If Private, Ottawa Breaks The Law: BENN

Published 08/03/2024 · Updated 08/03/2024

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Timely, complete, accurate. The basic elements of disclosure of material information as set by securities regulators in Canada. What is the relevance you ask? Ottawa City Hall continues to fail to meet its obligations to disclose material information.

Municipalities are not publicly listed entities, and thus do not fall under the regulatory umbrella of the Ontario Securities Commission. However, they do issue securities. Municipal bonds and other similar debt instruments are securities. The holders of those securities buy and sell them. There is a lot of City of Ottawa municipal debt out there. Billions of dollars of public debt.

The city is settling multiple legal proceedings with the businesses that are building various elements of the LRT. To the tune of hundreds of million of dollars. Yet city council and senior management have not seen fit to disclose any of this information. Suffice it to say that if a major Canadian public company failed to disclose material information on a timely basis the occupants of the C suites would be facing serious legal trouble. Serious trouble. Not a few paragraphs of censure written by a learned judge. Major fines. Possible incarceration. Most certainly career ending.

Yet here we are. A municipality of more than a million residents, with an operating budget of well over $4 billion, with a long-term capital budget of billions and billions and billions of dollars has decided that it is in its self-interest to not disclose material information. Any word from the provincial regulator, in this case in the form of the Minister of Municipal Affairs and Housing, aside from a discrete yawn?

Here’s another lesson from my days as a CFO of publicly listed companies. Media training, Day 1. Make sure that you can exercise a degree of control over the public disclosures by being timely, complete and accurate. See the recurring theme? Get out in front of the problem. Set the tone by being open and honest. Minimize the spin, because the financial analysts will see right through the nonsense and crucify you in their reports to their clients. And they won’t trust another word you have to say. Ever. As in ever. And ever is a very long time. As in, even if you reappear at another public company, you will be remembered as someone who tried to pull a fast one.

Eventually the quantum of these settlements will become public. Whether it takes the form of an envelope left on a table in a local coffee shop, or the next city budget, it will become public. And when it does, it will be too late for council and senior management to try and put the toothpaste back in the tube.

On the other hand, given the sad state of affairs of turnover at Ottawa City Hall it is unlikely that anyone will lose their job over this conspiracy of silence. Staff will claim they got their instructions from management. Management will say they deferred to the wishes of council. Councillors? Well, maybe one or two will not get re-elected, but that may be more a reflection of the overall level of incompetence than their participation in this farce of willfully withholding material information.

And therein the problem lies. Not only is city council willfully withholding material information from the public, but the regulator doesn’t appear to give a damn. Where is the leadership? Not just at the municipal level? At the provincial level, as well. To what depth has the quality of governance in Ontario sunk, other than so deep that it is now out of sight?

Timely, complete and accurate disclosure are just words in Ontario. Meaningless syllables.

Ron Benn, a finance executive, has been a member of the Centrepointe Community Association for the better part of three decades.