Not one cent of police HQ millions has been paid to city 'No funds' from the settlement have been collected: report By: Joyanne Pursaga Posted: 5:54 PM CDT Wednesday, Mar. 12, 2025

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This article was published 12/03/2025 (573 days ago), so information in it may no longer be current.

The City of Winnipeg’s first payment from a multimillion-dollar settlement into the lawsuit-laden police headquarters project could still be a year or more away — even as it banks on the money to balance the 2024 budget.

A report released Wednesday states “no funds” from the settlement have been collected and there’s no guarantee the city will receive money for at least another year.

“The public service has no information as to when or if the settlement amounts will be paid to the city. If payment is not made by March 23, 2026, the city will then be in a position to take steps to realize on the security provided as part of the settlement agreement,” the report to council’s executive policy committee notes.

On March 3, the city revealed it will eliminate its 2024 budget deficit by banking on the long-awaited settlement. Pairing that “receivable of $22.5 million” from the settlement with other savings and interest earnings is expected to let the city end that year with a $7.2-million surplus, despite a bleak November forecast that predicted a $20.5-million deficit, a finance report notes.

In March 2023, city council approved the settlement of fraud and construction deficiency lawsuits it had launched over the Winnipeg Police Service HQ project. The city would receive $21.5 million if the payment was made in full within 12 months of council’s approval, $22.5 million if paid within 24 months, or $23.5 million if paid within 36 months.

If not paid within 36 months, the city would ask the Court of King’s Bench for it to be paid $28 million.

Gage Haubrich, prairie director of the Canadian Taxpayers Federation, said the city would be better off cutting spending to balance its books than relying on the settlement dollars now.

“(This is) a gamble from the city and it’s not being fully transparent with Winnipeg taxpayers… They shouldn’t be banking on something that they’re not confirmed to be getting,” said Haubrich.

He said accounting practices can stretch over more than one year but the process needs to be clear for the public.

“Taxpayers don’t have a full assessment of the risk.”–Gage Haubrich

“Taxpayers don’t have a full assessment of the risk,” said Haubrich.

However, council’s finance chairman said the city is following accounting standards and several properties have been guaranteed to the city if the money isn’t paid.

“I understand it was six properties… (and) those properties have an appraised value of at least $28 million,” said Coun. Jeff Browaty (North Kildonan).

In an email, a city spokesman said noting “receivables” in budgets is common practice, while council can claim the property linked to the settlement if a payment is not made.

“The settlement states that the city will receive either cash or securities. The securities are now in place, equal in value to the settlement, so the city has certainty that they will receive the settlement amount,” wrote Adam Campbell.

Browaty said the properties officially became part of the equation in 2024. He said the budgeting decision is “not particularly desirable” but will help the city maintain services without additional fee increases.

Browaty said the financial decision shouldn’t interfere with the city paying its bills.

“I don’t think we’re in any kind of danger of not paying a contractor or employees,” he said.

Coun. Sherri Rollins, who recently resigned from the mayor’s executive policy committee citing governance and transparency issues, said the settlement is not her key concern.

“Banking on money that the public service is saying may not manifest is just the tip of the iceberg of the transparency and governance issues with our budget,” said Rollins (Fort Rouge-East Fort Garry).

The councillor said she’s much more worried that the city included revenue from a 911 fee of $1 per month on all local cellphones and landlines in its latest budget, when it doesn’t have senior government approvals to charge the levy.

“Banking on money that the public service is saying may not manifest is just the tip of the iceberg of the transparency and governance issues with our budget.”–Coun. Sherri Rollins

The 2025 budget predicts that fee will raise $3.75 million this year, followed by $7.5 million in each of the following two years.

Serious concerns surrounding the WPS HQ project have plagued city council for years. The building opened at 245 Smith St. at a cost of about $214 million — well above its original $135-million price tag. An external audit later found the project had been severely mismanaged.

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The RCMP conducted a lengthy investigation into fraud and forgery allegations, but no criminal charges were laid.

In 2018, the city filed a statement of claim to seek damages for alleged construction deficiencies from major contractor Caspian Projects and structural engineering consultant Adjeleian Allen Rubeli, alleging both companies were “negligent” in their work on the headquarters. 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.

The city reached a settlement with the defendants before the case went to trial.

joyanne.pursaga@freepress.mb.ca

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Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne 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.