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Google is not taking over.

That much is clear about the deal between Sidewalk Labs, a Google sister company, and three levels of government to pursue a smart city development in Toronto. “Quayside,” as the deal is called, has spurred more than a year of fierce debate, and there are still many questions to be resolved.

But one initial fear – that the complex project would slouch its way to completion without enough public scrutiny – has been disproven. In fact, the public agency Waterfront Toronto and this specific project will be subject to endless debate before anything is built. There’s a long, bumpy road left to travel.

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Wednesday’s report from Ontario Auditor-General Bonnie Lysyk proves that point. Ms. Lysyk raised serious questions about how the Quayside deal came together, and recommended more and better public oversight of the arrangement. Concerns such as hers – if taken up by any of the three governments – could scuttle the whole deal.

Ms. Lysyk’s concerns are generally well-founded. The arrangement didn’t start out well. At a minimum, Waterfront Toronto, and its then-CEO Will Fleissig, mishandled the deal to plan a sensor-rich urban neighbourhood that would make Toronto a hub for such technology. City and provincial officials were blindsided.

The news of Quayside, in October, 2017, broke the internet. Commentators and news reports treated the project as a done deal and complained Toronto was, to take one example, “happily handing [the company] a neighbourhood of prime real estate to call their own.” Wired reported that, “once the company has proven out its concept, it plans to expand its redevelopment to the entire 800-acre waterfront area.”

The structure of the arrangement, which had ambiguous goals and had public staff working alongside Sidewalk employees, has faced justifiable criticism.

But it was always subject to change. And in fact Waterfront Toronto has altered much about its approach to Sidewalk. “That idea of integration has changed substantially,” Marisa Piattelli, chief strategy officer of Waterfront Toronto, said Wednesday in a damage-control phone call. “Now, they will submit a proposal to us, and we will evaluate it rigorously.”

Waterfront Toronto and Sidewalk Labs are expected to present a “master innovation and development agreement” in early 2019 for public consultation. That deal will set out, among other things, the ambitions of the tech company and the public agency about how to capture, manage and exploit data that comes out of the development.

But here’s what many people have missed in thinking about Quayside: the MIDP is only the beginning. “After that, all the regular municipal process gets started,” Ms. Piattelli said.

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And that’s a big deal. Land-use planning in Toronto is complicated. (This seems to have escaped the notice of the optimistic urbanists who run Sidewalk. Many of them are veterans of Michael Bloomberg’s administration as New York mayor, who is much more powerful than Toronto’s.)

A typical development in Toronto requires changes to the city’s zoning bylaw or its official plan. These tasks routinely (and ridiculously) take three or more years to get done, even on ordinary buildings.

Sidewalk’s project is … not ordinary. The company is proposing 30-storey buildings with timber structures. It’s looking for changes to specific bylaws about commercial versus residential use. It wants to build tunnels under public streets, for autonomous vehicles to carry waste out of buildings and carry packages into them.

In a thousand ways, big and small, this will require city officials and councillors to be on board.

In a larger sense, the company needs the active co-operation of governments – federal, provincial and especially municipal – to have any hope of building its plan. Waterfront Toronto is controlled by the Toronto, Ontario and federal governments, who have board members and contribute funds.

Right now shovels are in the ground on a crucial $1.19-billion project to move the Don River and reshape the city. If any of the three levels of government was to lose faith in Waterfront Toronto and throw a bomb into the works, what would happen? Who knows? Who wants to find out?

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In short, the situation is delicate, and it’ll stay that way. The partnership between big tech and Toronto deserves to be carefully parsed, and it will be. Many real and serious concerns – about the financial arrangements between Sidewalk and the city, about the management of personal data on site and about the ultimate economic implications of the project – deserve to be talked through. And the conversation is nowhere near done.

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