Real Estate

Manitoba holds firm on declining Winnipeg call for inquiry into real estate, construction scandals

Manitoba’s PC government says it’s still too soon to call a public inquiry into the real-estate and construction scandals that plagued the City of Winnipeg more than a decade ago despite the resolution of a pair of city lawsuits over its police headquarters.

In 2013 and 2014, the final two years of former mayor Sam Katz’s time in office, a trio of external audits examined what went wrong with the commission of Winnipeg’s police headquarters, the construction of four new fire-paramedic stations and major real-estate transactions that included the sale of Canad Inns Stadium, the Parker land swap and the purchase of the former Canada Post complex in downtown Winnipeg.

The police headquarters project was also the subject of a five-year RCMP investigation that concluded without charges as well as civil litigation by the city against former city chief administrative officer Phil Sheegl and primary police-HQ contractor Caspian Construction.

In 2017, city council asked the province to call an inquiry into the construction and real-estate scandals. Manitoba’s PC government, under both former premier Brian Pallister and his successor, Heather Stefanson, declined that call on the basis the police headquarters remained the subject of legal proceedings.

At first, Pallister made this statement on the basis the RCMP investigation was still ongoing. Stefanson used the same argument when the civil litigation was underway.

The RCMP investigation into the police headquarters ended in 2019. In March of 2023, Caspian and dozens of other defendants settled with the city after agreeing to pay $21.5 million to $28 million, depending on how quickly the money is paid.

Appeal dismissed

Then on Friday, Manitoba’s Court of Appeal dismissed a Sheegl appeal against a Court of King’s Bench ruling the former CAO accepted a bribe from Caspian’s Armik Babkhanians and breached his duties as a public officer by favouring Caspian in the award of the primary police-HQ construction contract.

The PC government nonetheless maintains the police HQ remains before the courts and thus can not be the subject of an inquiry.

“It still remains before the courts today and our decision remains the same,” Stefanson said Monday.

A spokesperson for Manitoba Justice clarified the premier’s comments by stating the paperwork on the Caspian settlement has yet to be finalized.

“The documentation necessary to formalize a settlement has not yet been filed with the Court of King’s Bench. Until the scope of the settlement is fully clarified through the requisite court filings, it is premature to call the litigation conclusively resolved,” the spokesperson Jon Lovlin said in a statement.

“The verdicts and settlements reached so far demonstrate the justice process is working.”

The city expects to reclaim all of the money from the Caspian defendants over the course of several years.

The office of the mayor in Winnipeg reaffirmed the city’s desire for a provincial public inquiry.

“The mayor still supports an inquiry. Council’s 2017 request for an inquiry has not been rescinded,” said Colin Fast, communications director for the mayor’s office.

Manitoba’s official opposition also continues to support an inquiry. NDP leader Wab Kinew reaffirmed his support on Monday.