The Ontario Provincial Police have been called in to investigate allegations of kickbacks in a taxpayer-funded pool and hockey rink project in Gravenhurst.
Related story: Star probe- Toronto builder siphoned $1.8M from Gravenhurt project
All federal and provincial payments to the project have been frozen pending outcome of probes by both the police and government auditors.
These actions come one day after a Star investigation revealed that a Toronto builder siphoned almost $1.8 million of taxpayers’ money from a $22 million municipal project in cottage country.
Gravenhurst Mayor Paisley Donaldson and spokespersons for the federal and provincial governments said the OPP had been asked to investigate.
A police spokesperson could not be reached.
“(The OPP) are contacting me next week for details,” Donaldson said.
The Star’s research showed that the Dalton Company used a sophisticated kickback scheme to extract money from cement, steel, and other suppliers to the Gravenhurst Centennial Centre, a renovated and expanded building that will house an aquatic centre, ice rink and fitness facilities.
Subcontractors had to kick back up to 10 per cent they were paid, according to the Star’s investigation, which was based on Dalton Company documents, town of Gravenhurst records, and interviews with contractors and former Dalton officials who worked on the project. The project, paid for by federal and provincial stimulus money, and the town’s funds, is over budget and ratepayers have been told taxes will increase as a result.
Dalton has denied the allegations, and issued a brief news release Thursday saying the information presented by the Star is “inaccurate and untrue.” Dalton, a company run by two brothers, Randy and Andrew, said it has “instructed its lawyers to commence legal proceedings against” the Star.
Donaldson also said his town has hired Marshall and Murray Inc., a cost consultant, to review the entire project and provide the town with a “detailed cost estimate.”
A federal government spokesperson called the allegations “serious” and said “no federal or provincial payments on outstanding claims will be processed until the investigation is completed.” Julie Desrochers of the Federal Economic Development Agency for Southern Ontario said the federal government is “committed to monitoring and ensuring proper use of public funds.”
A provincial spokesperson (the federal and provincial governments equally shared a $12 million commitment to the project) said that if “these allegations prove correct, Ontario will use the available mechanisms under our Contribution Agreement to recover any funds that were misused.”
Serge LeBlanc, spokesperson for the provincial minister of infrastructure, said officials at his ministry “are taking a close look at every aspect of this project to ensure that provincial funds were used appropriately.”
