Les Leyne: Ancient clerical error costs $20 million

Les Leyne mugshot genericThere’s good news for people seeking a return to normalcy and continuity after a frightening week — B.C. is getting bamboozled by a railway again.

Most of the historic grievance about the special treatment for railways in B.C.’s history are buried in the past. But they might be freshened up with the introduction of an oddball bill that requires taxpayers to fork over $19 million to CP Rail because of some hundred-year-old paperwork errors.

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You’d think a corporation that boasted this week it “delivered the strongest financial results in the company’s history” might be a bit more generous in spirit when it comes to some obscure discrepancy about land rights from decades gone by.

You’d be sadly mistaken.

You’d think a giant railway that enraged Vancouverites by tearing up gardens on its downtown right-of-way to make the case that it needs a good price for the long-abandoned line would be treading a bit lightly elsewhere on the government-relations front.

Wrong again.

The same day CP Rail announced that it made $400 million in net income in just the third quarter, the government started debate on a bill that will give the corporation even more money.

It arises from a settlement about the disputed ownership of timber and stone rights on 213,000 hectares of land in the Okanagan and the Kootenay.

CP Rail filed a lawsuit last year seeking to confirm its ownership of timber and gravel rights that were mishandled decades ago and wound up assigned to various owners, including the government.

As outlined by the government, B.C. granted land to three railways between 1892 and 1908 to subsidize construction. Those companies reserved timber and stone rights for their own use when they sold the land over the years. But the legal reservations were not recognized in the subsequent deals, and many aren’t registered in the land-title system.

Canadian Pacific Railway became the successor to the assets in 1956. About 10 years ago, the legal issues around the timber and stone rights became an issue.

It sounds like a CP Rail lawyer checked the archives, found the fine print wasn’t done properly and eventually turned it into a lawsuit that is now worth $19 million to the company.

The settlement averts the scenario where the ownership and value of the rights on hundreds of parcels would have to be clarified. The lawsuit is dropped. Current owners get to keep the rights they assumed for years they already owned.

The government avoids a giant and potentially even more expensive headache. And CP Rail makes an easy $19 million.

But the Opposition cited some messy leftovers. Some purchasers over the years paid extra for the timber and stone rights and some didn’t. Those who didn’t will now have the additional rights given to them retroactively by the government, which gives them an unfair advantage.

NDP MLA Harry Bains said CP Rail claimed in the suit that the province and many private owners “essentially engaged in theft” of the rights. “They alleged that their timber and stone was taken away without their consent, so they call it theft.”

With the government buying the rights and restoring them to the current owners, the question is: “Are you not gifting them for theft?’”

On some parcels, there has been years of logging by people or companies who didn’t actually have legal right to the trees.

And as Forests and Lands Minister Stephen Thomson noted, property rights never really go away. So as even the Opposition conceded, the situation had to be rectified in some fashion.

Thomson said CP Rail’s original claim was for $40 million in damages and the government would have spent millions more defending the action.

Some clerks dropped the ball a century ago. The Canadian Pacific Railway came along 60 years later and then 50 years after that found a way to collect $19 million from taxpayers because of the errors.

It looks like a cheesy way to do business. But maybe that’s why they’re showing “the strongest financial results in history.”

The company said Friday it’s not in a position to comment. They’re likely too busy counting the money.


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