Are Pickering insiders setting up a multi-million dollar tax payer funded windfall?

 

The Pickering airport lands are now worth billions of dollars, building an airport could make it the best land investment of the 21st century.

The federal airport lands in Pickering, a billion dollar public land reserve just east of Toronto, are owned by the Canadian tax payer. For years It has been leased out on short term one year leases to commercial and tenant farmers. But now, there is a possibility, thanks to either a deliberate or unintentional administration misstep, that these land leases, instead of making money, are about to cost the Canadian taxpayers untold millions.

Through commitments in 2014 and in 2015, the Government of Canada transferred the majority of the airport lands to Parks Canada for inclusion in the new Rouge National Urban Park. Switching from one year to 10 year agriculture leases for those tenants allowed to remain in the Rouge National Urban Park makes sense, and are fully supported.

The remaining 9,600 acres were retained for economic development including for an airport. It was expected that this land would remain on one year leases pending the release of Transport Canada studies currently underway and follow-on development plans.

Economic development of the federal airport lands in Pickering is recorded in Official Plans. It is supported by the Region of Durham, the City of Pickering and all local Boards of Trade. But now it appears that an administrative misstep may have instead also placed a substantial part of this land on 10 year leases. This could block the economic development of these lands or force a tax payer funded payout to break these new leases.  If so, this appears to be pandering to a small, privileged group with leases and a boundless sense of entitlement to tax payer owned land.

To say that changing the lease term on these lands is premature is a billion dollar understatement. A jet aviation supply and demand study is expected to be finalized for transport Canada by KPMG this year. It has not yet been released, but thanks to years of strong growth is expected to show an immediate need to begin building a new regional airport in the Toronto region. This study was commissioned as a follow up to Dr. Gary Polonsky’s broader report on the Pickering lands which highlighted the need for the aviation traffic study.

Delaying this project will provide a windfall to a few corporations and private individuals currently profiting from agricultural enterprises on these lands. It will hurt our environment, drive up the cost of the new airport, delay billions of dollars in economic activity and thousands of jobs. The subsequent aircraft congestion at Pearson airport alone will generate millions of tons of unnecessary excess green house gas emissions.

It is important to immediately validate, before the commencement of the leases on April 1st, what lands remain on one year leases and which ones have been switched. This land must remain reserved for an airport needed by all, not misappropriated and slipped into the pockets of a few interlopers who have picked up these land lease for pennies on the dollars over the years. How many millions in discounted rent have these few already received from the taxpayer simply by co-opting and hiding behind the troubled history behind the airport lands ?

How did this potential billion dollar switch up take place? The first hint that something might be amiss came from Liberal Member of Parliament Jennifer O’Connell. Her office announced and then provided to the press a Transport Canada statement announcing the 10 years leases in May 2017. Details where limited, specifically, it did not mention limiting the 10 years leases to just the park lands as was expected. It did not mention the 60 day termination clause now in the one year leases.

The press release provided by Member of Parliament Jennifer O’Connell breaks with the expected immediate need to build a new airport in Pickering.

The second clue came from the GTAA ( Greater Toronto Airports Authority) that runs Toronto Pearson International airport. For a decade it has been opposed to Pickering airport ( it doesn’t want the competition). It has stated publicly that Pearson airport, the only airport it manages, can handle the growth in aircraft movements.  Its new master plan assumes growth can be kept to 1.5% a year over the next decade. Growth in 2016 was 2.6%, and 2017 was tracking to be 2 to 3.0% up to twice its 1.5% target. The GTAA has not updated its statistics since October 2017. Montréal Trudeau has report a 6.6% leap in aircraft movements,  Vancouver International has reported a 3.4% growth but Pearson is ominously silent.    Pearson airport is now the only major airport in Canada that has not yet reported aircraft movements for 2017.

NavCanada has confirmed that weighted aircraft movements for 2017 for all of Canada jumped a whopping 5.1%. Even at a 2.0% growth rate, Pearson airport will be at capacity before the new land leases expire.  As it is expected to take 10 years to build out Pickering airport, any sustained growth above 1.5% means there is not a moment to lose. Development needs to begin immediately.

Although Pearson airport is late reporting year end statistics, Nav Canada, who charges by weighted units, is reporting a 5.1% jump for 2017. Assuming an increase in aircraft size as well as numbers, That could equal up to a large miss of Pearsons 1.5% target. At this rate Pearson will be at capacity in only a few years. This will create a multi-Billion dollar drag on the Toronto regions economy.

What happens when the new airport is given a green light with the release of the KPMG study and these 10 years leases need to be broken. Is there a substantial windfall of riches to be paid out? Will we get to see a spectacular lawsuit dragged into the press every week, further delaying the airport?  Update: a reliable source in Transport Canada has confirmed that the updated leases will now have a 1 year  cancellation clause, however a local agricultural lobby group, land over landings, is now asking for 30 year leases with no cancellation clause at all!

The lack of information on what land leases are being switch to what terms and the lack of transparency on who is leasing these lands is the heart of the problem. It leaves open to the imagination all sorts of dark ideas. Is the release of the KPMG report being delayed intentionally? Who stands to profit if these leases are broken? Land over Landings, posted a jubilant “no shovels in the ground for 11 years “ on its Facebook page. Are insiders also using this potential misstep as an opportunity to take or expand a stake in one of the companies leasing these lands?

The group Landing over landing jubilant Facebook posting appears to be quoting an MP that they claimed to have been meeting with. Is Land over Landings a registered lobby group? When and how often has the MP been in contact with members of this group? Members of this group including its three of its executives live on the Pickering lands.

Agricultural leases for federal airport lands recently added to Rouge National Urban Park should not be granted automatically to the current corporate or personal lease holders. The government has created certainty for the long term use of these lands, and with that decision, the government can now enter into the best, long-term agricultural tenancy arrangements. Instead it may have given away the land at well below market rates for a fixed 10 year period.

The federal government must execute, if it has not already done so, market sensing to ensure the best return for all taxpayers will be received. The leasing process must be a public process, fully transparent, open to all capable and interested parties, with the final leases and terms available to the public.

Or, have these leases already been signed? If so, why the haste? And, why no public process?

The term for agricultural leases on the 9,600 acres of the federal airport lands retained for economic development must remain at 1 year with a 60 day cancellation clause. Pending release of the Transport Canada studies, changing the lease term on these lands is premature. Regardless, there should be no penalty for cancellation of these reserved leases.

Is nefarious activity taking place in an attempt to bilk the Canadian Tax payer of millions? Where is the transparency, checks and balances of our democratic institutions? Where is the Minister of Transport ?

Is the Minister of Transport, the honorable Marc Garneau, aware of this activity and of the impression of a potential conflict of interest? Can he please publish the details behind these leases including the cancellation terms. Has he informed our Prime Minister of this potential conflict of interest and will these leases be placed in review and investigated ?

 

5 thoughts on “Are Pickering insiders setting up a multi-million dollar tax payer funded windfall?”

  1. The Transport minister should ashamed for taking steps to destroy the general aviation industry.Pickering was to be an airport many years ago.I will never vote for liberal government again we have enough clowns in the government but Prime mini wan the price from the Indian politicians.Do the right thing and approve Pickering airport.

  2. The thing to remember is that decisions of this nature have been vetted through the administrative arm of Government long before they are ever sealed. The administrative arm of government (and I’m referring to the procurement branch in this case) would never counsel the Government into making a decision that was ill advised. Entering into 10 year leases with no out without costs would reek of political interference. Political parties live and die by votes. If in fact this issue has been sealed away the Government would appear to be putting this issue to bed for the next 10 years, which essentially extends beyond its expected useful life. It would be interesting to know how much the supporters of this plan are contributing to the governing political party.

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