An inquiry into the scandal-plagued construction of the Winnipeg Police Service headquarters will be launched Tuesday, the Free Press has learned.
Government sources confirmed Premier Wab Kinew will announce the hiring of Winnipeg labour lawyer Garth Smorang as chief commissioner, as well as the terms of reference that will guide the inquiry.
Smorang will be authorized to “inquire into the affairs of the City of Winnipeg and determine if any measures are necessary to restore public confidence in the ability of the city to implement large-scale, publicly funded construction projects.”
Phil Hossack / Free Press Files
Premier Wab Kinew will announce an inquiry into the scandal-plagued construction of the Winnipeg Police Service headquarters, Tuesday.
He will have the ability to review “the dealings of previous elected officials, including the mayor, and senior employees of the City of Winnipeg, including the chief administrative officer.”
Smorang, who will be asked to complete his work by Jan. 1, 2027, has a budget of $2 million, the sources said.
The inquiry fulfils a pledge made by Premier Wab Kinew shortly after the NDP won the October 2023 election. At that time, Kinew said Manitobans needed answers to “factual questions” about the downtown HQ project and the roles played by Sam Katz, who was mayor at the time, and Phil Sheegl, who was the city’s chief administrative officer.
Government sources, whose names are being withheld because they are not authorized to speak publicly, confirmed that Smorang, an experienced lawyer who has won several landmark cases for Manitoba unions, will head the commission.
Smorang helped the Canadian Auto Workers Union win a $6-million judgment for bargaining in bad faith against Buhler-Versatile, a tractor manufacturer that bought the company during the strike. He was also the lead counsel for the University of Manitoba Faculty Association which, in 2017, won a $17-million judgment against the Progressive Conservative government for secretly influencing contract talks between the union and school.
In his new assignment, Smorang will be charged with finding closure to a scandal that — despite being more than 10 years old — is plagued by unanswered questions, including why none of the major players was charged.
Originally pegged at $135 million in 2009, the project to establish a new headquarters for the WPS on the site of the former Canada Post warehouse and office tower at Smith Street and Graham Avenue was beset by delays and cost overruns. By the time it was completed in 2016, the price had soared to $214 million.
In 2014, the city hired KPMG to conduct an audit. It 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.
Over the next five years, two separate RCMP criminal investigations — linked by the involvement of Katz and Sheegl — were conducted. However, in 2019, Manitoba Justice announced it would not lay any criminal charges. No explanation was given for the decision.
Concern about that decision erupted again in 2021, when then-Opposition leader Kinew tabled 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.”
David Lipnowski / THE CANADIAN PRESS FILES
Manitoba Premier Wab Kinew will announce Tuesday the hiring of Winnipeg labour lawyer Garth Smorang as chief commissioner, as well as the terms of reference that will guide the upcoming inquiry.
In a 2022 civil proceeding, Manitoba Court of King’s Bench Chief Justice Glenn Joyal found that Sheegl had accepted a $327,000 bribe from Caspian Construction, the HQ project’s general contractor, in 2011.
Joyal ordered Sheegl to pay the City of Winnipeg $1.1 million in severance payments and penalties.
The city’s civil suit was based on case files from the RCMP, obtained via court order after Manitoba Justice decided not to charge anyone.
In March 2023, city council approved a $21.5-million settlement of the separate civil suit against Caspian, principal Armik Babakhanians, his wife and son, and several related companies.
The settlement increases depending on when it’s paid. Because Caspian missed the first deadline, it owes $22.5 million if it pays by March 2025. The city placed a $28-million mortgage on several properties linked to Caspian last year.
As of late 2024, neither Sheegl nor Caspian had paid the city any money.
dan.lett@freepress.mb.ca
Dan Lett
Columnist
Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986. Read more about Dan.
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