Greater Toronto Airport Authority - GTAA

The Greater Toronto Airport Authority is the creation of the Liberal Government of Jean Chrétien and his primary lieutenant former Minister of Transport David Collenette. It represents the pinnacle of political interference in this country (if you exclude the canceled helicopters for the military). The original idea to create independent airport authorities came from around the world, as many countries spun airport operations off to the private sector (read for profit sector not the porkbarrel not for profit sector) to achieve market based efficiencies. In Canada, the government of Brian Mulroney began a similar process just before they were escorted from office.

Mulroney started down this road when a 57 year lease was given to Don Matthews, former president of the Progressive Conservatives, who then combined with the only other bidder.

The Liberals killed the deal in 1993, tried to pass legislation to prevent the developers from suing, and settled out of court for a modest $60 million. Then the GTAA was created as a not-for-profit corporation.

The GTAA isn't a non-profit organization run by the airlines using it. That would make too much sense. It is run by appointees from the federal, provincial and municipal governments. None of the appointees can claim any experience in operating airports. This leaves the operation of the airports to all the former Transport Canada and other government bureaucrats who migrated to the spaces created for them after taking a generous retirement package from the government. They get to merrily implement policy for Transport Canada without the cumbersome responsibility of being accountable to anyone.

From 1997 to 2003 the GTAA raised $5.2 billion in debt. A spending spree followed. Airlines had no input. Air Canada complained about the size of the $4.4 billion terminal project. It went to court to block fee increases that would result, and sought damages for "abuse of monopoly power".

Now let's examine the assumptions.

           · The government got out of responsibility for the airport. Isn't the government responsible for the mismanagement of its appointees?

       · The airport could issue debt without adding to Canada's indebtedness. If the objective is to reduce cost of                         operating an airport, wouldn't the federal government get a better debt rating, lowest interest rates, and                   the lowest carrying cost? Dominion Bond Rating Service estimates that fees would have to more than double in              two years to comply with bond covenants.

       · The government would get rental revenue from the GTAA for the airport property. How can the government                  get rental revenue if airlines move to a lower cost facility such as Hamilton? (One of the ongoing squabbles is            that the GTAA is committed to paying progressively higher rental rates, imposed on it by the federal government,       unrelated to reality...