‘You’re setting yourself up for massive fraud’: Halifax’s fast-track list of favored developers opens door to abuse, experts say

The stakes are huge.

Halifax’s so-called “Trusted Partner Program” will give an exclusive group of developers “expedited administrative and residential development approvals.”

It’s a fast lane for a select list of developers to get their projects done.

The premier says it will mean more housing, more quickly.

But Tom Urbaniak, an expert in municipal politics, says it’s opening the door to abuse and corruption.

“Unless such a program is implemented with extremely rigorous, independent oversight — and unless it is based on objective, unassailable, almost formulaic criteria — the potential for corruption is significant,” says Urbaniak, a Cape Breton University political science professor.

“A decision to be inscribed as a ‘trusted partner’ could be worth many millions of dollars in profits to large developers, all with the stroke of a pen.”

At the very least, he says there will be perceptions and questions about favoured treatment, and the relationships between supposedly trusted developers and politicians and senior bureaucrats.  

The program is part of a controversial bill passed this fall by the Conservatives that shifts planning and development authority from the city to the office of the Minister of Housing. Bill 329, which has received royal assent, requires Halifax Regional Municipality to create the program.

It’s unclear about what corners the “trusted partners” will be able to cut, but Urbaniak points out that the bill lists vast areas of approvals where designated “trusted partners” could have their own fast track.

SaltWire asked the housing department about the criteria for being selected to the group, but none have been developed yet, according to the department.

“The program is in the very early stages of the development,” said department spokesperson Heather Fairbairn. “The province will be working closely together with HRM planning to determine the details and timeline for its implementation.”

That’s not good enough, says Ottawa lawyer David Debenham who specializes in fraud and construction law.

“The government, by definition, is unable to act swiftly and at the same time effectively and efficiently and safely,” said Debenham who’s authored two books: The Law of Fraud and the Forensic Investigator, and Executive Liability and the Law.

“What normally happens is they put out a call to their favourite friends and in good faith they say we have to do this fast, help me out. The insiders are profiting from having connections with the government.

“If there’s no proper bidding process, no proper bidding analysis or proper contract, they’re just throwing money out the window.”

Debenham says he expects that the province will end up just handing over public land to so-called trusted partners.

The pitch, he said would go like this: “You want affordable housing, give me all this land at a very good price to cover up the fact that I have to act super fast and the interest rates are high and that I have to pay a premium price to get your project done.

“You’ve got some joker in an office who doesn’t understand the process at all and you’re setting yourself up for massive fraud.”

On top of that, the affordable housing goal might not be met. 

“If it’s premium land, the developer will say I’m going to use it for premium customers, not affordable housing.”

SaltWire spoke to Housing Minister John Lohr about the program shortly after the bill was introduced in October. We asked whether any timelines or targets would be imposed on any developers whose projects are fast-tracked through the program. Lohr suggested there wouldn’t be. 

“I don’t know why that requirement is necessary,” said Lohr. “Here is the reality: If you were the developer, you’re putting out millions of dollars to build something; the sooner it’s done the better. It’s an enormous financial incentive to get it done as quick as possible. That’s why they hate these delays.”

Lohr also justified the program and the bill itself by arguing that city council has blocked too many projects that were compliant with its municipal planning strategy and ought to have been approved. He said his office would provide SaltWire with evidence, but we didn’t receive any.  

Urbaniak says he has serious concerns about other aspects of Bill 329 as well, including the fact it grants authority to the minister to decide to bypass the municipality entirely and to shield developers from basic technical reviews of their proposals.

“If I were the minister, I would be allergic to exercising such powers because each use of such powers will create suspicion about influence and motives.

“And even just having these powers on the books will make it very tempting for developers’ lobbyists to do an end run around City Hall and head for the minister’s office.”