Information & Ethics Committee on Feb. 21st, 2019

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

I'm so pleased you're here. I only have seven minutes, and I don't mean to sound rude, but I'm going to have to get a few more questions in, so we'll be moving along.

The development of the waterfront is crucial for Toronto, and I see that what's happening in New York and Brooklyn for creating innovative public spaces is really important. However, we were told that RFP was for 12 acres, and now we learn from the Toronto Star that it's for the whole waterfront. Why was that not made clear in the RFP?

[Meg Davis]

As I just mentioned, the RFP actually says to think about Quayside and to think about solutions at scale. That means transit at scale, district systems at scale and innovative financing options at scale. The designated waterfront area was actually, in fact, the area in which Waterfront Toronto has its purview.

[Charlie Angus, NDP, Timmins—James Bay, ON]

The first map was the 12 acres for the Quayside project, but then when you did the plan development agreement, it was for the whole designated waterfront area. Isn't it rather unusual, when we're talking about probably the most valuable real estate in North America, to say, “Here's the deal; it's only 12 acres,” but then, once we are moving down the road, to say it's actually the whole thing?

People who bid on that were thinking it was only 12 acres, so was that an understanding from the get-go, that you would allow in another map that was the whole waterfront?

[Meg Davis]

I can't be certain, but I think the RFP has a map of the entire waterfront; that is, the designated waterfront area that's in the plan development agreement is the geographic area that applies to waterfront Toronto.

[Charlie Angus, NDP, Timmins—James Bay, ON]

The RFP said very clearly that it was for the Quayside development, yet when it came out last summer, the agreement included the full map. That's the question.

It was only a six-week RFP, and 10 weeks to do public art installations on the waterfront. The Auditor General has said that Sidewalk Labs received more information from Waterfront Toronto prior to the RFP. She raised questions that the board was not given much time to actually review this. You tell us it's a rigorous process, but the Auditor General found that this thing was really pushed through quickly.

[Meg Davis]

Okay. There were maybe three or four points in there, and I'd like to try to manage each of them separately.

The RFP was actually 159 days, as I've already mentioned. In fact, it was the second-longest RFP we have ever run at Waterfront Toronto. It was a two-stage RFP process, and none of the bidders in the first or second parts asked for any extensions. We often give extensions if people are asking.

We sought guidance from our external legal, from our procurement advisers and from our own experience. We think 159 days was sufficient.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Did you say 159 days? We've been told it was six weeks.

[Meg Davis]

That's not correct.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay, so that's good to know.

Now, the investment and real estate committee did not recommend this project, but then it was passed to the board, which was only given one business day to approve, on October 13. We were told they already had the announcement ready the day before, saying that the Prime Minister, the premier, the mayor, Waterfront Toronto and Sidewalk Labs were signing the deal. If the real estate committee did not recommend this project, and if you have rigorous oversight, why was this flagged ahead?

[Meg Davis]

It's like saying a third reading of a bill is rushed when committee has had it for weeks, has reviewed every clause and every comma and has been helping the team negotiate.

IREC, which is our investment and real estate committee, in fact had at least six meetings prior to the meeting where the board voted, with only one dissenting vote, I might add.

[Charlie Angus, NDP, Timmins—James Bay, ON]

IREC did not recommend it.

[Meg Davis]

IREC did not recommend it, but IREC doesn't approve. It takes things forward to the board.

The board determined that it would vote on the document, and because the rigorous analysis had been done, IREC had reviewed all of the document and had given guidance to the negotiating team, the staff, all the way through the process. In fact, the IREC committee had been a part of the RFP process all the way through.

[Charlie Angus, NDP, Timmins—James Bay, ON]

It is the review committee. Now we learn from the Toronto Star that if this moves forward, it will divert a large, recurring revenue stream from the city into private hands, which was not in the original RFP.

You're saying you're talking about economies of scale, but the real estate committee said no to this and it went ahead anyway.

The Auditor General said that Sidewalk Labs was given more information than the competing bids. The Auditor General says the board was given just a weekend to discuss and understand the implication to the initial framework agreement before being asked to approve it.

Was the Auditor General wrong? Was she reading something else?

[Meg Davis]

No, I would say that the experience we have had at Waterfront Toronto was that due diligence was done at the committee level. The board was briefed all the way through the process. They also got two briefings on the framework agreement.

The other thing to mention is that if there was something I'd like to learn from this process, it's that the framework agreement we have with Sidewalk today is the one we should have started with. We probably should have done a different agreement right at the beginning. That agreement was just to get us to do the next agreement, which was the PDA, so it had no handcuffs for our board or for governments. It didn't require us to stay in the deal. We could walk away at any time.

[Charlie Angus, NDP, Timmins—James Bay, ON]

The Auditor General found internal Waterfront Toronto emails that led her to conclude:

[T]he board felt it was being “urged—strongly” by the federal and provincial governments to approve and authorize the Framework Agreement with Sidewalk Labs as soon as possible.

The board was under pressure to approve this deal, and the real estate committee was saying no. The Auditor General is feeling that there were a number of other questions. How was that framework agreement handled with rigorous review if the board felt it was being pushed into making this decision?

[Meg Davis]

There are two things I want to say about that.

One is that the board voted. There was only one dissenting vote. The board was actually fine with the agreement.

What was the first point you mentioned?

[Kristina Verner]

IREC didn't actually say no. They just deferred to the board.

[Meg Davis]

Oh, they deferred to the board. I'll come back to it. There was another point you made that I wanted to respond to.

Sorry. I mentioned the board. The board had briefings, and it voted, with only one dissenting opinion or dissenting vote. The board members were actually fine with the agreement.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

[The Chair, Conservative, Bob Zimmer]

Thank you, Mr. Angus.

Next up for seven minutes is Mr. Saini.

[Raj Saini, Liberal, Kitchener Centre, ON]

Mr. Chair, I'd like to give my time to Mr. Vaughan.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

I just want to review the history of Waterfront Toronto.

When was it started?

[Meg Davis]

In 2001.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Was that when the New Democrat mayor David Miller and the then prime minister and premier put together a development corporation on the waterfront?

[Meg Davis]

Yes. I actually have in front of me the Crombie commission report, which was 30 years in the making. I think it was in response to an Olympic bid. I wasn't at the corporation at the time. Following that failed Olympic bid, they determined there was enough work and enough energy there to put together a corporation to guide waterfront revitalization.