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Blog July 2, 2019

The Google ‘Smart City’ Plan: Financial Language of Hi-Tech Colonialism

George Orwell’s 1946 essay “Politics and the English language” is my suggested summer reading for Toronto city councillors and anyone interested in the ‘smart city’ plan that Sidewalk Labs/Google has proposed for Toronto’s waterfront. This is where you can peruse the multi-volume work, but if plowing through googlespeak for 1500 pages doesn’t appeal, you can instead read the informative ‘Note to the Reader’ that Waterfront Toronto posted.

The opus submitted to Waterfront Toronto in late June runs to 1500 pages, but it lapses into vagueness at crucial times. Of course corporate speak is always self-serving: but some corporations have done more damage than others with their obfuscating prose. Shosana Zuboff’s The Age of Surveillance Capitalism taught us that whenever Google promises us a useful gadget, we should realize that they’re making money in some other, covert way. She revealed that the Roomba robotic vacuum cleaner (a Google product) does clean the house; but its real purpose is generating digital maps of people’s houses. And she showed that the Google Streetview car does take photos of streets to be posted online: but its real, money-making purpose was to collect information on unsecured home wi-fi networks. 

The four-volume so-called “Master Innovation and Development Plan” (which flatly contradicts several of the actual City of Toronto plans for the Portlands area, so Orwell would say it is actually an anti-plan) is replete with the apparently precise but actually vague language that Orwell attacked. Here I will focus on just one bit: the proposals for financing the infrastructure that would be needed for any development in the currently barren land.

First, in most of the relevant sections of Volume 3 (“The partnership”) they use the word ‘financing’ correctly, to mean helping taxpayers accrue debt, since they have no intention of asking the Alphabet/Google mother ship to pay for the transit line they envision going to the front door of a new Google Toronto office. But in a couple of places they use the word ‘funding’ instead, which greatly confuses the key issue of who is paying. The funding they offer is, to quote Waterfront Toronto’s understated description, “modest” – like $100m towards a transit line estimated at $1.2 billion, and another $10m toward an ‘urban innovation’ research centre that would likely require generous grants from governments to continue.

So, neither Sidewalk nor other Google companies are planning to fund, as in pay the cost of, any infrastructure. Instead, the ‘plan’ tells us that they will help with what they call “optional upfront financing.” This is weirdly Orwellian. First, all financing is optional: banks don’t have a right to demand you get a mortgage from them. Secondly, Sidewalk Labs writes as if upfront financing from the private sector is an innovation. Do they not know that Infrastructure Ontario has obtained private “upfront” financing for many large infrastructure projects, for over a decade? Many Ontarians do not know this, because, during the Liberal reign, private upfront financing went under the Orwellian name of “alternative financing”. But the reality is that Infrastructure Ontario puts out Requests for Proposals for major projects (hospitals, highways, the Eglinton LRT) and eventually chooses a consortium to finance and carry out the work, a consortium that typically includes major banks (foreign as well as Canadian) and specialized infrastructure funds. 

Typically, the financing ‘partners’ (who are not really partners, but profit-seeking investors with no ongoing interest in the particular infrastructure) put the money up front, either in cash or by going into debt, and expect Ontario to repay them. The financing is not like a mortgage: Ontario pays only the interest during the life of the contract (40 years), shifting responsibility for paying back the hefty principal to a future generation. Governments could get money far cheaper since the risk of bankruptcy is almost zero, but public borrowing adds to the visible debt – a key reason why private financing has been preferred for large projects. Ontario politicians have long confused the public by saying that a project will be ‘privately financed’– as if pension funds and banks were giving away money. Public works may be privately financed but they are publicly funded. 

So what Sidewalk Labs is proposing as a brilliant financial innovation is actually old hat. What may be new is who’s brokering the financing. A newly created corporation, Sidewalk Infrastructure Partners (SIP), but no information is given as to what capital it has or who’s in charge. SIP is a Delaware entity created in 2018, supposedly to help to fund “high-risk” investments that banks and pension funds would balk at. Its corporate filings (which would list directors and give an address) are not available. So, we do not know what capital this entity has, who controls it, and whether it has any experience in financing ‘high-risk’ projects. 

This SIP (a pig in a poke, as far as Canadians are concerned) seems poised to replace Infrastructure Ontario’s usual role as manager of procurement and financing for large projects. But in keeping with Sidewalk Labs’ CEO Dan Doctoroff’s theory of Toronto’s waterfront as terra nullius (empty land rife for colonial appropriation), nothing is said about how creating a new and secretive US corporation to organize financing for a Toronto project would affect existing public bodies – or the large Ontario pension funds and Canadian banks that regularly invest billions in financing infrastructure.

One financial novelty proposed is ‘tax increment financing’ (TIF), regularly used in US cities but not in Canada. But the Sidewalk plan fails to mention that Waterfront Toronto is prohibited from raising taxes, so it could not use TIF. Perhaps Sidewalk Labs imagines it can coerce the city of Toronto (the only taxing entity in the area) into using a novel revenue tool – though using it would likely require new provincial regulations. Or perhaps the brains at Sidewalk just don’t know the basics of our political and legal system. 

Which brings me to the underlying governance issue: Sidewalk Labs’ blithe contempt for all public bodies, from the TTC and Metrolinx to the Conservation Authority and Toronto Hydro – not to mention the numerous city departments that have policies and legal powers over many of the activities and issues that the Sidewalk plan treats as brand-new. 

What’s most astounding is the contempt heaped on its own public partner, Waterfront Toronto. The plan has the audacity to call for a whole new “public authority”, a body that would oversee several specialized agencies that someone (Sidewalk, no doubt) would put in charge of public spaces, transportation, environmental issues, and data policies respectively. They say this new overall public authority could be Waterfront Toronto (though in a much more autonomous, corporate form) – but not necessarily. One can only speculate whether the Google folks, who as the auditor general of Ontario pointed out had a very cozy relationship with the federal Liberals when the original ‘deal’ was being cooked, have a plan B that has already got support in Ottawa. Only a secret plan B would explain the insulting treatment of their public ‘partner.’

I’ve read a lot about public-private infrastructure partnerships – and have never seen one where the for-profit partner suggested the elimination of its public partner. I have not been a fan, in recent years, of Waterfront Toronto. But when a Google company proposes to supplant existing public bodies, I say that any public agency, however lacking in transparency, is better than a giant American corporation with a track record of misleading customers and misusing our data to amass unheard-of profits. And fortunately, there are signs that the developers who control most votes on the Waterfront Toronto board, led by Stephen Diamond, are very unhappy that Sidewalk is proposing many things that were never part of the original agreement. That critics like me would prefer the still unbuilt waterfront turned over to the same developers who have made fortunes from luxury condos that privatize the edge of the lake is a sign of how desperately I think we need to build opposition to Google’s plan to steal our land, our money, and our democracy, in one fell swoop.

As Orwell wrote in 1946: “the decline of a language must ultimately have political and economic causes: it is not due simply to the bad influence of this or that individual writer. But an effect can become a cause, reinforcing the original cause and producing the same effect in an intensified form, and so on indefinitely.” If politicians and citizens are taken in by the Google-speak of our would-be corporate sovereign, the decline the English language into Sidewalk’s corporate prose will indeed “reinforce the original cause” of the misleading language use – which is the astounding arrogance of our would-be, hi-tech colonial masters.