STANDING COMMITTEE ON GOVERNMENT AGENCIES
COMITÉ PERMANENT DES ORGANISMES GOUVERNEMENTAUX
Tuesday 17 November 2009 Mardi 17 novembre 2009
The Chair (Mr. Ernie Hardeman): We’re meeting this morning to do three intended appointment reviews. The first one is already sitting at the end of the table, anxious to get started. We have Robert Prichard; he’s an intended appointment as member and chair of Metrolinx.
I would just point out that the process per individual will be half an hour, with 10 minutes for each party. We will start with the opening statement from you, Mr. Prichard. Any time that you take up to 10 minutes will come off of the government side of the questioning. We will do the questioning upon the completion of your presentation. With that, we turn the floor over to you and say: Welcome. We look forward to your presentation.
Metrolinx has been assigned an important role in the growth and prosperity of the greater Toronto and Hamilton area and, indeed, the province as a whole. I’m honoured to be invited to play a role in Metrolinx’s work.
I served from mid-April to early May as the transition adviser, as the merger of Metrolinx and GO Transit was contemplated. Following the passage of the legislation merging the two organizations and creating the new Metrolinx, I began service as president and chief executive officer, which I’ve done since May 13, or the last six months.
As the merger is completed and the organization is fully formed in the new year, our plan is to recruit a permanent president and chief executive officer for the organization to replace me, at which point the plan is that I would go from being the president to becoming the non-executive chairman once the new president is in place. We hope that process will lead to a seamless transition from the transitional arrangements to the permanent arrangements and that all the commitments we’re making to our municipal and transit partners will be honoured by my having a continuing role with the organization.
The merger, I think, has gone well. The legislation was approved in mid-May. It combined the old operating organization, GO Transit, with the policy and planning agency, the old Metrolinx, creating an integrated agency with a single management structure and an integrated mandate, going all the way from operations through to construction to planning and policy for the GTHA.
I think we’ve made good progress over the last six months. We’re working on our top priorities. Our top priorities include improved customer service for GO Transit riders: We’re working on expanding GO Transit and improving the quality of service and the reliability of service and having a focus on the rider, on the customer, in all we do.
Our second priority is to work on the major new infrastructure projects that have been announced, the so-called “Big 5” projects—four in Toronto and one in York region. Our goal is to deliver those projects on time and on budget. They’re a very, very large set of projects, but we’re making good progress working with the TTC, in the case of the Toronto projects, and with York Viva, in the case of York region.
Our third priority has been to work to successfully integrate the two organizations into a single organization. That work has gone well, including building the new governance for the agency with a new board of directors.
Fourth, we’ve begun work on our investment strategy, which is, we are obliged under the statute, as you know, to report by the end of June 2013 with a recommended investment strategy to sustain this work beyond the initial funding that has already been committed, and we’ve begun early work on that.
In terms of the governance of the new organization, from my perspective, it is working well. We have, in my view, an excellent board of directors that has been nominated. We’re trying to put in place exemplary governance arrangements for the organization. We have the advantage of a clean slate, and so we can put in place what should be best-of-class governance arrangements. We are being blessed so far by essentially 100% attendance of all board members at all board and committee meetings over the first six months, which has been excellent.
I have had the privilege of leadership positions in both the public sector, as president of the University of Toronto for a decade, and in the private sector, as the president and chief executive officer at Torstar. I’ve had a strong interest in public policy and public administration as a teacher, as a scholar and then as a practitioner in the field during my career.
I’ve had the special privilege of working on a non-partisan basis in the province, holding appointments from the Peterson government, the Rae government, the Harris government and now the McGuinty government, and I’m proud of that service across all political parties since 1985. I view public service as the highest calling, and I’m just delighted to have the opportunity to continue to serve through working at Metrolinx.
Mr. Michael A. Brown: We’re delighted to have you here leading this very important new venture, as we amalgamate the transportation system. We are very happy to have people—not just you, but people across the board—who are going to provide good services to the people of Ontario. We will be supporting your appointment.
The Chair (Mr. Ernie Hardeman): I guess I should have mentioned how much time you have left, but obviously that wasn’t necessary. It makes up for the fact that I also was supposed to tell you before the interview started that we would be starting the questions on the government side. So, my apologies for that.
Mr. Jim Wilson: Mr. Prichard, it’s great to see you again. Thank you for appearing before the committee, and thank you for stepping down at Torstar. Now we can resume our friendship again. I always enjoyed working with you in my various roles and your various roles.
I don’t live in the area in which Metrolinx has jurisdiction. I live in Wasaga Beach, Simcoe county. But from an outsider’s point of view, and being a member of this place for many years—in your opinion, what’s Metrolinx going to do that all the boards before it couldn’t do in terms of integrating the services for public transit riders? And what were some of the problems in the past that you think you can overcome?
I think we have a good shot. We’ve been given a strong statutory mandate. We’ve been given exceptional financial support. We have the basis of having very strong relations with our municipal and municipal transit partners. We have some tools to assist with integration. The Presto fare card, which will be a common fare card across all the transit systems, should give us real opportunities for improved service for riders regardless of what municipal boundary they’re going across. We’ve been given tools that should allow us to make real progress.
Second, I think there’s a growing recognition that the challenge of transit is a regional challenge. It is not just in each of the municipalities; it is for the region as a whole, and I think that recognition has become widespread. We’ve got a regional transportation plan to serve the region and we’ve been given the tools to get at that. It will require a high degree of co-operation between us and each of the municipalities within the region and their transit systems. We don’t have a “command and control” relationship. It’s a relationship of partners working collectively to realize the promise of the big move planned for the region. It’s not without challenge to more fully realize the possibilities, but I think we’ve never had as strong a set of tools and as strong a statutory mandate to try to deliver seamless, integrated transit and transportation options for people throughout the region.
Mr. Robert Prichard: I think moral suasion is an essential part of relationships among municipalities within the region—their transit systems—but we have more than just moral suasion, because we have tools like the Presto fare card, which, by harnessing the best of technology, will simply make it easier for everybody concerned to come together. I think barriers are coming down that will make the role of relationships and moral suasion among us more successful than it might have been in the past.
Mr. Robert Prichard: The fare card is called the Presto card. It is an electronic card whereby people, when they’re going on any of the transit systems, will be able to tap and go on. It will be a card they can load with value themselves—they will be able to do that in multiple ways—and it will charge them the lowest fare appropriate to them in the circumstances. That’s the smart card. So if the person has taken a certain number of trips in the month on GO, the price of their trip comes down to an equivalent of the monthly pass. It’s a smart card that will make it easier for people to get on and off, to use transit, to come in on the GO train, get off the GO train at Union Station and use the same card to get on the subway. That card will allow people throughout the region to use a single card and be charged the appropriate fare and the lowest fare applicable to them in light of their travel pattern.
Mr. Robert Prichard: We’re going to do the first rollout on the last day of November. This year is the first rollout. It’s a trial combining GO and TTC, with 500 people to test the system. The system is going live on November 30. If that goes well, we begin the rollout through 2010-11, and it should be fully rolled out by 2012 for GO. The rollout also depends, of course, on the participation of our municipal partners, and we’re working closely with them to make sure their rollout fits well with the whole system.
Mr. Robert Prichard: There will be kiosks, there will be machines in all the stations where people will be able to obtain the cards, and then they will be able to load the cards at those locations or at a distance, directly from their bank balances.
Mr. Jim Wilson: On the Big Move, do you have any preliminary thoughts? I know you have until the middle of 2013 to present the government with a financing plan. Do you have any thoughts on how this approximately $50-billion project is going to be paid for?
Mr. Robert Prichard: The financial challenge is significant. The Big Move contemplates capital investments over the life of the plan, which is to 2031. It contemplates capital investments of about $50 billion, of which the first $10 billion has been funded to give us a kick-start and show results, but there’s still $40 billion to go. The second issue is that there will be ongoing operating costs associated with this additional infrastructure as it’s built, and those need to be met as well.
In terms of developing an investment strategy, the work we’ve sought the board’s permission to initiate and were given approval for yesterday at our board meeting is to begin the analytical work of framing the problem properly—what are the capital costs; what are the operating costs?—and to begin to frame the problem and what the options are, both drawing on the best expertise in the region and looking at international experience.
I think Metrolinx should be part of that discussion and become a centre of expertise on the issues that face us. If we can spend the next period of time getting the problem properly framed, I think that’s the first step in what is a four-year process of trying to come to an investment strategy. It’s far too early to have a view as to what the answers would be, but I think we can play a very constructive role, over the next year or so, in beginning to identify clearly and crisply what the questions are and what some of the choices would be. We’re then going to need a significant process of public engagement and public dialogue to permit a full debate on what these choices would be.
Mr. Robert Prichard: Yes, the first $10 billion has been committed to these projects by the province. We will build out these projects with our municipal partners, the TTC and York Viva. We’ll get those built, starting this fall, and we need to get in place the sustainable funding for beyond 2013, both for the additional capital projects in the Big Move plan and for the operating costs of these facilities as they come online starting in 2013.
Mr. Jim Wilson: Recently the OECD commented that traffic congestion in the greater Toronto and Hamilton area was costing drivers about $3.3 billion annually in lost productivity. They suggested recouping some of the lost revenues in terms of implementing tolls. What do you think about tolls on our roads?
Mr. Robert Prichard: I think it’s too early for me to have an opinion on tolls. I think the job is to frame the challenge we face, and it’s a double challenge: one, a financial challenge, the investment strategy, and the second, to create good options for commuters, drivers and riders.
We believe the congestion cost identified by the OECD at $3.3 billion is a substantial understatement of the challenge we face. That’s only the cost of additional gas and waiting time in the vehicles; it doesn’t take into account the productivity losses to the region as well. The Metrolinx study that was done previously pegs to that number another $2.7 billion, for a total of $6 billion. But what is of greater concern is that the projection, looking forward to 2031, in the absence of intervention to increase options and transit opportunities to address the congestion issue—given the expected growth in the region from six million people to 8.6 million people, adding about a million cars to the GTHA—would go to $15 billion.
We have a big challenge to address that congestion problem. We think we need to get on the table exactly what that challenge is, what the options are for dealing with it, and then begin the public debate as to what the right ways are to respond. If I, as president or chair of Metrolinx, began with the answers, I’d be violating the very process we intend to begin: a process of public engagement and public dialogue informed by the best evidence available locally and internationally about the experience of other cities. We’re not the only region in the world to be addressing these issues, and we need to draw on the best learning that’s going on around the world as we come to a view as to the right way forward for the GTHA.
Mr. Howard Hampton: Okay. I want to ask some questions about some things that are already under way. One of the things you are taking over is the so-called rail run from downtown to the airport. As I understand it, the province has already had negotiations with SNC-Lavalin about the operation of a train. That’s a factual reality?
Mr. Robert Prichard: Incorrect, I believe. They will be bound by the Minister of the Environment’s order that any trains running on the expanded Georgetown corridor would have to comply with the minister’s conditions. That would be true for SNC trains and GO trains.
Mr. Howard Hampton: But I want to make a distinction here between what the minister is ordering and what SNC-Lavalin has proposed. My understanding of what they proposed was not state-of-the-art diesel trains—in fact, what’s called tier 2 technology.
Mr. Robert Prichard: If you’ll permit me a minute of context: The negotiation between SNC-Lavalin and the province is being conducted not by Metrolinx but by Infrastructure Ontario. I’m not at the negotiating table, so what I report will be one step removed, but I don’t believe there’s any ambiguity that the agreement the province hopes to conclude with SNC-Lavalin would have to comply with the Minister of the Environment’s conditions with respect to diesel technology. Whatever discussions there were in the past, prior to the minister’s order, have been overtaken by the minister’s order and conditions for Georgetown. So it’s not possible to run the trains, it wouldn’t be possible for the service to run, if the locomotives provided by SNC were not compliant with the Minister of the Environment’s conditions.
Mr. Howard Hampton: But isn’t that a problem? You’re supposed to be designing, coordinating and implementing, and yet this very project is not within your boundaries. It’s all being done by someone else. Isn’t that a problem? Isn’t that what you’re supposed to do away with?
Mr. Robert Prichard: I don’t think it’s a problem. The airport rail link is one of the major projects in the Big Move; that is, the plan that’s been articulated calls for rail transportation between Union Station and Pearson airport, number one. This negotiation that’s being carried on is designed to realize that project. So that’s a positive to us. Second, in order for SNC-Lavalin to operate the air-rail link, it has to do so over GO tracks and GO facilities, and GO-Metrolinx has to enter into agreement that would permit SNC to do that, which will ensure compliance with all of the requirements we have for managing the corridor, so it can’t operate without our permission.
The fact that we’re not actually at the table, doing the negotiation with SNC-Lavalin, is not of concern to me because we have to enter the stakeholder agreement with SNC-Lavalin to support that service, and in that agreement we’ll ensure that all the requirements of GO Transit and Metrolinx are met.
Mr. Howard Hampton: It seems to me that there is a problem. You’re quite right: One of the conditions imposed by the Minister of the Environment on the project going forward was that the new rail service employ tier 4 diesel locomotives. It was very clear that the Metrolinx proposal has been prepared on the basis of tier 2 locomotives. Tier 4 is an emission standard that current locomotive technology does not meet.
Here’s the real “but”: The condition placed on the new service linking the airport and downtown requires the use of tier 4 locomotives “when service begins or when such locomotives are available.” In other words, as you’ve said, you have no control over this. This is being negotiated by somebody else over there, but ultimately you’re going to carry the can for this.
The order doesn’t say you can’t begin service unless you have tier 4; the order says you can begin service with tier 2, and maybe at some time possibly, perhaps in the future, when tier 4 becomes available—if it becomes available—then it becomes tier 4. Doesn’t that cause you some worry that all these things you’re ultimately going to be responsible for are being negotiated, the deal signed somewhere else, but you’re going to carry the can for it?
Mr. Robert Prichard: I’m actually not concerned about it. The province is extremely transparent with Metrolinx and with me in particular. I get briefed, not on a daily basis but certainly on a weekly basis, on the progress of the project. My views as president of Metrolinx are sought as inputs to the process, and we also have to enter the stakeholder agreement to support it. So I feel completely informed. The only qualification I was giving you earlier was: What did SNC propose at the table at certain points? Because I’m not at the table, I can’t answer that. But on the rest of it, I’m not concerned about it. Indeed, I’m excited about the prospect that after years and years of delay, we’re on the verge of having a path to success of the line.
On the question of tier 4 diesel: We’re very comfortable with the order to have tier 4 diesels. We, based on our discussions with the manufacturing industry, are very confident that there will be tier 4 diesels available. That’ll be true for us as well as for SNC-Lavalin, assuming that agreement is reached with SNC-Lavalin. I believe the services will open with tier 4 diesels in place.
GO Transit has a long history of always adopting the best available technology, the cleanest fuel. That’s been a part of the GO tradition way before my arrival there, and this will be a simple extension of that tradition of trying to be at the front edge of environmental concern with respect to the locomotives and their fuel.
Mr. Howard Hampton: It’s funny you should mention the word “transparency,” because in the act you work under, corporations’ infrastructure projects are exempted from the procurement requirement under section 16 of the Ministry of Government Services Act: The contract for “construction, renovation or repair of a public work” will be put out for tenders.
I would think that’s ominous, given that we’ve just seen the auditor’s report on a billion dollars that went down the drain at eHealth. In the auditor’s words, he didn’t find much that was produced. Much of that was by way of untendered contracts.
I guess there’s an accountability question here. One of the things we saw at eHealth was that there was no accountability. I think we even heard the deputy minister say that he felt powerless to control what was going on because everything had been set up over there. This is what worries me about Metrolinx: the power to grant seemingly endless untendered contracts. Nobody on the Metrolinx board is an elected representative. How do you put this in the context of what’s gone on at eHealth?
Mr. Robert Prichard: You’ll never hear me come back and say we were powerless. We are fully accountable under our statute. The board of directors is accountable, as is the present chief executive officer, so the notion that something is going to be done to us is not a concern. We may get something wrong, but it will be because we got it wrong, not because it was done to us by someone else.
On the issue of procurement, we are fully compliant with all the provincial directives on procurement and we follow them in full. We have modified all the procurement policies at Metrolinx to adopt all the new requirements that have been announced by the province. I believe our record on procurement has been very strong and will continue to be very strong and compliant with the province’s highest standards for procurement. We’ve done a review of all procurement over the past number of years and believe it’s fully compliant, and I believe we’ve put into place, both at the management level and in our reporting to the board and the audit, finance and risk management committee of the board, full transparency on our procurement. It will comply with the provincial requirements for procurement and do so in an accountable way, delivering value to the taxpayer for what are going to be very significant expenditures over the next number of years with this infrastructure program.
So proper procurement complying with the highest provincial standards is a central part of the mandate of Metrolinx. We have full control over that and therefore responsibility and accountability for it.
Mr. Howard Hampton: I appreciate your answer, but let me give you another example. We have in Ontario today something called the Ontario Power Authority. The Ontario Power Authority has signed contracts for tens of billions of dollars in electricity supply, but under the legislative system we have, the legislative makeup, they can’t be called before a legislative committee to be reviewed. We can call Hydro One before this committee, we can call Ontario Power Generation before this committee, but the agency that’s out there signing contracts that the people have not even heard of is not reviewable—
Mr. Robert Prichard: We’ll be completely transparent with the work we do. We have said that we will—all our policies have been amended to comply with the current provincial requirements. We are subject to the jurisdiction of the Auditor General and the provincial controller. All of our work can be reviewed through that process.
Speaking for myself, I’m happy to appear anywhere I’m invited by the Legislature to explain the work that we’re doing. We’re proud of what we’re doing. We’re setting a very high standard for this new organization. We do have the advantage of a clean slate and being able to set the bar high. I think that’s what the people expect us to do, and we’re very committed to not just setting the bar high but living up to that high bar of accountability and transparency and getting the job done to advance the greater Toronto and Hamilton area and address what is this really quite profound challenge we have to improve transit and transportation options to make this region even more prosperous.
The Chair (Mr. Ernie Hardeman): Thank you very much for your presentation. Our time has expired, and we again thank you very much for coming forward this morning and enlightening us on your ambitions to move forward with Metrolinx.
As with the previous one, we will give you the opportunity to make a presentation. At the conclusion of the presentation, we will have questions from the three parties present—10 minutes for each party. The time for your presentation will be deducted from the government side. The first questioner in this one will be the official opposition. With that, we turn it over to you, Rahul, and we’ll ask for your presentation.
Mr. Rahul Bhardwaj: Thank you, Mr. Chairman. Good morning, everyone. It’s a pleasure to be here, and it’s certainly a privilege to be considered for a position on the board of directors of Metrolinx. In my current role as president and CEO of the Toronto Community Foundation, I have the pleasure of sharing every year in what we call Toronto’s Vital Signs. It’s an annual snapshot of the city of Toronto. Among our many findings are that transportation, and public transit in particular, is critical to not only the economy but the environment and the public health of the people in the region. So I commend you all for your investment in this, and I want to say that I consider this also a very important public service on my own part, given the gravity of the issue at stake.
I understand I have a few minutes to talk a little bit about my own suitability for the position, so forgive me if I highlight some of the things that I’ve done along the way, and I’ll leave it to your good judgment to evaluate it.
I’m confident that my professional and community involvement would in fact add value to Metrolinx. Both my training and practice as a corporate lawyer, along with my operational experience running a large public foundation, provide me with the discipline, the insights and the experience to be an effective member of the board.
I’ve also had the privilege of contributing to city- and region-building through my board and volunteer involvements, and I’m going to highlight a few of them for you. I’m currently a member of the George Brown College board, as well as the executive committee and the finance and audit committee. I’m currently a member of the Stratford Festival of Canada board, as well as the human resources committee and the nominations committee, and I’m previously chair of the marketing committee. I’m also the former chair of the Toronto Downtown Jazz Festival and several other boards, including the board of directors of the United Way of Toronto and the executive committee, and I can’t forget, of course, the Canadian Opera Company board, which it was also a pleasure to be a part of.
In addition to my volunteer roles, I was also vice-president of the Toronto 2008 Olympic bid and later as a member of Mayor Miller’s blue ribbon fiscal review panel. I can assure you that this has provided me with a most unique education regarding the complex issues surrounding city- and region-building, and at all times it has been a privilege to serve in these capacities.
You’ll find that I’m committed to fairness and accountability, good board governance and high ethical standards. Provided with the opportunity, I’ll look forward to bringing this and much more to the board of Metrolinx.
Mr. Jim Wilson: Thank you very much for appearing this morning. I’m not exactly sure why we called you. You’re eminently qualified for the position, I think, but I do have some of the usual questions.
Unfair questions, but you’re aware of the top priorities? I have a list of the top 15 capital priorities of the board. Has there been any informal discussion to date in terms of how the Pan Am games will affect that?
Mr. Rahul Bhardwaj: There certainly have been discussions at the board level that we’ve had both in open session and otherwise, and I think it’s fair to say that those plans are evolving. I think there has been some discussion in the media about that. Short of getting into specifics about it, I think it’s a very evolving process right now.
Mr. Jim Wilson: Again, going back to what Mr. Hampton was talking about with the chair, the electrification of the rail lines, particularly the Georgetown line—15 years on the horizon is what I read in the media. Do you have any personal thoughts on whether that should be sped up? Is it doable?
Mr. Rahul Bhardwaj: It’s obviously a challenge, but I think we’ve got a lot to be really proud of as well. One of the highlights of this whole process has been the commitment to public consultation. As the thinking was evolving, it was clear that there were some challenges in the community, different options were put forward, and I think it’s to the credit of the board and the operations of Metrolinx that they jumped into it with both feet and actually put together a process that’s now looking at things.
As you know, we’ve got a group out there with terms of reference. They’re going to be looking at this, and if there’s an opportunity to move it ahead faster, I’m sure every opportunity will be taken to do that.
Mr. Rahul Bhardwaj: That’s a great question. From our perspective, that means that we have the commitment of the provincial government to fund those as they go forward, and that’s what we’re relying upon at this point.
Mr. Howard Hampton: All right. The other question I have is something I also took up with the chair. There seems to be a lot of confusion about Big Move number 2, high-order transit connectivity to Pearson airport district from all directions, the first part being rapid transit connections to Pearson airport from downtown, right? Part of the problem there, as I see it, is that this is a project, as Mr. Prichard just indicated, that you don’t have any control over. It’s being negotiated somewhere else; it’s being managed, at this point, somewhere else; discussions are happening somewhere else. So how do you ensure that this is going to happen according to a plan when everything is being done somewhere else by someone else and you’re told what’s happening every once in a while, but again, you have no control over it? It seems to me a pretty peculiar thing when you’re on the hook. It’s part of your legislated mandate, but you have no control over it.
Mr. Rahul Bhardwaj: I guess my comments would be threefold. One is, I echo Mr. Prichard’s comments; but secondly, at least from my perspective, I would say that there’s control and then there’s input. I wouldn’t suggest by any stretch that we don’t have input, particularly informally, so people understand what the position of Metrolinx would be vis-à-vis the evolving journey of what happens between Union Station and the airport, and all aspects of the other links as well.
The other thing is, I think, quite frankly, we have a certain amount of trust that everything is being negotiated within the context of the Big Move, so I think there has to be a certain implicit trust that there is a certain amount of alignment that’s going to take place there, whether or not we’re directly involved in negotiations at this stage of the process on the specifics.
Mr. Howard Hampton: You say that everything is happening according to or within the parameters of the Big Move. There’s some irony, actually: I wanted to ask Mr. Prichard this because I think it was reported today in the Toronto Star that one of your high officials has said, for example, that what is known as Transit City in the city of Toronto, in his view, should be financed as a public-private partnership. Is that the direction we’re going to see here: overwhelmingly private-public partnerships? Because, as I understand it, that’s right up there as one of the first Big Move items.
Mr. Rahul Bhardwaj: I didn’t get the opportunity to read the article this morning, so I’m not sure about the context of the quote. But to answer your question, this is a learning journey for everybody. I think that what the board has been discussing is that we need to keep our options open on what the available financing mechanisms are on a go-forward basis. So for me to suggest right now what I think is going to be overwhelming or what we’re going to land on is really premature.
Mr. Howard Hampton: Let me give you an example. We had the auditor’s report on the Brampton hospital, which originally was floated as a public hospital. When it was finally built, it was a public-private partnership. The auditor reviewed it and basically said that the costs of going the private-public partnership route were about 100% greater.
The new hospital in Sault Ste. Marie is being built as a public-private partnership. While we haven’t heard anything official, what we’re being told is that the cost is now two and a half times what it would have been as a publicly financed, publicly built hospital.
As I mentioned to Mr. Prichard, one of the things I find troubling about your organization is that you can grant all kinds of untendered contracts. In fact, there doesn’t seem to be any financial limit on your untendered contracts.
Mr. Rahul Bhardwaj: I think you’ve raised a couple of examples of AFPs or P3s that may not have met the standard you’d be looking for. I’d also look at what’s happening in Vancouver between the downtown and their airport, and they’ve had a great amount of success in that.
I think your question was really to say: Have we prejudged this and is there a particular mechanism or vehicle that we’re wedded to on a go-forward basis? I’d say no; that’s simply not the case. We’re exploring all sorts of options within the context of what we think is the appropriate fiduciary duty of a board.
Mr. Howard Hampton: If I reflect on the last two years, it looked as if Transit City was well on its way in Toronto, yet today you read in the paper that something as fundamental as financing is now looking very seriously at the public-private financing route. It sounds to me like decisions have already been made.
Ms. Leeanna Pendergast: Good morning, Mr. Bhardwaj. Thank you for being here. I’m just looking over your CV, your resumé. It’s quite an eclectic background: Ivey school of business and law, and mixed in there is the Stratford festival and your involvement with jazz and theatre and opera and the art gallery. It goes on and on, as you know.
My attention has been drawn to your involvement with the Olympic bid. That being quite a unique experience, obviously tapping your expansive skill set, I’m wondering if you can elaborate for us, please: What skill set, what expansive expertise do you bring as a result of that experience that would help you perhaps understand the complex issues that Metrolinx is currently grappling with?
Mr. Rahul Bhardwaj: I think I’d start off with: Dream big. I think the bid was all about city-building and region-building. It invited everybody in southwestern Ontario and, in that case, Canada to raise their eyes above the horizon. I think that that was a very empowering process to go through. It also demonstrated to me personally that region-building initiatives like this have a lot of offshoots, such as developing a new generation of leadership, that are somewhat unintended consequences but have a long-term and lasting effect on this. That’s on the dream side.
On another side, I was very involved with the community consultations that were involved in this. This was a pledge to social equity along with the games as well. We had a very deep consultation process with members of the communities that would be affected not only by the infrastructure development but those who had interests in what was going on in the city with respect to the games. I have a deep personal commitment to community consultation and its contribution to helping define and refine big dreams such as this so that they do work for many.
I also had the privilege of being involved in it at a certain governance level in the sense that I was involved in all the board meetings and a lot of the political discussions, sometimes as a party, sometimes as an observer, to understand how these decisions and discussions are forwarded and, frankly, what the tenor of discussion is on and how to keep them on track. Those are things that I’m seeing very much come up as well in the board discussions that we’re having now, so it’s something that I hope to bring more value to as well over time.
The Chair (Mr. Ernie Hardeman): Thank you very much for making a presentation and making yourself available this morning to the committee to answer our questions. With that, we’ll conclude this part of our hearings.
The Chair (Mr. Ernie Hardeman): Our third and final interview is Rob MacIsaac, intended appointee as a member of Metrolinx. As he’s coming forward, I would just point out that the bells are ringing for a vote, so we have—let me check here. I think it’s 10 minutes.
The Chair (Mr. Ernie Hardeman): Sixteen minutes; sometimes you have to put your glasses on. We will start the presentation, and I’d like to point out, Mr. MacIsaac, that when there are about four minutes left—I would think we can all get there to vote in four minutes—we will have to leave you for a period of time to go and do the vote. Then we’ll come back and conclude the interview if it’s not completed before that time.
With that, as with the previous applicants, we will tell you that if you wish to make a presentation, you can do so. Upon completion of the presentation, we will have questions from the committee, starting this time with the third party. Each party will have 10 minutes, and the time you take to make your presentation will be taken from the government’s 10 minutes. I want to say that in the time that we’ve been doing this, it never seems to bother the opportunity of the government to get their questions out. We ask you to make your presentation, and we’ll proceed from there.
Mr. Robert MacIsaac: Thanks very much, Mr. Chair. Thank you to the whole of the committee for the invitation. It’s an honour to appear before you again, Mr. Chair. I think our paths have crossed a number of times over the years.
I’m very proud to stand for the nomination as a member of the board of Metrolinx. Members of the committee perhaps will be aware that I have been the first chair of Metrolinx, and I’ve served on that agency over the past three years. I was, in fact, the first person through the door when we were really just a start-up agency, and I was the first employee. Over the past three years I’ve worked to staff the organization and to develop a comprehensive set of what I think are state-of-the-art policies, procedures and guidelines to govern the organization. I’ve worked with the first board to develop a regional transportation plan, which I think is really the first of its kind for this region. At the end of the day, it was very gratifying to see that the plan was unanimously approved by the first board of directors of Metrolinx.
I should brag just a tiny bit: I was very pleased to be in Niagara last month to accept the Canadian Institute of Planners award of excellence, which was given in recognition of the work done on the regional transportation plan that we call the Big Move.
Over the last three years, I think we’ve made very good progress in moving the agency forward in every area of its mandate, including goods movement and a multi-modal approach to transportation planning—an approach, by the way, which integrates both land use planning and transportation planning, which I think has been a policy problem that governments around the world, but most particularly in North America, have grappled with for many decades.
We developed a world-class triple-bottom-line evaluative method for transportation projects, which I think is something that this jurisdiction can be very proud of, looking at the environmental, economic, and social implications of any particular project and examining various alternatives for projects. Our plan, at the end of the day, I think, will make a really big difference for this region.
Just in terms of my own background, I’m a lawyer to begin with, and I was the mayor of Burlington for nine years. I served on many boards which I think are relevant to the subject matter before you: the board of AMO, the Canadian Urban Transit Association, the Canadian Urban Institute, and I’m a member of the Pragma Council at the University of Waterloo. All of those experiences really nurtured in me a passion for developing city regions, and it’s something that I’ve thought a lot about over the course of my career and done a lot of work on.
I was very privileged to work as a member of the smart growth panel, and led the group of individuals within that panel that developed a strategic growth management plan for south-central Ontario, which ultimately resulted in the growth plan that we see today. I was also very privileged to chair the greenbelt task force, which resulted in some two million acres of land being preserved in its current state. I think both of those exercises, together with this exercise in transportation planning, are fundamental in terms of being able to develop the potential that this city region has as a player on the world stage. Frankly, I was talking to my board last night, and I said, “You know, I think there are lots of planners who would have felt very lucky to have been a part of any one of those exercises,” and for me to participate in all three is an extraordinary privilege and honour which I feel very fortunate to have had.
Let me just finish with a little bit of context. I think my work at Metrolinx is almost done. I’ve been there for three years and helped to recruit my successor, Mr. Prichard, who is going to—depending, of course, on the deliberations of this committee—step into the chair sometime in the new year. He’ll do that when we find a replacement for him. We have a search process under way for a new CEO. When the new CEO is found and appointed and steps onto the board, my view is that its appropriate for me to step off of the board. I think that’s likely to happen early in the new year.
I think this appointment, again subject to the deliberations of this committee, will be a fairly short-term one because I’ve now taken on some new responsibilities. I’ve been appointed the president of Mohawk College; I’ve been there since February. So I’ve really been working part-time in this job and really focused on governance as opposed to the day-to-day operations of the agency. Beginning next February or thereabouts, I intend to devote my full time and attention to my new duties.
The Chair (Mr. Ernie Hardeman): With that, we will start the questions. We don’t have quite the full 10 minutes, but you can get your five minutes in, and then we will come back to that after we go to vote.
Mr. Howard Hampton: I want to take you up on the issue of governance because one of the tasks, as set out in the legislation for Metrolinx, is “to act as the central procurement agency for the procurement of local transit system vehicles, equipment, technologies and facilities and related supplies and services on behalf of Ontario municipalities.” I want to understand how this works. You sign the contracts?
Mr. Howard Hampton: I’m always worried when I have to pay the bill but somebody else gets to negotiate and sign the contract. What governance structures are there to ensure municipalities get a good deal?
This is really a purchasing co-op. We’ve set up a very comprehensive set of guidelines, working with municipalities, to come together, to pool their purchasing power and to get better deals on transit vehicles and so on. In fact, the first procurement went through last year and resulted in a savings of something like $5,000 or more per bus.
The idea, sir, is that if a municipality needs to buy some buses, they have the option of coming to us, pooling their purchasing power with a number of other municipalities and working under a contract which, I think, is very thoughtful and collaboratively developed, and we go out to the industry for a tender. We had three or four very significant manufacturers respond; New Flyer was the successful proponent after our first round. But everybody who was involved in that, I think, felt that it was a good deal and a good process.
Mr. Robert MacIsaac: We will go out on tranches under this, probably on an annual or biannual basis. I think if we had a sense that there were enough municipalities to do something sooner, we would do that. It’s really just a matter of trying to align our processes with the procurement needs of municipalities.
Mr. Howard Hampton: One of the other legislative mandates you have is to provide leadership in the coordination of planning and financing. As I understand public-private partnerships, what essentially happens is that the construction costs, the financing costs and the operating costs don’t get paid up front; they get paid over, say, a 25- or 30-year time period. In other words, you can give the appearance of saving on the up-front costs, but it has the nature of effectively increasing your operating costs over the first 25, 30 or 35 years of the contract. Is that a fair assessment?
The Chair (Mr. Ernie Hardeman): We’ll call the committee back to order. With the committee’s consent, we’ll just defer the five minutes that Howard still has left and we’ll go to the government side for questions and comments. Hopefully Howard will be here before that is completed.
Mrs. Laura Albanese: I just had one question, and that is, recently the board has approved the recommendation by the community advisory committee on the study of electrification and you have issued an RFP. Can you talk a little bit about that and what that’s going to entail? And do the Minister of the Environment’s recommendations for tier 4 preclude electrification?
Mr. Robert MacIsaac: The Big Move suggested that one of the really transformational things that we could do in our transportation system is to begin the process of electrifying public transit, more particularly GO Transit throughout the region. I believe that this one thing perhaps more than any other is something that will ultimately really help to change the way people get around in the region. Having said that, it’s really expensive and it’s something that can’t be done overnight.
We engaged a community advisory committee here in the region to help to develop terms of reference which will allow us to go out and get some consulting help to develop a plan for electrification across the region. At the end of the day, we need to answer a whole bunch of complicated questions, such as: What would cause you to electrify a line or choose not to electrify a line? What would the priorities be? Which lines should go first? Which lines should go second? What other emerging technologies might you consider in lieu of electrification?
I think the regional transportation plan, the Big Move, basically put forward the big idea about electrification and how important it could be. We’re now about to get into studying the details, if indeed you decide that it’s worthwhile to electrify, of what’s the most rational approach in order to implement this across a huge region, given the very significant capital costs that are entailed. I think it’s an important step in the right direction.
Mrs. Laura Albanese: At this point, if I still have more time, Mr. Chair, I would ask—the question I get asked most often is: Why can’t it be done in more immediate terms, aside from the cost? It is being implemented in other parts of the world, so what’s the big challenge?
Mr. Robert MacIsaac: I guess the big challenge is, we have a huge mega-region here that has lost a generation of investment in transportation. We’ve allowed all kinds of things—and I say this in a non-partisan way. All political stripes have participated in a decline in transportation infrastructure in this region, so we need to make up for that. A generation’s worth of underinvestment can’t be made up for overnight.
The Big Move, the regional transportation plan, is an important watershed, a turning point, I think, in terms of the ability of this region to have a world-class transportation system, but we need to be patient and we need to accept the fact that it’s going to take some time to overcome the sins of the past.
I neglected to answer your earlier question. There’s nothing in the Minister of the Environment’s statement that would preclude us from electrifying sooner. He’s not saying, “You must use tier 4 diesel technology on the line.” So it is indeed possible, but I think we need to take a studied, measured approach to how we implement electrification across the region.
Mr. Jim Wilson: Thank you, Mr. MacIsaac, or, as I’m used to referring to you over the years, Your Worship, for your service on Metrolinx, and congratulations on becoming president of Mohawk College. As the PC critic for colleges and universities and research and innovation, I look forward to working with you.
I just have one question. Mr. Prichard talked about new tools in the newest legislation to allow Metrolinx to reach its goals and get the job done. I’m not familiar with what’s different now than what was different during your time. Do you want to enlighten me?
Mr. Robert MacIsaac: From my perspective, the most significant—I’m probably showing my bias towards the importance of planning—is the ability of the Minister of Transportation to issue policy statements surrounding transportation.
The idea is that Metrolinx is responsible for developing regional transportation planning and policy. That planning and policy will be empowered via policy statements made by the minister, and municipalities across the whole of the region are obliged to bring their official plans and their master transportation plans into conformity with those provincial policy statements. I think this is a very significant tool, going forward, to make sure that we’re all rowing in the same direction insofar as municipal infrastructure and provincial infrastructure all falling into place. I think we can talk about things like the change in the board of directors—from my perspective, a positive development that will allow us to implement the plan in a way that’s more efficient and effective than were we to stay with the former governance model.
Having said that, I think that the original board did yeoman’s work, and I don’t think we could have gotten to where we are today without that original board. I kind of feel like we ended up with the best of both worlds.
Mr. Howard Hampton: The concept, as I understand it, of public-private partnerships is that instead of paying, say, $2 billion up front for the construction of something, the financing costs and the construction costs almost become a part of operating costs, say, over a 25- or 30-year period. So it has the effect of having the public believe that something doesn’t cost as much in the time of construction, but those costs are paid over time, along with, I think, significant charges—interest and otherwise—so it has the effect of creating your operating costs. Fair conclusion?
For example, municipally, I used to finance public works all of the time on the basis of the debentures. I guess I can say the same thing: By going out and borrowing that money and doing those works, it might give the appearance that you weren’t incurring the whole of the cost in the early days, at the start, and in fact, you’re probably increasing your costs going forward because you have to borrow the money and you have to pay interest on the money.
I think that any time you don’t take the cost of a capital work out of your current budget, you’re doing what you’re suggesting. Having said that, there are lots of good reasons, I think, for deferring costs over the life of a capital work. I think from a public policy point of view, you might ask: Why wouldn’t you have the users of a work help to pay for it over its useful lifetime rather than trying to get everybody who happens to be in the room on the day you build it pay for the whole freight?
One of the issues that you have to come to grips with, and Metrolinx has to come to grips with, is not just capital costs but operating cost. We’re talking, I’m told here, about $50 billion in capital construction, and today’s paper says that the $10-billion Transit City is seriously considering public-private partnership.
Mr. Robert MacIsaac: We’ve done broad-brushed projections of both capital, operating and state-of-good-repair costs. I apologize, but I don’t have those for you off the top of my head. But it’s fair to say that in our early deliberations around an investment strategy, our philosophy is that those three components need to be accounted for as we come to terms with what the appropriate revenue and financing techniques will be for the whole of the regional transportation plan.
Mr. Jim Wilson: Mr. Chair, on a point of order: Since the government won’t hold public hearings on the HST legislation, I’m going to ask for a 20-minute deferral on these votes for concurrences, under the standing orders.
The Chair (Mr. Ernie Hardeman): Okay. The option is, of course, we get a concurrence motion and then the 20-minute deferral. That will take it past the time of this committee so we will not be able to do any of the other votes. The other option is to ask for a seven-day deferral on all three appointees, with consideration to be given at the next meeting.
Mr. Michael A. Brown: I don’t have the standing orders with me right now. It seems to me there’s a limit. If I recall from the standing orders, there is a limit to the number of times you can ask for deferrals. If not, then the appointment is concurred with.
The Clerk of the Committee (Mr. Douglas Arnott): The standing orders provide for two deferrals. The first was the extension of the deadline, and the second, in this case, is the deferral of the consideration at the conclusion of the interviews for up to seven days. It’s the latter deferral that Mr. Wilson requested today.