Photo: AAR posted its signs after purchasing Premier Aviation.
Premier Aviation Jobs Deal Exposed, But More To Come
Story And Photo By Alan Halberstadt
I came across a newspaper article early this year that fortified my beliefs about the shortage of value and accountability surrounding taxpayer-funded handouts to private sector businesses.
A new University of Calgary study calculated that the Canadian federal government and four provincial governments — Ontario, Quebec, Alberta and British Columbia — bestowed $29 billion in subsidies to businesses in 2014-15 while estimating that more than half of that money was wasted in terms of economic performance.
For a local example, look no further than handouts to Federal Express Canada Limited (FedEx) and Premier Aviation, two secretive operations on Windsor airport lands that rose from the ground over the last eight years, thanks to the generosity of politicians with grandiose visions of a Windsor aerotropolis.
I have previously exposed, in this space (October 2017), the FedEx sweetheart deal.
The city and federal governments invested $24 million to create cargo handling and research facilities at the airport and the University of Windsor. FedEx was gifted a 35,000 square foot, state-of-the-art loading and staging structure, in exchange for a 30 year lease, starting at a dirt cheap $4 per square foot.
My Freedom of Information (FOI) request revealed there are no job guarantees in the deal with the city. FedEx brought 51 existing employees into the new space when the company relocated from a nearby old building, but a FedEx official later told me, last fall, that information on current employment levels is proprietary.
An outrageous attitude when you consider how former Mayor Eddie Francis championed new industry job creation as justification for throwing tax money at these multi-million dollar projects.
That brings us to the notorious aircraft Maintenance, Repair and Overhaul (MRO) facility that has occupied a $23 million, 144,000 square foot space, constructed by the city and federal government. Founding company Premier Aviation started fixing planes in Windsor in 2012. AAR, a respected aircraft services company based in Illinois, purchased the Windsor business and Premier’s similar-sized MRO in Trois-Rivières, Quebec, late last year.
Extracting basic information on job numbers out of Premier (now AAR), the city and Your Quick Gateway (YQG), the agency that oversees Windsor International Airport, has led me on an FOI odyssey covering six years.
It began with a two and a half year mediation that resulted in an order from an FOI adjudicator to make public Premier’s lease with the city, which turned out to be $1 per year for the first three years of a 10 year contract.
That prompted me to begin another FOI journey, requesting a copy of the commercial services agreement between the city, YQG and Premier that spelled out the number of jobs Premier was required to create at the end of 2013, 2014 and 2019. As well I asked what penalties existed for not meeting those targets.
When the stakeholders refused me, I launched an FOI appeal under the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA). A phalanx of lawyers, led by city legal department counsel Mark Nazarewich, fought like caged lions to conceal the jobs and penalty information.
In April of this year, more than three years after I filed the appeal, Commission Adjudicator Jenny Ryu ordered the city to disclose the pertinent portions of the agreement.
There is a good possibility that the numbers in the agreement would cause embarrassment to Francis and his like-minded successor Drew Dilkens, a staunch defender of the project.
CBC reported in June of 2012 that Francis expected the company to hire 250 to 300 people within the first two years and 375 people after seven years.
There has been much speculation that the gold-plated hangar has not met these objectives. I have yet to count more than 50 cars in several drives around the parking lot this summer, and on some days I counted significantly fewer than that.The FOI order exposed covenants from the service provider to hire 100 full-time employees within the first year, 175 employees by the end of the second year and 325 by the end of the seventh year.
These covenants impose penalties or “additional charges” of $5,000 times the difference between the number of full-time employees required to be employed and the number actually employed.
This information led me to ask the city’s FOI Co-ordinator, in an email on May 29, to tell me the actual number of employees hired by the service provider at the end of year one and the end of year two, and also the number of FTEs presently employed as the end of the seventh year approaches in 2019.
Concurrently, I asked how much the service provider is obliged to pay in penalties, if any, for not achieving those employment figures.
Further questions arose from an FOI revelation of an agreement in which the city, through the airport (YQG), agreed to use its best efforts to provide the service provider with $3 million in working capital from various federal, provincial and other government authorities.
I asked how much of the $3 million has been given to the service provider and to identify the sources of that funding.
The sale of Premier to AAR begs the question whether there is a new agreement with AAR that changes the commitments made by Premier. Further, has AAR agreed to pick up any default payments to the city imposed on Premier for not meeting its employment guarantees?
After AAR announced its purchase last September, the company stated that over 300 staff positions in Trois-Rivières and Windsor would be retained. Interestingly, the company’s Communications Officer Kathleen Cantillon would not tell the mainstream media how many of those 300-plus aviation mechanics would be employed in Windsor.
After several attempts to have my May 29 questions answered by the city, I was informed in an email from City Clerk Valerie Critchley that YQG is a corporate entity that is now handling its own MFIPPA matters.
The old runaround, I suspect. But, on July 20, I dutifully filed an FOI request to YQG’s new FOI Coordinator Jim McCormack seeking the information outlined above.
On August 14th I received a response to my access request saying they would make a decision by September 13.
If they deny the information I will lodge another appeal to the commission. Stay tuned, and remember that Mayor Dilkens, who is seeking re-election next month, chairs the YQG Board.
The views and opinions expressed by Alan Halberstadt do not necessarily reflect those of Biz X magazine or its advertisers.