Tuesday, April 20, 2004

Thousand-year BC Rail deal leaves Liberals looking bad

VICTORIA - The BC Rail sale is turning into a huge problem for the Liberals.
Even people who don't think government should be running a railway are worried about the Liberals' slipperiness and self-serving secrecy, highlighted by the news that CN Rail is getting the right to run the railway for almost 1,000 years.
When the Liberals announced the deal in November, they released a summary of the terms designed to sell the public on the merits of the sale. Everything else was to stay secret until the federal competition bureau approved the deal - when it would be too late for any changes.
And a centrepiece of the Liberal spin was the claim that the deal was for 90 years, with CN Rail getting a 60-year lease with a 30-year renewal option.
That was part of Premier Gordon Campbell's bogus claim that he wasn't breaking a campaign promise not to sell BC Rail.
Now columnist Michael Smyth reports in The Province that the deal includes 15 more 60-year renewal options that the Liberals never mentioned. And CN won't have to pay the government a nickle more if it exercises those options and operates the railway on public land for 990 years.
Normal business practice, says Transportation MInister Kevin Falcon. Sure CN Rail can keep operating the line until 2994 (unless centuries of global warming mean parts of it are under water). But every 60 years government can decide to buy the business back from CN. No big deal.
But if it's normal business practice, and no big thing, why did the government not only keep it secret but mislead the public with its claim the deal was for 90 years? (One answer may be that the money CN paid works out to $750 a year on the longer term.)
The government also kept secret a contract clause that specifies that CN Rail can close parts of the line - after a five-year moratorium - and buy the land for $1.
Falcon defends the provision. It protects the province, he says. If the land is valuable, the government will exercise its right to keep it. But if it's contaminated and requires costly clean-up, the government will be able to force the burden on to CN Rail. It's good business.
But if it's good business, why the secrecy? Why, even now, does the government refuse to release the details of this and other provisions that could bind the people of the province for 1,000 years?
The deal faces other big problems. The courts have ruled that before any Crown land is transferred to private ownership, local First Nations with unresolved land claims must be consulted.
The Liberals maintain that because the government retains ownership of the dirt beneath the tracks, there is no duty to consult. And they set up a $15-million development fund to try and win support from the 25 First Nations along the rail line.
It's not working. First Nations have already served notice that they believe the deal is a sale, and will exercise their legal rights.
BC Rail has turned into a nightmare for the Liberals. Campbell's 1996 campaign pledge to sell the railway helped lose him that election. In 2001, he said he had learned his lesson: BC Rail would not be sold or privatized.
But that's exactly what he's done. The government's claim that because the province continues to own the dirt beneath the tracks BC Rail hasn't been sold is bogus. CN owns all the equipment, and the business, and runs it with no strings attached.
Campbell could have defended the sale of BC Rail. He could have argued that the risk to taxpayers in owning a railway outweighs the potential economic development boost for resource communities. (It's a good argument.)
But it's much tougher to try and deny the broken New Era promise, or defend the unwarranted secrecy - and slipperiness - around this deal.
Footnote: Falcon made much of CN Rail's likely investment of some $3.5 billion in the railway over the next 90 years. But that is comparable to past BC Rail spending each year on maintenance and equipment, money that in recent years has come from the railway's profits.

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