Monday, May 28, 2007


B.C. Rail, Canada's 3rd largest railway, what's the deal?

Official Report of Debates of the Legislative Assembly
Monday April 26, 2004, afternoon sitting
HANSARD Volume 24, Number 4

J. MacPhail: I'm going to start with questions on B.C. Rail, and I'll make an opening statement about B.C. Rail. ...

The Liberals campaigned on a new-era commitment to not sell or privatize B.C. Rail. They were elected by constituents who took them at their word. I'm sure there'll be Liberal MLAs standing up and saying to the minister: "Hey, we said we weren't going to sell B.C. Rail." So how's that going? The Minister of Transportation and the Premier claim that they have not sold or privatized B.C. Rail. It was interesting to hear what the CEO of CN, Hunter Harrison said when he told an analyst upon the conclusion of the deal. He said CN paid "$750 million to buy the business."

The Liberals have said repeatedly that they'll release the B.C. Rail sale deal. Open up the deal now.

While holidaying, BC Mary felt some stray questions surfacing. Like, has anybody ever actually seen the B.C. Rail sale deal which the B.C. Opposition (above) was asking for? Then, while googling unsuccessfully for that info, I saw how much passionate opposition there had been among the northern communities over selling off B.C. Rail ... here's an example from Prince George:


November 5, 2003 12:00 AM

PRINCE GEORGE, B.C. — City council did the right thing last night (Nov. 3) by voting to postpone the sale of BC Rail in spite of the mayor’s strong support for the sell-off of the profitable public asset, says CUPE BC.

“It’s time to take the side of the community here and in North Vancouver and all along the railway line,” CUPE BC president Barry O’Neill told about 750 protesters [who] weathered minus 16 degrees celsius cold to support councillors fighting the deal. “The majority of this council knows that and acted wisely.”

“The person who doesn’t know it and has chosen another side is Mayor (Colin) Kinsley,” O’Neill said. Kinsley is one of the nine politicians appointed to a new government committee set up to smooth the sell-off.

“The creation of this committee, announced as the council was meeting and with the mayor on it, is a desperate measure that suggests the sale is a done deal,” O’Neill said. “The Liberal government may have cut a deal with CN Rail already.”

Still, council took the right step by showing the government that communities in the North do not want this deal. That includes the local business community. A recent survey shows that only 1 in 73 of the companies that do business with the country’s 3rd largest railway agree with the privatization scheme. [Emphasis added 3 years later. - BC Mary]

“Transportation Minister (Judith) Reid and Finance Minister (Gary) Collins have been parachuted here in a hurry,” O’Neill said. “Is it because they are here to sell a done deal or lose credibility to their privatization-hungry friends?”

O’Neill pledged to shadow the government committee and challenge the notion that governments should be selling public assets instead of building them.

“If our political leaders are bent on selling not building our province,” he said. “We need to change those politics. We need to take the side of our communities and fight those politics.”

Here's that voice from the B.C. Legislature 3 years ago ...

If the B.C. Liberal government is interested in pursuing any level of accountability, the deal should be opened for scrutiny. It's not enough for the Premier to say he's willing to campaign on this in the next election. What's he going to campaign on? Open up the deal now.

Actually, here's why the government probably doesn't want to release the deal. Here's what we know already, taking a closer look. There are supposedly $1 billion of benefits for British Columbians. Wrong — $250 million of that is at risk.

It's not even guaranteed in terms of tax credits. We've had no ruling from the Canada Revenue Agency about whether CN is going to be able to use those tax credits to write down its own payment of taxes to Canada, so the taxpayers could be left on the hook for that $250 million if the Canada Revenue Agency doesn't agree with the Premier on the tax credits. It's the British Columbia taxpayers that will be on the hook for that.

Let's be clear. Even the $1 billion isn't $1 billion. CN is going to pay $250 million less in taxes than it would have prior to this deal because of this deal. How is that good news for Canadians or British Columbians that a private, publicly held corporation is going to be paying a quarter of a billion dollars less in taxes?

Then let's look at the figures of the rest of the $750 million. Some of it's going to go to deserving projects — deserving projects that didn't need to have the B.C. Rail deal at all. The government could have committed to these projects regardless, but I certainly hope that the government is going to proceed with these projects. They haven't yet proceeded on any of the projects. They're deserving, and I hope that the money is well used, because our communities in the north need all the help they can get. They have been completely ignored by this government to date.

Here's what some of the projects are: $4 million for an expansion to the Prince George Airport; $17.2 million to fund expansions at the port of Prince Rupert, even though that expansion requires $54 million; $15 million for a first nations' trust fund that has become incredibly controversial already with this Minister of Transportation trying to use it as a claim of support for the B.C. Rail deal and the aboriginal leaders saying, "Uh uh. Not so"; $135 million for a northern development initiative. Good news — all of that. However, the total amount of that funding is 17 percent of the billion dollars that CN is claiming to pay that goes to our communities. That's the best-case scenario. Dig deeper, and it gets even a little more sketchy.

The northern development initiative. Some $60 million will be divided into four regional funds: the Peace gets $15 million, Prince George gets $15 million, the northwest gets $15 million and the Cariboo-Chilcotin gets $15 million. It's $15 million each, so the entire Peace region gets $15 million out of a billion dollars. That's 1.5 percent of the entire deal. Is that a good deal for the Peace when the mayors along the line are saying, "Uh uh. Hold off. Suspend the deal until the police investigations are over"? They're getting a total of $15 million. That's it. The northwest, the entire northwest, gets the same — $15 million.

So much of this process and this announcement are wrapped up in suspicion and secrecy. The other bidders complained about the process. One even dropped out. The winner was a major donor to the Liberal Party. The fairness adviser raised serious concerns about leaks. The government said not to worry. The Premier isn't showing us the deal.

Well worth reading the full HANSARD transcript at:


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