Front Burner - Sidewalk Labs offers a futuristic vision for Toronto, but at what cost?

Episode Date: June 25, 2019

After 18 months of consultation, Google sister company Sidewalk Labs has released its master draft proposal to develop a portion of Toronto’s waterfront. The proposal includes everything from an affordable housing plan, to sensored pneumatic garbage shoots, to a data privacy framework in the form of an independent urban data trust. Today on Front Burner, we talk to The Logic’s editor-in-chief David Skok about what’s in the report, and what questions we need to ask ourselves when we consider building smart cities.

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It is over 1,500 pages. You feel this thing? I'm here with David Skok, CEO of The Logic. I can barely hold it. It is a real novel. Hey guys, it's Jamie Poisson here. We're back in studio now. Today, could Toronto become a living laboratory for smart cities the world over? Who pays? Who profits?

What's the trade-off? We're asking these questions because a Google sister company has finally unveiled its plan for a high-tech, nearly carbon-neutral district on Toronto's waterfront. Like I mentioned, David Skok from The Logic, a startup reporting on the innovation economy, is my guest. This is Frontburner. David, hello. Hi, Jamie.

Thank you so much for coming on the podcast. We're back in the office now. My pleasure. It's been a fun day. I feel like I've tried my best to wrap my head around this 1,500-page report, but it is complex. It's complex and heavy. Yeah, and lots of questions still remain to be fair. But I'd like to start here. So for the last 18 months, we've been talking about a plan to make a plan, right? And today, that plan has been released.

You and I were both in this lockup. We heard Dan Doktoroff, CEO of Sidewalk Labs, deliver his vision. Toronto tomorrow, a new approach for inclusive growth. And I know that we've heard some of this before. This five hectare plot of land was handpicked by Google offshoot company Sidewalk Labs. They're in urban development and their specialty is weaving technology into neighborhoods. But paint me a picture of what Sidewalk Labs is promising to do here. This was the big reveal, right? This was the moment after 18 months, at first, you know,

they got the big RFP from Waterfront Toronto, looked at it and said, oh my goodness, this is the moment for Sidewalk Labs to show itself to the world. And in doing so, they announced really with the official fanfare of all the things that they've kind of dripped out and dribs and drabs over the past few months, whether that's the wood timber buildings. Far more sustainable than concrete. Far more sustainable than concrete. Please welcome my partner, Josh Seiriffman. This would be the first neighborhood with that material, which has a range of benefits,

including the economic development strategy of creating an Ontario-based factory. Or the heated sidewalks. Self-melting sidewalks. Sounds quite cool. Very cool. And, you know, for a lot of urban planners, 40% affordable housing. Right. That's 1,700 units just in the Quayside and Villiers West. But most importantly, adding new tools to the arsenal that government can have

to ensure affordable housing gets built. So this was the moment when all of that stuff became a reality on their side. Public transit as well, a light rail expansion to this district, which would make it easy for people to get to. Right. And we forget, for those of us who live in Toronto and grew up in Toronto, this is 800 acres of really useless land, to be fair. This stretch of Queen's Quay at the moment is pretty industrial and sparse. And land that no one has successfully developed in a very, very long time.

Not yet. I know what I want to do today is dig in with you around some of the criticisms or concerns swirling around this project, but we should acknowledge that for many people, this is cool, right? Like this is, you know, the chance to develop a piece of land that has been kind of derelict

for a long time that the city has not developed itself. And the idea of creating an almost carbon neutral neighborhood. Between a thermal grid and advanced power infrastructure that can allow a 100% use of renewable energy. This is very appealing to a lot of people. It's easy to be cynical about this, when it comes to bike sharing and scooters and everything else that's been promised. Right, there's also scooters.

But the reality is, from a ground-up development perspective, Sidewalk wants to create a true urban utopia in a downtown piece of land that has been derelict for so long. This project was announced to much fanfare. Justin Trudeau was there. This partnership will effectively transform Quayside into a thriving hub for innovation and create the good, well-paying jobs that Canadians need. Kathleen Wynne was there. well-paying jobs that Canadians need. Kathleen Wynne was there. And, you know, obviously, part of what makes this neighborhood smart is all of the sensors and all of the metrics that are going to be measured. And before we move on, you know, when you talk to the people at Sidewalk, they'll tell you that all of this data collected would help make a better neighborhood. And just

give me one example of how that would work. So one of the things that they talk a lot about is utilizing public space. So in the case of, let's say, sidewalks and streets, we traditionally view streets as being separate to sidewalks. They have an idea where traffic patterns and traffic flows can change depending on the time of day or whether it's a weekday or a weekend. So, for example, if it's rush hour on a Friday,

cars take up both lanes and everybody moves as is. If it's a weekend, you could shut the traffic to cars and have it be optimized for people to live in that space. And to do it in an optimized way using data to inform what the perfect way to take advantage of that space and to do it in an optimized way using data to inform what the perfect way to take advantage of that space would be. If you need to, there's a great deal of people dropping off groceries at six o'clock in the evening. The curb can be managed accordingly. But, you know, obviously, since this big announcement with much fanfare,

much has happened in the world. We're seeing this huge tech clash. Yes. When this project was announced, nobody had ever heard of Cambridge Analytica. Now that there is a growing public awareness of the offline risks of online data collection, you are seeing a heightened sense of concern by citizens and by groups about how that data can then be utilized. So that very same example I just gave you of traffic sensors helping to optimize traffic patterns and flows, well, if you are a more pessimistic or sinister person, you could use those traffic patterns to favor certain merchants or markets over others on a street corner.

Essentially change people's behavior. Changing people's behavior through what you're learning through those algorithms to optimize for whatever purposes you may have. And I know in the last year in particular, we've heard a lot of concerns around this, but also that personal data could be leaked or that this neighborhood could be used to just track us around and then sell us ads. And so now we have this plan and Sidewalk has addressed some of this. And let's talk about what you heard today. Yeah. So the first thing was,

if you think about GDPR, which was this European regulation that came in around 18 months ago, actually, which was their privacy laws. GDPR, General Data Protection Regulation, basically every company that does business in the EU has to comply. All those emails you've been getting about email lists, do you want to opt in? Consumers now have to give consent. Those really protect individuals and their data from being shopped around or sold to different merchants

or being capitalized on. Sidewalk has put in some mechanisms to protect that effectively. So at the individual side, there is this thing, a data trust. Boy, did we hear concerns about privacy. The approach, we're proposing this complete control of urban data in a government-sanctioned, independent data trust. And all of the data is anonymized and, you know, it's held up in a public utility warehouse somewhere.

Not selling personal information, not using it for advertising, and certainly not using any personal information without any explicit consent. So they've addressed the individual concerns. In this data urban trust, and, you know, I saw you, you were digging into something else in the report while I was speaking on background with someone today, and they were sort of talking about this trust and talking about how it would be overseen by five people, like this is what they're proposing, a data expert, an academic, someone from business,

and that this trust, of course, would have to follow privacy laws, but it would also be like the gatekeepers of the rules and also the permissions. This is how I understand it. Like, if you wanted to gain access to any data that was collected in this neighborhood, you would have to ask the trust for permission. To be authorized based on the intent of the use of the data and the strategy to ensure privacy. And also the trust would make sure that you're following the rules around de-identifying information at its source so that these companies, Sidewalk Labs, but other companies involved in this project

don't have tons of personal information about you. But I do want to bring up one thing in the report that made me take pause. And it was this one line that Sidewalk is promising to not sell personal information and says they won't target people with ads. But if you agree to a terms of service, they said they could share their personal information with sister alphabet companies, including Google. I mean, I think, you know, the big question is, as someone who is not well steeped in data and an editor of a publication, how does this work in practice? You know, if you go walk into this neighborhood, are you going to have to face some sort of customs official who's going to say, if you agree to go into this neighborhood, you have to sign away your rights? Right. And your data could be shared with other companies. Like,

could this be something you have to do if you sign a lease to live in one of the apartments? Exactly right. And then you start to think, well, in the online world, it's like anything else where you accept the terms of reading a website's terms of service. You generally just press the accept button and move on. So how much control will you as a citizen really have when you enter this neighborhood in terms of what you give away and what you don't? Right, right. So long as you consent to it. The other part of this debate around data feels less logistic to me, but more existential. Right. And I've heard this argument from people who have been fiercely critical of sidewalk labs. But it's this argument that we really haven't had this discussion in this country about whether or not we want all of this data collected en masse in the first place, right?

Like whether it's de-identified or not, whether it's publicly available or not, whether it's in a trust or not, because we don't know how it could be used in the future. It is, to me, the biggest question. If you step back from all of this smart city jazz and you look at it from a geopolitical sense, so bear with me here. Okay, I'm following.

You have China, on the one hand, who has no permissions for their citizens in terms of what kind of data they allow them to protect. It's all part of the government and the state. And you have companies like Tencent, Weibo, and others who are a part of that system. Then you have Silicon Valley, which has more of a libertarian sense of it's a commercial entity and we can commercialize that data. Then you have the European Union, who has said, hold on a minute, we want to control our own data. And if you look at the spectrum of where we are in society right now, you have these three huge forces. And the question for Canadians and for the Canadian government is very large. It's who do we want to put our horse on here? Which system do we want to be a part of?

And we haven't even begun to have that question as a society or as a government and a people. And yet, here we are already getting into the fine print of a service agreement with a vendor to take advantage of that in the Quayside. Okay. We'll be back in a second. Discover what millions around the world already have. Audible has Canada's largest library of audiobooks, including exclusive content curated by and for Canadians. Experience books in a whole new way, where stories are brought to life by powerful performances from renowned actors and narrators. With the free Audible app, you can listen anytime, anywhere, whether you're at home,

in the car, or out on a jog. The first 30 days of the Audible membership are free, including a free book. Go to www.audible.ca slash cbc to learn more. You know, when I think of Google, which is affiliated with Sidewalk Labs, I think of a business model that's predicated on advertising, right? Like they follow you around the internet, they take all this data on you, they sell you ads. And Sidewalk Labs is saying that they're not going to sell us ads in this neighborhood and that they're not going to collect all this personal information. And I think the big question then is, okay, like how are they making money, right?

So if you go out and you want to look at a condo that isn't built yet, you go walk into the showroom and you see their mock suite and how they have the bed all laid out with their own furniture and everything else. Sometimes they have a dog in the picture. It's never how my place ends up looking, but it's theirs. You go into that place and then you buy the showroom. You buy your suite based on that. For Sidewalk Labs, this is the greatest showroom on earth.

You have a space in downtown Toronto, which, by the way, let's talk about. Yes, we just said it's a derelict piece of land, but it's also a beautiful waterfront. Yeah. And those renderings look very nice. Exactly. So now you have a showcase that you can bring in everybody from all over the world and all these other cities around the world that want to build their own smart cities and say, look, we know how to do this. We've done it here. Right.

And we can take this proof of concept and apply it on a larger scale in your neighborhood. Jesse Shapens, the director of public realm at Sidewalk Labs. So we very much see this as a prototype for bringing together a lot of these innovative ideas. for bringing together a lot of these innovative ideas and we hope really proving how they can work to demonstrate a different way of building neighborhoods in this city that can then be picked up in other parts of the city and in other parts of the world. Toronto is a giant R&D lab for sidewalk labs.

And what concerns have you heard around this from Torontonians, from Canadians? The biggest concern is that what's in it for them, basically. I mean, what's the land transaction value? What's the money in the exchange? I mean, it gets into the weeds here. But what kind of financial compensation does Toronto get for Sidewalk being able to use Toronto as its testbed? Now, there are a lot of things that Sidewalk would say in their defense here, which is, look, they're creating massive GDP growth. They're creating jobs. We commissioned an independent entity, Urban Metrics. They have projected that within the Idea District,

44,000 jobs, direct jobs will be created. Their investment will come along with it, along with actually giving 10% of all IP created in this period for the first 10 years in profitable ventures to the city or to whichever governing body exists. And, you know, they mentioned today, you know, there are obviously going to be taxes, right? Municipal, provincial and federal taxes. They model that this will generate $4.3 billion annually in tax revenue for all three levels of government and create almost over $14 billion in economic activity for the overall Canadian GDP. In a lot of ways, they're looking at the proximity of Canadian innovation to this space. $14 billion in economic activity for the overall Canadian GDP.

In a lot of ways, they're looking at the proximity of Canadian innovation to the space as a benefit. So you can build on top of their technologies and build Canadian companies. And the bet is, and Canadian universities are on board in this, the bet is that if we have this innovation hub, we can use that to build on top of it and generate additional IP as a result. Okay, so with that sort of intellectual property 101, there are also other ways in which there's a long game for Sidewalk Labs here financially, right? How they make money. So at the top of the show, when we were talking in the lockup today, I know that you were really interested in real estate. One of the early stories that we did that didn't get much attention externally, but certainly I know was generated a lot of attention at Waterfront Toronto

and with sidewalk labs was a land valuation of the 12 acres, which was the initial portion. And what we said at that point was based on current estimates of what the price of land is down there today, that land is worth half a billion dollars. Why that was so important was it took this ephemeral, really high level, you know, exciting project about timber buildings and made it very real for a lot of people who understand how a development works. And so at the end of the day, if you strip everything else aside, you now have a situation where Sidewalk Labs is asking for 190 acres to build and to build a development. And to be clear, you know, again, you know, we mentioned at the top of the show that this parcel has now expanded, right? Like it's bigger as of today. And to be clear, you know, again, you know, we mentioned at the top of the show

that this this parcel has now expanded, right? Like it's bigger as of today. And to be clear, are they asking for it? Like, are they asking for it to be given to them? Are they leasing it? Are they buying it? Unclear. What they're saying is, we do we will have a transaction. So we will pay for this land. But they want the payment terms to be considerate of the innovation expenses that they're taking on. Right. They're essentially asking for a deal because in return, they're building this cool futuristic city. And one thing that I don't think we've mentioned yet is that the majority of these lands are publicly owned land. So these are lands that the taxpayers own. Most of it, yes.

Okay. So clearly there are a lot of questions to mark still after the plan today on whether or not Sidewalk Labs will end up walking away with some sweetheart real estate deal here. That's right. And the biggest amount of questions today, surprisingly, came from Waterfront Toronto, the agency that was at the beginning of this project, connected to Sidewalk Labs and actually issued the RFP for Sidewalk Labs to come. Right. The head of Waterfront Toronto seemed surprised that Sidewalk Labs wanted to expand its footprint in this neighborhood. We believe it's necessary to expand that approach to a second piece of the project, known as Villiers West,

where the learning, the innovation from Seaside can continue to flow, can continue to be developed. Steve Diamond, who's the chair of the board for Waterfront Toronto, who also in his own right is a developer whose family is from the Cadillac Fairview family of developments, made it clear that on their end, going past the initial 12-acre period and expecting that land to have any sort of deal at this point is premature. And speaking of Waterfront Toronto, my understanding largely from your reporting is that that relationship between Waterfront Toronto and Sidewalk Labs is not the best right now. The words I was told were negotiations have not been successful to this point. And what that actually means, if you looked at the document today, Sidewalk Labs opening the possibility to working around Waterfront Toronto and creating a

new agency by the three levels of government to deal with them specifically because they don't think that Waterfront Toronto is up to the job. That public administrator needs to have the capabilities and be empowered to think about new models, think about new approaches, think about the kind of policy and regulatory issues that have to be dealt with in order to enable innovation. I know that there's so much more that we could talk about right now, but to end our conversation today, I do want to zoom out a bit. Because, you know, listening to people talk about this neighborhood, I hear it in terms of a trade-off. I don't know if you would agree with me.

Like, you get all of these incredible things, this potentially carbon-neutral neighborhood, self-melting sidewalks, spaces where you can stay outside for most of the year, you know, an incredible garbage system. But possibly we have to give something up in order to do that. And, you know, Roger McNamee is a former advisor to Facebook. He's a venture capitalist. He's very critical of big tech companies. And he recently wrote a letter to the city of Toronto. I want to read you a quote from that. Quote, no matter what Google is offering, the value to Toronto cannot possibly approach the value your city is giving up. And, you know, parting thoughts today. What

do you think when you hear a quote like that? We've gotten to this point in this conversation and this discussion, because in in many ways it's a failure of leadership. You can't fault a private company for wanting to do what a private company does, which is pursue profits. And I don't think anybody at this stage can say Sidewalk Labs is doing anything wrong. They're doing what companies do. So the question really falls to government and how they have framed this entire debate over a smart city in downtown Toronto from the very beginning. This is about the future of our city and the future of our country in the sense of we don't have a lot of money. And the city of Toronto certainly doesn't have a lot

of money. And so we can't afford to build the infrastructure. We can't afford to put transit lines in downtown Toronto. So here we have a foreign entity that is willing to do this on our behalf. But there is a trade-off, as you say, which is, are we willing to have that at the expense of our privacy and at the expense of control? And I don't think I've heard any political leader frame the conversation in that way, which I think then puts the onus then on citizens to make up their own mind. David Skok, thank you so much for this conversation. I hope you'll come back soon so that we can continue to discuss these really important issues. Thanks for having me.

So the obvious question here is what happens next. Waterfront Toronto, which is in charge of Toronto's waterfront revitalization, is going to have to approve or not approve this plan. It says it will now undergo full, thorough, and extensive evaluation processes of the proposal before putting it to a vote. Its board will have to decide. There will also be public consultations on this in July. The vote was pushed back from September. It is now expected in December or January. We'll keep you posted. That's all for today. Thanks for listening to FrontBurner.

For more CBC Podcasts, go to cbc.ca slash podcasts. It's 2011 and the Arab Spring is raging. A lesbian activist in Syria starts a blog. She names it Gay Girl in Damascus. Am I crazy? Maybe. As her profile grows, so does the danger. The object of the email was, please read this while sitting down. It's like a genie came out of the bottle and you can't put it back.

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