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Report on Business Federal staff were advised to press Sidewalk Labs CEO on IP concerns at October dinner

Briefing notes prepared for a senior deputy minister with Innovation, Science and Economic Development Canada (ISED) show the federal government was ready to press the CEO of Sidewalk Labs over concerns about intellectual property and data at a dinner about the Google affiliate’s “smart city” development in Toronto.

NDP ethics critic Charlie Angus shared the briefing notes, obtained through an access-to-information request, with The Globe and Mail. Provided to ISED Associate Deputy Minister Paul Thompson ahead of an October dinner with Sidewalk Labs CEO Dan Doctoroff, the Privy Council Office and senior bureaucrats from a half-dozen federal departments, the notes highlight IP and data as “an area of contention” that ought to be raised. Criticisms about the planned five-hectare development, called Quayside, on Toronto’s waterfront reached a peak that month, as both tech entrepreneur Saadia Muzaffar and world-renowned privacy expert Ann Cavoukian resigned from advisory roles over concerns about data collection and IP ownership, and the potential for privacy breaches, respectively.

But the federal Liberal government – which has consistently supported big tech companies investing in Canada – has largely refrained from commenting on Sidewalk’s Toronto project in specific terms since it was announced in October, 2017. At the time, Prime Minister Justin Trudeau called it “a thriving hub for innovation” that could “become a model for cities around the world.”

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The briefing notes prepared for the October dinner, hosted at ISED’s office in Ottawa, show Mr. Thompson was advised to raise specific concerns, highlighting “a lack of clarity” surrounding IP and data that would be generated by sensors installed in the neighbourhood. It suggests he address to Sidewalk that “The Government of Canada wants to ensure that Canadian companies involved in the Quayside project are able to realize the benefits of the IP they develop." Earlier, it advises him to bring up that "proper data governance and respect for privacy rights are central to ensuring that information generated and collected by Sidewalk Labs is used only for the benefit of the project and that public policy interests are served in the longer term.”

The memo references an August report in The Globe about a document in which Sidewalk asked potential project consultants to hand over any IP that’s developed to the company; Waterfront Toronto, the tripartite government development agency that selected Sidewalk Labs as its “innovation and funding partner" on the project, said at the time that final IP sharing details would be determined later and would be applied retroactively. Sidewalk is owned by Google parent Alphabet Inc., which has become one of the world’s most valuable companies by monetizing people’s data.

Asked by The Globe about the project’s IP implications the week before the dinner, ISED Mister Navdeep Bains declined to reveal any direct concerns.

Reached this week, an ISED spokesperson declined to confirm whether IP concerns were discussed at the meeting, instead referencing the Liberal government’s creation of a national IP strategy. Sidewalk’s CEO, Mr. Doctoroff, was not available for an interview.

The company’s head of policy Micah Lasher, who was at the dinner, told The Globe that he did not remember whether the subject was discussed. Mr. Lasher said that if it was, the CEO would have explained that “Quayside should be an epicentre of innovation by Canadian companies, and also, intellectual property that the public sector has a role in giving rise to should result in financial benefits for the public sector.”

While the federal government has kept its concerns private, Waterfront Toronto’s other two government stakeholders have expressed worry about the project’s direction. In December, Doug Ford’s Ontario government fired its three directors on the agency’s board over frustrations with the agency’s governance in connection with the Sidewalk partnership. And in October, Toronto Mayor John Tory said he had “acute concern” over the transparency of Sidewalk and Waterfront Toronto’s partnership so far, and that the process of bringing Sidewalk Labs to Toronto “was not handled the best way.”

While Sidewalk staff are registered on the federal lobbyist registry, which makes public each of their meetings with federal staff, those have tended to be smaller gatherings with single departments.

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Those who were listed as attending the Oct. 25 dinner on both the government memo and the lobbyist registry include many senior Ottawa civil servants: co-host Matthew Mendelsohn, a top deputy secretary to the cabinet in the Privy Council Office; Infrastructure Canada Deputy Minister Kelly Gillis; Treasury Board Secretary Peter Wallace; Public Health Agency of Canada President Siddika Mithani; Environment and Climate Change Canada Deputy Minister Stephen Lucas; and Finance Canada Associate Deputy Minister Ava Yaskiel.

The NDP’s Mr. Angus told The Globe he was concerned with the Liberals’ approach to the Quayside project at a moment when resignations were piling up and and tech leaders such as Jim Balsillie, the smartphone-IP pioneer and chair of the Council of Canadian Innovators, have deepened their criticism of the project’s data collection, IP generation and privacy implications. He said he has voiced his concerns in a letter to Infrastructure Minister François-Philippe Champagne, whose ministry oversees Ottawa’s stake in Waterfront Toronto.

ISED spokesperson Hans Parmar said in an e-mail that in its meetings with Sidewalk Labs, “senior officials from the Government of Canada have reiterated that growing a strong economy requires a balance between innovation, safeguarding privacy and maintaining trust."

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