of the first page:
The Board strongly supports the development of a regional airport authority and believes that privately developed and managed terminals can be part of such an authority.
That was part of that.
Mr. Lewis: I'm not denying I didn't get the letter. I have not seen the letter recently, sir.
Senator Bryden: I thought you quoted from this letter this morning.
Mr. Lewis: I do not think so. I quoted from letters that were as a result of a Board of Trade letter-writing campaign, but that was in June of 1989. Okay?
Senator Bryden: Just I think one final area, and it really does relate to the policy of local airport devolution. I'm referring this time to a letter dated February 15, 1991 to you from the Minister of Transport of Ontario.
Mr. Lewis: Mm hm.
Senator Bryden: In that letter, he says -- and there are other things here, and if you want them, I'm prepared to read it all, but the points that I wanted you to respond to is:
I would like to take this opportunity to confirm my support for a proposal to establish a Local Airport Authority (LAA) in the SCOAA. Such a system will better serve the broad economic and social interests of the people of south-central Ontario.
Then just one other line:
The development of a single LAA is a prerequisite to Transport Canada's proposed plan to privatize Terminals 1 and 2 at Pearson Airport.
That was the position of the minister of Ontario at the time. Given that position and the position of the mayor of Toronto, who basically said if we don't have T1 and T2, what's the point of proceeding, nevertheless, the government decided to proceed with private developers; is that correct?
Mr. Lewis: No no, no no. Government had decided by the time of that meeting and the time of that letter to call for requests for proposals for the redevelopment of Terminals 1 and Terminals 2. And as I am reported to have said in answer to a question from the minister you are referring to, on December 7, Minister of Transport of Ontario Minister Philip asked if the province set up a private public corporation, could they bid on terminals. The minister indicated we'd have to look at whatever they were considering. However he had no confidence that the GTA could get together on this matter.
I mean, I always kept that door open.
Senator Bryden: I see.
Mr. Lewis: I always intended to, and I think it's reported by others that I did, because I couldn't close that door. But they couldn't get through the door. Okay?
Senator Bryden: Effectively, by providing the most economically viable facilities to the private sector, the door was closed.
Mr. Lewis: But they had not been provided, sir. What we had said was we were looking for requests for proposals. We didn't even have the terms of the requests for proposal at that time. I said, "Get your act together. I'm glad to." I mean, my old roots are in the Board of Trade of Metropolitan Toronto, and so I'm not going to turn them down. They had a valid point. But you've got to get your act together.
Senator Bryden: And from the time the indication was given that you were going to call, which was in 19 --
Mr. Lewis: October.
Senator Bryden: October of 1990?
Senator LeBreton: Yes.
Senator Bryden: And the RFP went out in March of 1991.
Senator LeBreton: Two.
Senator Bryden: Sorry, 1992.
Senator LeBreton: Seventeen months later.
Senator Bryden: I never said I could count.
Senator LeBreton: I guess lawyers aren't good accountants.
Mr. Lewis: Oh, I don't know.
Senator LeBreton: Some lawyers aren't good accountants. I'm glad I'm not a lawyer or an accountant.
Senator Bryden: As you indicated, the local airport authority in the greater Toronto area was still in the beginning stages of getting itself organized. And while you've indicated they had -- if they could get their act together in the 17 months and get ready to respond to a 95 day proposal, they were welcome to do that.
Mr. Lewis: Just a minute. At that point, those words are all true, but they've got to be examined. I didn't put the 95 day time limit on it. That was put on when the request for proposal was put out some 16 months later. Okay?
Senator Bryden: But it was the Minister of Transport of the day. It was not you.
Mr. Lewis: Yeah.
Senator Bryden: And the private sector, you have indicated that almost right from the beginning of the time that you were minister, the private sector side, whether it's Paxport or Airport Development or the list, they already were organized enough that they were making proposals? Unsolicited, but nevertheless.
Mr. Lewis: Sure. I think the dating on it -- doesn't the Paxport letter say, "Here is our old 1989 proposal"? So they'd been doing some work on it. Unfortunately, because it's not included in the materials that you were given by Transport Canada, the proposal of Canadian Airports Limited is not there, so you don't know -- presumably they will provide it, but you don't know when that one was dated either. So they have been working on this.
Senator Bryden: I guess that is the point that I'm really trying to get to. Maybe I'm not getting at it very well, and I apologize. It's all fair to say, "You individual municipalities representing however many million people get together here in the next few months, and you are entitled to bid on this project same as anybody else." I wonder if that is a level playing field with the private sector who have been organizing, at least some of them, organizing since 1989, to make this bid and to get ready to respond to an RFP.
Mr. Lewis: I guess an interesting question would be for the committee to ask where the GTA was when the request for proposals went out. Where was the GTA and their local airport authority in March of 1992 when the request for proposals went out with a 95 day deadline? Were they organized by then? I don't know, but I'm sure that the committee will want to know that answer.
Senator Bryden: Just one last area. In the announcement later that accompanied the opening of at least three of the airports, I believe Vancouver, Calgary, Edmonton, and maybe more, but they were all made in about the same time, and in each of the announcements, Senator Corbeil said that this has been the result of three long years of organization and negotiations, or words to that effect. So in those cities which are smaller and perhaps less diverse, it took three long years to get an LAA up and ready to be able to compete.
Mr. Lewis: I have no knowledge as to when that announcement was made.
Senator Bryden: If that were true, wouldn't one expect that it would take at least that long for metropolitan Toronto to be able to organize for such a huge project as this?
Mr. Lewis: Well, I don't know when those announcements were made. I would be interested in the minister -- I'm not saying the minister didn't say three years. I wonder at what intensity the developments, the negotiations, took place. I would wonder at what his starting point is for that three-year term, because the starting point would be an interesting thing to factor in. And like I say, in December of 1990, by their own admissions, the LAA for the GTA was in the very early stages, and it would be interesting to ask the question -- I'm sure you will get an opportunity -- why didn't the LAA bid on the request for proposals when it came down.
Senator Bryden: Following on that same point a little bit, if they were in the final -- or the initial stages in December 1990, and it was the same period of time, three years, they would have had a significant amount of work still to do in order to be in a position to bid. Is that fair? You would not know that?
Mr. Lewis: I would not be in position to judge that.
Senator Bryden: Mr. Chairman, I don't really have anything further.
I want to thank you, Mr. Lewis, for your patience.
Senator Tkachuk: I have a couple of short questions on the LAA. I understand the other witness is ready.
The local airport authorities, when Mr. Mazankowski was Minister of Transport, were they already in issue in Western Canada? This was a western Canadian movement, really, to establish local airport authorities in the 1980s, even before our policy of 1987.
Mr. Lewis: I do not know. I would think the genesis of it was in the mid '80s, that is for sure.
Senator Tkachuk: I believe our policy was announced in 1986-87. It would have been three years prior to your appointment. Were there already airport authorities informed, organized, lobbying to have an airport authority in their city, with the exception of the city of Toronto?
Mr. Lewis: That is correct. In other words, those four areas had been able to get on with the job of forming the local airport authority and Toronto did not seem to be at that position in 1990.
Senator Tkachuk: I wanted to make note of that because, by 1992, it was already six years after the announcement of local airport authorities, and yet the city of Toronto had not created a local airport authority. And I am not sure if they have to this date, which is 1995. So I suppose we could wait.
But he brought up -- the mayor of Toronto -- I have not seen the book but you mentioned there were a number of lobbyists, that there was letters and stuff coming in, when you were minister, regarding the state of the Toronto airport and the need and the desire to fix it. Who was the mayor of Toronto? Was it Mr. Eglington?
Mr. Lewis: It was Mr. Eggleton, yes.
Senator Tkachuk: Did he also make representation on behalf of the city of Toronto, or did the city council make representation?
Mr. Lewis: To the best of my knowledge, I cannot remember that, and I would not want to venture a guess. I don't know. There were lots of people, but I can't say it with any certainty so I won't.
Senator Tkachuk: That is it. Thanks.
Mr. Nelligan: Mr. Lewis, if I may ask you some more directly political questions, since it is one of the issues, it has been suggested in this matter that there was excessive political pressures.
Either as a minister of the Department of Transport or subsequently as a minister in the cabinet of the government of the day, would you tell us please whether there were any direct political pressures on you by proponents for construction, and what your personal contacts were with them with regard to preference in obtaining a contract?
Mr. Lewis: There was never any political pressure on me by anyone to give any edge to anybody interested in the development of Terminals 1 and 2. The pressure was: Get it done. Not by whom or by when, but just to get that file as far along as you could, but never any pressures both when I was minister or afterwards.
Mr. Nelligan: Thank you, sir.
The Chairman: We are very grateful to you, Mr. Lewis.
Mr. Lewis: Thank you. Members of the committee, thank you very much. I offered to leave these letters, Mr. Chairman, and I will. You can even have my yellow stickies.
The Chairman: Mr. Shortliffe? You are no stranger to parliamentary committees.
Mr. Glen Shortliffe, Former Minister of Transport: That is true, senator.
The Chairman: We welcome you back. Before you start, you know that we are swearing witnesses.
(Mr. Glen Shortliffe, Sworn:)
The Chairman: Ladies and gentlemen, Mr. Shortliffe, as you probably know, began his career as a federal public servant at the Department of External Affairs in 1962, after holding progressively more responsible positions at External and the Canadian International Development Agency. He became deputy secretary to the cabinet, operations of the Privy Council Office, from '86 to '88.
Then he was Deputy Minister of Transport, and these are the dates: April 1, 1988 to August 31, 1990. That was approximately two years and some four months.
Mr. Shortliffe: It was October 1, actually, senator.
The Chairman: October 1, 1988?
Mr. Shortliffe: No, May 1, 1988 to October 1, 1990.
The Chairman: After he left the Department of Transport, he became associate secretary to the cabinet, deputy clerk of the Privy Council, and finally Clerk of the Privy Council, the senior mandarin, 1992 to 1994.
After he left the public service, he went into private practice.
I understand that you have no opening statement, Mr. Shortliffe?
Mr. Shortliffe: That's correct, senator. I would just like to say I am here to be as helpful to all members of the committee as I can.
Senator Kirby: Mr. Chairman, can I clarify, for the witness' benefit, as much as anything else, clarify what I think was our understanding, which is that Mr. Shortliffe is here today to testify about his period of time as deputy minister of Transport and that he will be brought back subsequently to deal with his time as Clerk of the Privy Council and, therefore, we will not be asking questions on that latter period of time today. That is my understanding. Am I correct on that?
The Chairman: Yes. That is correct. Even if we brought him back, it might be difficult to try to pry questions --
Senator Kirby: I just wanted to be clear. I was under the view we were dealing strictly with Mr. Shortliffe's period of time as deputy minister of Transport. On subsequent events, he would be coming back.
The Chairman: Fine. That is understood.
Senator Kirby: That is fine. I thought he should know that that is where we were coming from.
The Chairman: In trying to prime the pump, Mr. Shortliffe, when you arrived at the department, can you give us some idea of the climate at that particular time. It was the time of airport devolution. It was a time of rapid activity in the department.
What did you find when you came in the department? First of all, when you first came in, your minister was Mr. Bouchard.
Mr. Shortliffe: That's correct, senator.
The Chairman: And then, latterly, Mr. Lewis.
Mr. Shortliffe: That's correct. And I was gone, I think, when Mr. Corbeil became minister.
Well, sir, to try and describe the atmosphere in the Department of Transport in 1988 is a bit difficult in one sense. I was supposed to begin on a Monday. And, in fact, on the Saturday, I believe, preceding that Monday, there was the Dryden plane crash. My tenure as deputy minister began with trying to cope with the fallout of that horrific event.
I very quickly learned in my first days of my tenure what a vastly complicated, wide and difficult area transport was. I had known it perhaps intellectually but I certainly learned it viscerally very quickly.
One of my mandates as I took up the position of deputy minister, both from my minister and, as I recall, from the then Clerk of the Privy Council, was to move the department forward as fast as I could, with respect to LAAs.
As I think has come out in testimony from other witnesses, the policy on LAAs had been set before I arrived in the department. There were documents that the department of the minister of the day had issued explaining what the LAA policy was, how it was supposed to work, how we would approach negotiations.
There were, at that time, embryonic LAA groups in the four cities which have been discussed with you previously. As I say, part of my mandate at the time was to make a very real effort with my officials in the department to determine whether or not it was, in fact, feasible to transfer an airport to a LAA, whether or not a successful negotiation could be achieved.
The picture, I must say, at that time, was not totally clear. The range of issues that had to be dealt with were extraordinarily complex and difficult and, as I think has come out from other witnesses before you, in the event, it proved to be a very long, complicated drawn-out process before those negotiations were successfully completed and airports were, in fact, transferred to LAAs.
That was one of the priorities that I faced as I took up my tenure. Another one, however, was Pearson. Pearson in the late '80s -- I am talking in the period 1988, '89, running into '90 in particular -- Pearson was a mess. It was a disgrace. And worst of all, it was not working.
Now, there were all kinds of factors that led to that reality. One of the factors was that we did not have enough air traffic controllers in the towers to handle the existing traffic, much less the growth of traffic that we were anticipating at that point.
I think it is important to emphasize that this was well before the recession of the '90s. This was a period of economic growth, and this was a period when those of us who were concerned with Pearson and with other airports, were anticipating that we were already facing a crisis and that that crisis was going to get infinitely worse as traffic patterns increased in the '80s and the '90s.
A second factor was that, by the late 1980s, the professionals involved had pretty well come to the conclusion that the runways at Pearson were inadequate for the existing and projected traffic that was going to come into that airport.
The fact is that, by the late 1980's, by the time I took up my position, Pearson had become the hub of the national air transportation system in this Canada. Pearson was the target of international air travel to Canada.
In earlier phases, in earlier periods, there had been some question mark about that in the minds of both politicians and bureaucrats. I was not there at the time, but there was a day and age when it was hoped that Mirabel would become the primary international airport serving entry certainly into eastern Canada. But by the time I took up my job, the reality was that Pearson was the hub.
Equally, by that period, 1988-89, the terminals at Pearson were a big part of the problem as well. Terminal 1, by 1988-89, I can best characterize as a slum. Anybody whoever had to travel through it at that period or, for that matter who has to travel through it today, would very quickly come to appreciate that its useful life and its once cutting-edge technology had then rendered it into the one-horse shay which had collapsed.
The parking garage alone at Pearson was down more than it was up. It was impossible to get cars in to park at Terminal 1 for a very long period of time.
Terminal 2 was, that stage, was clearly suffering from an inadequacy of gates. Our perception was that that inadequacy was going to increase very quickly as the years unfolded. And as I think has been pointed out in other testimony before you, senators, by the time I took up my position, the government of the day had taken a decision to build Terminal 3, and that project was, in fact, about to get under way. It got under way, in terms of construction, shortly after I became deputy minister and after a couple of rancorous negotiations at the last moment -- which were fun in retrospect -- which surrounded the decision to actually begin construction.
But when I took up my position, although the deal had been made, construction had not yet started; the legal documents had not yet been signed. All of that happened on my watch in the department.
I think it is also important to say at the outset that, as I took up my watch, the policy positions of successive governments, regardless of party, had been to avoid policy decisions with respect to Pearson and its future.
In effect, for about something like 15, 16 years, successive governments, although issues were raised from time to time, had not wished to take decisions with respect to: Did we want Pearson to be the hub of the national transportation system? Did we want to further develop it to cope with the traffic that we were anticipating in the 1990s and the twenty-first century, or was it time to begin develop Pickering, around which the Department of Transport had acquired huge amounts of land in the 1970s, I think it was, and at one time point had made a policy announcement that Pickering would, in fact, be the airport of the twenty-first century.
There were ancillary issues surrounding it, such as the relationship between Pearson and the airport at Hamilton. There were a second set of subsidiaries surrounding the use of Buttonville and the island airport in Toronto.
The point I am making now is that successive governments had not decided or had avoided decision as to the longer-term future and place of Pearson in the national scheme for air transportation in this country.
I am offering you a personal view. Why? Because every decision made about Pearson, and most other large airports in this country but certainly about Pearson, was highly contentious in the local, the regional, and, indeed, at times in the national environment, but certainly at the local and the regional environment.
If I may digress just for a second, I remember the first time I saw Pearson, which was then called Malton, which was about 1953. It was an airport that was a way out in the country side, quite far from any place and serviced essentially by gravel roads.
When I became deputy minister of Transport in 1988, Pearson was an airport surrounded by urban communities, and no airplane could land or take off at that airport without causing contention with somebody. There had been an absence of policy decision-making about the place of Pearson and its future in the air transportation system.
One of the things that I tried to do in my initial period -- and I am quickly going to open a bracket here, senator, and say I have no access to documents anymore. I am in the private sector. So I will be necessarily vague about dates. I am running just on memory.
Certainly one of the things that I believed ought to happen, shortly after I had gotten my feet under the desk and begun to understand some of the problems that were facing the department, was that I thought ministers should come to some conclusions and decisions about whether they wanted to see further development at Pearson, or whether they wanted to begin to divert traffic to other airports, which was feasible, or whether they wanted to develop a new airport at Pickering; but how was the government of the day going to cope with the reality of the congestion, the overcrowding, and the anticipated growth in air traffic that was going to face southern Ontario in the '90s and in the twenty-first century.
One of the first things that we mobilized ourselves to do in the department was to undertake, in effect, a policy review of the options that faced the government with a view to seeing if we could get determination and direction as to whether the government wanted to see Pearson developed as the hub for a lengthy period of time, well into the twenty-first century, or whether it wanted to pursue some other option for airport development in that general geographic region.
And in the event, the government did take such a policy decision. It did decide that it was going to develop Pearson as the hub of the national air transportation system for the twenty-first century and, really, all the other decisions that that have occurred since flowed from that first policy decision that was reached, as I recall, sometime in 1989.
Does that give you a good enough introduction, senator?
The Chairman: I just said priming the pump. That wasn't a question.
Senator Kirby, would you like to pick up?
Senator Kirby: Thank you, Mr. Chair.
Thank you, Mr. Shortliffe, for your long answer, detailed answer rather than just merely lengthy. I wonder if I could just go back to pick up a couple of points that were raised this morning and then run off into another number of issues.
In your response to Senator MacDonald a minute ago, one of the things you said, that when you got there you found that Pearson was a mess I think was your word. I think Pearson wasn't working. I don't like to use this phrase, but who do you blame for that, what caused that, who was responsible for the fact that the country's biggest airport was a mess?
Mr. Shortliffe: Well, I think it was a combination of factors, senator. I, as I've just said a moment ago, I think there had been an absence of policy decisions for a very long period of time about the airport. I think some decisions were made in the mid '80s about the numbers of controllers that were required that were out of sync with the realities of the traffic that eventually arrived at the airport. I guess the most honest answer to your question, senator, at the end of the day, since Transport Canada ran all the airports in those days, it was the government's fault.
Senator Kirby: And when you say the government's fault, just tell me a bit about the sort of, the bureaucracy you inherited, when you commented a few minutes ago in response to Senator MacDonald that, the word you used was the opinion of professionals and you then talked about runways and terminals and needed more gates, when you said professionals did you mean professionals within your department?
Mr. Shortliffe: Yes, both within the department and people with differing kinds of expertise that were outside of the department who were constantly make representations.
Senator Kirby: Presumably the officials in your department were, in your view, reasonably, to use your word, professional?
Mr. Shortliffe: Oh yes.
Senator Kirby: I mean they were pretty competent?
Mr. Shortliffe: Sure.
Senator Kirby: Did you have a feeling as the evolution of airport policy unfolded that the public servants were opposed to the policy or were fighting it or going slow on it or dragging their feet or anything like that?
Mr. Shortliffe: I was -- before I answer that, I was doing a number of things this morning but I had CPAC on with one eye and I heard Mr. Lewis.
Senator Kirby: I thought since he blamed the bureaucracy and since the bureaucrats were your employees we should at least give you an opportunity to respond.
Mr. Shortliffe: When Mr. Lewis was my minister, senator, we often agreed on things and there were times when we profoundly disagreed and, with deep respect to Mr. Lewis, I don't agree with his characterization of the bureaucracy that he made this morning. I have some understanding of it because he was, and he was reflecting that to you, he was a man who wanted to make progress as fast as possible. But were the bureaucrats, quote, opposed, and were they slowing down? I would like to answer that in two ways. The bureaucrats in Transport, like most other bureaucrats throughout the Government of Canada, are highly professional. They give their advice freely and they implement directions received from ministers to the very best of their ability. And that's what bureaucrats in Transport were doing at the time and I'm sure that that's what they are doing today.
I think it is fair to say as somebody who had to get deep into the trenches on a whole host of issues in Transport Canada, that these were very complicated projects; whether it was LAAs, whether it was the future of the air navigation system, whether it was how do you develop enough controllers to operate the system, whether it was the future of the Coast Guard, et cetera, these are very complicated, difficult projects and the negotiations that surrounded LAAs were extremely difficult and complicated and they did take a long time. There was no deliberate slowing down.
Senator Kirby: Frankly I just thought as a former deputy myself you should at least have the chance to respond on behalf of your former employees.
I wonder if I can get to the LAA issue in the following context: You described the difficulty of negotiating LAAs and I assume this was not only Toronto, this was just a general municipal, anything intergovernmental is painful, I think generally it's more -- and the more players the more difficult it is. Is that true?
Mr. Shortliffe: The more players the more difficult it is, I wouldn't characterize those, the LAA negotiations as intergovernmental in the traditionally understood sense of the word.
Senator Kirby: Well they weren't federal-provincial but they were --
Mr. Shortliffe: No, we were dealing with an entity that eventually became an incorporated entity.
Senator Kirby: Oh, I see, okay. Even though the owners, have it in quotes, would have been municipal governments in various parts of the country?
Mr. Shortliffe: Yeah.
Senator Kirby: So to that extent it wasn't typical federal government, intergovernmental negotiations, okay. Were you involved when the LAA negotiations were going on elsewhere in the country, excluding Toronto?
Mr. Shortliffe: Oh yes, absolutely.
Senator Kirby: That's what I thought.
Mr. Shortliffe: Absolutely. I mean it was during my tenure that the major push to open negotiations and then proceed with negotiations with the entities -- and I'll use that word repeatedly -- in Vancouver, Edmonton, Calgary and Montreal got under way. I wish I could say to you that they got completed during my time, but they sure didn't. But they got under way during my time.
Senator Kirby: Am I right in saying that all those negotiations were oriented toward turning over to leasing to an LAA, essentially the management and operation of the entire airport excluding safety security issues?
Mr. Shortliffe: That's correct.
Senator Kirby: None of those other airports had the notion that you would be involved -- I don't mean you personally -- the government would be involved in arranging to lease the Montreal Dorval airport or the Calgary airport, et cetera, to somebody and outside of the LAA process, as I understood it when the LAAs took over they took over the entire operation. Is that basically correct?
Mr. Shortliffe: That's correct. They got a, I think the phrase is they got a land lease for the whole airport and everything thereon. Transport retained and retains regulatory responsibility for safety and security and it retained the air navigation system.
Senator Kirby: The air traffic controllers in fact continued to work for your department, right?
Mr. Shortliffe: Yeah.
Senator Kirby: Can you tell us then, because I didn't really understand this this morning, why was it totally different policy or approach used in Toronto in the sense that even if you had been successful in negotiating an LAA, having already leased, turned the terminals over to somebody else to the private sector, why was a different strategy followed and did it even make sense to have a situation, why would anybody want to have an LAA if the revenue generating portion was in large measure gone?
Mr. Shortliffe: With respect, Senator Kirby, could I answer your question in the reverse way?
Senator Kirby: Sure.
Mr. Shortliffe: In Toronto, in '89, we perceived that we had a crisis and that crisis needed to get fixed and there was no entity with whom Transport could discuss or negotiate. There was a problem. And so the government of the day looked at a number of options for fixing that problem and ultimately chose the one that is now of course completely in the public realm, that is to say it decided without going the LAA route, because there was nobody to talk to at that point, that it was going to develop that airport, that it was going to develop more runway capacity at that airport and that it was going to refurbish the terminals. So this was a, if I may, sir, was this a departure from the generally announced LAA policy that had been put out in 1987? Sure it was. Was it a deliberate policy decision by the government of the day? Yes, it was. And was it taken to address what was perceived as a crisis at Pearson? Yes, it was.
Senator Kirby: The crisis though, as I understand it, was not merely a terminal crisis. Well, one can take that in any way you want. It was not a crisis that had to do with capacity of terminals but in fact involved runways and a whole series of other things?
Mr. Shortliffe: Yes.
Senator Kirby: And yet an impression was made, the impression I have -- please correct me if I'm wrong -- the impression I have is that higher priority was placed on getting the terminal issue settled than on the runway, the runway one hasn't been changed yet so obviously there must have been some element of -- you know, at -- am I right on that?
Mr. Shortliffe: No, I'm not sure that I would agree with that, senator, at least; I'm relating to my time as deputy minister --
Senator Kirby: That's all we've asked you.
Mr. Shortliffe: -- of Transport. During my time as Deputy Minister of Transport the decision was to proceed with all possible speed to fix three problems essentially: runways, terminals and controllers. And we were working on all fronts to attempt to get on with fixing that problem. In my time.
Senator Kirby: All three problems?
Mr. Shortliffe: All three.
Senator Kirby: When you say the problem you mean all three problems?
Mr. Shortliffe: I mean all three, yeah. So was there a higher priority accorded to runways versus terminals in my time? No. The processes were different though.
Senator Kirby: The processes were different in a sense that vis-à-vis the runways you had to go through an environmental review process, correct?
Mr. Shortliffe: That's correct.
Senator Kirby: And so that dragged on so essentially you tried to run three parallel tracks, is that essentially what you were trying to do? I guess logically, maybe it's just my view of airports, but logically it seems to me solving the terminal one without solving the runway one doesn't necessarily really solve your problem, I mean in the big scheme of things? I mean a recession helps because you get fewer flights.
Mr. Shortliffe: The recession ultimately of course changed the --
Senator Kirby: Solved of the problem.
Mr. Shortliffe: Solved the problem, I think the problem is still there frankly. If anybody has gone through Terminal 1 lately.
Senator Kirby: Many of us try to avoid it.
Mr. Shortliffe: I think it's there in spades. But no, it would have depended in fact subsequently I believe, it would have depended on the nature of the refurbishment of the two terminals, the nature of that refurbishment would be affected by any decisions ultimately reached about runways, but was there a perception that there was a need for refurbishment regardless of runways, the answer is yes.
Senator Kirby: So that the perception was that you needed both but you just said that the ultimate solution of the terminal problem depended in part and I understand on the ultimate solution of the runway problem?
Mr. Shortliffe: Yeah, the design of the refurbished terminals would depend ultimately on a decision about --
Senator Kirby: And yet -- and we can come back on this when you're back again -- but ultimately a contract was signed that dealt with the terminals in spite of the fact that the runway problem hasn't been completely taken care of?
Mr. Shortliffe: Well, I don't think you want to get into the later stages.
Senator Kirby: No, no, I understand, that's all I said, we will come back on that down the road.
Mr. Shortliffe: In fact by that -- well, in fact by that time I think both had been decided.
Senator Kirby: I'm happy to leave that for now.
On the LAA issue, and I understand you're deciding to try to proceed on three fronts at once, am I right in saying that you were asked by the various municipalities involved to go slowly on the T1T2 privatization issue until they could get their LAA act together because they felt what was the sense of having an LAA if you had already given away -- given away, I'm sorry -- if you had already leased T1 and T2; i.e. if T1 and T2 would not be under the control of an LAA?
Mr. Shortliffe: There were, near the end of my time as deputy minister, senator, there were some municipalities who were of the view that you have just articulated, there were others who were of the view that we ought to be getting on with fixing the airport. There was no consensus of view.
Senator Kirby: You know the LAA, you know what an LAA is infinitely better than I do, so let me ask you for your view on the question of does a LAA without any terminals to manage make sense? And if so how?
Mr. Shortliffe: Yeah, it depends frankly. If you're asking me does an LAA at Toronto without Terminals 1 and 2 --
Senator Kirby: Well, and 3.
Mr. Shortliffe: And 3. Does it make a lot of sense? It depends on what the perception is of the future development of the airport. If you're going to add more runways and Terminals 4 and 5 it could indeed make sense. And I believe throughout the period the government of the day kept stating and restating that as it took various decisions about terminals and so on that this did not preclude an eventual negotiation with respect to an LAA but the government was getting on with refurbishing the airport.
Senator Kirby: So they were going to refurbish and if an LAA came on down the road and if it made sense in the future, et cetera, it was a plus.
Mr. Shortliffe: And if a point was ever reached where there was somebody to talk to because certainly in my time --
Senator Kirby: There were too many people to talk to is the point --
Mr. Shortliffe: No, no, I mean an entity.
Senator Kirby: Oh, I see, okay. Yeah, I got you.
Mr. Shortliffe: An entity with whom Transport Canada could negotiate. And certainly in my time in Transport, which comes up just to the point where Mr. Lewis made his announcement, there was no entity to talk to.
Senator Kirby: On the EARP process, or FERA, or whatever it was called in those days -- they keep changing the acronyms for the environmental review process -- it was going on with respect to the runways, correct?
Mr. Shortliffe: Yes.
Senator Kirby: Was there a general view within the department that it made sense to continue to negotiate on T1T2 or to redevelop T1T2 in the absence of the EARP process being finished, or was that also a controversial issue within the department?
Mr. Shortliffe: Well, it was, as I recall, when we started into the EARP process on the runways officials in my department and officials in the Department of the Environment and officials in the EARP secretariat, or whatever it was called at that time, were wildly optimistic about the speed and the pace by which an environmental assessment could be completed. I remember exchanging letters with the then head of the EARP process in which we set out mutually agreed terms of reference for this environmental assessment and agreed that it was all going to be done in 12 months. And in fact it took -- yeah, wildly optimistic -- and in fact, as I recall, it took two and a half years, more than that. So it wasn't, at the beginning it wasn't so much of an issue. As the EARP process dragged on it became a question mark.
Senator Kirby: So in fact there would have been people arguing with get EARP finished and there would have people arguing --
Mr. Shortliffe: Let's get on with the --
Senator Kirby: It's not good.
Mr. Shortliffe: Yeah.
Senator Kirby: When you were deputy, am I right that it was in the period that you were deputy that a letter of intent was signed with Air Canada vis-à-vis an extension of their lease on T2?
Mr. Shortliffe: M'hmm.
Senator Kirby: And in the course of those negotiations, since this was at the time the questioning of the refurbishing the terminals was coming up, was being discussed, did Air Canada have any views on this question, did they have a view as to who ought to own the terminal or whether or not they ought to own it or whether there ought to be, who ought to pay for the refurbishing, et cetera?
Mr. Shortliffe: Well, the letter of intent to which you refer, senator, to the best of my recollection was a deal that we negotiated, we meaning Transport, negotiated with Air Canada in order to get some short-term fix into Terminal 2 using Air Canada's money.
Senator Kirby: Can you explain what you mean by "fix"?
Mr. Shortliffe: Refurbishment. Using Air Canada's money rather than Transport Canada's money, which traditionally had been the way that these things were done, and was designed and aimed at getting that refurbishment under way. Period. Paragraph. Did Air Canada have views on terminals? As I recall yes, it did, and I think at one stage of the game it expressed interest in running terminals itself.
Senator Kirby: And indeed at the time that you did the letter of intent for the lease extension was it contemplated in that lease that Transport Canada would continue to own the terminal? Was that an issue where they had, or was it simply a lease without any reference whatsoever to who would ultimately --
Mr. Shortliffe: No, as I recall it again there was a provision in that Transport Canada did own Terminal 2, was controlling Terminal 2 in that sense, and there was a provision within it that if we did anything else with the terminal that Air Canada would get a chance to recoup its money, its investment.
Senator Kirby: Oh, I see, so they would in a sense get, quote, paid back for their investment?
Mr. Shortliffe: Yeah.
Senator Kirby: But beyond that the issue of who would own the terminal was not an issue from Air Canada's standpoint, they didn't care?
Mr. Shortliffe: Oh no, I wouldn't say that they didn't care but, and here again I'm going by memory and dates, but as I recall at that point -- certainly at that point because this did happen on my watch, so no RFP had been issued at that point for private sector development. All kinds of things were being discussed and debated but no decision had been announced. And did Air Canada have views? Sure it did.
Senator Kirby: Okay, well, we can ask Air Canada what they were. That's fine.
With respect to -- just a couple of questions, Mr. Chairman, and then I'm happy to come back on a second round. You were subjected to, let me call them lobbying -- "lobbying" unfortunately is a pejorative term and I don't necessarily use it to mean a pejorative thing. It's like a political decision, the word "political" is a pejorative adjective as a general rule. You were subject to all kinds of lobbying on the part of various people in connection with the T1T2 development I presume. Is that correct?
Mr. Shortliffe: Did I receive representations?
Senator Kirby: Yeah.
Mr. Shortliffe: Sure.
Senator Kirby: Fine. Paxport did a fair, a fair bit of those, make a fair number of those representations?
Mr. Shortliffe: Yes.
Senator Kirby: Who made those on behalf of Paxport largely?
Mr. Shortliffe: Largely? Ray Hession.
Senator Kirby: You had I presume known him when he was a deputy minister in Ottawa, is that correct?
Mr. Shortliffe: That's correct.
Senator Kirby: And had he, do you remember -- I'm trying to remember, he was a deputy when I was here too so I can't remember when he left the Public Service.
Mr. Shortliffe: Yeah, '86 or '87.
Senator Kirby: Yeah, that's right, mid to late '80s. Okay. So did, of the various people who made representations to you is it fair to assume that you knew him better than the others simply because he had been a former colleague, acquaintance, somebody you would have known?
Mr. Shortliffe: Well, had I known him as a former colleague, yeah, the answer is yes. Over my time there were all kinds of people making all kinds of representations about all kinds of subjects, senator, and some I knew and some I didn't know.
Senator Kirby: Right, okay. Mr. Chairman, I think I've taken up a fair bit of time. I'm happy to come back on a second round but I know my colleagues have some other questions.
The Chairman: Regardless of the high value you place on the professionalism of public servants, Mr. Shortliffe, did you become convinced that the development of airports through LAAs or taking on long-term commitments was better handled by local authorities than by bureaucrats?
Mr. Shortliffe: Senator, with deep respect, I'm not going to answer that question because my job was to advise the government of the day, to assist it to take decisions and to implement those decisions once they were taken. And my job, as I said earlier, when I came do Transport was to get on with negotiating whether or not an LAA could be achieved, and that's what I sought to do.
The Chairman: Now, it seems to have been, it seems to have become apparent from the testimony yesterday of Mr. Emerson, which was very impressive testimony, that Vancouver is bringing in more to the feds than Pearson is, more money to the feds, at the present time.
Mr. Shortliffe: I couldn't comment, senator. First of all, I don't know how much money Vancouver is bringing in and, secondly, the bookkeeping with respect to moneys earned or lost inside Transport Canada, at least in my time, was a very complicated, arcane business because at that point Transport was operating 300 airports around the country and we were trading off all over the place, and to try and track a dollar other than actual cash receipts was very difficult. But you may be right, sir, maybe that's true today, I just don't know.
The Chairman: Well, I can understand why you're reluctant to answer the question as to whether local authorities are better equipped to handle that than bureaucrats are. If there is doubt in your mind, there must be a fair amount of conviction in the minds of those people in the Department of Transport who run airports that they are going to lose their jobs.
Mr. Shortliffe: Well, in the event, senator, which I am quite happy to address, in the negotiations that we had with the entities in the four cities one of our priorities in Transport was to see to it that people didn't lose their jobs at least for a period of time that looked like a reasonable period of time, and that was one of the, that was one of the tougher -- well, not tougher -- it was one of the points on which Transport was not prepared to give away. And so if LAAs wanted to get their hands on airports they were going to have to comply with our insistence that people were not going to lose their jobs.
The Chairman: But what about back at head office?
Mr. Shortliffe: You mean back in Transport, the head office of --
The Chairman: In Vancouver there weren't policies being made at that level?
Mr. Shortliffe: No.
The Chairman: So you were protecting your people, yes.
Mr. Shortliffe: Sure.
The Chairman: And Mr. Emerson I think said 80 per cent of them were kept on, but I'm talking about how many people in Transport --
Mr. Shortliffe: In my time?
The Chairman: Yeah, were working on airports?
Mr. Shortliffe: Overall in the country?
The Chairman: Yeah.
Mr. Shortliffe: Oh, I think something in the order of 6,000.
The Chairman: Has there been a diminution of that number in the last little while?
Mr. Shortliffe: Yes, probably there has because certainly in my time we were already into downsizing, which has continued fairly unremittingly since 1988 through to the present day. So yeah, my anticipation would be that there would be fewer today than there were then, in fact obviously there are fewer because we've transferred four airports and so all the employees on those four airports are no longer there.
The Chairman: Yes. I too will come back a little bit later, but I have Senator Jessiman and Hervieux-Payette.
Senator Jessiman: I only have one question. I assume I'm correct that your testimony in respect to bureaucrats is limited to such persons that you knew in the Department of Transport between May 1, '88, and October 1, 1990, the time you were there? Or are you talking bureaucrats generally?
Mr. Shortliffe: Well I'm not sure I understand the --
Senator Jessiman: You, sir, you said you watched the television and you heard that the minister said that he couldn't prove it but his, from whatever information he got he was having difficulty because he, people were slow, they weren't going on with this. Now you've said as much as you --
Mr. Shortliffe: I said I disagreed with Mr. Lewis, and I do.
Senator Jessiman: Right, I understand that, and I know you do, but I want to know whether your evidence here today, and I understood it was, was between May 1, '88, and October 1, '90?
Mr. Shortliffe: Well, senator, my answer is no, that I'm drawing upon 32 years of experience as a senior bureaucrat in this country.
Senator Jessiman: So you're defending each and every bureaucrat?
Mr. Shortliffe: Yes, sir.
Senator Jessiman: And you're saying that none of them at any time, none of them at any time, to your knowledge, have ever slowed down or weren't as good as some of the others? Surely there are people --
Mr. Shortliffe: No, no, senator, that's not the question you originally posed to me. Do I think there are differing talent levels among bureaucrats? Of course I do.
Senator Jessiman: Do you also think that some might? Because you were only there during that period. Is that not correct?
Mr. Shortliffe: I was only in Transport during that period, I have been in the Government of Canada until last year.
Senator Jessiman: I see. But I'm asking about those in Transport outside that period.
Mr. Shortliffe: Well, I can't comment on the, except to say that my experience with bureaucrats is that they are hard working, dedicated, professional individuals of high integrity.
Senator Jessiman: I don't deny that as a rule but certainly you would agree, I would think, there are some exceptions?
Mr. Shortliffe: There are always exceptions to every rule.
Senator Jessiman: Thank you. That's all I ask. Thanks very much.
Senator Hervieux-Payette: I tried to clarify that earlier and maybe you are the person that I should ask that question. And I received in the meantime the document about the privatization minister, what was her responsibility and the process to which this formula would apply, and it was the government policy of the time that privatization was one of the way the government was going to make sure that some of its responsibility would be done but maybe in a more efficient manner. So I have the criteria and, Mr. Chairman, I mean, I guess it was through somebody from our secretariat; it was done on the twenty-fifth of May 1987. So the policy was in place when you were there. I was wondering if when, and this morning the minister talked about a decision from the cabinet to fast track the project, and so I was asking the people from Transport Canada as well in the last two days if there was a memorandum to the cabinet that was prepared and of course some discussion being held with the people who were on the privatization side of the government in order to make a decision that was in line with the overall policy of privatization and solving the three problems, because I guess you have a problem that we can say were three problem that my colleague and you discussed before which was the terminal question, the runway question and the controller question, and I suppose that this could be addressed in the memorandum and say here are the solutions that we, and it's a global problem because this was the Pearson Airport problem. So I mean was there a document so that a decision could be made, instruction could come back that you could go ahead first that, I don't know why and where the decision on runway was made because it has not been done so I wonder where it was lost in the whole process, but I mean since you had identified these three problems as being the main problems of Pearson Airport I'm just asking you how was this addressed in the policy decision-making process within government?
Mr. Shortliffe: Senator, I think you well understand that I cannot now or at any time discuss matters that fall within cabinet confidences. What I can tell you is that these were matters decided by cabinet.
Senator Hervieux-Payette: But the decision there is a process, I mean do we, is there a document being prepared? Yesterday we had --
Mr. Shortliffe: I can't answer you, senator.
The Chairman: I wonder, Senator Hervieux-Payette, just so I understand, are we becoming a little bit confused? Are you talking about the use of the term privatization formally which was given to the responsibility of the Honourable Barbara McDougall when she was Minister of State for Finance, and as I recall it was this department, for instance, that went through the first tranche on the sale of the Air Canada shares and it dealt with a few things like Crown corporations and so on, but for the life of me I don't think it had anything to do with airports.
Senator Hervieux-Payette: Well, I'm sorry, but I went through the process in the Canadian arsenal and this was a Crown corporation but the process was applied and I mean we're talking about an asset of the government. Never mind the lease. I mean we were alienating for $500 million I mean in terms of, you know, it was not a small deal, I mean for a smaller deal than that for the government.
Senator Jessiman: It's still a lease.
Senator Hervieux-Payette: No matter what the lease is all about. We're not going to discuss if a long-term lease is the same thing as being a owner or, ownership or no ownership. I think it's complicated enough. I mean I'm just asking if when you decide not to take the LAA, local airport authority route, I mean and you say, well, the decision was made by cabinet, fine, I'm satisfied, I'm saying was there any consultation done with the privatization staff or whatever I mean prior to do that, if you say yes or no with your colleague at your own level.
Mr. Shortliffe: I can't recall, senator.
Senator Tkachuk: Senator, before you ask your next question, could you tell me the difference between ownership and a lease? And then when you use the word I'll know what you mean because I'm not sure what you mean, I'm not sure if it's a language problem or not, but just tell me the difference between owning something and leasing something?
Senator Hervieux-Payette: No, it's not a language problem because I mean we would discuss that previously. Just to clarify my own language, it's that long-term lease in civil law are sometimes giving all the rights of propriety of law. So I mean it's equivalent. It's not called, you are not the owner but you have the same rights an the owner.
Senator Jessiman: For a period of time only.
Senator Hervieux-Payette: It's usually long-term leases and all these long-term leases are usually over 25 years and sometimes up to 99 years. I mean in French we call them "bail emphytéotique" and it's equivalent to ownership. So okay, that's what I mean when I'm talking about it and so that's why I say I tend to associate that to some kind of form of indirect ownership because of the size, because of transfer of the responsibility, who is going to insure the property, who is going to run the property, who is going to take all the risk associated with the property, and it's not because you own the pieces of land underneath, now they were also in fact responsible for the building, the maintenance of the building, making sure that the building would be improved and they were spending as if they were the owner, and if they go to the bank I mean at the time they can make --
Senator Jessiman: They're leasing it.
The Chairman: Order, please, we have a very valuable witness, can we direct, can we get the benefit --
Senator Hervieux-Payette: My last question, was there a cost-benefit analysis done? I mean because we have asked before, I mean we were told that Price Waterhouse later on in the whole story made an appraisal of the request for proposal, but before the decision to go ahead with the approach of going not through the LAA route but through a request for proposal for Terminal 1 and 2, I mean was there a cost-benefit analysis done for the government to know if it was preferable to go one way or the other in terms of cost. Was it more beneficial financially for the government to go one route or the other?
Mr. Shortliffe: Senator, I think Minister Lewis outlined to you earlier today that ministers looked at a number of options. And to the best of my recollection there were comparative costs looked at in respect of options, but I have to say to you again there was no entity with whom Transport could discuss any transfer of the airport to an LAA in Toronto when the decision was taken to proceed with refurbishment of the terminals and with runways and, indeed, getting on with controllers. There was no entity.
Senator Hervieux-Payette: But how could you solve the problem, the three problems that you mentioned, I guess the controller, you had to increase their numbers, give a bigger budget and they were hired. This should have been done without going to cabinet.
Mr. Shortliffe: Well, I wish it were that simple. What in fact it meant was you have to accelerate training programs, you have to get more people on as trainers and so on, so it was more complicated than that, but yes, the priority was to get more controllers and to get them trained up to operate in Toronto. I learned to my great surprise when I became deputy minister that an air traffic controller is not an air traffic controller. An air traffic controller who operates in Whitehorse is not qualified necessarily to operate in Toronto. So you have different levels, it's more complicated than I had thought before I came. And the answer to the other two is that the government took the decisions because of the inadequacies of Pearson to proceed with the terminals, with terminals and with runways.
Senator Hervieux-Payette: Anyway maybe we can ask at a later date, Mr. MacDonald, if that analysis or comparative analysis study was done and if we can have access to that document.
Mr. Nelligan: I think unfortunately this witness wouldn't have been there at the period it would have been done.
Senator Hervieux-Payette: No, but maybe, but that's when Mr. Shortliffe was there that the decision to issue a request for proposal to go that route that was made, so I mean when you make a decision normally you have some documentation and at least you have to provide the options and to analyze the option you have to have the cost and why you are going one way or the other because the time factor, if it was the most important factor, even today it's not being built and the traffic is about the same and the runway is not in place, and that decision was done of course you will tell me it was a difficult decision to be made, I suppose you would have to convince the Minister of Finance to give you the money to build the runway and this is a long process, but at the same time I mean I know what's going on now in Vancouver. We've been told by the witness yesterday that they are proceeding with all these construction and with the ten dollar certainly not pleasant user fee, anyway they go ahead with making all these things happen even though the local airport authority seems to be a very difficult organization to put in place, once in place it seems to be working well.
Mr. Shortliffe: Yeah, and of course one of the advantages of the LAA policy was that any criticism that does accrue over the passenger facilitation charge in Vancouver goes to the LAA and not to the government, and governments were happy to be relieved of that burden.
The Chairman: Mr. Shortliffe, would it be fair, well, I know it's a fair question, in July, we're in July '95 and the airport authority in Toronto has not yet secured a chief executive officer.
Mr. Shortliffe: Maybe I should apply, senator.
The Chairman: Well now just, surely you can give a, would you give us a ballpark figure as to when you think that the Pearson International Airport will be brought up to world class standards that it deserves knowing as you do that which is required?
Mr. Shortliffe: If decisions were all taken and reached, 2002, 2003, somewhere in there.
The Chairman: Seven years.
Mr. Shortliffe: Yeah.
The Chairman: Senator Tkachuk.
Senator Tkachuk: Just a couple of questions. This has been a fascinating couple of days and of course the documents we've received have been fascinating but I've been in politics a long time and transportation is always, always very political.
Mr. Shortliffe: I certainly would agree with that, sir.
Senator Tkachuk: Decisions you make in transportation today have huge implications for the future. Yesterday the gentleman from Vancouver, the manager of the airport authority from Vancouver said we make long-range decisions of, you know, 30, 40 years, that's not unusual. So the problems, we're focusing on a very tiny little period of time here, you know, the problems at Pearson I would gather, I'm going you, are the result of decisions made 3 years before that, 4 years before that, 10 years before that, 20 years before that?
Mr. Shortliffe: Well in my very long-winded answer to the chairman's first question about priming the pump, I was trying to make two points. The mess that I inherited at Pearson was years in the making. The policy decision that the Government of Canada subsequently took to develop Pearson was a policy decision designed to take us well beyond the first quarter of the twenty-first century. So we were dealing with -- I hope I'm answering your question, sir -- we were dealing with long time frames, yes, and that's why that policy decision to develop before you got to how you were going to develop it, the policy decision to develop in my judgment was a very important one by the Government of Canada because now you were looking at options that indeed would be there and manifest and working well into the twenty-first century. In fact as I recall it the kind of numbers that we were bandying about were 2025, 2035, and then frankly I felt that the government out there at that time would then have to take some more decisions of a different nature. Does that answer your question?
Senator Tkachuk: That's very helpful because my view is that we have a number of ministers here under scrutiny and civil servants, et cetera, about a short period of time because of a certain urgency of a problem that has developed at Pearson Airport, but in the 19, say the 1970s there was no airport authorities, there was no, you know, basically the Department of Transport ran all the airport and while they made some good decisions they also made some very I think, well, let's put it this way, I'll be as kind as I can, can I be kind, they made some decisions that had huge consequences for Pearson, for example, building Mirabel, perhaps choosing Pickering rather than fixing up Pearson. What would your --
Mr. Shortliffe: May I be permitted a personal observation? And I wasn't there, I wasn't in Transport in the '70s so I plead, in one sense I plead innocence, but I -- fearless prediction, senator, which I won't be able to prove because I'll be dead. But I really believe that those people, and that would be ministers and officials, who took the decisions in the '70s about Mirabel and Pickering, about the year 2035 will be thanked profoundly by the people of Canada. Because the reality is that Pickering and Mirabel are the only two airports spaces in the eastern part of the North America that can grow. No other major airport in the eastern part of the North America can grow. They are all confined. They are all congested. And one day, in spite of all of the white elephant jokes and all the rest of it, the people of Canada will be grateful to the ministers and officials of those days for having taken the decision to acquire that land and to hold it. Now that doesn't mean that Mirabel did not turn out the way everybody thought it was going to because it didn't.
Senator Tkachuk: I understand that. What I'm trying to getting at is that the decisions that are made by Transport officials and are made by bureaucrats and are made by politicians judged in a short period of time may not necessarily be true 20 years down the road. So the privatization process, as some of the members call and I call it the leasing process, although we may have differences on policy we don't know ten years from now whether that will be, we believe will be a positive policy, could be a positive policy, the airport authorities themselves may be positive but may not be positive because we are not able to sort of garner the future, which is what we are trying to do here and what the implication is --
Mr. Shortliffe: The proof will be in the pudding.
Senator Tkachuk: -- over a two, three year period, short period of time.
Mr. Shortliffe: The proof will be in the pudding. It's a bit early to be totally judgmental, but I think on the LAA negotiations both sides entered in on the assumption that it's going to work. Now, will it?
Senator Tkachuk: Exactly. Twenty years from now we'll find out.
I was going to ask you, you have a little bit about procedure as well. There were, we had an official here yesterday, a Mr. Barbeau, who was the assistant deputy minister in charge of airports, who had testified yesterday about sort of how the procedure worked. Did you hire him?
Mr. Shortliffe: Yes, I did.
Senator Tkachuk: Or was he already there?
Mr. Shortliffe: No, I hired him.
Senator Tkachuk: You hired him?
Mr. Shortliffe: Well, to be technical, the Public Service Commission appoints but is that the person that I wanted to be assistant deputy minister of the airports group? Yes.
Senator Tkachuk: Now, in the question of procedure when a decision is made between a minister and a deputy minister or associate deputy minister.
Mr. Shortliffe: Assistant.
Senator Tkachuk: Assistant. How does that all work? What happens? Like there has to be some flow upwards, there has to be some flow downwards. When a decision is made to do something in the minister's office that would have direct reference to something that would say, for example, the assistant deputy minister on airport management, how would a decision take place?
Mr. Shortliffe: There are a variety of ways. It can, decisions can be taken in conversation between the deputy and the minister, it can be taken in conversations between the minister, the deputy and a whole host of other officials, it can be done by formal memorandum, it can be done by phone calls. I mean there is a whole variety of ways.
Senator Tkachuk: When a project is done, for example, that requires Treasury Board approval, and it's done by a particular unit within a department, then that needs approval to get done. How does that work, like how would it work in your watch? How did that work?
Mr. Shortliffe: It would route up through the, you're talking about a Treasury Board submission?
Senator Tkachuk: Yeah.
Mr. Shortliffe: It would route up through the responsible ADM to me and it would go from me to the minister for signature.
Senator Tkachuk: Was there any signing off along the way? Did they require anything at Treasury Board that said yes, it has been approved at this level, this level, this level, or just required one --
Mr. Shortliffe: The important thing about Treasury Board submissions is that they required the signature in almost all instances of the minister himself or herself. There are a few exceptions which allow in some cases a deputy minister to sign a Treasury Board submission in the absence of the minister but they are very rare and certainly not on big projects. The signature that has to be on a Treasury Board submission is that of the minister.
Senator Tkachuk: And is that the result of a, the Treasury Board submission the result of a document that would have been produced within the department asking for a decision to be made by Treasury Board? What I am saying is --
Mr. Shortliffe: A Treasury Board submission is a particular form where I'm speaking generically now, not to any case.
Senator Tkachuk: That's what I want. I'm just trying to get an idea here.
Mr. Shortliffe: It is a document that takes a particular form and is signed at the bottom of the first page by the minister.
Senator Tkachuk: Did you have --
Mr. Shortliffe: And incidentally, senator, if I may, a department like Transport, which had a very wide range of responsibilities, is generating those kinds of submissions on a virtually daily basis.
Senator Tkachuk: Did you have an executive committee in your department?
Mr. Shortliffe: Yes, I did.
Senator Tkachuk: And who would be on that executive committee?
Mr. Shortliffe: My ADMs and my, I think my DG, communications.
Senator Tkachuk: Could you not use acronyms.
Mr. Shortliffe: Assistant deputy ministers, and my director general communications, and a couple of members of my personal staff.
Senator Tkachuk: And you met on a fairly regular basis?
Mr. Shortliffe: Yes, sir.
Senator Tkachuk: How often would you meet?
Mr. Shortliffe: Minimum once a week and sometimes twice.
Senator Tkachuk: So this was to discuss decisions made or just general business of the department?
Mr. Shortliffe: It was to discuss in a way, senator, the best way I can characterize it, it was to discuss the management of the department.
Senator Tkachuk: So the Toronto, the Pearson Airport would have come up quite a bit I would think at this, part of this time?
Mr. Shortliffe: In the executive committee?
Senator Tkachuk: Yeah.
Mr. Shortliffe: Sure. But I wouldn't want to leave you with the impression that that's the only place it got discussed in the department.
Senator Tkachuk: But you're in the business of doing business here, you're managing the department here and the executive committee is discussing it. In the case of Pearson would the discussion there be led by the assistant deputy minister in charge of airports? How would that work or would the guy from, airport person come up?
Mr. Shortliffe: No, in the executive committee it was executive committee, we did not have other officials in the room. So it was limited to those people who are members of the executive committee. If I wanted to have a detailed briefing on any aspect of Pearson, or any other subject for that matter, my normal practice was to have the ADM and a number of responsible officials meet with me for whatever period of time it took, an hour, two hours, three hours, half a day, whatever.
Senator Tkachuk: So Mr. Barbeau would be at these meetings?
Mr. Shortliffe: Of the executive committee?
Senator Tkachuk: Yeah.
Mr. Shortliffe: Yes.
Senator Tkachuk: And he was of course fully cognizant and well aware of the problems there were raised by say the minister this morning and the community in southern Ontario and the pressures on the Pearson Airport?
Mr. Shortliffe: Yes.
Senator Tkachuk: And did he bring solutions forward as to how this should be dealt with? Would you have expected that of him?
Mr. Shortliffe: Yes.
Senator Tkachuk: And what was his job in all this?
Mr. Shortliffe: I'm having a little difficulty with your word, senator, in the sense that did he bring forward ideas and proposals for examination. Remember that we are public servants and we're living in a highly politicized environment so we don't, quote, decide a lot of things, unquote, but did he bring forward proposals and ideas and thoughts? Sure.
Senator Tkachuk: And so you had a lot of confidence in him?
Mr. Shortliffe: Yes.
Senator Tkachuk: And he was the person in charge then in 1990, when the announcement was made by the minister, he was the person in charge of putting together the, getting together the RFP -- is that what you call it, the RFP?
Mr. Shortliffe: Yes.
Senator Tkachuk: And you would believe that he would do an excellent job at this?
Mr. Shortliffe: Yes.
Senator Tkachuk: And I know this is going past your tenure, but you would have confidence in him handling the process to the very end and have the integrity of the process, that the process would be handled with integrity, i.e. the proposal process and the RFP process and all the rest of it?
Mr. Shortliffe: Senator, I, you asked me earlier, I mean had I, quote, hired him, yes, the answer is this, did I have confidence in him through my time in transport? Absolutely.
Senator Tkachuk: Okay, thank you very much.
The Chairman: I would like to sort of finish the first round before Mr. Nelligan gets a chance and I'm very uncomfortable when Senator Bryden is silent.
Senator Bryden: I got beaten up so badly this morning I hesitate to come forward but I'm going to try.
There was something, Mr. Shortliffe, that came up over the last couple of days and it's the definition of, the understanding of three different processes and not particularly in your capacity as Deputy Minister of Transport, but I believe you would be qualified to answer the questions. In putting out proposals, the government putting out proposals for the private sector to make submissions on, in various documents and so on there are three, as I understand it from reading it, there are basically three ways and I was wondering if you without just in layman's language could tell us what the three ways are; it's a competitive proposal call, a negotiated agreement and a contract definition approach. Are you familiar with those terms?
Mr. Shortliffe: Well, I'm familiar with them but I'm not an expert on this kind of thing, senator, and I'd frankly be reluctant to try and give you, I think you need Treasury Board officials to give you definitions of this kind of thing, that's their bailiwick and I spent most of my life trying to avoid them.
Senator Bryden: I appreciate that and believe me I --
Senator Kirby: I should point out to the witness, Mr. Chairman, that I'm not the only guy on this side who has been a deputy minister, so has Senator Bryden in New Brunswick, and the one thing all three of us would share in common is a desire to avoid Treasury Board rules.
Senator Bryden: I think everything has been pretty well covered in your period that you, as you say, had the watch. I just wanted to make sure that I understand your long and useful answer to the first question in relation to the decision about the policy on Pearson Airport. What I understood was that governments, from what you said, that governments of whatever stripe had carefully avoided making a policy on Pearson presumably because there are other competing factors and all kinds of things. But that was resolved I think in early 1989?
Mr. Shortliffe: Yeah, to the best of my recollection that's about the time frame, senator, but I am going on recollection, but to the best of my recollection that's about the time frame.
Senator Bryden: And who would have been the minister at that time?
Mr. Shortliffe: The minister at that point was the Honourable Benoît Bouchard.
Senator Bryden: Can you once again tell us what was that policy decision?
Mr. Shortliffe: That Transport was, in effect Transport was authorized to look at ways for developing Pearson Airport for the '90s and the twenty-first century. And that implied that things were going to happen vis-à-vis runways, terminals, et cetera, as distinct from other possibilities that might have been pursued.
Senator Bryden: So to develop Pearson I think it was you, or perhaps it was the minister, who used the term the hub?
Mr. Shortliffe: I certainly do use it, the hub of the national air transportation system.
Senator Bryden: What do you mean by the hub? When I think of a hub I think of the central thing that holds the wagon up and the rest of it is the spokes that go around.
Mr. Shortliffe: And in many ways that analysis is -- I don't want to insult anybody in other parts of the country -- but that analogy is, in terms of operating the system, is pretty valid. If, for example, you get, if you close runways at Pearson you will back up traffic in Halifax, Vancouver, Edmonton, Calgary, Ottawa, you can even keep planes on the tarmac in London, Paris, Frankfurt and Tokyo. That's what I mean.
Senator Bryden: And I take it that with that there would be one hub?
Mr. Shortliffe: Pardon me?
Senator Bryden: There would be one hub in the air transportation system?
Mr. Shortliffe: That it would be the central hub of the air transportation system, no, in fact over time, for example, in terms of regional carriers in the country, Halifax is now very clearly a hub for regional carriers in the country and Vancouver in many ways is a regional hub as well, but as a national hub that was Toronto.
Senator Bryden: I'll pass over the fact that Moncton would be more appropriate but the --
Mr. Shortliffe: Actually, yeah, one of the things that annoyed me well after my watch when I couldn't do anything about it is that you can't fly from here to any place in the Maritimes without going to Halifax.
Senator Bryden: It's late in the day and I'm not making any editorial comments.
From that policy decision to develop Pearson as the transportation hub, were there any, and therefore go on and get it done in the year 2000 in the year 2025, was there an urgency with that decision? With the development decision?
Mr. Shortliffe: Yes.
Senator Bryden: And I think you indicated in three areas?
Mr. Shortliffe: Yes.
Senator Bryden: Runways.
Mr. Shortliffe: Yes.
Senator Bryden: Terminal facilities?
Mr. Shortliffe: Yes.
Senator Bryden: And controllers?
Mr. Shortliffe: Yes.
Senator Bryden: While were you on the watch did the controller one get resolved?
Mr. Shortliffe: Not totally.
Senator Bryden: You stayed with government. Well, it must get resolved, we no longer have to get stacked up.
Mr. Shortliffe: This is 1995, I left in 1990, senator.
Senator Bryden: But the controller one, is it fair to say, Mr. Shortliffe, did get resolved? Controllers are not a --
Mr. Shortliffe: My understanding today, senator, is it is not the problem that it was in '88, '89 and '90. Thank heavens.
Senator Bryden: And to your knowledge has the runway capacity issue been resolved?
Mr. Shortliffe: No.
Senator Bryden: And obviously the terminal, other than T3, T3 was not open when you were there, or was it?
Mr. Shortliffe: Construction began in my term and, as I recall it ended after I had left the position of deputy minister. Yeah, it was because I remember I got a special invitation to attend the opening when I was in my new capacity in the PCO.
Senator LeBreton: February '91.
Mr. Shortliffe: Yeah.
Senator Bryden: What's the capacity of T3; can you recall off the top of your head?
Mr. Shortliffe: The passenger capacity fully loaded, ten million.
Senator Bryden: Do you -- no, you wouldn't, I'll ask someone else. I'm wondering what is actually the utilization of T3 now?
Mr. Shortliffe: I can't answer that. I can tell you, senator, that part of the deal that was negotiated on T3, as part of the deal that was negotiated on T3, Transport guaranteed a minimum flow of traffic to T3. Transport can control which traffic goes to which terminals and there was a guarantee built into the T3 deal that guaranteed a floor to T3. My understanding is that current traffic is well above that floor.
Senator Bryden: So let me just understand this that if traffic is really low the government has a commitment to the operators of T3, if necessary, to divert traffic from T1 and T2 to reach the floor?
Mr. Shortliffe: Yes.
You're getting me into areas that are outside my time as deputy, and Senator Kirby said earlier, I mean if it is your intention to invite me to come back at that point I would be happy to discuss these things, but since you're trying to proceed chronologically --
Senator Bryden: As the hub, the policy being pursued, or that was commenced to be pursued under your time there, was it a particular policy to the Pearson Airport?
Mr. Shortliffe: Yes. Yes, it was, senator. One of the other things that we had under way, and again to the best of my recollection was not completed during my watch, is in addition to the decisions about Pearson itself, the policy decisions about Pearson, we in Transport were certainly looking at options and strategies for southern Ontario which involved a number of other airports in southern Ontario. And there was even a phrase for it, there was a title for this project and I can't remember it today but there was one. But the policy that I was describing to you was a policy vis-à-vis Pearson.
Senator Bryden: But sort of concurrent with that there was a separate policy although you can't remember the name for the airports in the rest of?
Mr. Shortliffe: Of southern Ontario.
Senator Bryden: So there was one policy for Pearson?
Mr. Shortliffe: Yeah.
Senator Bryden: And one for the others?
Mr. Shortliffe: Well, let me be more precise, senator, so I don't inadvertently mislead you. There was a policy decision about Pearson, what I'm saying to you was that there was analytical work of a policy nature going on during my watch vis-à-vis airports in southern Ontario.
Senator LeBreton: If I could just interject, senator, we have it in our briefing books under section Q, and it's called "the Aviation in Southern Ontario, a Strategy for the Future", and it was put out in January 1990.
Senator Bryden: Thank you very much, that was one part of that book I haven't read yet.
The policy for the rest of southern Ontario airports was not completed but it was in the analysis stage while you were there?
Mr. Shortliffe: Well, if I heard Senator LeBreton's intervention correctly, I guess it was because I was still deputy in January 1990, so maybe it was.
Senator Bryden: But I guess the real thing that I wanted to be clear on that the fact that there was a separate policy for Pearson did not stop there being a continuing development of a policy for the rest of southern Ontario?
Mr. Shortliffe: That's correct, sir.
Senator Bryden: And the policy that is being applied in the rest of Canada is the policy generally known as the devolution to LAAs, or had been to that point, local airport authorities?
Mr. Shortliffe: Yes. Well, there was, there was a policy articulated by the Government of Canada vis-à-vis the question of devolution of airports which we called the LAA policy. The policy decision that I'm referring to this afternoon, sir, with respect to Pearson was a policy decision about development of Pearson.
Senator Bryden: Yes. And it was --
Mr. Shortliffe: Not in my judgment the same thing.
Senator Bryden: I guess now I don't, thought I was getting clear on this. There was a policy decision made in this time frame in early 1989 on Pearson?
Mr. Shortliffe: Yes, sir.
Senator Bryden: What you were going to do with Pearson?
Mr. Shortliffe: No, again, sir, to be very precise with you, there was a policy decision reached by the government that there would be development of Pearson. This is after some 15 years of in effect a policy of benign neglect. It now became a policy of active development.
Senator Bryden: And almost concurrent with that or closely related to that was the development or the discussions to develop the policy that Senator LeBreton has referred to for the rest of the airports down south?
Mr. Shortliffe: That was going on at the same time, yeah.
Senator Bryden: So is it correct to say that at that time, after that policy decision, there was a policy for Pearson and a general policy that applied to all of the other airports?
Mr. Shortliffe: No, sir, it's not. With deep respect, senator, you're mixing up the issues of devolution with the issues of development. And it's not the same thing.
Senator Bryden: So the policy in relation to Pearson, was it a decision to develop Pearson in a particular way but by a particular method?
Mr. Shortliffe: The first decision was to develop it. That was, as I said earlier, a very important policy decision reached by the government. There were then subsequent decisions, which are the subject in hand, about how to develop it, and by what means to develop it. But the first decision was a decision to develop the airport after many years of no development whatsoever.
Senator Bryden: And develop it as the hub of the system?
Mr. Shortliffe: As, yes, and that's why I'm making distinction that I am, sir, with yet another government policy which was the policy of devolution of airports.
Senator Bryden: Yes. Mr. Chairman, that --
Senator Hervieux-Payette: Just a clarification on just one because a policy of this and policy of that, sometimes I'm just asking myself is it, because in my language it's not the same, but the policy of development was not part of the policy of LAA; is that what you mean finally? I mean the global, because my perception was that there was a global policy that addressed the whole of the county.
Mr. Shortliffe: Yes, it did.
Senator Hervieux-Payette: And because there was no LAA in Toronto there was another policy aside so that Pearson Airport development took place, but that was not part of the overall global policy?
Mr. Shortliffe: No, sure it was, senator, and I think I said earlier to the best of my recollection every time the Minister of Transport, whichever minister made a policy statement in those days about Pearson he usually put in the phrase "and nothing that I've just announced precludes eventual transfer of Pearson Airport to an LAA".
Senator Hervieux-Payette: And I just want to clarify the one fact because you say many of the problems were due of course of the increase of traffic and because of the Mirabel question, this is to follow up on what you were saying. I mean I don't know if it was common or public or at least some common knowledge in your department at the time that, and I'm saying that because I mean Mirabel was not necessarily, you know, the pride of Quebec because there was always, the forecast of passengers, never made what it was supposed to be, and there was big planning and big studies and so on. But I have to remind this committee that we had in 1976 a government that was elected to separate Quebec from Canada and we had a referendum in 1980, and I was wondering if because; I mean, one of complaints of Quebec people and Quebec MPs was, at the time, that many airlines did not apply to go to Mirabel but to Toronto and diverted their, what I would say, international flight, international connection flight, instead of going to Amsterdam, Mirabel, L.A., or Tokyo, Mirabel and London, they decided to go through Toronto. And we were, this is something that we; of course, it was a fine line. They didn't knock on the door and say we're not going to go to Montreal, but I thought that in the original plan of the Mirabel Airport -- and it's just to share this view so that we are on the -- that why there was such a concession, well, there were specific things that I don't think that were in the plans in the 70s. And I mean but I can tell, I mean, you know, every time a new airline was applying to go on the hub question to Toronto it was creating of course some stress in Quebec and people were not satisfied that they would not land in Mirabel and they were criticizing Transport Canada as the bad guy. That's true.
Mr. Shortliffe: Yes, they were, senator, and successive ministers of transport to the best of my recollection under successive governments tried very hard to force airlines that wanted to go to Toronto to go through Mirabel first. And to be reasonably blunt about it, it worked for a while after a fashion and then ultimately because all, as you know, senator, all bilateral agreements are just that, I mean they have to be agreed by the sending country and the receiving country and over time the capacity of Canada to successfully negotiate access to markets that we wanted to get into eroded our capacity to force airlines to go through Mirabel.
Senator Hervieux-Payette: Okay, and there was a second factor, Mr. MacDonald, I would like to share too; the fact that we saw and certainly not with great pleasure that many head offices were transferred to Toronto, I mean of course always for political reason and of course these people are the travelling people and they were not leaving any more from Dorval but they were leaving from Toronto. And this was a massive movement that took place between '76 and 1980 and just on the record that, you know, you may have the prediction or the forecast of the Department of Transport may not have been wrong in the 70s, but events have changed the forecast and the traffic instead of being in Mirabel went to Toronto. If you look at the overall global traffic in Canada I mean probably there were not more one or less stranger in the country coming to our country but instead of coming to Montreal through Mirabel they were going through Toronto. That's how I interpret, I mean there was of course an increase of people travelling but the increase didn't go to Montreal.
Mr. Shortliffe: Essentially that's correct.
Senator Hervieux-Payette: Thank you.
The Chairman: A short question?
Senator Kirby: Two very short questions.
The Chairman: Well, yes, I'll put Mr. Nelligan on now and you can ask them afterwards, Mike, which do you want to do?
Senator Kirby: That's fine.
The Chairman: All right, Mr. Nelligan.
Mr. Nelligan: I just have a couple of short questions, Mr. Shortliffe. During the time that you were deputy minister and dealing with this problem of Pearson development was there a general awareness in the department of those organizations that might be capable of carrying out the necessary development?
Mr. Shortliffe: Yes, sir.
I'm laughing when I say that. I mean there was no end of people who wanted to carry out development at Pearson, let me assure you.
Mr. Nelligan: Who were the principal players at that time?
Mr. Shortliffe: Well, round up the usual suspects; Paxport, Airport Development Corporation, Huang and Danczkay, Air Canada, British Airports Authority, Claridge, yeah.
Mr. Nelligan: And at the time that you were there was there lobbyist activity in the department with regard to this development?
Mr. Shortliffe: Sure.
Mr. Nelligan: And how were they handled?
Mr. Shortliffe: How were they?
Mr. Nelligan: How were the lobbyists handled, what was the protocol for lobbyists in the department; how far or did they have any influence?
Mr. Shortliffe: They were listened to. They were received courteously, I trust, most of the time, unless they were persistent, overly persistent. Did they have any influence? I must say, sir, that I have watched over a number of years a lot of lobbyists get paid a lot of money and their actual influence on the way projects are developed, negotiated or decided upon is zip. And that's my answer to your question.
Mr. Nelligan: And was there any difference during the period you were Deputy Minister of Transport?
Mr. Shortliffe: No.
Mr. Nelligan: Those are the all the questions I had.
The Chairman: Senator Kirby.
Senator Kirby: Mr. Chair, just a couple of questions by way of clarification, but just as a follow-up to Mr. Nelligan's comment. I listened carefully to your answer. Your answer indicated that you've seen lots of cases where the influence was zip. That does not of course mean, I assume, that in this particular case, the specific case that we're referring to, that lobbyists had no influence, I mean you talked generally, not about a specific case; is that right?
Mr. Shortliffe: Well, with respect to Mr. Nelligan, senator, I, if he, if the import of his question was were lobbyists influencing bureaucratic practices and procedures my answer is no.
Senator Kirby: In general?
Mr. Shortliffe: Yeah. And in specifically in this, at this time.
Senator Kirby: No, I took that to be a general statement.
Mr. Shortliffe: Yeah. Now, do lobbyists have influence on the political process? Well that's another issue.
Senator Kirby: No, I was just making sure I understood your answer.
Just as a follow-up to the question Senator Jessiman asked you I just want to be clear that I had understood your answer to a question I had asked you earlier, so let me ask it slightly differently.
During the time that Mr. Lewis was your minister, that you were his deputy, did he ever express to you the sorts of views that he expressed here this morning, and I give you a quote from this morning although you said you watched on CPAC. He said to us this morning the bureaucrats do not want to part with Pearson under any circumstances, he went on to say that bureaucrats wanted to run their own airport, he went on to say that bureaucrats slowed down the process. Did he ever express those views to you while you were his deputy?
Mr. Shortliffe: What he, and I'm speaking very generically now, senator, what he often expressed was vast impatience with the speed by which things could be accomplished, and what I like to think very patiently and repeatedly expressed to my distinguished minister was that's the way it works, sir.
Senator Kirby: But frustration with as a matter of fact --
Senator Tkachuk: Would that have been unusual to any minister?
Senator Kirby: I've got to say I don't know any minister who didn't express the same view, so my point is that, I think you've answered my question, you did not hear from him directly that he was singling out a particular group of people as having a problem. I would just like to ask you one --
Mr. Shortliffe: No, in fact, senator, may I just add a piece of information to the committee's knowledge?
Senator Kirby: Sure, absolutely.
Mr. Shortliffe: This was not Mr. Lewis I believe, I think it was Mr. Bouchard when he was minister. When we started down the negotiating path on LAAs, Mr. Bouchard decided that he was going to establish something called the Airport Transfer Advisory Board. And it was composed of all private sector people except for me, I was chairman of the board. And its function was to advise the minister and the department as to the state of negotiations, it was to monitor negotiations and it was in effect to make sure that the bureaucrats were not, were getting on with the job. I had the honour of chairing that board and it became far more protective of the federal interest than most federal bureaucrats were as the negotiations proceeded.
Senator Kirby: Thank you, Mr. Chairman, that's all I had.
The Chairman: The last question, Senator Tkachuk.
Senator Tkachuk: No, that's fine, I'm done. You can take me off the list.
The Chairman: All right. Well now, we'll be delighted if you can find time in your schedule to come back and assist us, Mr. Shortliffe. We're very grateful to you for your testimony today.
Mr. Shortliffe: My pleasure, thank you, and I'll try to be of assistance whenever I can, senator.
The Chairman: Now, could I make, before you leave, can I make just a few announcements.
As you know, colleagues, we were to have started our hearings on July 4 but we were unable to do it because we couldn't get the documents and the information we required at that particular time so we had to, we had lost a week and came back and started July 11. Our original game plan was to work for two weeks and then we take the third week to assess what we did the two weeks before and prepare for the third week. So now, having missed the first week, we finished the second week and we're into the third week, which is the week we take off. So the next hearing will be on Tuesday, July 25, starting at three o'clock in afternoon, with witnesses from Air Canada, and at 7:00 p.m. that night with witnesses from Price Waterhouse.
Now, the evidence of the committee is now being prepared. We were a little slow this week because of the Senate sitting, but now it's moved up again, the reporters are able to catch up. This evidence by court reporters unrevised, unedited, is available to anyone who asks for it. In Ottawa it will be hand delivered, if you're in the centre of the city, as most who have asked are, and sent by Purolator to people outside who have asked, and many have, particularly the media, and by Internet to those who request it of us.
I'll take any questions from anybody in the room for that matter if there is anything to be made clear. If not, I wish you all a good weekend. Thank you.
The committee adjourned.