Saturday, July 11, 2009
Leah says: Something Isn't Adding Up! See Article 5, 5.1(a) ...
Something Isn't Adding Up!
Contributed by Leah
So, what is the real reason for selling BC Rail…and is it a sale? Or is it a lease? According to a confidential memorandum from CIBC World Markets (downloadable from the Legislature Library):
"After (or in conjunction with) completion of the restructuring steps, the Transaction will occur and be structured as a sale by BCRC and BCR Properties Ltd. (snip)…The Province intends that legislation be passed in the fall to facilitate and support the Transaction." What were some of the “positives” that CIBCWM liked about BC Rail? What made it such an attractive purchase? Again, from the “highly confidential” memorandum:
· Attractive revenue sources from a range of forest, and agricultural products commodities for a potential operator.
· Modern, High Quality Assets because of substantial capital expenditures for 5 years prior to sale.
· BC Rail provides enhanced operating flexibility and efficiency.
· Attractive Operating Ratio with further opportunities for improvement. In reality, it compared favorably to ratios enjoyed by Class 1 railroads, due to management’s success in controlling maintenance and operations expenses.
· The year 2003 operating ratio met or exceeded the full year outlook by the end of the first quarter, once again in line with other Class 1 railroads.
· 2.05 billion dollars in tax pools, at the end of 2002.
· Pension Surplus of 151.7 Million dollars, giving its new owner a contribution holiday for a number of years.
That’s already more than the one billion dollars paid – and we haven’t taken the machinery or other assets into account yet! Yet the Campbell government insists that it was a losing venture that absolutely had to be sold? Who do you believe?
More importantly, why is the BC Rail Transaction Agreement the most heavily redacted agreement I found while looking through numbers of documents from the Legislature Library? If one was hoping to find the truth about the conditions of the sale – they’re in for a rude surprise. Entire schedules, some with rather large numbers of pages are completely redacted, as well as segments on so many pages that it renders the entire document worthless to the citizens who owned this asset. Yet, the Campbell government appears to believe by placing in the Library in that condition, that this is “good enough” for us. His disdain for the citizens of the Province is so palpable; it’s almost painful.
There is one thing I found “interesting” in the document though, as it relates to a letter published in The Kamloops Daily News, on July 7. It said that a number of us were hoping to seek an interim injunction to stop the sale of this BC asset, until the terms were made clear to those with an interest (Us). That would be done by producing ALL agreements to this deal, (as there are a number of them) in an UN-redacted state to be scrutinized by a knowledgeable citizen tribunal. Until it was proven, there were no illegalities or wrongdoing, forming any part of the agreement.
Interesting! From the BC Rail Transaction Agreement:
CONDITIONS OF CLOSING
5.1 Mutual Conditions
The obligation of the Vendors to complete the sale of the Purchased Interests contemplated by this Agreement and of the Purchaser to complete the purchase of the Purchased Interests as contemplated by this Agreement is subject to fulfillment of the conditions on or before the Closing Date:
(a) No Order or Proceedings: No injunction, declaration, restraining order or judgment of a court or administrative tribunal of competent jurisdiction will be in effect which, directly or indirectly, restricts or prohibits the transactions contemplated by this Agreement and no action or proceeding will have been instituted and remain pending before any such court or administrative tribunal to restrict or prohibit any of the transactions contemplated hereby. (Underlines by the writer)
(f) Legislation: The Legislature of the Province shall have passed such amendments to the British Columbia Railway Act, and any other applicable laws which may be required to authorize and permit the consummation of the transaction contemplated in this Agreement and the other documents to be executed and delivered pursuant hereto.
One can only assume by those clauses that someone responsible for the creation of the contract, and the closing of the sale knew at the time of writing that this agreement would be found so odious by the citizens of the Province, that an injunction would likely be sought to stop it. So, they blocked our right to dispute the sale beforehand.
Magically, they have removed our rights as citizens (and as owners of this asset) to dispute either/both the sale, and/or the terms of the sale, with no recourse. In effect, that’s what clause (a) does. Premier Campbell has taken it upon himself to grant both his government and CN a right no other private citizen or corporation in this entire country has, being above the law. Then he has given himself (f) the power to enact new law, or change existing laws to accommodate both himself and CN!
As a friend, Skookum-One has said:
“What we have is a Provincial regime that has surrendered, or attempted to surrender, BOTH the sovereignty and the authority of Canadian laws and the Canadian constitution, the sovereignty of the Parliament and Courts of Canada, as well as the Courts of British Columbia…to an American company. The corporate right has found a way to annex Canada without actually having to annex the country itself; just enter into a contract which contains clauses that bypass Canadian law, overriding the authority of the courts and Canadian Constitution. How can this be legal? And does it not point to conspiracy to overthrow the authority of the Crown?
Well done, Leah. Many thanks for your research and for sharing. Here's a thought for discussion, though. By "closing" (as in "Conditions of Closing"), wouldn't it be referring to the date of signing (July 14, 2004) rather than the 5-year anniversary? Or can it be understood as referring to both? - BC Mary.
And, there's no need to SNIP, its public domain.
And thank you for your advice, this newbie has a lot to learn about writing...and some of its terms. Much appreciated!
I would hope the courts have jurisdiction over it, it is definitely something we need a crystal clear answer to. Otherwise, if we were reading it correctly, and nothing was done about it...could it not set a new precedent as far as citizens rights vs. corporate rights and government are concerned?
Thank you for your thoughts.
Here's the Green-est of ideas for ridding ourselves of sewage plants..... are you listening David Suzuki....
You do two things at motorway services: fill up one tank and empty another. US chemists have combined refuelling your car and relieving yourself by creating a new catalyst that can extract hydrogen from urine.
CIBC confidential report on BC Rail's worth
oh what the heck, eh, here's the list for all of the Legislative Assembly Library
That's an excellent question - I understood it to mean both because the contract "matures" or completes, 2 days from now...and CN takes possession of the lands as part of the deal.
If it was referring only to the date of signing, then the second half of my opinion may well be considered misleading, and should be immediately removed. The entire sale of BC Rail is confusing with the numbers of agreements that form the entirety of it...stating my opinion shouldn't be adding to that!
I'd really like to hear the second opinion though, and a third if there is one because as important as this whole deal is/was...if it can impact our freedoms to dispute the governments actions legally or otherwise(no matter what party is in power at the time), then I think the issues have to be taken very seriously.
What would have been most helpful to the citizens of BC was for the Premier to put the REAL deal into the Library, no redaction's. If he is as proud of it as he says he is, he has nothing to lose and everything to gain on a "transparency" level. As it stands, unless someone forces him to do it - we will never know the full extent of what we have lost.
In any event, if the confusion now surrounding Article 5.1 (a) can't be cleared up completely - then I respectfully ask that you remove the article from your blog to retain the integrity of your site. That's why you have the following you do, we can come here for truth. Period.
1912 – The Pacific Great Eastern (PGE) Railway – intended to run from Vancouver to Prince George – is incorporated as a private company.
1917 – PGE is investigated by a legislative committee, which leads to the incarceration of a witness for refusing to answer questions.
1918 – The provincial government acquires PGE when the railway defaults on bond obligations.
1921 – A line expansion to Quesnel is completed, then construction stops until the 1950s.
1924 – The Galliher Commission investigates charges of mismanagement and misappropriation of railway funds.
1956 – The first train finally travels from North Vancouver to Prince George.
1958 – The expansion of the line connecting Prince George to Fort St. John and Dawson Creek is completed. “At long last the Peace River country was connected by rail with Vancouver.” The following decade sees what the McKenzie Royal Commission calls “the most ambitious period of expansion” in the railway’s history.
1972 – PGE’s name is changed to British Columbia Railway.
1978 – The Royal Commission on the B.C. Railway recommends the railway’s transfer to CN or, “in the more likely event that management of the railway remains with the province… that it be made a genuinely autonomous Crown corporation.”
1979 – The British Columbia Railway Finance Act “enshrines the principle of ongoing government financial assistance for the railway.” from a bc leg document
BC Supreme Court Decision March 2005# 15
Evolution of British Columbia Railroad Company
 There were changes in the corporate structure of PGE as well as it evolved to its present incarnation. By 1979, PGE had become the British Columbia Railway Company. The British Columbia Railroad company is the parent company of the defendants BC Rail Ltd., BCR Marine Ltd. and BCR Properties Ltd. and is a partner of the defendant BC Rail Partnership. The British Columbia Railway Company sold its assets to BC Rail Ltd. and BCR Properties Ltd. BC Rail Ltd. acquired the railway, as documented in certificates dated June 18, 1984.
 In 1993, BC Rail purchased Vancouver Wharves Ltd., which later became BCR Marine Ltd.
 In 1997, BC Rail Ltd. sold its assets to BC Rail Partnership. The Minister approved of the transaction and to the acquisition by the Partnership of the railway by certificate dated December 16, 1997.
I thought BC rail partnership was the BC Rail CN deal,
Over and over, I tell myself that I'll never be surprised by any new BC government revelation ...
but this series of legal maneouvers (sales?) is surprising.
My inclination is to believe July 14, 2004 is contingent on July 14, 2009 and that the latter is the true closing date. But I don't know.
I added this comment to my post this morning.
Jim comment: It has been brought to my attention that there is some legal question surrounding 5.1 (a). Is the completion date July 14, 2004? Or is the completion of sale of 'the Purchased Interests' contingent on the legal fulfillment of the July 14, 2009 obligations? I'm not a lawyer-and as so much of the deal remains secret-I don't know. I'm leaving this post up as it does suggest more than one legal interpretation can be argued. Is there a public champion, a barrister Zinedine Zidane out there?
It is not likely to happen in time but it seems to me that a courtroom could create a pitch for an intense legal match were arguments to be put into play and defended against. Pity. That's 'Court TV' I would watch. Could be as exciting as a FiFA World Cup match. Certainly the stakes are high.
Me? I say: SHOW US THE DEAL.
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