Good morning. A former executive at Toronto’s St. Michael’s Hospital and the former president of Bondfield Construction Co. Ltd. have been convicted of fraud in the $300-million redevelopment of the health-care facility. That’s in focus today – plus, we chart the unfortunate rise of two Canadian cities in North America’s unaffordability rankings.

Mining: The U.S. government has negotiated a sizable stake in Canadian junior mining company Trilogy Metals Inc., as part of an aggressive new push by the Trump administration to bolster national security.

Energy: Investors have committed US$20-billion to the second iteration of Brookfield Asset Management Ltd.’s Global Transition Fund, making it the world’s largest private fund dedicated to the transition to clean energy.

Immigration: A New Brunswick seafood processing company has been fined $1-million for violating rules of the Temporary Foreign Worker Program – the largest ever fine levied by the federal government against companies that use the program for migrant labour.

On our radar

• Dominic LeBlanc, the federal minister responsible for trade, is picking up negotiations in Washington after Prime Minister Mark Carney met with Trump yesterday.
• The President predicted Canada and the U.S. would ultimately reach a deal even if some levies remain in place.
• He also said the countries would be “working together on a Golden Dome” anti-missile defence program.
• Ottawa has not announced to Canadians that it has agreed to join the project.

The redevelopment of St. Michael’s Hospital was meant to transform the facility into the country’s premier critical-care hospital by 2019. The $300-million project – which included a new 17-storey patient care tower, expanded emergency department and renovated intensive-care unit – was announced a decade ago. Today, it’s over budget and unfinished, years after allegations first surfaced about irregularities in its procurement process.

Those concerns culminated yesterday with fraud convictions against the hospital’s former chief administrative officer and the former president of the construction company that won the contract.

The backstory

The convictions followed a four-year police investigation and 24 days of testimony. But for The Globe, the story began much earlier – with the arrival of four brown envelopes.

In June 2015, four Globe journalists received identical letters urging them to question a recent decision by St. Michael’s and Infrastructure Ontario to award the $300-million contract to Bondfield Construction Co. Ltd. The anonymous author alleged that Bondfield president John Aquino and St. Michael’s executive Vas Georgiou were friends and had failed to disclose their ties during the bidding process.

That tip sent The Globe’s investigative team on a long, winding pursuit, writes Greg McArthur, one of the journalists who received an envelope in 2015. It involved cultivating sources, combing the halls of St. Michael’s, and eventually fending off a $125-million lawsuit.

The series

On Sept. 24, 2015, the newspaper published its first article on the ties between the two executives – reporting as well that Georgiou had been placed on indefinite leave after learning through inquiries made by the reporters that he admitted in 2011 to creating false invoices used in a kickback scheme at York University.

The series of stories by McArthur, Robyn Doolittle, Karen Howlett and researcher Stephanie Chambers showed that while Georgiou was evaluating Bondfield’s bid, he was personally involved in two of Aquino’s businesses. The hospital fired Georgiou after an internal probe, citing undisclosed conflicts of interest.

The aftermath

Bondfield sued The Globe, the reporters and then-publisher Phillip Crawley, alleging the articles inferred that the contract was awarded because of corruption – which it denied.

The Globe successfully quashed the suit in 2018, although the Ontario Court of Appeal overturned that decision in 2019. But Bondfield was in financial distress, struggling to pay subcontractors and leaving more than a dozen public projects behind schedule.

That December, the St. Michael’s subsidiary created for the project was placed in receivership. Three months later, Bondfield sought creditor protection as it faced more than 200 lawsuits – effectively ending the lawsuit against The Globe.

Zurich Insurance, which issued construction surety bonds to Bondfield on more than $1-billion worth of its projects, uncovered e-mails in 2020 showing Aquino and Georgiou had communicated throughout the St. Michael’s bidding process.

What the court found

In a 135-page decision yesterday, Superior Court Justice Peter Bawden found that Georgiou secretly and fraudulently shared information with Aquino and lobbied for his company during internal deliberations.

The Crown’s case against the men focused on alleged undisclosed business connections, as well as their alleged secret communications throughout the bidding process for the project, which Bondfield won in 2015.

Georgiou testified in his own defence last December, saying he did not breach his conflict-of-interest declaration because he always put the hospital’s interests first, that he did not provide any confidential information to Aquino and that he believed Bondfield was the only bidder that could submit a compliant design at an affordable price.