Information & Ethics Committee on Feb. 21st, 2019

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thank you, everyone, for coming today.

I want to start by asking about the resignations and give an opportunity to provide some context: why the resignations and, in the aftermath of the resignations, what steps have taken place.

[Meg Davis]

Could you clarify which resignations in particular? Do you mean the digital strategy advisory panel resignations or...?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Yes, I mean specifically with respect to privacy and this group, but I understand there was another person as well.

[Meg Davis]

Yes, okay.

[Kristina Verner]

The DSAP resignations happened very early in the process of the committee's setting up, before real work had gotten under way and certainly before we had any grist in the mill, if you will, for the committee to begin to think through what the main issues were.

The committee is now very well guided by Dr. Geist's leadership. We have a vice-chair from IBI Group, Charles Finley, who was one of the co-founders of Code for Canada.

We have also just completed a recruitment for new panellists, which had a very warm reception from the communities. We're in the process of selecting three new panellists.

It's unfortunate that we lost some very valuable perspectives when those resignations occurred, but we certainly have extremely valuable contributions that we're having around smart cities. We're still hopeful that we'll be able to engage those individuals in the conversation moving forward.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I appreciate that. I understand, and I hope it's not a problem anymore, but I want to drive at this idea of de-identification.

This notion that information collected through whatever sensors—there are a couple of examples in Sidewalk Labs' most recent information—if it's de-identified at source and there's a commitment to de-identification and openness by default.... I understand the dispute at the time was that de-identification was not to be mandatory.

Can you speak to the current state of affairs?

[Kristina Verner]

Absolutely. Immediately after that meeting, Dr. Cavoukian and I had a follow-up meeting. We had a very candid conversation. The actual question was about the definition of “at source” and whether it was at the point of collection or at the initial point of storage or processing. We came to a very good understanding of what was meant, which is why we're comfortable in making that very firm commitment now from Waterfront Toronto.

We also had further conversations with one of Canada's leading researchers looking at de-identification of data, to understand exactly what the implications were from both security and privacy perspectives, and also to ensure that we weren't precluding Canadian farms from having access to the technology they would need on an affordable basis to do that de-identification.

All of those factors were able to be satisfied, and that's why we're able to make that commitment to de-identification today.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Can you give us an example?

Let's say I'm walking or driving through this 12-acre project once it's developed. How is my personal information collected and at what point is the information de-identified? Can you provide me some examples and then, hopefully, some assurance?

[Kristina Verner]

Some of that will need to come from Sidewalk Labs when they're here in front of you with regard to some of the specific solutions they're suggesting, since they are providing some of the technologies or have been talking to the technology companies more directly than we have at this point in time.

However, if we look at some of the pedestrian counting or traffic counting that would typically happen, whether it be in the Quayside project or in other urban environments, what is being proposed is that immediately upon collection, rather than having an image captured, you would be converted into a shape. That shape would be non-specific enough that you wouldn't be able to determine gender, age, whether you have a difference of abilities, and so on. You would become a number—an algorithm, if you will—in the whole perspective. From the moment of collection, you're essentially nothing more than a variable statistic in an algorithm.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Ms. Davis, you mentioned that the data governance plan will be made public soon.

[Meg Davis]

Actually, we have not yet received the master innovation and development plan, the MIDP, from Sidewalk. We've seen dribs and drabs, but we haven't seen a full proposal. I understand their plans are not finalized yet, and we expect to see that very soon. It will be taken to our government partners through our intergovernmental steering committee, which has representations from all three levels of government. It will then be offered up to the public for input, and Sidewalk will need to demonstrate how that input is reflected in the final MIDP that is given to Waterfront Toronto to evaluate.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I understand, from your opening comments at least, that when Sidewalk Labs publishes the digital governance proposals for the DSAP consultation in October 2019, they will include the principles of de-identification and open by default.

Would it be fair to say those are two core principles that Waterfront Toronto will require as mandatory for the project to proceed?

[Kristina Verner]

In that case, the principles they are putting forward are consistent with Waterfront Toronto's approach for the project as well. The master innovation and development plan will have an entire chapter and potentially some resources associated with the notion of digital innovations and the urban data question. That will be further built out throughout that piece for their evaluation as well.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I'm not completely familiar with all the public consultations that have taken place. I know some people have raised concerns. You noted just now that when the master plan is released publicly, there will then be continued consultations.

[Meg Davis]

Yes, that's correct. Waterfront Toronto will conduct additional consultations. The City of Toronto will conduct its own consultations as well. We anticipate, as we do with all of our projects at Waterfront Toronto, very deep consultation with the community.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Can you respond to the Ontario Auditor General's indication that preferential treatment was given to Sidewalk Labs by Waterfront Toronto? Can you speak to that?

[Meg Davis]

I don't think the Auditor General actually said there was preferential treatment. She said there was a risk.

Waterfront Toronto conducts its RFP process very independently. It was an independent RFP process governed by Justice Coulter Osborne as our fairness commissioner.

We conducted a pre-RFP process called market sounding, which is very typical for complex RFP processes where we meet with a lot of companies. We met with over 50 companies, most of whom we met with before we ever met with Sidewalk. We had discussions with a lot of other interested parties, etc., beforehand.

The Auditor General also said the process was a bit too short. In fact, it was 159 days. It's the second-longest procurement we've had at Waterfront Toronto. We had six proponents, and three were shortlisted. None of the proponents asked for any additional time. We felt the process was very robust and appropriate for what we were asking for, which was to prepare a plan. There's no transaction of land; there's no development happening. This is just a plan for us to think about.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I'm out of time, but I look forward to asking about data trust when I get another opportunity.

[The Chair, Conservative, Bob Zimmer]

Thank you, Mr. Erskine-Smith.

Next up, for seven minutes, is Mr. Kent.

[Peter Kent, Conservative, Thornhill, ON]

Thank you, Chair, and thanks to all of you for attending today.

I'd like to pick up on that last point, but before I get to my questions, I just want to do a bit of a scene set recap of the chain of events.

It's not surprising there's a widespread belief that a political fix of sorts has been in for Sidewalk Labs' preferential treatment, since Justin Trudeau met with Alphabet's former chair Eric Schmidt at the Google Go North summit in 2017. As you've just referenced, Waterfront Toronto chose Sidewalk Labs to develop a data-driven neighbourhood in a process that the Auditor General, I believe, did in fact question as preferential and certainly rushed. John Brodhead, one of the Liberal government's top infrastructure operatives, the infrastructure minister's former chief of staff and a long-time friend of the former PMO principal secretary, was then installed in a senior management position.

Next, after those very notable resignations from Sidewalk Labs' associated panel over the secrecy and privacy issues, we suddenly discovered last week that far from a relatively compact 12-acre digital neighbourhood, Google's plan—or Sidewalk Labs', Alphabet's plan—is for the entire 350 acres of Toronto's Port Lands.

Those leaked documents basically indicated that in return for its investment in the 12 acres, Sidewalk Labs wants a share of all eventual development fees across the dockland, and property taxes on appreciating land values as a result of the Quayside project, apparently in perpetuity.

Do you believe that even after these revelations—of which the Toronto mayor's office, the Toronto council, the premier's office and the cabinet were unaware—the original RFP and the agreement that was subsequently signed are still valid?

[Meg Davis]

Yes, I do. We ran an independent process. It was guided, as I said, by the former integrity commissioner, Justice Coulter Osborne. It was also guided by a steering committee, not Waterfront Toronto's board. These were independent individuals. We had three external subject matter experts on that steering committee. The evaluation team was Waterfront Toronto staff, and we also had support from some external subject matter experts, including KPMG and the Canadian Urban Institute.

Those evaluations were not done by our board, by any politicians, or by any sort of political operatives or bureaucrats. There was no interference in that process. Sidewalk Labs was chosen through a very rigorous process, based on evaluation criteria that were signed off by Justice Coulter Osborne, and also with legal opinions from Dentons and from McCarthy's.

This process was as independent as any we've run, and we've run hundreds of them at Waterfront Toronto. The selection of Sidewalk Labs was absolutely appropriate. They provided the best proposal of the short list of proponents.

[Peter Kent, Conservative, Thornhill, ON]

Do you understand why people and politicians in the GTA, in Toronto and beyond, in Ottawa, see this suddenly as more of a high-profit real estate property development project than a technology partnership?

[Meg Davis]

If we look back at the RFP, we didn't specifically ask for technology. We really were looking for.... Let me take a quick step back.

Waterfront Toronto's mandate is to bring economic development, private sector investment and innovation all to the waterfront, and to use that as an economic engine. We have the ability to transform the market and have effective leadership of public lands. We don't own all of it; a lot of it's owned by the city. Ten years ago we set a sustainability standard, for example, of LEED gold. People may not know much about that, but it's an international standard of sustainability that a building must meet. There's a whole process that needs to be gone through, and it's third party adjudicated. That was transformational at the time. Ten years ago people said, “You've got to be kidding me,” but we now have development partners, Tridel for example, building LEED platinum on one of our projects without even being asked to do so. That's table stakes now.

The 12 acres at Quayside are owned primarily by Waterfront Toronto. There's a very small portion that the city owns and a small portion that is owned by the private sector. We asked ourselves what we could do with that land that would be different. We have an affordability crisis in Toronto. We are dangerously close to a sustainability crisis in terms of climate change and mobility. The congestion in Toronto is unbearable. It takes me over an hour every day to get to work on the subway. We asked, “What can we do, as a public agency of all three levels of government and with this land that we own, to push the envelope again and really raise the bar on all these elements?”

We put in an RFP for a thinking partner and somebody who might have some money to help us do some research element. When we were looking for the innovation and funding partner.... It is not a development proposal. The intention in the RFP and reflected in the plan development agreement, which is the agreement we have now with Sidewalk, is to come up with these ideas and standards so we can then engage the Toronto community or the international development community to help us build out the Quayside property.

The other thing the RFP and the plan development agreement allow for is thinking at scale. If we wanted to get to carbon neutral or climate positive, what would we have to do to get there? Twelve acres probably isn't going to get you there. You need district energy systems. You need different electric grids. You need transportation systems, etc. What would it take to get to some of these very lofty objectives that Waterfront Toronto set?

The RFP and the plan development agreement allowed the successful proponent to think at scale, to think bigger, to think beyond Quayside, and to come up with some ideas—innovative funding ideas around transit, for example. We have a transit need in the waterfront. We've had one for a very long time. The city has identified it as a priority, but the city has a lot of priorities, so we were looking for innovative opportunities in order to help fund a Waterfront Toronto LRT system.

In fact, I am surprised people think there was some sort of fix in. This is what Waterfront Toronto was set up to do. We ran a process like all the other processes we've run, and we selected an innovative thinking partner, who also agreed to spend $50 million thinking about things and suggesting ideas to us.

The other thing I'd like to say about the fix being in is that we haven't even seen the proposal yet. We've seen little pieces—we've all seen what was in the paper last week—but we don't have a final proposal that brings together all the innovations, the financials, and all of that. We are going to go through an incredibly rigorous evaluation process that will include all of our government partners. Through our intergovernmental steering committee, we will spend a lot of time analyzing that proposal, so we haven't offered anything to anyone. Sidewalk doesn't have rights to land. We haven't transferred any land. Most of those lands are owned by the city. The city will have to be the decider on whether or not there are any property taxes or development charges provided to Sidewalk. All those things are yet to come and will be discussed and debated in the public forum.

[Peter Kent, Conservative, Thornhill, ON]

Thank you. My time's up, but we'll come back.

[The Chair, Conservative, Bob Zimmer]

Next up for seven minutes is Mr. Angus.