Sask. government agreed to transfer 300 acres of GTH land to CP for no cost

A confidential document obtained by CBC's iTeam says the Saskatchewan Ministry of Highways agreed to provide Canadian Pacific Railway 300 acres of serviced land atthe Global Transportation Hubat no cost.

The government has steadfastly refused to release this December 2009 contract,despitea recommendation from the SaskatchewanInformation and Privacy Commissioner to do so and despite ongoing pressure in the legislature from the NDP opposition.

In addition to the 2009 agreement, CBC has learned the government also signed a two-pageamending agreement with CP in 2013. CBC has not obtained a copy of that document.

• Sask. government withholds GTH info at CP's request; privacy commissioner says release it

At the time the 2009 contract was signed, CP's rail yard was located on Dewdney Avenue, just north of downtown Regina.

But, the agreement says, CP required a new facility "to provide the capacity and level of integrated rail/truck service required by its current and future customers."

CP and the province agreed it would be mutually beneficial to work together tofind a new location and build a facility.

CP sold its old site to the City of Regina for $7.5 million.

And the province agreed to provide CP serviced, accessible land west of the city"at no cost to CP and free and clear of all encumbrances" except for a few easements.

It's a pretty good value for CP, it would seem. But how is that a good value for taxpayers?- ToddMackay,Canadian Taxpayers Federation

The agreement says the land is being given to the private railway company "in consideration of CP's contribution to theproject." According to the contract, CP agreed to pay for railway infrastructure, container handling facilities and buildings for the project.

Meanwhile, the Ministerof Highways promised to pick up the cost for most everything else,including land, servicing, the moving ofpower lines, and construction of CP's parking lot and internal roadways.

After reading the agreement, Todd MacKaywith the Canadian TaxpayersFederation said it appears CP received 300 acres of serviced land for free.

"If CP did in fact get this land for free, we need to know why," saidMacKay. "It's a pretty good value for CP, it would seem. But how is that a good value for taxpayers?"

Serviced land 'at no cost to CP'

According to land title records, the government expropriated most of the 300 acres from farmers in 2008. It acquired the majority of that land for less than $4,000 an acre. After signing the agreement, the government transferred that land to CP.

The agreement says the government will run services, such as water and sewer,to the land at no cost to CP.

The ministry told CBC's iTeamit cost $10 million to service the GTH land.

The government also committed to pay for "all internal roadways, parking lots for intermodal transfer of containers," and it promised to move power lines wherever they needed to go, at no cost to CP.

Despite multiple requests, the Ministry of Highways has refused to say precisely how much taxpayers actually paid for all this.

The contract says that for the land, servicing, power line move and parking lot development, the government is willing to pay "a maximum of $20 million to the total cost of those items."

A promise to build roads, highway

Theministry also promised CP it would pay for a series of "improvements" to the surrounding roadway.

It committed to constructthe West Regina Bypass, beef upDewdneyAvenue, and builda road fromDewdneyto the new CPfacility.

• CBC's full coverage of the GTH land deal

The agreement doesn't say how much all of this will cost nor does it spell out precisely which agency will pay for what. The document references a separate "contribution arrangement" between the province, CP, the federal government and the City of Regina.

However, government officials have confirmed some details about what has been spent.

Anemailfrom the Ministry of Highways says from 2008 to 2015 the total cost of the West Regina Bypass was $104 million: The province paid $77 million, with Ottawa picking up the other $27 million.

It also said the GTH access road cost $4.5 million and the cost of beefing up Dewdney was $1.7 million.

Comparing CPand SaskPower deals

Mackay said this deal with CP is puzzling when compared with what SaskPowerpaid to acquireits land at the GTH.

CPofficially opened its new facility in January 2013.

'We need an explanation of the discrepancy as to what taxpayers paid for land forSaskPowerversuswhat CP paid.'- ToddMackay,Canadian Taxpayers Federation

Later that year, Saskpower purchased less than half that land 145 acres for $25 million. That works out to about $172,000 per acre.

Using the same value per acre, CP's 300 acres of land would have been worth $52 million in 2013.

MacKay wonders why a private company was promised so much at no cost, while a publicly owned company paid top dollar.

• SaskPowerbought $25M of GTH land just in time to fund controversial deal

It's a discrepancy that Mackay says requires an explanation.

"SaskPower paid a pretty high price. Maybe there's a good explanation for that, but taxpayers deserve to get that explanation with clarity and, frankly, a pretty detailed balance sheet."

MacKay said the SaskPower deal is particularly galling, because since making the multimillion-dollar purchase, the Crown corporation has let the land sit idle. The company has said its development plans are on hold because of difficult financial times.

No comment from CP, government

MacKayadded that theagreement with CP leaves many unanswered questions and he said it's possible CP covered the cost of the land by some other means not spelled out in the contract.

"A dealthis big and complex, you always have to be able to recognize there may be factors not articulated in 11 pages,"MacKaysaid.

For weeks,CBC'siTeamhas been asking questions of CP and the government about this agreement. In anemail, CBC presentedthe facts in this story and a copy of the 11 page agreement to CP and the government before publishing.

However, both agencies have refused to comment for reasons of confidentiality.

"CP has not released, and objects to the release, of the agreement," wrote a CP spokesperson.

Meanwhile, aministry spokesperson wrote in a statement that "CP operates in a highly competitive business environment and the Ministry respects the fact that release of commercially sensitive information could harm their interests."

Confused about the GTH land deal? Here's a short explainer video

8 years ago

Duration 8:39

In 2015, CBC Saskatchewan's iTeam started looking into a transaction between the Global Transportation Hub and a Regina developer. This video is a summary of what CBC has learned since then.

ButMacKaysaid the ministry is spending public money and has an obligation to account for it.

"As citizens and taxpayers, we own that land. They're buying and selling our land and so it's incumbent on the government to explain why they're doing what they're doing with that land," he said.

Government withholds contract

Last year, CBC's iTeam requested a copy of the CPagreement through freedom of information legislation. The government refused to release it, citing the objections of CP.

CBC requested a review of that decision by Saskatchewan's Information and Privacy Commissioner. He found there's no legal reason for the government to withhold it and recommended it be publicly released in its entirety.

• 3 strikes: Sask. government chastised again for handling of GTH document requests

The commissioner said despite the protests of CP and the Ministry of Highways, the document contained no commercial, financial or technical information that must be kept private.

• EXTERNAL LINK | Privacy commissioner's report

Since the spring session of the legislature began, the NDP has pushed Premier Brad Wall to make the CP agreement public.

"If his moral compass still worked, he would do the right thing, come clean with Saskatchewan people, and release these documents," said Trent Wotherspoon, leader of the Opposition, earlier this month.

Wall responded, "we signed a confidentiality agreement as previous governments have in the past with companies, and we feel duty bound to that confidentiality agreement."

Taxpayers Federation wants full costing of GTH

Wall has also responded to Wotherspoonby assuring him that taxpayers are doing well at the hub because"there's money being made at the GTH on land sold."

But MacKaywonders if the facts bear that out.

"How can we know whether the GTH is making money if we don't know how much we've spent to get it up and running?"

He said out of respect for taxpayers, the government should provide detailed information about what they agreed to pay in this contract with CP and why.