Five years ago, when Google’s corporate cousin Sidewalk Labs was chosen to develop valuable Toronto waterfront land called Quayside into a futuristic neighbourhood, Prime Minister Justin Trudeau was part of the announcement. Standing beside the PM was Eric Schmidt, chairman of Google and Sidewalk parent Alphabet. “Eric and I,” said Mr. Trudeau, “have been talking about collaborating on this for a few years now. Seeing it all come together today is extraordinarily exciting.”
What Mr. Trudeau exactly meant wasn’t known until this week, when reporting by Globe and Mail journalist Josh O’Kane showed that Mr. Trudeau and Mr. Schmidt had a previously undisclosed phone call on Jan. 16, 2017. It was two months before the start of official bids for Quayside and nine months before Sidewalk was picked by Waterfront Toronto, on behalf of the city, the province and the feds.
There is no direct line between the Jan. 16 call and Sidewalk’s win, though it is one more indication of how multiple levels of government went gaga over the thought of gifting Google a piece of Toronto’s waterfront. In 2018, Ontario’s auditor-general outlined how Sidewalk had been handed more information than other bidders and may have had an “unfair” advantage, and how the Waterfront Toronto board had been “urged – strongly” to approve the deal by Ontario and Ottawa.
Sidewalk Labs project gained support from Trudeau in 2017 call ahead of bid process
An excerpt from Josh O’Kane’s Sideways: The City Google Couldn’t Buy, a book revealing the collapse and failure of Sidewalk Labs
The PM’s people tried to keep the Jan. 16 call a secret, and for five years, they succeeded. That’s a problem, because lobbying rules exist to disclose things such as the Prime Minster and the chairman of one of the world’s biggest companies discussing a deal for some of the country’s most valuable real estate. But while the Lobbying Act is supposed to ensure transparency about such meetings, the rules require reporting only when someone makes contact with government. If Mr. Trudeau calls Mr. Schmidt, no disclosure is necessary. Seriously, that’s the law. This comic loophole gives new meaning to the old phrase: Don’t call us, we’ll call you. It enabled the Trudeau government’s effort to keep a matter of obvious public interest hidden from the public.
Mr. O’Kane worked to uncover the details. In 2018, he filed an access to information request. The result had one seemingly important paragraph redacted. He then asked the Prime Minister’s Office about talks with Google; the vague reply was that Mr. Trudeau regularly speaks with business leaders about economic development. He also filed a complaint about the redaction with the Information Commissioner. It was three years later that Ottawa yielded the secret words. It showed Mr. Trudeau spoke with someone at Alphabet/Google about Quayside – but the name was still redacted. The PMO then confirmed its records showed it was Mr. Schmidt.
The PM’s lobbying-that-wasn’t-lobbying chat doesn’t mean Google’s win was preordained. Waterfront Toronto has always said the process was fair. But what’s certain is Ottawa spent years withholding salient details about its role in a major public project. And the system to hold Ottawa accountable was once more exposed as filled with loopholes.
Sidewalk Labs abandoned the project in May, 2020, after years of criticism and controversy. That may seem to relegate the whole affair to the distant past, but this tale of how not to approach modern city-building, and how not to negotiate with tech giants, continues to yield cold lessons.
At the start, there was a starry-eyed techno-utopianism. The Trudeau government failed to show even a little skepticism about Google – not entirely unlike the dangerous initial absence of skepticism about Xi Jinping’s China. Google wanted as much power as it could get – dreams of a domed city of autonomous cars, where an internet-advertising company with zero city-building experience made the rules and owned the data. Mr. Schmidt in 2017, when Sidewalk was chosen, jested “give us a city and put us in charge.” Sidewalk later demanded much more land and power than initially agreed, before relenting, and then walking away.
The Sidewalk story is a sorry episode with many levels of regret. The latest revelation shows that Canada’s lobbying rules are ineffective. It also reveals something, and not for the first time, about the Trudeau government’s instincts. Its opening move was to hide rather than to disclose, and to try to keep under wraps something that should have been made public. In this case, the secrecy was likely within the letter of a badly written law – within its letter, but far outside its spirit.