BC Rail Sale Sidetracked
Jim Lipkovits and Marco
The BC Liberal government’s move to sell BC Rail, already marred in
scandal, has taken another hit as newly leaked documents showing a
secret deal to sell railroad lands to the Canadian National Railway for
just one dollar have come to light.
In addition, the documents, obtained by the NDP
opposition, say the government is planning to do this under a one
thousand year lease agreement with the company.
"The scheme to sell BC Rail was already under a considerable cloud of
suspicion due to the police investigation of key BC Liberal officials
and allegations by rival bidders of leaks of confidential information,"
said BC NDP leader Carole James, adding that the privatization deal
should be halted because of the scandals. ”In addition, the leaked
sections of the agreement allow -- after just five years -- for the
sale of public land under rail lines to CN for one dollar. These lands
include very valuable waterfront properties between North Vancouver and
The Liberals had repeatedly promised during the 2001 provincial
election campaign that they would not sell off BC Rail if they formed
the next government. Shortly after they were elected, they began the
process to do just that.
Since the release of these documents, critics are now challenging the
government’s claim that it will make about $1 billion from the sale of
the highly profitable railway, since the huge land give-away and other
taxpayer funded bonuses for CN are now estimated to cost around $1.2
The documents are also adding more fuel to the accusations influence
peddling by the government and collusion with CN. Influence peddling is
one of the suspicions of police investigators who raided the
legislature last December. Several other rail firms that had bid on the
sale are also alleging it.
Freelance journalist and political commentator Bill Tieleman revealed
in the Georgia Straight that three other bidders, Canadian Pacific
Railway; OmniTRAX, in partnership with Burlington Northern Santa Fe
Railway, and RailAmerica had complained that the bidding process was
stilted toward CN.
“Several media reports said the government was determined to award the
deal to CN. CN has donated about $150,000 to the B.C. Liberals since
1994,” Tieleman wrote. “CP wrote in a bitter private letter, dated
November 21, 2003, and copied to the premier's office, that the
government's handling of the BC Rail deal was ‘extremely prejudiced,’
that CN had been provided ‘enhanced access to shippers,’ and that CP
was formally withdrawing from the bidding.”
James’ call to stop the sale has been echoed by a growing coalition of
municipal councils, labour, small business and residents’
organizations, both along BC Rail routes and across the province.
The group recently sent a letter to Liberal Premier Gordon Campbell
demanding the sale be stopped.
“A broken promise and a criminal investigation betray the trust of the
people of British Columbia,” the letter said. “The only responsible
decision you and your government can make is to suspend the sale of BC
Rail until matters related to the raid on the legislature have been
fully investigated by the police.”
The letter was signed by Fort St. James Mayor Jim Togyi, Quesnel Mayor
Nate Bello, and North Vancouver City Mayor Barbara Sharp and by nine
Councilors from Williams Lake, Prince George, Squamish and North
Vancouver City, and six large business enterprises in the region, along
with representatives from railway unions.
The coalition is also calling on the federal Competition Bureau, which
has to rule on the legitimacy of the sale before it can take place, to
block it. It is also considering court action to stop the government’s
But the government is still pressing ahead with the sale, claiming it
will be an overall plus for BC communities and the economy.
Despite audited financial statements showing the provincially owned
rail system returned a profit in 19 of the past 20 years, Campbell
insists that, “recent financial losses for the year preceding the sale
shows BC Rail is a money-losing public venture.”
Transportation Minister Kevin Falcon has charged that BC Rail does not
have enough rolling stock and other resources to provide adequate
services during peak periods, such as during the grain harvest season.
He also says that despite his admission that the government did provide
privileged information to CN Rail, there was no actual wrongdoing,
according to the government’s appointed fairness commissioners.