Sidewalk Labs cancels plan to build high-tech neighbourhood in Toronto amid COVID-19

Sidewalk Labs, a Google-affiliated company, is abandoning its plan to build a high-tech neighbourhood on Toronto’s waterfront, citing what it calls unprecedented economic uncertainty.

Quayside project still didn't have full government sign-off

Sidewalk Labs wanted to turn this industrial section of Toronto's waterfront into a so-called 'smart city.' However, after years of work, the company has now abandoned that plan citing economic uncertainty amid the COVID-19 pandemic. (Sidewalk Labs)

Sidewalk Labs, a Google-affiliated company, is abandoning its plan to build a high-tech neighbourhood on Toronto's waterfront, citing what it calls unprecedented economic uncertainty.

The project, dubbed Quayside, still didn't have all of the government approvals it needed to go ahead. Toronto citizens and civic leaders had raised concerns about the privacy implications of the project and how much of the city's developing waterfront Sidewalk Labs wanted to control. 

The so-called "smart city" was set to feature a range of cutting edge technology, from residential towers made of timber to the use of autonomous cars and heated sidewalks. The company had initially claimed the project would create 44,000 jobs, generate $4.3 billion in annual tax revenues and add $14.2 billion annually in gross domestic product for Canada.

"As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed," company CEO Dan Doctoroff said in a statement.

Toronto Mayor John Tory was quick to issue a statement saying he regrets the company's decision, but anticipates others will step in to develop the area.

"Toronto's economy will come back strong after COVID-19 and we will continue to be a magnet for smart people and smart companies," he said in an email.

Tory also said he plans to push Waterfront Toronto, the organization that controls development along the city's shoreline, and both the provincial and federal governments to make sure any new development in the area will create new jobs and a "carbon-neutral neighbourhood" with affordable housing units and "better transportation and sustainability features."

Sidewalk Labs CEO Dan Doctoroff said in a statement issued Thursday that the decision to walk away from the project was 'a difficult one.' (Michael Wilson/CBC)

Throughout the process, critics complained about a U.S. company getting its hands on prime land that could be developed by homegrown enterprises. They also worried about what would happen with data collected from a myriad of sensors and devices throughout the neighbourhood.

Last November, Sidewalk released a 482-page Digital Innovation Appendix explaining how it would use the data captured in the area. It also vowed to not use facial recognition software or use personal information for advertising purposes.

The Canadian Civil Liberties Association is calling the project's cancellation "a victory for privacy and democracy, clearing the way for that reset to take place.

"Waterfront Toronto never had the jurisdiction to sign off on a data surveillance test bed with a Google sibling. Serious harms to privacy would have been our future," the organization said in a statement.

"The current Canadian regulatory landscape simply lacks modernized privacy legislation to provide essential safeguards to protect residents and visitors from the kinds of ubiquitous and intensive sensor-laden infrastructure that was envisaged. So the project was fundamentally flawed from the outset."

Concerns raised

Coun. Joe Cressy is a member of the Waterfront Toronto Board. He said in a statement he learned the company was pulling out of the project Thursday morning.

"Over the past two years, Waterfront Toronto has invested a considerable amount of work in the development of Quayside," Cressy said. "Legitimate concerns were raised regarding Sidewalk Labs' proposals, including concerns over data collection and digital governance."

That led to reviews and "significant public consultation," Cressy said, to understand the "risks and opportunities" of the proposal.

"While this does mean that Waterfront Toronto will start again to reimagine Quayside, none of this work will go to waste," he said. "The engagement and feedback we have received from residents and community organizations has given us a solid framework that will shape our work going forward."

Prime Minister Justin Trudeau, left, Ontario Premier Kathleen Wynne, centre, and Toronto Mayor John Tory, right, look on during the 2017 announcement about the waterfront development. (Patrick Morrell/CBC)

The Quayside project was formally announced at a ceremony in October 2017, when Prime Minister Justin Trudeau, Premier Kathleen Wynne, Tory, and representatives from Waterfront Toronto and Sidewalk Labs laid out plans for the area.

Trudeau said at the time that the proposed high-tech neighbourhood would "create a test bed" for new technologies.

But concerns abounded through the years. An advisory panel raised a range of issues last year, saying plans for the site were "frustratingly abstract" and that some of the innovations being proposed were "irrelevant or unnecessary."

Relief for some

While the initial plan involved nearly five hectares, Sidewalk unveiled a proposal in June 2019 that envisioned a project that spanned 77 hectares — 16 times the original size. The project was later scaled back to 4.8-hectares.

Sidewalk had also agreed to store and process data collected from the project in Canada, pay fair market value for the land at the time of sale, team up with one or more real estate partners and allow Canadian companies to use its hardware and software patents.

Julie Beddoes is a member of the Block Sidewalk advocacy group, and lives at the bottom end of Parliament Street, near the proposed site. She said she is elated by the news.

"I am so relieved and happy that I'm hardly coherent," she told CBC News.

Beddoes said she believes Toronto's own urban designers, architects and technology sector are capable of doing everything Sidewalk proposed and more.

"And they'd do it for our sake, not for the sake of shareholders in California," she said. "We can build something stupendously wonderful down there I'm sure."

This image was presented as part of the project's initial announcement. (Sidewalk Labs)

The Council of Canadian Innovators, which represents technology companies, echoed that sentiment in a statement, calling for a national data strategy that includes a "smart city" component.

"Our country has some of the world's best smart city innovators and we urge Waterfront Toronto to re-start the project with the view of protecting Canadian civil and digital rights and advancing economic development for the benefit of Canadian economy rather than Silicon Valley," said executive director Ben Bergen in a statement.

In his statement announcing the project's demise, Doctoroff also thanked Toronto's residents, community groups and civic leaders for their support.

"Sidewalk Labs was attracted to Toronto by the diversity, growth, and opportunity the city has to offer, and that view has been affirmed and strengthened at every step along the way," he said. "Toronto is one of the world's great centres of technological innovation, and nothing about this decision will in any way diminish that."

With files from the CBC's Thomas Daigle and The Canadian Press