Department of Justice

SETTLEMENT PAVES WAY FOR PROGRESS AT PEARSON INTERNATIONAL AIRPORT

OTTAWA,April 16, 1997 -- Allan Rock, Minister of Justice and Attorney General of Canada, and David Anderson, Minister of Transport, announced today that the litigation arising from the cancellation of the contract to privatize Terminals 1 and 2 has been settled.

The Government of Canada and the T1T2 Partnership have agreed to the following terms:

The Partnership has agreed to drop its $662 million claim in the litigation.

Members of the Partnership have agreed not to pursue any related claims they may have against the Government of Canada arising out of the cancellation of the contract.

The Government has agreed to the payment of $45 million for direct out-of-pocket expenses and disbursements incurred by the Partnership. A further $15 million will be paid for interest and legal costs.

"The settlement of this litigation is consistent with the intent of the legislation that was approved by the House of Commons. No amount will be paid in respect of lobbyist fees or future profits," said Minister Rock. "We have been able to achieve through negotiation what we had tried to achieve through legislation," added Minister Rock.

"The government cancelled this privatization because it was not in the public interest," said Minister Anderson. All issues impeding the development and operation of Pearson have now been removed. Pearson will now be operated as all other not-for-profit airport authorities. It can be developed to its fullest potential unimpeded by divided control of its essential airport facilities. The Greater Toronto Airport Authority can pursue its ambitious and much needed $2.5 billion redevelopment program."

The Partnership made the settlement conditional on the Partnership being able to reach a satisfactory agreement to sell Terminal 3 to the GTAA. This agreement of purchase and sale has now been completed making a settlement possible.

A backgrounder is attached. Letters of agreement are available.

Ref.: Jennifer Lang          Sue Ronald
      Minister's Office      Minister's Office
      Department of Justice  Transport Canada
      (613) 992-4621         (613) 991-0070