GTH structure encourages abuse of system

So far, the story of the Global Transportation Hub has been one of a burgeoning scandal, utterly devoid of any redeeming results or mitigating circumstances.

A provincially driven megaproject which enriched friends of Saskatchewan Party insiders has brought in only two major private-sector tenants — and those only due to sweetheart deals which left the public holding the bill for a failed attempt to conjure up an economic hub.

The lack of any plausible defence or justification for the costs surrounding the GTH has led to the Saskatchewan Party’s utter refusal to talk about the scheme at all, no matter how offensive or unaccountable they need to be to try to change the subject.

But it’s also led to a lack of scrutiny as to the problems which would have arisen if the GTH had managed to accomplish what it was designed to do. And this week, we began to see how the Global Transportation Hub has been set up to encourage abuse rather than to foster fair economic development.

In a new report, CBC’s Geoff Leo has highlighted how the GTH allows businesses to avoid the laws which govern everybody else by relying on legal fictions which bear no resemblance to reality.

So far, that’s manifested itself in the exploitation of immigration rules by Brightenview as part of its plans for a wholesale mall.

The GTH has generally been advertised to investors — and operated in practice — as part of Regina for all intents and purposes. And Brightenview has followed that same path, pitching to investors that their location is “in Regina, the capital of Saskatchewan.”

But that hasn’t stopped the appeal to potential businesses from including special exemptions from investment and employment rules which exist for the sole purpose of encouraging rural development.

At the moment, Saskatchewan’s immigration nominee program requires urban businesses to hire Saskatchewan workers and to invest a larger amount of money in order to qualify. But investors in rural businesses are exempt from those requirements, while also receiving advantages in the assessment of immigration applications.

Somehow, despite piggybacking onto the City of Regina in terms of both governance and operations, the GTH site is being treated as “rural” — allowing investors to buy their way into Regina with a lower level of commitment than would be required of anybody else.

In other words, the core of Brightenview’s business plan looks to be regulatory arbitrage: setting up an artificial means to access provincial benefits which by all rights shouldn’t apply.

For anybody wanting to see our province governed fairly, that might seem like a glaring design flaw. But it’s actually the core premise behind the GTH’s governance structure.

The GTH has been set up from the beginning to be “self-governing”, with the result that a provincially appointed board is given sole control over what are normally municipal functions.

In some cases, the GTH Authority has punted on that option: for example, its tax bylaw adopts the City of Regina’s rates and provides for the city to perform services.

But while the GTH is intended to be connected to Regina geographically and functionally, it has the authority to set its own planning and development rules — potentially allowing it to set policies and approve developments which would never pass muster if they were subject to review by any elected body.

To date, the Wall government has found very few investors interested in buying into the idea of a democracy-free zone where normal rules don’t apply. But we should recognize the dangers of both setting up such opportunities for abuse, and electing governments which see them as desirable.

The GTH allows businesses to avoid the laws which govern everybody else.