CANADA

Political stalemate

The Pearson inquiry slings mud on both sides

E. KAYE FULTON October 9 1995
CANADA

Political stalemate

The Pearson inquiry slings mud on both sides

E. KAYE FULTON October 9 1995

Political stalemate

CANADA

The Pearson inquiry slings mud on both sides

During a 30-day investigation of the ill-fated deal to privatize Toronto’s Pearson International Airport in November, 1993, former Ontario Liberal leader Robert Nixon conducted himself in the same genial, unadorned style that made him a political folk hero in Brant County for more than 25 years. In fact, as Nixon recounted at a Senate hearing last week, he went out of his way to meet with 15 angry residents living near the airport, even though their complaints about noise pollution had little to do with his inquiry. That relaxed approach had obvious shortcomings. The ‘Toronto MPs” Nixon cited among the 26 organizations and groups he consulted, for instance, were all Liberals. Conspicuous by their absence on Nixon’s list were more than 30 key public officials and private developers who stitched together the $750million contract that the federal Liberal government later cancelled, on his advice. As for notes made of his conversations during the whirlwind review: “Notes?” said Nixon as he appeared before the senators last week. “I don’t take notes.”

The relaxed style of a veteran politician may in part explain why Canadians were no closer last week to learning the full story behind the controversial deal to privatize two terminals of the country’s busiest and most lucrative airport. Up until last week, most of the evidence presented during two months of testimony before the Conservative-dominated Senate committee appeared to repudi-

ate Nixon’s conclusion that the deal with the Pearson Development Corp., finalized during the dying days of the former Conservative government, was “a flawed process under the shadow of possible political manipulation.” But attempts by Conservative senators to portray the privatization scheme as a “squeaky clean” deal were muddied last week with the astonishing discovery that Nixon based much of his criticism on material that the former Tory cabinet itself had before it approved the Pearson deal in August, 1993: a 200-page evaluation prepared by Treasury Board officials that suggested it indeed favored the developers, at the expense of taxpayers and travellers.

According to Nixon’s legal adviser, Toronto lawyer Stephen Goudge, the secret report was “mistakenly” included among some 200,000 pages of documents gathered by public servants and delivered to Nixon in large cardboard boxes shortly after Prime Minister Jean Chrétien appointed his old friend to head the review promised by the Liberals during the 1993 federal election campaign. Nixon, who signed an oath of confidentiality that protects sensitive cabinet material, is prohibited by law from either relinquishing the report or divulging its contents. But that did not stop the Nixon team

from incorporating information without attribution into its own report, which criticized the deal for its appearance of patronage, excessive haste, and political interference.

Ironically, details of the cabinet document are well known in Ottawa, where Ottawa Citizen columnist Greg Weston obtained it and published it in the newspaper in September, 1993. Last week, the Senate committee demanded that Weston turn over the documents, or face being subpoenaed. The newspaper declined to comply.

According to Weston’s original report, the secret document contradicts Tory promises that taxpayers would be better off if the government rented the Toronto airport to private developers. Instead, it says that Ottawa would actually forfeit “tens of millions of dollars a year” in net profits. And despite federal policy stating that major airports should be turned over to local non-profit businesses, the document also states that “there was no consideration” given to anyone but developers—in this case, the last-minute consortium formed by the merger of Paxport Inc., led by former Tory party president Don Matthews, and the second-place bidder, Claridge Holdings Inc., controlled by liberal Charles Bronfman.

For the time being, taxpayers remain caught between two highly partisan versions of the proposed privatization. Backed by the Conservatives, proponents claim that the 57-year contract would have generated $7.5 billion in rent and $3.4 billion in taxes for the government. Nixon countered that an independent appraisal of its terms indicated it “was inordinately generous to investors.”

The political fallout from the controversy is equally ambiguous. By using their Senate majority to force the inquiry, the Tories may have opened wounds the party was desperate to heal. For instance: Canadians heard last week that former prime minister Brian Mulroney intervened in negotiations with a request to Glen Shortliffe, then Clerk of the Privy Council, that Claridge get “a piece of the action,” a month before the winning bid was announced. At the same time, Nixon’s admission that he either ignored or downplayed key players who favored privatizing Pearson during his investigation raised serious questions about the Liberal government’s motives for cancelling the contract—a decision that may ultimately cost taxpayers between $500 million and $2 billion in damages to developers. In fact, far from resolving the issue, the Senate hearings, which resume on Oct 14, threaten to further diminish the already tarnished reputation of the Upper Chamber— as well as the two parties that dominate it

E. KAYE FULTON