The bridge was dead. Island airport expansion was history, or at least that seemed to be the promise of the decision of Toronto City Council. Robert Deluce and the TPA had said that a bridge was essential for airport expansion. The island airport expansion, which threatened waterfront regeneration and had promised to bring poisonous pollution, traffic and safety problems into the community, had been finally slain. Community groups celebrated. But reality has proven to be different.

Port Authority Under Fire
After the bridge was cancelled there was a fury of talk about liability and who was going to pay for the costs. One fact that was missed by the Toronto media was that Robert Deluce, who had threatened a $500-million lawsuit, if city council stopped the bridge, was silent. No statement of claim was issued by him against the city or the federal government.

What did emerge was that the Toronto Port Authority had tried to set processes in motion to make cancelling the bridge impossible. On October 31, 2003, just ten days before the election in which it was widely reported that David Miller was poised to become mayor, the TPA had signed a binding contract with Aecon Construction to build the bridge. Miller had made it very clear that if elected he would use everything in his power to cancel the bridge. He had done just that. Now it was revealed that the TPA had put the public in a position to be held financially responsible for the cancellation.

Miller commented, “They knew full well that there was a serious risk that the bridge would be cancelled. They were a public agency in a position of incurring liability for public funds in a way that can only be described as deliberate. And I think that’s an unacceptable way for a public agency to conduct itself.” ( Toronto Star , December 19, 2003)

The whole debacle of the bridge and its cancellation led to an outpouring of anger directed at the Toronto Port Authority. John Barber, a Toronto columnist of The Globe and Mail , led the calls for its dissolution. “The port authoritarians behaved so badly throughout the recent ordeal that they proved the great seer’s point beyond question…there is now a historic opportunity to finish the job of beheading the Hydra.” (The Globe and Mail , June 5, 2004)

More outrages about the TPA were revealed. In 2003, the year of the election and the cancellation of the bridge, the port authority lost $5.3 million on its operations. In that same year, Henry Pankratz, the chair of the TPA, received $120,000. Lisa Raitt, president and CEO, was paid $185,000 including a bonus of $25,000 for getting approval of the bridge, and Alan Paul, the CFO, received $155,000, with a bonus of $20,000. But the bridge was cancelled and the approval rescinded. As well, critics pointed out that Raitt and Paul were working for a public agency. In Canada civil servants never receive bonuses for doing their jobs.

Christopher Hume of The Toronto Star commented, “The Port Authority has become an agency whose prime concern is its own survival. Not surprisingly, a growing number of observers are calling for its abolition, most notably Mayor Miller.” ( Toronto Star , September 10, 2004)

The Star editorialized. What is “needed … is a new board to run the port, composed largely of elected city officials. Above all the board should be dedicated to meeting the needs of Toronto. That would serve this community far better than the unelected and unresponsive agency weighing on the city now.” ( Toronto Star , October 4, 2004)

NOW Magazine joined the chorus. “Get the wooden stake, the silver bullet – whatever it takes – but please, somebody kill Toronto’s pathetic Port Authority.” ( NOW , December 23-30, 2004)

Louis Sokolov (Community Air's lawyer), Bill Freeman, and Brian Iler at a press conference in 2005.

The $35-Million Settlement
But gradually the newspapers got tired of editorializing and the issue of the Toronto Port Authority faded. Then, unexpectedly, on May 3, 2005, it was announced that the federal government had paid $35 million to settle the liabilities around the bridge cancellation.

People were shocked. Why did it cost $35 million to kill a bridge that was only going to cost $22 million to build? What happened to the money? A total of $7.8 million went through the books of the Toronto Port Authority, but what happened to the rest? Lisa Raitt and Liberal federal politicians were grilled on these questions but refused to say, claiming that the terms of the settlement required that this not be disclosed to the public.

It was known that some of the money had gone to Robert Deluce and his companies but why? A settlement of this kind is based on a business loss or future losses. But Deluce did not have an airline, and virtually all of the airline businesses at that time across North America were losing money. As well, some of the approvals for the bridge had not been given before the decision was made to cancel the bridge. Why would Deluce have a claim at all? Mayor Miller, a corporate lawyer himself, has always claimed there was no liability to the city or federal government. So why was the money paid?

Later it was revealed that Robert Deluce and his companies received $20 million of the $35 million settlement. The rest of the money was paid to Aecon, which had a legitimate claim because of the binding contract, and Stolport, a company owned by Victor Pappalardo. (John Barber, The Globe and Mail , August 27, 2006)

Even more disturbing, it also came to light that Robert Deluce, or one of his companies, had purchased a company called City Centre Aviation Ltd., which owned three hangars at the island airport. This deal became final on May 1, 2005, just three days before the announcement on the $35-million settlement.

The controversy raged. Why was the money paid? Why did Deluce get the lion’s share? The $7.8 million that was received by the TPA appeared to be a subsidy. The Canada Marine Act clearly states that port authorities are not to receive federal subsidies. Why was it paid?

John Barber called on Sheila Fraser, the auditor general of Canada, to launch an inquiry. “The Auditor General is the obvious candidate for the job of prying this cozy deal open to view.” ( The Globe and Mail , August 20, 2005) Eventually Fraser refused, saying port authorities such as the TPA were outside her mandate.

The pressure for an inquiry continued. Clearly the government of Paul Martin wanted nothing to do with it. They had enough problems dealing with the Gomery Inquiry into Liberal corruption in Quebec. They did not want another inquiry in Toronto.

New Democrat Peter Julian was on the Parliamentary Transportation Committee, and he tried to get an answer on the $35-million settlement. “Why was the settlement made? We’re being stonewalled!” he said angrily as he questioned Mr. Lapierre, the minister of transport, and his officials. “This is exactly how the sponsorship scandal started out. Money went out. There was no justification. There was no legitimacy around the payment of these funds!”

Olivia Chow and Tony Ianno face off about the Island Airport during the 2006 federal election.

The port authority avoided this controversy and marched ahead. At its annual meeting in the summer of 2005, Lisa Raitt announced that the port authority had ordered a new ferry boat and was making improvements to the island airport passenger terminal. It looked as if the TPA were planning to expand the airport even through it had said that expansion was impossible without a fixed link to the mainland. What was happening? There was a lot of speculation but no one knew for sure.

In December 2005 and January 2006, during the federal election campaign, many citizens demanded to know why the Liberal government had promoted the bridge and provided the $35 million payment. The New Democrat candidates called for the closure of the airport. Conservative candidates responded to controversy by saying that local issues should be dealt with by local people.

When the January 24, 2006 election produced a Conservative minority government, members of CommunityAIR believed that this was a new opportunity to hold a fully public inquiry into the operations of the Toronto Port Authority and close the island airport. Events, however, proved the opposite.