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Toronto’s Pearson airport plans massive transit hub

Air Canada jets sit at the terminal at Pearson International Airport in Toronto, November 24, 2014.

J.P. MOCZULSKI/The Globe and Mail

Toronto's Pearson airport is preparing to seek bidders to design a massive regional transit centre as behind-the-scenes talks heat up with Ottawa, the province and potential private investors.

A source close to the project told The Globe and Mail that the Greater Toronto Airport Authority (GTAA) is preparing to launch a request for proposals to produce an initial concept design of the transit hub.

Government documents obtained by The Globe also show that federal officials view the multibillion-dollar project as a potential candidate for funding through the new $35-billion Canada Infrastructure Bank, which was approved by Parliament in June.

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Read more: Toronto's Pearson airport unveils early concept for transit hub

The airport authority has been gradually building support for the idea of establishing Pearson as a second major transit hub – after Union Station – in the Greater Toronto and Hamilton Area. Regional mayors and the Ontario government announced their support for the idea at a news conference in April. In May, Pearson and 10 other airports announced the Southern Ontario Airport Network, which is based in part on shifting smaller regional air traffic away from Pearson as it focuses on larger international flights. Improved transit connections to Pearson are a key part of that plan.

The GTAA has estimated in January that the total cost of the project is at least $11.2-billion. The plan has six transit components, five of which involve extending existing or planned transit lines – such as the Eglinton LRT and Finch LRT – so that they connect to the airport. The most expensive aspect is a contribution to a high-speed rail line that would run from Union Station to the airport and on to Guelph, Kitchener-Waterloo, London, and possibly as far as Windsor.

The Ontario government is currently conducting an environmental assessment of the high-speed rail proposal.

A provincial study by former federal transport minister David Collenette released in May indicated that a Toronto-Windsor high-speed rail line alone could cost about $21-billion when so-called "soft" costs are included, such as design work, overhead and contingencies.

The Collenette report said that if only capital costs are measured, a high-speed rail line could be built from Toronto to London for $4-billion. Extending the line to Windsor would cost an additional $3.4-billion.

Janet De Silva, president and chief executive officer of the Toronto Region Board of Trade and a strong advocate of the Pearson transit hub plan, said talks are progressing quickly among municipal, provincial and federal leaders and potential private investors, such as pension funds.

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"The momentum around the project is tremendous," she said in an interview.

The federal government has commissioned and received a confidential study of the potential for fully privatizing Canada's major airports, including Pearson. While some airport authorities, including in Ottawa, Calgary and Vancouver, have strongly opposed the idea, the GTAA has signalled that it is open to considering privatization options as a way of attracting private investors to help fund the transit-hub plan.

Ms. De Silva, who previously led Sun Life Financial's operations in China, said her organization and others need to persuade Canadians of the benefits of private infrastructure investment through options such as the Canada Infrastructure Bank that bring in private investors to projects that tend to have some form of user fee attached.

"One of the pieces that's going to have to be dealt with, is helping public opinion understand that everything can't be so-called free," she said. "I've lived in Asia for 15 years. There just seems to be more cultural acceptance that country assets can be sold so that the capital can be redeployed for other things. Here in Canada, there still seems to be a mindset that we need to continue to hold everything for a rainy day. But the challenge is we simply have insufficient revenues to take care of all the needs."

The GTAA has hired Deloitte to reach out to potential private investors, including Canadian pension funds. The source said direct meetings between the GTAA and pension funds are likely to take place soon.

The federal infrastructure bank is expected to launch later this year.

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Representatives of the GTAA have also held at least 54 meetings with federal officials and MPs this year, according to the federal lobbyist registry.

These included meetings with Finance Minister Bill Morneau, Transport Minister Marc Garneau, Environment Minister Catherine McKenna and senior political aides in ministers' offices and the Prime Minister's Office.

A briefing note prepared by officials for federal Infrastructure Minister Amarjeet Sohi ahead of a Dec. 8 meeting with Howard Eng, president and CEO of the GTAA, provides some insight into federal thinking about the Pearson plan.

"The jurisdictional complexities of converging ground transportation at the airport may present an opportunity for the federal government to play a role in supporting a partnership between the GTAA and provincial, municipal and other transportation stakeholders in the development of an intermodal ground-transportation hub," the officials told the minister. The note then suggests points the minister could make if asked by Mr. Eng about funding through the infrastructure bank.

"We have a solid track record in terms of partnerships with the private sector regarding infrastructure," the note states. "With the bank, we want to bring this partnership to a whole new level."

Brook Simpson, a spokesperson for Mr. Sohi, said in a statement that Ottawa will work with the GTAA to see how the transit hub plan could fit with federal transit infrastructure programs.

"As for the whether the Canada Infrastructure Bank will look at investing in this project, the bank is now in the process of being set up and once operational, it will decide if an investment is appropriate," he said.

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About the Author
Parliamentary reporter

A member of the Parliamentary Press Gallery since 1999, Bill Curry worked for The Hill Times and the National Post prior to joining The Globe in Feb. 2005. Originally from North Bay, Ont., Bill reports on a wide range of topics on Parliament Hill, with a focus on finance. More

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