Manitoba

Manitoba CFS minister sued over claim $10M lease to house at-risk kids was 'waste of taxpayer money'

The owners of a building at the centre of a controversial 20-year lease agreement to house at-risk kids have launched a defamation lawsuit against Manitoba's families minister.

Heather Stefanson made the remark in mid-September when asked about a government bill to end a 20-year lease

In 2019, the province introduced a bill to get out of a rental agreement for 800 Adele Ave., a building that had been converted into emergency housing for at-risk kids in care. (CBC)

The owners of a building at the centre of a controversial 20-year lease agreement to house at-risk kids have launched a defamation lawsuit against Manitoba's families minister.

In documents filed on Monday in Manitoba's Court of Queen's Bench, the owners — Peter Ginakes, Ken Cranwill and their numbered company, 5185603 Manitoba Ltd. — say Families Minister Heather Stefanson made comments to the media on Sept. 16 of this year that damaged their reputation and caused "loss of opportunity."

The lawsuit is the latest court filing related to a 20-year lease agreement, signed in 2008 — when the NDP were in power — between the numbered company and the Southern First Nations Network of Care (at the time called the First Nations of Southern Manitoba Child and Family Services Authority). It oversees 10 First Nations child and family services agencies and gets its funding from the province.

The authority had been paying $500,000 a year to lease an 18,000-square-foot building at 800 Adele Ave. in Winnipeg, which had been converted into an emergency placement for children in care. The building opened in 2009, but has been partially empty since 2014.

In May of last year, the Progressive Conservative government introduced legislation to get out of the 20-year lease, which is supposed to end in 2029. 

On Sept. 16, Manitoba Liberal Leader Dougald Lamont and Southern Chiefs' Organization Grand Chief Jerry Daniels held a press conference criticizing that move.

They also said the government ordered the eviction of the building in February 2019, months before the government introduced a bill to end the housing contract, and that children were forced out in the middle of the night.

On Sept. 16, 2020, Grand Chief Jerry Daniels of the Southern Chiefs’ Organization held a press conference in front of 800 Adele to criticize the government for a number of issues related to kids in care. (CBC)

Stefanson responded in a statement to CBC News, saying the province stepped in to help the Southern First Nations Network of Care with the lease "at their request."

"The lease did not allow for an early termination, which meant a large portion of SFNNC's budget — intended to support children and families — was consumed by lease payments," the statement said, adding the government tried, unsuccessfully, to renegotiate the lease.

"We believe that is a complete waste of taxpayer money, which is why we are taking steps to end the lease," Stefanson's statement said.

The lawsuit calls Stefanson's remarks defamatory and untrue, and says they were "maliciously stated and published with intent to disparage and cause loss and damage" to the owners.

The owners' claim says Stefanson's statements suggested their behaviour was "unethical" and "unbusinesslike," and suggested they "deliberately entered into an agreement with the tenant that they knew was not appropriate for the tenant."

Lawsuit seeks damages, apology

The owners say the did everything asked of them to create a "much-needed facility to function as a stabilization and assessment unit for the vulnerable, at-risk children who were serviced by its agencies", which included $1.5 million in renovations.

The 20-year lease was "established at the tenant's request because it wanted to have the comfort of knowing that it had a long-term, sustainable facility" to provide care, the statement of claim says.

The agreement was "entered into only after the tenant had conducted extensive research to find a suitable property," and "the tenant and landlord had carried out careful, purposeful negotiations," the court filing says.

The owners also say that the Southern Authority had significant input and "ultimate approval" from the province, and that the contract was drafted by lawyers acting on the government's behalf.

The owners are asking the court to issue damages, and to direct the minister to publicly apologize in writing for the defamatory statements.

Their claims have not yet been tested in court. No statement of defence has been filed.

In July 2019 the owners sued the province, Premier Brian Pallister, Finance Minister Scott Fielding and Crown Services deputy minister Scott Sinclair over the attempt to terminate the lease, seeking nearly $7.4 million in damages.

About the Author

Caroline Barghout

Investigative Reporter, CBC Manitoba I-Team

Caroline began her career co-hosting an internet radio talk show in Toronto and then worked at various stations in Oshawa, Sudbury and Toronto before landing in Winnipeg in 2007. Since joining CBC Manitoba as a reporter in 2013, she has won an award for her work on crowded jails and her investigation into Tina Fontaine's death led to changes in the child welfare system. Email: caroline.barghout@cbc.ca

With files from Ian Froese and Bryce Hoye

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