Adam Vaughan to Public Infrastructure Bank skeptics: you’re “stupid”

Mark McQueen

News report: Opposition to private investment in infrastructure ‘stupid’: Adam Vaughan

Toronto Mayor John Tory likes to joke that “no good deed goes unpunished.”  I’d like to think that if you live long enough, your good deeds will go rewarded.  Maybe not tangibly, but you’ll at least get a moment to smile.

Liberal MP Adam Vaughan was a vociferous critic of many sensible things during my eight years on the Board of Directors of Ports Toronto (see representative prior post “And Adam Vaughan wants to be Toronto’s Mayor?” Nov. 30-12), and I have now lived long enough to see him turn himself inside-out on a topic that’s important to many Toronto voters.  When he was a Toronto City Councillor, Mr. Vaughan voted against the motion before Council that would provide a City easement for the Billy Bishop Toronto City Airport Public-Private Partnership Pedestrian tunnel.

Now, according to my daily read, Mr. Vaughan loves private participation in public infrastructure.

The airport tunnel was going to be built one way or the other (see prior post “Towhey to give advice on leadership and diplomacy?” Dec. 1-13), but the City easement allowed it to go straight, rather than do a short dog leg around a City-owned piece of land that was immediately adjacent to the existing city-side ferry terminal.  By providing the easement, Ports Toronto could extend the moving sidewalk further north.  This would mean that mobility-impaired travellers would be able to access the north end of the proposed underwater moving sidewalk sooner; combined with the easement was an agreement whereby the City would save $10 million in duplicate construction costs by not having to upgrade its own utility main by combining its project within the tunnel infrastructure.

Despite the fact that the tunnel was a P3 project, one that was free to taxpayers, Councillor Adam Vaughan voted against it just the same back in 2011.  Every time his caucus colleagues glide through that tunnel on their way to a meeting or to see their families, they must shake their heads at his spiteful opposition.

Fast forward to the other day, and it was now-MP Adam Vaughan returning to form by attacking the stewards of Vancouver’s airport and massive port operation (from the Globe and Mail):

Vaughan pointed to the urgent need to spend about $1 billion to upgrade the levees around the Port of Vancouver to prevent flooding from extreme weather events brought on by climate change. Those levees were almost breached three years ago, he said, coming within inches of flooding the port and the nearby Vancouver International Airport.

“The cost of losing that port and that airport? Three-quarters of our exports come in and out of that piece of infrastructure. If that isn’t fortified and rebuilt very quickly, climate change will have an economic impact on this country, the likes of which will be impossible to calculate,” he said.

“The idea of losing southern Vancouver and southern B.C. to a levee that was built in the 40s for weather conditions that have changed radically in the last 50 years, to put that at risk because you have a fear of the private sector being a partner is not only stupid, it’s bloody irresponsible.”

It is clear to me that Mr. Vaughan is trying to convince Canadians that the proposed Public Infrastructure Bank is the solution to all of our problems.  It is much more complicated than that, as I tried to explain earlier this month (see prior post “Canada’s best negotiators needed to ensure Public Infrastructure Bank doesn’t replicate Ontario’s $7 billion Samsung “fiasco”” Nov. 15-16).

The foundation of Mr. Vaughan’s argument was rather silly.  Not the “stupid” part, but the core of his advocacy.  That he back-tracked on the blame-game doesn’t make me feel any better, even if it is just another example of Mr. Vaughan’s longstanding comfort with intentionally using fibs in the pursuit of his political objectives (see representative prior post “Adam Vaughan is at it again” Nov. 14-12).

After his spanking at the hands of the Vancouver Port and Airport agencies, Mr. Vaughan had this to say about the magic to be performed by the proposed Pubic Infrastructure Bank:

Vaughan, who acknowledged receiving a similar rebuke from the port authority, says he never meant to imply that the two authorities aren’t doing their jobs to protect their facilities from flooding; it would have been more accurate to say the levees and dikes elsewhere within the Fraser River Basin need fortification to prevent flooding which could shut down access to the port and airport.

Either way, Vaughan said Friday his overall argument remains the same: urgent infrastructure investments are necessary to protect the Vancouver port and airport from the ravages of extreme weather events brought on by climate change.

“They could be lost to flood if the levees upstream break. The whole system has to have integrity, not just part of it,” he said.

No matter how well defended the airport is on its own, a breach of the levees elsewhere in the system could leave it with “a landing strip that’s dry but no roads to get to it,” he added.

Mr. Vaughan seems to think that foreign institutional investors, under a P3 model, are going to build “levees and dikes” upstream along the Fraser River.  Levees and dikes that he describes are outside the geographical and legal purview of either the local Port or Airport authorities.

Fat chance of that.

For any P3 project to work, there needs to be a business plan.  A revenue model.  How are the cities of New Westminster, Surrey or Maple Ridge going to finance the installation of levees along their shores?

There won’t be any incremental ship traffic to tax (Port user fees are already being collected and spent by the VPA, I assume), and I’m unclear how the local Councils could utilize an availability payment model; where will the revenue come from to pay the Public Infrastructure Bank for the installation and maintenance of the urgently-needed levee network?

Using the Fraser River levee example, there’s only one pocket to dip into: the local property tax.

There are plenty of good reasons to utilize a P3 funding model, but there needs to be a business case for each and every application of the structure; whether via a Public Infrastructure Bank or otherwise.  A P3 approach is not free, however, despite Mr. Vaughan’s subtle attempt to offload the $1 billion cost onto the “private sector” for these dikes and levees.

Mr. Vaughan was always going to be a liability to his Party and government, and it was only a matter of time before his years of intellectual dishonesty caught up with him.  In his over-the-top efforts to pitch the Public Infrastructure Bank as the solution to a problem that no P3 investor can solve — building a wall of concrete along a river — Mr. Vaughan has shown that the Public Infrastructure Bank has no clothes.


(disclosure: this post, like all blogs, is an Opinion Piece and reflect a personal view)

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