Real estate audit: Councillor's bid for Manitoba Justice review passes

A Winnipeg city councillor's bid to have Manitoba Justice officials review a damning report into the city's real estate transactions has been approved in a close vote.

EY auditors grilled by councillors on City of Winnipeg real estate report

Winnipeg city councillors questioned auditors from the firm EY about their damning audit of the city's real estate transactions. 2:05

A Winnipeg city councillor's bid to have Manitoba Justice officials review a damning report into the city's real estate transactions has been approved in a close vote.

Councillors voted 8-7 just before 6 p.m. Wednesday in favour of a motion by River Heights-Fort Garry Coun. John Orlikow to ask justice officials to review the Ernst & Young (EY) report and determine if any criminal wrongdoing had taken place.

It's not known at this time if the provincial government will carry out the review.

"I'd be very pleased if it comes back — and I think all Winnipeggers would be very pleased if it comes back — and the review says there's nothing new to review here," Orlikow said earlier in the afternoon.

"That would be fantastic. And then we can start moving forward."

St. Vital Coun. Brian Mayes had said he doesn't think it's necessary to get the provincial government involved.

"I don't think we need more audits and more reviews of the reviews. I think we need to implement the recommendations so we don't have a mess like this again," Mayes told reporters.

EY auditors looked at 33 City of Winnipeg property deals in its extensive real estate management review report, which was released last week.

EY officials questioned

Councillors spent much of Wednesday grilling EY representatives about the report's findings.

Daniel McIntyre Coun. Harvey Smith asked the auditors why Phil Sheegl, the city's former chief administrative officer, and officials with Shindico Realty were not interviewed as part of their investigation.

EY representatives said the focus of the audit was to examine the city's real estate transactions and the process, not probe the performance of past city employees or developers.

"We stand by our methodology and approach," Mark Single, an EY accountant, told council.

"Overall evidence supporting compliance with City of Winnipeg policies, procedures, and industry practices was lacking in many instances."

The report found that in several cases, councillors often didn't get the full facts about some of the city's major real estate deals.

For example, the report said no appraisal was performed by the city on the former Canada Post building — which is being converted into the new police headquarters — and that fact wasn't disclosed in city reports recommending that council approve the purchase of the Graham Avenue building.

In a surprise move, acting City of Winnipeg CAO Deepak Joshi was asked to answer some questions — but only for clarification — on some of the city's transactions.

But Smith said the EY report and Wednesday's special council meeting won't solve the issues at Winnipeg city hall because no one is being held accountable.

"Nothing is going to take place here. The public is going to wonder what the hell we're doing at city hall," he said.

It's now up to council to implement the EY report's 17 recommendations, which have all been adopted.