Waiting on a business plan [Ontario Northland Transportation Commission] – by Ian Ross (Northern Ontario Business – January 8, 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Ontario Northland Transportation Commission

The unions proposing a plan to transfer ownership of the Ontario Northland Transportation Commission (ONTC) to a new operating ‘port authority’ must submit a business plan to participate in the province’s divestment process, said a ministry spokeswoman.

Laura Blondeau said the ‘New Deal’ group must submit a qualified proposal of its capabilities to Infrastructure Ontario, something the government has yet to see, as of early December.

Blondeau said that was the message sent in an Oct. 31 meeting between Northern Development and Mines Minister Rick Bartolucci and Roy Hains, CEO of a proposed entity called the James Bay & Lowlands Ports Trustee Corp.

The ‘New Deal’ group is spearheaded by the General Chairperson’s Association, representing unionized employees at the Ontario Northland Transportation Commission (ONTC). Its ambitious plan is to transfer the ONTC’s assets, including the railroad, to a ‘port authority’ available under the Canada Marine Act.

The James Bay & Lowlands Ports Trustee Corp. proposal has been endorsed by KWG Resources, a chromite junior miner in the Ring of Fire, and Nipissing-Timiskaming MP Jay Aspin.

The ‘New Deal’ group wants to keep the ONTC telecommunications, bus and rail divisions intact to maintain jobs and support Far North mineral development.

Hains said Bartolucci is determined to continue with the divestment process.

“I’ve asked him to cease and desist, and he said, ‘No, it would cost the taxpayers too much, I’m in a race to liquidate this thing because it costs the taxpayers money.”

Blondeau said the ‘New Deal’ group is invited to ‘submit a proposal to Infrastructure Ontario, the same as any other prospective purchaser.

But Hains said his group has been unable to develop a business plan because it’s been blocked from seeing the financials of each ONTC division.

“He (Bartolucci) keeps telling me to bid on the phone company. I said I want to bid on it all, but there’s no vehicle. You’ve created an unfair playing field because I’m trying to bid on it all.”Blondeau said without a detailed plan demonstrating the group’s technical expertise and financial backing, Blondeau said it’s highly unlikely Infrastructure Ontario will invite them to participate in the next stage of the divestment process.

In September, Ontera, the ONTC’s telecommunications division, was the first business line put on the block with Infrastructure Ontario inviting interested buyers to submit their financial and technical capacities through a Request for Qualifications (RFQ) process.

Blondeau said there was “healthy interest” from “good prospective buyers.”

Only after signing non-disclosure agreements will those buyers have access to the ONTC’s financials at the Request for Proposals stage.

Blondeau said the “New Deal” group’s submission has consisted of maps, press releases, presentation speaking notes and newspaper clippings.

“In the case of this group, they haven’t participated.”

Blondeau said with the process being monitored by the Office of Fairness Commissioner, “we would get in trouble if we selected one group to treat differently in having access to information that others don’t.

“The minister was clear he wasn’t stopping the process, but everything is speculation (from the New Deal group) because we have nothing.”

“At this point, the ship has sailed with Ontera,” she said.

It’s now up to Infrastructure Ontario to determine the next lines of business to be sold.

“The province has never undertaken a divestment of this size, ever. There was an initial target date, but we are not glued to that.”

Hains deflected any suggestion his group would resort to an injunction to halt the process.

“I don’t like to negotiate outside, but I would like him to cease and desist. His (Bartolucci’s) first line of communication is that it would slow it down and cost the taxpayers’ money.”

Hains, who acted as a consultant and executive vice-president of the Ontario Northland in the early 2000s, was in charge of a privatization process under the Harris government until the Conservative government backed out.