An example of Quayside, Sidewalk Labs and Waterfront smart city project. Source: Sidewalk Labs

Published: December 6th, 2018

Waterfront Toronto has been criticized by some for the way it has handled privacy and intellectual property issues with Sidewalk Labs at its planned landmark smart city community.

Now it faces another critic: Ontario’s auditor Bonnie Lysyk, who on Wednesday issued a report saying Sidewalk Labs — owned, along with Google, by Alphabet Inc. — had a leg up on others competing on a request for proposals (RFP) to be the project’s innovation and funding partner.

“Sidewalk Labs received more information from Waterfront Toronto prior to the RFP than other respondents,” says the report.

It’s one of several criticisms of the project included in the auditor-general’s annual analysis of provincial spending. It isn’t known yet if the report will slow the plan to have a leading-edge connected subdivision on Toronto’s lakeshore.

Waterfront Toronto is a planning agency representing the city, the province and the federal government, which owns the 800 hectare waterfront site. The so-called smart city community, dubbed Quayside, is a small slice of that.

But the tri-level ownership has created a mess, the auditor suggested, with Waterfront Toronto never given complete authority over all the land. In fact, the only property it has direct planning control over is Quayside.

In March 2017, Waterfront Toronto issued an RFP for an innovation and funding partner for the Quayside area, the report notes. Respondents were given six weeks to respond to a complex request for proposal. By comparison, companies were given 10 weeks to reply to an RFP for public art projects in another part of the portlands.

Sidewalk Labs was chosen, the auditor admits, because its proposal was by far the most comprehensive. However, the report adds, “Sidewalk Labs received more information from Waterfront Toronto prior to the RFP than other parties that would be responding to the RFP. Waterfront Toronto indicated that it also shared information with some other potential bidders prior to the issuance of the RFP. Sharing agreements were also signed with Sidewalk Labs and two other organizations, one of which was also shortlisted.

“According to Waterfront Toronto, this sharing of information was before the issuance of the RFP and part of its regular market sounding process where it was trying to gauge market interest in the Quayside project,” the report states.

Unlike its previous operating practices, the report says,  Waterfront Toronto did not adequately consult with any levels of government regarding the Sidewalk Labs project. The scope of the project, from self-driving vehicles to data collection, falls under multiple provincial and federal ministries and City departments, but Waterfront Toronto did not adequately consult with any of them prior to signing an initial agreement on Oct. 16, 2017, and beyond. This was being discussed at a senior political level.

The report also notes that so far Waterfront Toronto doesn’t have a data governance framework, or clarification on whether personal information, which Sidewalk Labs gathers, will be linked to its Google’s existing collection of personal data in its users’ accounts.

In April, the report said, Waterfront Toronto established a 15-member Digital Strategy Advisory Panel consisting of industry experts and academics, to advise it on matters such as data security, systems set-up, privacy of personal data and intellectual property. “Based on discussions with panel members, the panel’s effectiveness in providing management guidance on key issues in the smart city project has been limited. Members assessed some meetings as primarily focused on administrative work, such as project background and confidentiality, and technical and scheduling issues. There have also been two resignations due to concerns over lack of transparency and apathy on the part of Waterfront Toronto over residents’ concerns over data privacy.”

In October Sidewalk Labs proposed stepping back as the data collector. Instead, it proposed an independent Civic Data Trust be created to approve and control the collection and use of data collected within Quayside, including that by Sidewalk Labs. Under the proposal, Sidewalk said the trust would, “as a default, make de-identified data freely and publicly accessible to other companies or researchers.”

In her report, the auditor also found the province lacks a policy framework to guide the development of a mixed-use smart city such as the one being contemplated for Quayside. To protect the public interest, such a framework should address intellectual property; data collection, ownership, security and privacy; legal issues; consumer protection issues; infrastructure development; and economic development.”

In response Waterfront Toronto issued a statement saying “our RFP processes are competitive, fair, and follow best practices.” It hired former Ontario associate chief justice of Ontario and provincial integrity commissioner  Coulter Osborne to review the auditor’s report, who disputed the findings.

“In summary, I am satisfied that no organization, including the eventual short-listed proponents, was provided with any information or documentation that was not public or readily accessible,” the agency said Osborne found. “The evidence pertaining to this seems to me to be clear. I am satisfied that Waterfront Toronto successfully took all reasonable steps to ensure that the Quayside procurement proceeded on the basis that no proponent or potential proponent secured any unfair advantage. In my opinion, there is no evidence that would support a contrary conclusion.”

Waterfront Toronto said it expects to see a Master Innovation and Development Plan in the new year.



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