Toronto·CBC Investigates

Collingwood calls for judicial inquiry into 'serious questions' about public utility sell-off

Politicians in the booming ski and vacation community of Collingwood, Ont., located northwest of Toronto, are asking a Superior Court judge to step-in to investigate the mystery-filled sell-off in 2012 of the town’s public power utility.

Investigation by a judge marks latest chapter as OPP continue probe into multi-million dollar deals with town

Collingwood residents were told PowerStream paid $15 million to buy half stake in the public’s power utility — but reviews reveal the public netted only $8 million. (Dave Seglins/CBC)

Politicians in the booming ski and vacation community of Collingwood, Ont., located northwest of Toronto, are asking a Superior Court judge to step in to investigate the mystery-filled sell-off in 2012 of the town's public power utility.

Town council voted Monday night to invoke a rarely used section of Ontario's Municipal Act to set up a formal judicial inquiry into the sale of a 50 per cent stake in Collus (the Collingwood Utility Services Corp.) to the private company PowerStream.

"If critical questions about a massive transaction like this can't be answered then we have problems," deputy mayor Brian Saunderson told CBC News explaining his support Monday for a judicial probe.

"Who benefited? If things were done in such a way that people benefited, then people in this community need to know."

Collingwood town council voted Monday to call in a Superior Court judge to probe irregularities involving town utility sell-off. (Dave Seglins/CBC)

At Monday's meeting, lawyer William McDowell, who was hired by the town, outlined how a judicial inquiry could help answer who benefited from the sale, potential conflicts and where the money from the sale went.

The vote for an inquiry — expected to cost a minimum of $1 million — passed by a margin of 5-1, with Mayor Sandra Cooper the lone dissenter.

Slippery millions, no paper trail

The sale has been controversial from the beginning after the mayor and head of the public utility first trumpeted it as a $15 million windfall for the town. But some on council soon began asking question and discovered a lack of documentation, finding that the buyer, PowerStream, only actually paid $8 million into public coffers.

In 2013, CBC News revealed that the Ontario Provincial Police opened an investigation after citizens formally complained and questioned why Mayor Cooper never disclosed that her brother, former Liberal MP Paul Bonwick, was working directly for PowerStream, as well as other companies doing business with the town.

Cooper told CBC News at the time there was nothing to disclose and that her brother's involvement is not a conflict of interest.

Bonwick has acknowledged to CBC News that he was on a monthly retainer with PowerStream providing "strategic advice" on their purchase of the utility from the town. But he declined Monday to discuss the amount of his compensation or the work he performed.

Bonwick has told CBC News in the past that he and his sister, Mayor Cooper, discussed his work as an outside consultant with the town clerk and determined there was no conflict given Ontario's conflict of interest laws do not extend to siblings.

The now-private utility has had even more recent problems, with the town revealing last week that due to a metering problem the utility had been double billing some electricity customers in Collingwood for years to the tune of millions of dollars in overcharges, and is now looking to refund affected customers.

Seeking transparency

Collingwood's current deputy mayor, Saunderson, says the public deserves answers, claiming Mayor Cooper signed off on the 2012 sale of Collus with very little input from others on council or town solicitors.

Saunderson also wonders whether the public got a fair price when initially selling off the 50 per cent share.

"We got $8 million dollars for our shares in the first sale. We've now entered into a second sale for our remaining 50 per cent, where we've realized $12 and a half to 13 million.  So that kind of growth over a four or five year period makes you wonder,"  Saunderson said.

Deputy mayor Brian Saunderson spearheaded call for a judicial inquiry into mysterious multi-million dollar power utility sale. (Dave Seglins/CBC)

He explains an inquiry, by a yet-to-be appointed judge, could cost in excess of $1 million depending on whether the justice decides to call witnesses or hold public hearings.

But the deputy mayor insists other cities have benefited from shining light on major public expenditures where questions have been raised around contracts, computer leasing or alleged conflicts of interest.

"This is about making sure we fix it so that it can't be done again," Saunderson said.  "And if you look at the other public inquiries that have been held across the province, whether it be Toronto, Mississauga or Kitchener, the upshot was — how do we fix things going forward? That's the prime motivation."

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Dave Seglins

CBC Investigations

Dave Seglins is an investigative journalist whose recent work includes exposés on global ticket scalping, offshore tax avoidance and government surveillance. He covers a range of domestic and international issues, including rail safety, policing, government and corporate corruption.