Public Values

Airports privatized by stealth

Canada's cities now coping with effects of Chrétien Liberals putting airports under control of unaccountable boards made up of political appointees.

Toronto has an extreme case of Union Station-itis, says Harry Gow of Transport  2000by Ish Theilheimer

Recently Canadian Press reported that a Transport Canada scorecard gave Toronto airport low marks compared with other airports in Canada in terms of efficiency and cost of operation.

In the 1980s there were frequent complaints about the stodgy, old, and too-small, Toronto Airport. Prime Minister Brian Mulroney attempted to address the situation by privatizing the airport. He offered a 57-year lease on the airport to construction magnate and former president of the Progressive Conservatives, Don Matthews, father of former Ontario Premier David Peterson's wife's brother-in-law.

A public controversy arose, with citizens' groups like Transport 2000 criticizing the plan. The national transportation watchdog said it was too big, environmentally unsound and unconnected, physically and in scale, with other modes of transportation. Jean Chrétien said the deal was patronage, and his 1993 federal Liberal Party made a "Red Book" promise to stop the sale of the airport.

Once elected, however, Chrétien changed course and partly privatized all Canadian airports. A new law transferred operations to local airport authorities, chartered as not-for-profit, non-share capital corporations, which took over from the public service, and, in cities like Toronto, a spending spree began.

Harry Gow of Transport 2000 says the structure of the airport could best be described as what the British call a QUANGO or "quasi non-governmental organizations. They're not crown corporations really. They're not municipal or regional agencies. They are definitely some kind of creature of the federal government but at such arms' length they do whatever they bloody please."

These authorities operate with little accountability either to the public, which has no role in their appointment and direction, or even to the government, which, although it appoints directors, has no control over them. The authorities fund themselves through their own operating revenues.

While some authorities have done reasonably good jobs of managing airports and working with local governments and services, others, like Toronto, have not. "Quango status," says Gow, "has meant that the regional players playing out their fantasy of being the centre of the world in different manners, some doing very realistic projects like Ottawa and Calgary, others going for the sky."

Although technically non-profit, the authorities represent a subtle form of privatization that removes accountability and control from the public. They set their own priorities independent, in most cases, of local government or the public. Their directors are usually chosen from the "old boys' club", political heavyweights and top donors chosen by the governing party. Most have strong ties to local business, and few of them represent the majority of citizens who rarely travel by plane and who depend, or would like to do so, on public transit as a daily necessity.

The boards tend to represent "the local moneyed elite," says Gow. "They don't pick someone who represents the waterfront or someone who represents the disabled person's community." They do not tend to have "sufficient user or local representatives."

"None of the appointees can claim any experience in operating airports," claims the website of the citizens' group Vocal Voice, which opposed the proposal for a new airport in Pickering. "They get to merrily implement policy for Transport Canada without the cumbersome responsibility of being accountable to anyone."

In Vancouver, Gow says, the airport authority has done a much more efficient job than in Toronto but, even there, problems have arisen because of this lack of accountability. Revenue from landing fees is being used to build public transit to downtown, which he supports. This transit, however, only serves city residents between the airport and downtown, because the airport authority is not required to work with the city and its residents.

Gow says these authorities would work better if they were "re-jigged" to include more community representation and more people with business and planning skills.

Local airport authorities, in theory, are responsible to the community through annual meetings, appointed boards of directors, bond market discipline and government oversight. These annual meetings, in the case of Toronto, for example, turned out to be coffee klatches for contract bidders. The board positions have become political plums: with the Toronto authority paying $5,000 per meeting for a stipend, it became a dumping ground for patronage appointments. Toronto's seat on the board of Pearson Airport was held for many years by high-powered Conservative lawyer Jeffrey Lyons (one of those investigated by the Bellamy Inquiry into improper contracting procedures with the City of Toronto — the MFP scandal).

While some airport authorities have operated with modest efficiency, others have built glitzy palaces, intended to glamorize their cities and enhance the prestige of the authorities themselves, and their directors. In Toronto, former CEO Louis Turpin, now retired on a pension reported to be $800,000 yearly from the authority, spent $4 billion (which will end up costing $7 billion) on the world's most expensive airport. Pearson's $20 airport improvement fee is one of the highest in the country.

"In the case of Toronto you've got an extreme case of Union Station-itis," says Gow. "In the 1930s every big city had to have a magnificent railway station, like Toronto's Union Station. All these things were palaces. They wanted to give positive impressions of their city to the traveller, and most were much nicer places to be than airports." They "overbuilt in this rush to establish Toronto as a major centre."

Posted: March 25, 2008

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