By Tammy Flores
September 10th, 2014 Edition
Back in 2010, I noticed some questionable reports prior to Ferrovial selling 10% of its share in 407 ETR to CPPIB. At the time, Ferrovial owned 53% of 407 ETR, Canada’s most controversial Private-Public-Partnership (P3) that operates Highway 407. I questioned if Ferrovial “HAD” to sell part of their very profitable shares because of our foreign ownership rules on our infrastructure. I never really did get an answer to that. However, fast forward to 2014 and you have SNC Lavalin reporting the same thing and CPPIB is very much interested in scooping up those shares too.
To me the deal didn’t make any sense because Ferrovial was reporting it “HAD” to sell 10% of its share in the highway and our CPPIB paid 25% more than what the experts thought the company was worth. For a company that “HAD” to sell 10% of its shares, why did CPPIB pay more than the highway was reported to be worth? Talk about your fancy accounting to support private business profits, on a highway that was a very much needed piece of infrastructure for the public.
I can’t speculate on the whys, but what I can tell you is that there is still much finagling going on. J. Robert S. Prichard is Chair of the Board of Directors for Metrolinx, the government agency that was formed to improve the coordination and integration of all modes of transportation in the Greater Toronto and Hamilton Area. He was given the position of President and CEO of Metrolinx in 2009 and served in the role of Chairman shortly thereafter. Also, he just happened to have been appointed the Chairman for the law firm Torys LLP. on August 31st, 2010. Never having to have had to article, he started serving there as a lawyer for the first time in his career at the age of 61. Since graduating law school in 1974, he went on to further education and eventually taught law at Yale, Harvard and the University of Toronto, served as Dean of Law at the University of Toronto in 1984 and became President of the university from 1990-2000. He also served as president and CEO of Torstar Corporation (The Toronto Star) from 2000-2009 and served on several other boards. A very busy man indeed! There is no question about it; Mr. Prichard’s resume is outstanding. He’s one smart cookie.
Torys LLP is a law firm that specializes in international business. Mr. Prichard took over former Premier Bill Davis’ role at the law firm. Torys LLP was behind CPPIB’s purchase of shares in 407 ETR and some of its partners are serving on the Canadian Council for Private-Public-Partnerships, a non partisan, not for profit organization whose mission is to promote innovative approaches in infrastructure development and service delivery through P3’s with all levels of government. Ironically, the Council is a proponent of facilitating the adoption of international best practices. My question is where the heck have they been in the mess 407 ETR has caused? Furthermore, how do they feel about law firms such as Slaght Royce Smith Griffin LLP, that would rather “bet the company” in a very high risk litigation than make sure best practices are followed while administering one of the most controversial P3’s in Canada’s history?
Headlines this past week in The National Post were about how CPPIB’s operating expenses are actually three times more than what they report. They can finagle about definitions for expenses and bury literally hundreds of millions of dollars in consultancy fees, federal government management and transaction fees. For some time now, the media has been reporting about the fears that our CPP won’t be there for us when we retire. To add insult to injury, now the Province of Ontario wants to take a page out of CPPIB’s book and form its own pension.
Far be it from me to criticize someone getting paid for a job well done, BUT when you have reports like this with our pension and reports that Metrolinx is bleeding money you have to start to question the people that are actually the puppeteers… the ones pulling the strings… and ask what’s up with that?