Inquiry into police HQ fiasco may not hear from key players By: Carol Sanders Posted: 7:02 PM CST Tuesday, Feb. 11, 2025

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This article was published 11/02/2025 (281 days ago), so information in it may no longer be current.

The Manitoba government will spend $2 million on a public inquiry to get to the bottom of the Winnipeg police HQ construction project — which was $79 million over budget and plagued by delays — but there is no guarantee the key players will testify.

“We’re fulfilling our commitments made in the last election and answering the city’s call to launch a full public inquiry,” Justice Minister Matt Wiebe said at a news conference Tuesday.

“This inquiry will get to the heart of the issue and determine what steps need to be taken so that the City of Winnipeg can construct future projects in a cost-effective, efficient and ethical manner.”

Garth Smorang, the lawyer hired to lead the inquiry, must “consider the dealings of previous elected officials, including the mayor, and senior employees of the City of Winnipeg, including the chief administrative officer” that occurred in respect of large-scale publicly funded construction projects, as per the Feb. 5 order in council that sets out the parameters of the inquiry. Smorang has until Jan. 1, 2027 to issue his report.

“If there are hearings, they will be public and if there are witnesses, they will be called under subpoena,” said Smorang, who didn’t know whether he has the power to subpoena witnesses who don’t live in Manitoba.

Sam Katz, who was mayor at the time of the HQ project, as well as Phil Sheegl, who was the city’s chief administrative officer during the project, have lived in Arizona.

“I don’t know whether a Manitoba-issued subpoena could be served on someone in, let’s call it, the State of Arizona,” Smorang said.

“I expect to have the assistance of Crown counsel from the Department of Justice… and I may require experts as well.”

The project, which involved converting the former Canada Post office and warehouse on Graham Avenue into police headquarters, was $79 million over budget and tainted by fraud and bribery allegations. It opened in 2016 after being approved by city council in 2011, with a budget of $135 million.

Smorang said he plans to find out what happened.

“My job, I think, is to try to produce a report that allows… for the city to be better prepared when it undertakes major projects such as the police headquarters building to ensure that that money is spent properly,” he said, “that cost overruns are true cost overruns and not necessarily made-up cost overruns.

“I’m not saying they are in this case. I don’t know yet.”

University of Alberta law professor Gerard Kennedy said provincial inquiries don’t have the authority to subpoena witnesses from outside their jurisdiction. The former U of M instructor, who is familiar with the WPS project, said Tuesday he’s surprised it took so long for the inquiry to be called.

Winnipeg Mayor Scott Gillingham issued a statement saying he supports the inquiry.

“Winnipeggers deserve the full story, and this is an important step to get it. I look forward to the results.”

A 2014 KPMG audit commissioned by the city raised issues about the processes for awarding contracts and procuring materials, and a general lack of oversight. The KPMG report and two other audits, one of which probed questionable real estate transactions, were provided to the RCMP for review.

Two separate RCMP criminal investigations — linked by the involvement of Katz and Sheegl — were conducted. In 2019, Manitoba Justice announced it would not lay any criminal charges. No explanation was given for the decision. In 2021, then-Opposition leader Wab Kinew tabled in the legislature a copy of a 2017 confidential briefing note that confirmed the RCMP had recommended charges be laid “relating to financial crimes with an estimated value of over $33 million.”

On Tuesday, Smorang said it’s not his job to question the Crown’s decision not to lay charges.

“I don’t see that as directly part of my mandate,” he told reporters. “That would have been a decision made by the prosecution branch. As far as I understand it, they would have done that on whatever basis they felt was appropriate.”

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A spokesman for the city said it’s still waiting to receive the millions of dollars in legal compensation it is owed in relation to fraud and construction deficiency lawsuits and bribery associated with the project.

In 2018, it filed a statement of claim for damages for alleged construction deficiencies from major contractor Caspian Projects and structural engineering consultants Adjeleian Allen Rubeli, alleging both companies were “negligent” in their work. In 2020, the city launched a civil suit against Caspian, AAR and dozens of other defendants, alleging a fraudulent scheme inflated the price of the project.

A settlement out of court approved by council in March 2023 would see the city receive $21.5 million if the payment was made in full within 12 months of council’s approval, increasing to $23.5 million if paid within 36 months.

“If it is not paid by the end date in the council-approved settlement, the city has secured several properties which would then be used to obtain payment to the city,” spokesman David Driedger said in an email Tuesday.

In 2022, a judge found Sheegl had accepted a bribe from the police headquarters project’s contractor and ordered him to pay the city $1.1 million in compensation. Sheegl lost an appeal of that ruling in July 2023.

“The city continues to take steps to ensure that both the court-awarded damages as well as the terms of settlement approved by council are completed,” Driedger said.

Progressive Conservative interim leader Wayne Ewasko said taxpayers expect accountability and they look forward to Smorang’s findings.

“We have full confidence in his ability to be impartial.”–Justice Minister Matt Wiebe

When asked why the NDP government appointed a lawyer to lead the inquiry rather than a retired judge as has been the norm, the justice minister said he thinks Smorang “is the best person for the job.”

Wiebe dismissed any concerns about a governing party with ties to labour appointing a labour lawyer to lead a commission of inquiry.

“We have full confidence in his ability to be impartial,” he said.

The province would likely have struggled to find a retired judge “with an appropriate background and interest in a complex assignment” to lead the inquiry, said University of Manitoba political studies professor emeritus Paul Thomas.

“The choice of (Smorang), a respected lawyer, probably does not diminish the credibility of the inquiry process to any significant extent, especially since there is so much legal evidence already on the public record,” Thomas said.

carol.sanders@freepress.mb.ca

WPS HQ INQUIRY

Carol Sanders
Legislature reporter

Carol Sanders is a reporter at the Free Press legislature bureau. The former general assignment reporter and copy editor joined the paper in 1997. Read more about Carol.

Every piece of reporting Carol produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.