The Auditor General’s Report, Part 6: Procurement
The majority of Auditor General Shelley Spence’s 121-page Value for Money audit of the Ontario Place redevelopment centres on procurement. “We found that the CFD [Call for Development] process and realty decisions were not fair, transparent or accountable to all participants as would be required by the Realty Direction, the CFD document, and best practices,” writes Spence.
That language echoes the words of previous Auditor General Bonnie Lysyk, who analyzed changes to the Greenbelt in a 2023 report, concluding that the way the government proposed changes to the Greenbelt “was not publicly transparent, objective or well-informed, and was inconsistent with the vision, goals and processes of the Greenbelt Plan, as well as previous amendments to the Greenbelt boundary.”
Summarizing the Ministry of Infrastructure’s decision-making on Ontario Place, the report points to how, for example, “despite published guidance that contact with government officials was prohibited during the open period, some participants were invited to meet with government officials and high-ranking political staff during the CFD open period.” These communications included nine e-mails and one call between a Vice President at Infrastructure Ontario and Therme’s legal counsel, an introduction of Therme to the transaction advisor leading the Call for Development, and an invitation to an event at the legal counsel’s firm. Minutes of these meetings—as well as separate meetings between the VP and other participants—were not kept, so there is no way to know what was discussed, let alone assess whether all participants had equal access to the same information.
Rather than following the Province’s standard procurement law, directives, or best practices, the 2019 Call for Development, as well as an earlier call in 2017, were categorized as real estate transactions. This is unusual—other large waterfront developments, in both Ontario and abroad, have proceeded as procurements. In any case, the current process also did not meet the lesser requirements of the Realty Directive, which strives for accountability and transparency. As a result of terms and conditions with considerable ambiguity (for instance, “The Government may select one, none or multiple submissions as part of the process”), a few participants did not invest a significant amount of time and resources into their submissions, sending in a one-page response.
The assessment process itself, in the Auditor General’s summary, “was irregular, subjective, and not always followed.” The process used a qualitative scoring framework, with criteria that were not finalized until after the submission deadline—with the result that a third of the criteria never appeared in the CFD document being referenced by submitters. Criteria were not assigned relative weights, leading to uneven scoring. In many cases, individual assessors’ scores were very different from each other—not unusual in itself—but after a consensus meeting that sought to reconcile those scores, some scores were altered two subsequent times. While assessors were required to score all areas, there were 126 instances (or 11%) where an objective was left unscored by an assessor. One assessor did not score any of the criteria for Therme prior to the consensus meeting. The process did not include a fairness monitor, whose job as an independent third party involves ensuring that the advertised process is followed, and all parties are treated fairly and equally.
One of the submitters, Triple Five Group, was asked to substantially revise and resubmit its submission, which was received 70 days after the submission deadline. This process moved the submission from a consensus score of “low” and the lead assessor writing that they were “unable to assess” the submission, to Triple Five Group eventually becoming the primary comprehensive site-wide solution option. In other cases, proponents were selected for a short list or further discussions despite ranking lower than others. Due diligence meetings, in which Infrastructure Ontario sought to clarify information and/or confirm assumptions in submissions, were conducted with only six of the 34 participants, despite four additional participants receiving a high score for “Alignment with Government’s Vision” and an additional 13 participants assessed as receiving a moderate score on this criteria.
One of the biggest procedural missteps is that the Call for Developments envisioned two different types of bids: some that would present a comprehensive site-wide solution, and another scenario with multiple single tenants. “The same criteria were used to score these vastly different solutions,” notes the report. The full implications of the provincial costs of each solution were not presented to key decision-makers, even though by taking on its present role as Master Developer, the province has put taxpayers on the hook for public realm, parking, and last mile transit costs totalling over $950 million for the project. The report notes that several of the site-wide submissions includes designs for the public realm, parking solutions, and/or last mile designs, including, in some cases, provisions to pay for these features.
The social and environmental costs of redevelopment were not considered in the redevelopment, either—and the report makes notes that the government’s Rebuilding Ontario Place Act, 2023 exempts the site from key environmental assessments and heritage requirements. As critics have long noted, there was no input sought from the public until after the tenants had already been announced. In the 17 consultations held afterwards, a key sentiment, according to Infrastructure Ontario’s own reporting, was “why now and what’s the purpose; why [wasn’t the] public consulted on partner selection.”
“Taking what the public wanted into consideration from the beginning would have made the process more open and transparent to the public and could have prevented many of the issues, lawsuits, media attention, etc. that have occurred,” says the Auditor General’s report. “Between September 2019 and June 2024, the government has spent $8.5 million on legal fees associated with the 2019 CFD, MZO, lease negotiations and associated work.”
Related:
The Auditor General’s Report, Part 1: The cost of privatizing Ontario Place
The Auditor General’s Report, Part 2: The billion dollar question of parking
The Auditor General’s Report, Part 5: The Future, Continued Privatization of Ontario Place
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