Pallister slams NDP after details of untendered $10M lease deal emerge

The Manitoba Progressive Conservatives are slamming the NDP after details emerged showing a 20-year, untendered contract to lease space was awarded to an agency funded by the provincial government, according to an audit report obtained by CBC News.

"Sadly, this doesn't surprise me," PC Leader Brian Pallister said, calling the news "frustrating."

"This is a government that doesn't shop very intelligently with the money it takes from Manitobans."

• Child welfare agency signed $10M untendered lease with company partly owned by Peter Ginakes: audit

An audit was conducted into a long-term property deal made nine years ago between the Southern First Nations Network of Care, also known as the Southern Authority, and a numbered company owned by Winnipeg business man Peter Ginakes and two partners.

The company, 5185603 Manitoba Ltd., bought a building near Arlington and Notre Dame in Winnipeg in 2007 to be used as emergency placement for youth under the care of Manitoba Child and Family Services. The building could house 10 kids that would've otherwise temporarily been placed in hotels.

Lawyers with the provincial government examined the proposed lease and red flags were raised, according to the Feb. 25, 2016, audit. A briefing note at the time said the lease cost was "up to twice the Winnipeg market rate" which "may raise questions of good judgment and prudent use of limited resources within child welfare."

According to the audit, at the end of 20 years, Ginakes and his partners were projected to make more than $10 million in lease payments after spending less than $2.5 million to buy and renovate the building.

On Tuesday, Pallister said the report supports the PCs' concerns about an NDP government being financially irresponsible with taxpayer dollars.

"The government should do the best it can with the money that we have to send to it in taxes, but it doesn't. So we've seen this with the stadium project. We've seen it with the helicopter they didn't tender — we've seen it with an epidemic of un-tendered contracts."​

In January, Manitoba Infrastructure and Transportation Minister Steve Ashton came under fire for his role in an untendered deal with another company represented by Ginakes. An ombudsman's report found the province "lacked sufficient justification" to buy $5 million in flood-fighting tubes known as Tiger Dams.

• Manitoba government lacked justification for Tiger Dam contracts, ombudsman says

Pallister said his party had heard similar stories and that is why he is committing to an open-bidding process for provincial contracts and transparency on tendering.

NDP leader Greg Selinger said his government has done what was necessary after the audit pointed out problems with the un-tendered lease for the Southern Authority facility.

Selinger said his government put procedures in place based on recommendations by the province's auditor general, including posting every tender over $10,000 online.

Selinger said he won't call a public inquiry into awarding government contracts, either by the province or the city of Winnipeg.

"I think all criminal investigations should be followed through with respect to city contracts on the police headquarters — that's the path that has been taken," Selinger said. "In our case, we've followed the auditor general's recommendations and put new measures in place."

Gord Mackintosh, who was minister of family services and housing when the contract was awarded, said the province took over lease payments of the building April 1, 2016, and will continue to do so until the situation is resolved.

Pallister said if elected, he would give Manitoba's auditor general the power to review contracts. He would not commit to holding a provincial inquiry into government contracts — either at the provincial or municipal level.

"It would be prudent to reserve comment on the potential for a public inquiry until we have a better handle on the depth and scope of such an inquiry," he said. "The inquiry going on right now is whether people want a change in government."

The Liberal party declined to make their leader available for a response.