Settlement offer for Downtown Winnipeg Police Headquarters lawsuit approved by EPC

A settlement offer for two lawsuits launched by the City of Winnipeg over construction cost overruns for the downtown police headquarters project has been approved by the mayor's inner circle.

A report to the Mayor’s Executive Policy Committee (EPC) is recommending councillors accept $21.5 million if the full payment is made within a year. The report says this would cover both the “deficiencies” and “fraud” claims against all parties, minus a separate action against former City CAO Phil Sheegl and other defendants.

"This is a victory for the citizens of Winnipeg," said Mayor Scott Gillingham.

It says if the payments are made within two years the payment rises to $22.5 million and $23.5 within three years.

"I believe this is the best deal for the people of Winnipeg."

The report states, “The settlement recommended by this report has been worked out with the various defendants in the Fraud Action and the Deficiencies Action. Given the number of parties involved and the complexity of these actions, this has been a time-consuming and difficult undertaking.”

It says if council rejects the settlement, an over-expenditure of $6.4 million would be needed to continue the legal action.

"We feel we've done everything we can do within the civil court sphere. I think this is really the best outcome we can manage," said Michael Jack, the city's CAO.

The cost of the $200 million-plus project at the former Canada Post site ballooned out of control.

In December 2014, RCMP raided Caspian Construction as part of a criminal investigation that did not result in charges – that's when the city decided to sue.

In court documents, RCMP alleged the city was the victim of a multimillion dollar fraud and a 2018 briefing note from the Mounties to prosecutors suggested there were financial crimes worth more than $33 million.

The decision is now headed to Winnipeg city council for a final vote.

Gillingham and Premier Heather Stefanson were also asked about the potential of the province holding a public inquiry, as city council, under former mayor Brian Bowman, had called for that to happen.

"I'm open to that if the province would call it," said Gillingham.

"I'm going to have that conversation with the mayor and others and we'll make our decision moving forward," said Stefanson.

CTV News reached out to Caspian Construction, which said it had no comment on the matter.