Senior Peel government staff secretly worked to undermine Mississauga’s exit from the region, FOI documents show

This article was originally published on September 4, 2019, and is being republished by The Pointer to give important information to the public about the fraudulent behind the scenes effort of senior staff who worked at the Region of Peel at the time, when they secretly tried to mislead the public about the benefits of keeping the Region of Peel intact. Some of the senior staff named in the article are no longer with the Region. The Deloitte report that is the subject of this article was discredited, but Patrick Brown is now using it to once again mislead the public.

A trove of documents obtained by The Pointer — regional staff emails, meeting notes and project updates — paint a disturbing picture of senior Peel Region staff attempting to influence and direct an external financial analysis and review process that was quietly initiated in January immediately after the province’s surprise decision to examine the need for regional governments across Ontario.

The documents show that, on the day after Premier Doug Ford’s PCs announced a sweeping review of several regional governments — opening the possibility that the Region of Peel could be dismantled — Peel’s chief administrative officer and chief financial officer began a secretive effort to influence Queen’s Park’s final decision and undermine Mississauga’s desire to exit regional government. 

The province, which said Jan. 15 that it would be looking at whether regional governments were “working efficiently and effectively,” is expected to make a final decision on the future of Peel and other regions this fall.

Mississauga Council, led by Mayor Bonnie Crombie, had already made clear that it wanted the country’s sixth-largest city to become independent, like Toronto and other single-tier municipalities, regardless of whether the move would mean eliminating Peel Region government. Brampton and Caledon councils have since taken the position that the status quo, keeping Peel intact, is their desired outcome.

Mississauga Mayor Bonnie Crombie

The three scenarios that could emerge from the review include dismantling Peel, giving Mississauga and possibly Brampton and Caledon their independence; amalgamating all three into the country’s third-largest city; or the status quo, keeping Peel Region as-is. The province invited all local municipalities and regions under review to submit their final positions by late spring and meet with two provincial advisors ahead of the deadline to provide formal reports on desired outcomes.

The end of Peel’s regional government would probably mean job losses for many current staff. Regardless, the expectation in any study by staff is that they are to provide to council a factual, objective analysis of financial and other impacts of various scenarios, free of any personal considerations. It’s up to elected officials, not senior bureaucrats, to determine a position — in this case on the future of Peel Region. Council, on behalf of the public it represents, was expected to tell the provincial government what they would like to see happen.

However, the documents, obtained through a request under the Freedom of Information Act, suggest that senior staff secretly took a position without regional council’s knowledge, hired the consulting firm Deloitte for $225,000 without informing council, and made clear to the firm, before it was officially hired, that its work to produce a financial analysis of all three scenarios should show that leaving Peel intact was the best option, and that would be the region’s submission to the province. 

The Pointer sent questions about the documents to regional chair/CEO Nando Iannicca, CFO Stephen VanOfwegen and former CAO David Szwarc, who quietly stepped down this summer after Mississauga councillors learned of his actions. None responded directly, but a response from strategic communications manager Bethany Lee said in part that, “While the two cities (Brampton and Mississauga) and the Town of Caledon had a position, the Region did not have a position.”

The documents suggest that was not the case.

Former CAO David Szwarc

Immediately after the PCs’ surprise announcement, emails show senior regional staff began working behind the scenes without council’s knowledge to save Peel’s government. An outside analysis was sought, with staff quietly directing what the outcome would show.

A Jan. 16 email, sent less than 24 hours after the Ford government made its move, from VanOfwegen, commissioner of finance, to Sherona Hollman, manager of financial policy & strategic initiatives in his office, had the subject line "Deloitte." It said: "How soon can we get them started. With the Province announcing early we need to get started on the analysis while sorting out contact and Procurement details in parallel."

Deloitte did not provide a response to questions from The Pointer.

VanOfwegen and Szwarc immediately began an effort to undermine Mississauga’s position that its exit from the region would save the city $85 million annually. That figure came from a revised projection based on a 2003 financial analysis done for the city by accounting firm Day & Day. Mayor Crombie had already been using it publicly to gain support for Mississauga’s exit. 

In a Feb. 1 email, a week before Deloitte was hired, VanOfwegen wrote to Peel Treasurer Dave Bingham and Hollman: “In advance of next Friday’s meeting with the Provincial Advisors David (Szwarc) has asked for a one pager, bullet point format on the flaws in the Day & Day 2003 report.”

CFO Stephen VanOfwegen

On Feb. 4, Hollman wrote back to VanOfwegen: "Agreed Steve — please find attached the analysis of the Mississauga report — identifying what the analysis fails to consider and inherent flaws in their assumptions." She later added in a subsequent email: "Hello Steve, Please find attached the updated synopsis of key points for rebuttal for Mississauga's report." 

Four days later, Deloitte was hired. In a Feb. 12 “information brief” on the work Deloitte was to do, senior project manager Marisa Fantin wrote that, "In addition to the analysis stated above, they [Deloitte and Watson] will evaluate the findings of the Financial Report to the City of Mississauga on the Transition to Single Tier, completed by Day & Day Chartered Accountants, and other key documents to provide opposing arguments such as financial savings." 

Watson & Associates is a consulting firm that was hired by regional staff, along with Deloitte, for a total of $325,000, to analyze the three scenarios for Peel’s future. Dividing the work into two contracts allowed staff to order separate procurements without having to consult council under a rule that any work over $250,000 must be approved by regional council.

On March 22, more than a month after regional staff quietly prepared criticism of the Day & Day report to identify flaws in the city’s argument, VanOfwegen emailed Hollman under the subject line, “Potential Presentation to Regional Council – Analysis of Mississauga’s Report.” 

“Are we concerned?” the CFO asked, in the midst of a flurry of emails among senior staff just before Deloitte was to deliver its final report. Hollman replied: “Not concerned – but there is definitely reluctance on the part of Deloitte to share anything publicly about their assessment on this review as well as being critical of another accounting firm.”

An hour later, Szwarc weighed in on the matter in an email to VanOfwegen. “Ok, I think that they could position their presentation in a way that points out that the analysis is incomplete – and explain why – and that if they were doing such an analysis they would not use population as the basis because … in other words, critique the report not the company.”

The Deloitte/Watson analysis that was eventually handed to staff included the exact outcome they wanted, that keeping the region intact, as-is, was the best of the three options.

When the existence of the Deloitte/Watson report was finally revealed near the end of March, it went first to Brampton Mayor Patrick Brown, who had requested information from the region to help his city form its position on the regional review and was given a copy before the rest of regional council was informed of its existence. Brown subsequently tweeted out parts of it to Brampton residents to back up his view that Peel should stay intact. That created a furor among the 12-member Mississauga caucus on regional council, which still had not been informed of the Deloitte work commissioned by senior staff. Crombie wrote in a scathing email to Iannicca that this was “unacceptable behaviour and not what I would expect from the Chair of the Region of Peel or its CAO.” 

Brampton Mayor Patrick Brown (left) and Mississauga Mayor Bonnie Crombie square off in the regional council chambers.

In council, she called the process by which the report was created “wrong and immoral,” adding, “This isn’t about the numbers, it’s about how this place functions,” saying it had caused a fundamental lack of trust — a position now bolstered for her by the revalations in the FOI documents.

“Mississauga Council is extremely concerned with the behaviour of some staff at the Region of Peel throughout the Regional Governance Review,” Crombie responded in an email after The Pointer shared some findings from the recently released documents. “To be kept in the dark about staff’s activities, especially given Mississauga provides roughly 60% of the funding to the Region, is simply unacceptable. It appears there was a concerted effort to use taxpayer money, without Council approval, to develop a report to justify the continued existence of the Region.”

Mississauga Councillor Pat Saito told The Pointer the goal of the report process was clearly focused on the effectiveness of the Region and those who represent it. “I would expect staff to work to show this, as their job is to safeguard the region and its employees and departments,” she said in an email. “I believe that Chair Iannicca planned to go into the sessions with the province to show that regional government should remain as it is. … [However,] he did not have this mandate to do so granted by Council and should have had Council approval prior to any reports being requested and any comments being shared to the province.”

As tensions mounted, Iannicca sent an April 9 memo to regional staff, after the formal presentation of the Deloitte report to council prompted loud accusations by Mississauga members that the outcome was predetermined. “I agreed that the terms of reference would include the financial analysis of three specific delivery models without any recommendations on which would be favoured over the others,” Iannicca wrote. “This formed the basis for the scope of work to guide Deloitte.”

Regional Chair Nando Iannicca

However, the FOI documents suggest the chair misled regional council and the public on this point.

Despite claims that he and staff had taken no position, it appears that Iannicca was determined from the outset to convince the province that keeping Peel unchanged was the best outcome. 

A Jan. 21 document, containing notes from a meeting about the regional review with the Region’s executive leadership team, shows that Iannicca said, “What does it mean to staff? Region of Peel makes a great deal of sense.”

Emails show that senior staff was having high-level discussions with Deloitte well before the contract for the job was even signed. Lindsay Edwards, a manager of the office of the CAO, said in an email to Hollman and another colleague, "I really need your help here. We are struggling with the procurement timelines since they don't line up with the meetings we had with Deloitte (i.e. We had a kick off meeting before the contract was awarded)."

The Feb. 8 Procurement Award Report — a document formally detailing the $225,000 contract with Deloitte LLP to conduct a “Financial Impact Analysis of Service Delivery Models,” says that the agency is to prepare a submission to the province “to demonstrate the efficiency and effectiveness of the Regional municipality of Peel under its existing structure in providing value to taxpayers. The Agency requires expert financial impact analysis services that can be delivered expeditiously to inform this submission to the Province."

Mississauga Councillor Carolyn Parrish, referring to that wording in the document revealed under the FOI request, said, “I would assume (from the Procurement Award Report), ‘This is the objective. This is what we want you to work towards.’ So that’s what they did,” she told The Pointer. “How could staff have known on February the 8th that Deloitte’s report would show the existing structure is efficient and effective?” she added. “The contract with Deloitte hadn’t even started. Unless all of it had already been predetermined by Peel staff.”

Mississauga Councillor Carolyn Parrish

After the Deloitte work was completed and council learned about it, the same procurement award report was altered and the wording about the existing Peel government structure being efficient and effective and providing value for taxpayers was removed. Later versions of the procurement report include the original wording, except for the deleted passage.

No explanation was provided by the region in response to The Pointer’s questions about the terms of Deloitte’s work, why the procurement document was altered, or who directed it to be changed after the Deloitte work was completed and publicly revealed, showing that it supported the position regional staff secretly took in opposition to Mississauga Council’s desired outcome.

Another problem with Iannicca’s claims is the timeline he publicly outlined in writing and during a regional council meeting. He justified the staff-ordered contract by telling councillors Deloitte’s work was needed to provide him with objective financial analysis ahead of his meeting with the two provincial advisors working on the review ordered by Queen’s Park. That meeting (along with separate meetings with mayors) took place on Feb. 8, the same day Deloitte’s contract began and more than a month before its report was submitted. Iannicca did not respond to questions about the discrepancy.

Another issue is whether or not staff violated procurement rules that require council approval for any expense over $250,000. Mississauga members, led by Parrish, have suggested staff purposely split the contract into two parts, hiring two separate firms, to avoid telling council what they were doing. 

A subsequent legal opinion, obtained from Cassels Brock & Blackwell LLP, found there was “a good basis to conclude the procurement for the financial impact analysis” contravened the regional bylaw requiring council approval.

“Whether staff believed they had the authority to commission these reports and spend money [is] irrelevant,” Crombie argues in her response to The Pointer. “On an issue of such importance, it was the duty of staff to seek Council approval to proceed with this work, especially knowing that Mississauga held opinions contrary to those of the other member municipalities.”

While the region flew under the radar, Deloitte compiled its report without consulting any of the municipalities or seeking data from them, which Crombie contends resulted in “an incomplete analysis designed to help Regional staff make their case for maintaining the status quo.” The fact it was submitted to the province without council’s approval “represents a breach of trust,” she told The Pointer.

It remains unclear why senior staff didn’t inform regional council when they decided to commission an independent, $325,000 financial analysis. Even if they were allowed to separate the work into two procurements and proceed without council approval, on such controversial matters — in this case the very future of Peel and its three local municipalities — staff is expected to keep council closely informed.

It’s also unclear why former CAO Szwarc intended at the outset of the regional review to engage a lobbying firm. A Jan. 21 briefing memo indicated that Szwarc planned to consult with StrategyCorp, a Toronto-based PR firm, to obtain “political” analysis. The memo includes the name of John Matheson, a partner and general counsel at StrategyCorp. Regional staff did not explain why the former CAO, in a non-political role, was considering engaging a lobbying firm while the Deloitte work was being planned.

The controversy over the report came to a head when Mississauga demanded a new, fuller analysis, which regional councillors agreed in May to commission, this time through Ernst & Young, at a cost of $660,000. That rushed report, which Crombie praises as “accurate and unbiased,” was delivered at the 11th hour before the province’s submission deadline of May 21. It more or less concurred with Mississauga that amalgamation would be costly and Mississauga could save some money going it alone — thus raising the question of whether nearly $1 million spent on consultants for two contradictory reports will have any impact on the provincial officials now deciding the fate of regional government and the future of two of Canada’s largest cities.

A decision is expected sometime this fall.

For Crombie, the legacy of the whole episode is broken trust. “The outcome of the FOI only bolsters Mississauga’s position that Regional Government in Peel is not working properly, or in the interests of all member municipalities,” she told The Pointer. “A fundamental change is needed to ensure Mississauga residents, taxpayers, and Council are treated with respect and can re-establish trust with the Region.”

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