Secrecy, conflicts in Collingwood deals point to holes in Ontario’s integrity rules, judge finds

Paul Bonwick

Public inquiry recommends conflict-of-interest overhaul for municipal councillors

CBC News

A tangle of insider relationships among officials and family in the resort town of Collingwood, Ont., led to serious problems in two multimillion-dollar public contracts, a judge concluded today after a two-year public inquiry, pointing to the need for the province to plug holes in its laws around municipal politicians’ conflicts of interest.

The 306 recommendations from Judge Frank Marrocco include a call to overhaul Ontario’s Municipal Conflict of Interest Act. The judge said elected officials should be barred from participating and voting on many matters in which extended family such as siblings are involved — a much bigger circle than in current rules. It’s also something already recommended nine years ago but not acted on, after an inquiry into a municipal deal in another Ontario city.

Another recommendation is to compel municipal councillors throughout Ontario to publicly declare their assets, income and debts, and any family involved in those financial interests every year — the same way provincial and federal politicians do.

“Unfair bidding practices, unfair procurement practices, conflicts of interest, inaccurate and misleading town council reports, the misuse and inappropriate disclosure of the town’s confidential information,” was how Marrocco described his findings Monday at a news conference releasing his 914-page report.

“In other words, behaviours that, left unaddressed, undermines the foundational core and reputation of a municipal government.”

Mayor’s brother involved in 2 deals

Marrocco was tasked in 2018 with looking into two deals hatched in 2012 by the town of Collingwood, about 150 kilometres north of Toronto: the sale of half of the local electrical utility and the use of the proceeds to build a new arena and a domed roof over a community pool.

Local officials asked for the inquiry after learning that, among other things, lobbyist Paul Bonwick, a former Liberal MP and brother of then-mayor Sandra Cooper, consulted for the winning bidder for the stake in the utility. CBC News later revealed that Bonwick also did undisclosed work for the construction company that built the domed roofs for the pool and arena.

In total, he earned nearly $1.1 million in fees from the deals. The Municipal Conflict of Interest Act, however, does not explicitly require politicians to recuse themselves on a matter in which their sibling is involved, so Cooper said she thought she was OK to debate and vote on the contracts.

Bonwick was not only the mayor’s brother but also a close family friend of then-deputy mayor Rick Lloyd. Bonwick also employed one of the town’s councillors and was a sometime business associate of the town’s acting top bureaucrat, Ed Houghton, the inquiry found.

The inquiry concluded Bonwick obtained confidential information about the electrical-utility sale from Lloyd and Houghton, “including sensitive information about the other bidders’ presentations,” which he then passed on to his client.

‘Unusual influence and freedom’

Bonwick told CBC News on Monday that he respectfully disagrees with many of the inquiry’s conclusions that he had so far reviewed.

“I do not believe that the evidence provided during the hearing supported those findings,” he said in a text message.

“That said, I also believe we all have a responsibility to improve upon review of any dealings. At the end of the day, the municipality received exceptional value on both transactions.”

Collingwood Mayor Brian Saunderson says the report of a judicial inquiry is ‘dispelling some clouds that have been hovering over our community.’ (Dave Seglins/CBC)
Reached Monday evening, Lloyd said he’s been going through the inquiry documents to try to determine what exactly the “sensitive information” findings refer to, “because nothing was ever released by me ever that would be confidential, that wouldn’t be public[ly] available.… I don’t think that’s accurate at all.”

Marrocco’s inquiry also found that Houghton, in particular, had “unusual influence and freedom” within the town bureaucracy and unilaterally initiated talks to sell off part or all of the electricity utility without telling the mayor or council. Once it came to council’s attention, Cooper and Lloyd “ignored warnings” from Collingwood’s municipal lawyer that the town should seek independent legal advice about the sale.

Lloyd, while saying he welcomed the inquiry and its recommendations, said he didn’t agree with this finding that he and Cooper ignored the warnings from the municipal lawyer.

Cooper said Monday evening she was still digesting the report and did not yet have any comment. Houghton did not immediately reply to a phone or text message.

In the end, the bidding process was “blighted by unfair advantage,” the inquiry found. The successful bidder, PowerStream, had insider information all along, had written the news release announcing the bidding process itself and then won despite offering $3.85 million less than the highest bidder, Hydro One, the report said.

Don’t call mayors ‘CEOs’: Judge

The judge’s recommendations include:

-Amend Ontario’s Municipal Act so that mayors aren’t referred to as the CEO of their municipality. “The erroneous belief that the mayor, by virtue of being described as the ‘chief executive officer of the municipality,’ had the power to provide unilateral direction on behalf of council, without council’s agreement or approval, underpinned the lack of transparency” around the electricity utility sale, Marrocco wrote.
-The law should also be amended to clarify that no single council member — only council as a whole — has the authority to compel city staff to act on something. In the case of the Collingwood deals, the deputy mayor had “involved himself in staff’s work” and “engaged with vendors seeking to deal with the town” outside the normal bidding processes, the inquiry found.
-Municipal elected officials should have to disclose their financial interests every year — including income sources, assets and debts, as well as the names of any family who have overlapping financial interests. This would bring city and town councillors in line with the disclosures required of MPPs and MPs.
-The Municipal Conflict of Interest Act should be broadened so that it applies to not just financial interests of elected officials and their parents, spouse or children but all “real, apparent and potential” conflicts of interest of a wider group, including siblings, in-laws, aunts, uncles, nephews, nieces, first cousins and grandchildren. A similar recommendation was made in a 2011 public inquiry into municipal dealings in Mississauga, Ont.
-Ontario’s Ministry of Municipal Affairs and Housing said in a statement Monday evening that the Municipal Conflict of Interest Act has “been effective in ensuring transparency and accountability across Ontario’s 444 municipalities” but that the government will take a look at Marrocco’s recommendations “for future consideration.”

Collingwood’s current mayor, Brian Saunderson, said Monday that he’s “very excited” to get the report and that it validates the concerns the town had when it asked for the public inquiry — the final tab for which will exceed $7 million.

“At the end of the day, it’s dispelling some clouds that have been hovering over our community since these transactions happened,” he said.

He said that he disagreed that the town had gotten good value on the contracts for the pool and the new arena.

An OPP investigation into the arena and pool construction deal, which began in 2013, is ongoing, the force said on Monday. No criminal charges have been laid.

See also:

Unfair, inaccurate, misleading, inappropriate: judge comes down hard on Collingwood transactions