That is what has been reported here. The Ottawa Citizen reported that on May 12.
I understand one of the concerns relates to the preservation of unblurred images in Google's possession. As I mentioned earlier, Canada's commercial privacy legislation--that's the Personal Information Protection and Electronic Documents Act--indicates that no enterprise can possess the personal information of a citizen without that citizen's knowledge and consent.
Knowledge, I believe, can be given through public notification. Consent is much more difficult. You can't stop along the street and ask everybody whose images you're taking, but you are, in Google's case, keeping them in your possession without their permission. This does raise some important privacy concerns. How are you prepared to allay those concerns? Are you prepared to give commitments of a timeframe by which any captured unblurred image will be deleted?