Mayor Sandy Brown Responds to ‘Selling a railway in secret’ column (Sept. 29)

October 6, 2022   ·   0 Comments

By Sandy Brown

A recent article by local resident Neil Orford presented inaccuracies. The sale of some of the real estate assets of the Orangeville Railway Development Corporation (ORDC) needs further examination.  

In 1995, the Canadian Pacific Railway announced that the 55 km rail line would be abandoned. It was declared surplus and not profitable by CPR. Orangeville Town Council of the day felt that purchasing the rail line would continue to support local businesses and attract new industries that could use the rail.  

In the mid 2000’s, The Highland Group – proponents of the Mega Quarry in Melancton secured a Conditional Agreement of Purchase and Sale with the Town of Orangeville to acquire the rail line for approximately $8,000,000.   During the Due Diligence period – the Highland Group paid the property taxes owed to the Town of Caledon and the Cities of Brampton and Mississauga. This negotiation saved the Orangeville taxpayer more than $1,000,000. Fortunately, the Mega Quarry died as did the Conditional Agreement with The Highland Group.   

The 2021 financial statement of publicly owned ORDC was recently presented to the Board of Directors (the council of the Town of Orangeville) wherein the accumulated losses since acquisition were pegged at $9,200,000. This loss was paid for by the taxpayers of the Town of Orangeville over the last 21 years. The loss would have been in excess of $10,000,000 without The Highland Group temporary agreement.

The beneficiaries of this $9,200,000 of taxpayer money were 6 multi-national, multi-billion-dollar companies – four in Orangeville and two in Brampton. Orangeville taxpayers paid approximately $450,000 per year to subsidize the transportation costs of these companies. 

During my election campaign in 2018 – I made it abundantly clear that this issue needed to be addressed.   Meetings were held in 2019 with the Orangeville Brampton Railway Access Group – the six users of the rail line. We asked them to cover the property taxes and relieve the taxpayer of this continuing burden.   They declined, stating that they could not afford to cover those additional costs.   

In late 2019, CAO Ed Brennan and I met with Mr. Paul Kalia, President of E. Hofmann Plastics. During our meeting I asked Mr Kalia why his company did not use the rail line to bring in raw materials?   His response was “we did a cost analysis, and it is cheaper for us to bring the goods to Guelph by rail – and then truck them to Orangeville – than use your rail line.” For me, that was a seminal moment. The moment that I realized that the economics of the rail line did not work – even for the manufacturers using it.  

On July 15, 2019 a council motion was made, asking staff to explore the potential of selling the rail line.   This motion was supported unanimously in an open council meeting.  

In mid-2020 – one of the members of OBRAG gave notice that they would no longer be using the rail line to carry freight. This put a further economic burden on the remaining 5 OBRAG members. In Dec 2020, OBRAG submitted a UNILATERAL termination letter to the Town of Orangeville and the rail operator GIO – stating that they would no longer be using the rail line as of Dec 2021.     

In his letter, Mr. Orford made the following claims

“That the rail line provided an important industrial transportation link for 5 companies”.  The truth is – they unilaterally determined that truck transportation was a better option

“That Credit Valley Explorer and the Santa Train were “highly successful.” They were highly subsidized.  Private business operators abandoned them as they lost money.  

“That ORDC did not hold open public meetings”.  That is correct. However, all substantial business was reported through the shareholder (the town council) at its’ regular council meetings. The motion to explore the sale was brought in open council on July 15, 2019.  By approving that motion, town council announced that the $9,000,000+ collective hemorrhaging of taxpayer dollars was coming to an end.  

Mr. Orford suggests we “open the books.” The citizenry elected councilors to represent them – including as Directors of ORDC. The losses each year, for 21 years, were captured and reported in the Town’s annual budget – in open council. Sale of Real Estate Assets are by their nature, private, until such time as a Conditional Sale Agreement becomes firm. There were several pieces of real estate involved – City of Mississauga, City of Brampton, Town of Caledon and Region Peel all purchased a piece of the Orangeville Brampton Railway – south of the Town of Orangeville boundary.  

Mr. Orford suggests “dissolve the ORDC.” There are legal and statutory reasons that the ORDC must remain intact for the foreseeable future. There are still real estate assets within the Town boundaries owned by ORDC.  

Mr. Orford suggests “earmark a portion of these monies – for a full transportation study”. Let me reference the “Metrolinx – 2041 Regional Transportation Plan” which is available online. Nowhere in this study is Orangeville mentioned, except for a potential Express Bus on Hwy 10. Transportation studies are commissioned where there is a need. Currently, the GO Bus to Brampton from Orangeville is at less than 50 per cent capacity. Commuter Rail Lines are created where there are hundreds of thousands – or – millions of people. The OBRY is a Class 2 rail line that can support trains travelling no more than 25 km per hour. There is no justification to consider upgrading this rail line for commuter traffic – not now, and I doubt,  within the next 50 years.  

Mr. Orford suggests “earmark a portion for the Orangeville-Shelburne rail trail.” In 2021, I chaired the Dufferin County Infrastructure and Environmental Committee. We approved an expenditure of $800,000 to improve this rail trail. Orangeville residents contributed significantly to this Dufferin County infrastructure improvement – through their property tax payments to Dufferin County.

Mr. Orford stated this this council had no vision and no plan for Orangeville Railway. That is absolutely correct. We identified it as an unreasonable financial burden to the taxpayer – and we fixed that. There is no prospect for this rail corridor to carry commuter passengers. If a new transportation technology or population density dictates that the Provincial and Federal Governments will invest billions in commuter rail for this area – the corridor remains in government hands.    

This $32,000,0000 is a blessing. A financial windfall that puts the Town of Orangeville in very good financial shape. I watched the Mayor and Deputy Mayor Debate on Rogers Cable 63 – and many of the recorded councillor election platforms this week. There were some good ideas.

Use the $9,200,000 of recouped taxpayer dollars to freeze taxes over the next 4 years

Invest the $9,200,000 of recouped taxpayer dollars and use the earned income to offset taxes each year at budget time – protecting the capital

A few candidates suggested holding public meetings to discuss the $32,000,000.  

The bottom line is, the citizenry elects councillors to make budgetary decisions. The Council that I led was not in the business of squandering. I am quite certain that the next council will judiciously contemplate the best use of this money – reducing debt, increasing reserves, accelerating infrastructure repairs or improvements, supporting new recreational amenities, supporting affordable housing initiatives – will all be discussed with the requisite input of town staff and the public.

The sale of the Orangeville Railway was completely transparent and announced in open council

meetings. The financial reporting of the Orangeville Railway Development Corporation can be

followed in the town budgets over the past 21 years – completely transparent. Real Estate

negotiations were held in private, until conditions were cleared – as is the nature of every real

estate transaction in Ontario, commercial or residential.

The burden of the Orangeville taxpayer has been lessened by the transition to the OPP and the

sale of railway assets. I am confident that the focus of the next council will be on the business of

the Corporation of the Town of Orangeville and maintaining a strong financial position for many years to come. 

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