Angry in the Great White North

On Monday, September 8th, 2003 the Requests for Proposals (pdf file, see item 9., page 16) were opened by the City of Charlottetown for a transit system. As the minutes of the Council meeting show, "Proposals were received from Yellow Cab Company, Trius Tours Company and Dupont Industries." [emphasis added] By December 16th, as reported by CBC-TV, it was determined that none of the proposals met the City's requirements.

Jump ahead to January 12th, 2005. The City of Charlottetown commissions another survey on the transit system:

Stu MacFadyen, Charlottetown's deputy mayor, said the survey should give the city some valuable information.

The councillor hopes the information will give the city an edge in securing federal funding from Ottawa's Green Fund, a federal initiative aimed at reducing greenhouse-gas emissions. Charlottetown wants the federal government to help with start-up costs of a transit system. The three municipalities [Charlottetown, Stratford and Cornwall] would assume the operating costs.

On February 18th, Dunne Consulting completes its survey of 500 households, and confirms that residents do indeed want a transit system. [Just as an aside, according to Elections Canada data, Dunne Consulting contributed $250 to Charlottetown Liberal M.P. Shawn Murphy's campaign for the June 2004 election. They did not contribute to any other party.]

Dunne Consulting of Charlottetown polled 500 households over the last month, asking how they might use buses. It is the latest in a three-year process that has seen the municipality spend $100,000 gathering various opinions on how best to set up a public transit system.

The next city budget will contain money to buy buses. Councillors did the same thing two years ago, but none of the money was spent on creating a transit system. Deputy Mayor Stu MacFadyen expects the money will be spent as intended this year. "We're hoping to put a line in there that will cover a half a year or so for operation, and we're looking for the other levels of government to come on board with us."

MacFadyen said there are no commitments from other levels of government. And earlier this week the provincial environment minister endorsed a transit system for Charlottetown, but cautioned the government will not spend any money to help.

Three days later, Liberal M.P. for Charlottetown, Shawn Murphy, who has represented the riding since November 2000, in a CBC-TV report, states that transit funding for Charlottetown is close. [This is the same M.P. who, on May 7th 2004, moved to shut down the House of Commons Public Accounts Committe hearings on the Sponsorship Scandal. On May 11th, the Liberals, led by Murphy, did indeed succeed in shutting it down.]

City councillors want to start a system, but say the city can't afford to run the system on its own.

Murphy, the MP for Charlottetown, said all three levels of government are close to signing a deal that would split the federal gas tax, a divide funds in another infrastructure program. It would mean millions in federal funding for the province.

"I'm reasonably optimistic that some sort of a deal can be reached over the next week or two."

Murphy said both programs can be used to help fund a transit system, which is an idea he supports.

Jump ahead again to April 1, 2005. Three interesting things occur that day, one of which is not made public.

The first item of interest is that the City of Charlottetown finally commits $350,000 in its budget toward a transit system.

Stu MacFadyen, the city's finance chair, said that's half of the estimated cost of starting a city-wide system.

"We're hoping, and that's why we put that money in. We're hoping that we can have something going sometime this year."

MacFadyen said the city has received a proposal from Trius Tours that would see four buses start the initial run within Charlottetown's city limits.

The city plans to ask the federal government for the money to purchase the equipment needed for a transit system.

The second item of interest is that P.E.I. Provincial Treasurer Mitch Murphy (not a direct relation to Shawn Murphy, as far as I know) issues a press release chastizing Shawn Murphy for "not [being] prepared to go to bat for the province in its times of need." (I can't find a link to the statement Mitch Murphy is responding to, but it refers to transfer payments.)

"If I had known better," says the Provincial Treasurer, "I would have thought it an April Fools joke."

"The truth is that the MP for Charlottetown has not supported our province in winning critical federal support for its public services. Shawn Murphy has simply not been prepared to go to bat for the province in its times of need. Unlike our other federal MPs, he has never challenged his own Government's rhetoric when it comes to federal transfers coming to P.E.I.

"Clearly our MP for Charlottetown is totally insensitive and poorly informed of the financial stresses that are placed on the Province because of the inadequacies in federal transfers. It would be far better if our federal representative was actually proactive in supporting the Province in these difficult times, instead of acting as an apologist for federal inaction."

The third event that occurs on April 1st, but is, by all accounts not revealed to the public till June 2nd, is that Trius Tours Ltd., who have become the sole contender for Charlottetown's transit system, changes ownership. As revealed by publicly accessible information from the P.E.I. Attorney General's office, on April 1st the founder and sole owner of Trius, George Brookins, sells his shares to Mike Cassidy and Bill Keith. Although the transfer of ownership occurs April 1st, lawyers for Trius wait till July 22, 2005 to submit an amended return to the Attorney General's office, which the office records as received on July 25th, 2005. (In fairness, given that Trius has 6 months from their year end to submit an amended return, this is not all that unusual, but in the context of events that follow, it is significant.) It is also unknown when Brookins, Cassidy and Keith began negotiating the share transfer, though it is safe to assume that this wasn't hatched overnite.

Now, Mike Cassidy just happens to be married to Charlottetown Liberal M.P. Shawn Murphy's sister, Mary Jane, and is a former business partner with Shawn's brother, Kevin Murphy. Cassidy has also previously partnered with his new Trius co-owner, Bill Keith, as a co-owner of Seafood Express until Keith bought out his 50% interest in 1989 when Cassidy chose to move on. [Another aside: according to Elections Canada, Seafood Express donated exclusively to Shawn Murphy's campaigns in both 2000 ($300) and 2004 ($250). And if you look at donors to Murphy's campaigns, a large chunk, if not the majority, is made up from various family members and a confusing array of family businesses controlled by his family members. I have not had time confirm all Murphy family donations and add it up.]

Jump ahead just 27 days to this press release:

Minister of the Atlantic Canada Opportunities Agency, Joe McGuire, and Shawn Murphy, Parliamentary Secretary to the Minister of Fisheries and Oceans, together with Premier Pat Binns and Elmer MacFadyen, Minister of Community and Cultural Affairs, today announced a five-year infrastructure governance framework that will ensure a focused approach to the management of three infrastructure funds on Prince Edward Island. As well, the Municipal Rural Infrastructure Fund (MRIF) agreement was signed concurrently as the first concrete action of this enhanced management approach.

The infrastructure program is divided into 3 programs:

1. the Canada-Prince Edward Island Municipal Rural Infrastructure Fund (CPEI-MRIF) (signed concurrently - see above);
2. the Canada Strategic Infrastructure Fund (CSIF); and
3. the transfer of federal gas tax revenues under the New Deal for Cities and Communities (yet to be negotiated with the province).

Categories 4 and 5 of the MRIF (pdf file, pages 18-21) both deal with funding available for public transit infrastructure.

A mere one month after this announcement, P.E.I. Premier Pat Binns and Charlottetown Mayor Clifford Lee announce that:

Charlottetown will use the Municipal Rural Infrastructure Program to buy four buses, and build 20 kiosks around the city. It said that startup cost will be $1.2 million.

The province's contribution is a $120,000-tax rebate on Charlottetown's $1.2-million purchase of equipment.

The city will then lease the four new buses to George Brookins of Trius Tours. It will provide his company him [sic] with an ongoing operating subsidy of $540,000 per year.

"The subsidy might have to last forever, in every city where there is a transit system throughout North America, it's subsidized," said Brookins. "You can call it subsidy, or part of the service of the system that taxpayers of city and the Island deserve." [emphasis added]

What CBC apparently doesn't know is that George Brookins is no longer the owner of Trius Tours Ltd. and hasn't been since April 1st.

Just four days later, on June 2nd, 2005, Guardian newspaper reporter Dave Stewart reports two interesting items.

The first is the following reaction from Wayne Easter, Liberal M.P. for the riding of Malpeque, P.E.I. to the joint provincial/municipal transit annnoucement:

Easter said that he is baffled why the city and the province would make a joint announcement without the federal government. "I don't know why they would make an announcement...they can't do it alone, they're going to need the feds."

Easter also implies that this federal funding is dependent on whether or not Premier Binns can exert significant pressure on Stephen Harper to support the Liberal budget:

"The question is that it all hinges on the budget," he said.

The second item that Stewart reports on pertains to an interesting annoucement by Charlottetown Liberal M.P. Shawn Murphy. He announces that on the previous day, June 1st, 2005 he had stepped down from his role as liaison between John Godfrey, Federal Minister of State responsible for Infrastructure and Communities. "I am in a potential conflict of interest in that my brother-in-law, Michael Cassidy, is, I understand, a shareholder of Trius Tours Inc.," Murphy said.

It is unknown how long Murphy served in this capacity as liaison to Minister Godfrey, but it is certainly conceivable that he held the position during the time that negotations were ongoing between his brother-in-law, Mike Cassidy, Bill Keith and George Brookins, the founder of Trius Tours Ltd. The situation raises some interesting questions:

1. When did Murphy first become aware of his brother-in-law Cassidy's interest in acquiring shares in Trius Tours Ltd.?
2. Did this awareness occur before or after Murphy's February 21st announcement that "I'm reasonably optimistic that some sort of a deal can be reached over the next week or two"?
3. When did he become aware of the actual purchase of the company by Cassidy and Keith that occurred on April 1st?
4. Did he share information with Cassidy or Keith that would have placed his brother-in-law in the enviable position of being able to take advantage of a business situation complete with generous federal government programs that he knew were coming down the pipeline?
5. Why was the sale of Trius Tours Ltd. kept secret? This secrecy is apparent given the CBC's error in naming Trius founder George Brookins as owner as late as May 27th, and further bolstered by the fact that there was apparently no mention anywhere else in the press of this sale -- which, on P.E.I., would be a fairly significant news item. Although Trius, as a private company, was under no obligation to divulge the sale, it is highly unusual that such a sale would remain secret, given the high profile the proposed public transit system had at the time.

On October 12th, 2005 CBC-TV reports that:

The City of Charlottetown is prepared to make a long-term commitment to Trius Tours, the company that's just started operating a new public transit system.

Councillors approved a ten-year contract on Tuesday night that will pay the company $400,000 a year to provide the service.

The contract provides both sides with "out clauses" in case the system fails to sway automobile addicted Islanders to choose the new form of transportation. As of Wednesday, two of the four transit trolleys were operational.

The contract calls for both sides to split any profits made by the transit system. [emphasis added]

On November 22nd, 2005 Infrastructure Canada announces that the New Deal for Cities and Communities has been signed between P.E.I. and the federal Liberals:

Canada and Prince Edward Island today signed an agreement that will result in $37.5 million of federal gas tax revenues invested in communities across Prince Edward Island.

Joining the Minister of Atlantic Canada Opportunities Agency (ACOA), Joseph McGuire, there on behalf of Minister of State (Infrastructure and Communities) John Godfrey, and the Premier of Prince Edward Island, Pat Binns, at the signing ceremony were Shawn Murphy, Parliamentary Secretary to the Minister of Fisheries and Oceans, and Elmer MacFadyen, Minister of Community and Cultural Affairs. Stan Campbell, President of the Federation of Prince Edward Island Municipalities, witnessed the signing.

Examples of eligible projects under public transit include:

• Rapid transit, such as ferries, park and ride facilities and grade separated bus lanes
• Transit buses: bus rolling stock and transit bus stations
• Technologies to improve transit priority signaling, traffic information and transit operations
• Public transit facilities including garages, maintenance facilities, and terminals
• Public transit for persons with disabilities
• Transportation studies and municipality-wide or regional transportation planning studies

Budget 2005 provided $5 billion over five years in gas tax funds, ramping up to $2 billion in year five and indefinitely thereafter. In addition, Budget 2005 committed up to $800 million over the next two years for transit funding, of which PEI's share is over $3.45 million. [emphasis added]

On January 9, 2006, as reported in the Charlottetown Guardian [print only], Trius outlines its expansion plans:

Sunday, Cassidy said the City of Charlottetown will likely make an application to the federal government for two more trolleys within the next couple of months. P.E.I. is set to receive $3.4 million from a federal government funding program for municipal transit across Canada.

With the money expected to flow into the province in 2006 and 2007, extra trolleys would be the best option, Cassidy said.

"It would be nice, with the size of Charlottetown and the demand, to have six trolleys," he said.

Right now, the system has limited resources, Cassidy said. With more equipment, the coverage and the frequency of the trolleys would be greatly improved.

On the same day, CBC-TV announces that Trius Tours is expanding into Nova Scotia.

Trius Tours has received temporary permission take over a bus route between Halifax and Yarmouth. Acadian Lines, the current provider of the service, has decided to drop the route on January 25th.

I'd say Shawn Murphy's brother-in-law has cut himself a sweetheart of a deal.