Open this photo in gallery Illustration by Michael Haddad

Jim Balsillie is a former chairman and co-CEO of Research In Motion, where he commercialized Canadian intellectual property in more than 150 countries.

With politicians rushing to show Canada’s innovation chops, “smart cities” have emerged as their new frontier. Most consequential of these is a high-profile agreement between Waterfront Toronto and Sidewalk Labs, a subsidiary of Google’s parent company Alphabet. A year ago, Canadians were treated to an announcement involving the leaders of all three levels of government gushing and fawning about an enlightened urban partnership with a foreign company whose business model is built exclusively on the principle of mass surveillance.

The most insightful comments during the public announcement came when Eric Schmidt, Google’s former executive chair, said they had realized their long-running dream for “someone to give us a city and put us in charge.” He also thanked Canadian taxpayers for paying, creating and transferring the core artificial-intelligence technology he credits for Alphabet’s success, making it the world’s third most valuable corporation. The Google parent’s past and future growth are based on the intellectual property (IP) they own and the data they control.

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The 21st-century knowledge-based and data-driven economy is all about IP and data. “Smart cities” are the new battlefront for big tech because they serve as the most promising hotbed for additional intangible assets that hold the next trillion dollars to add to their market capitalizations. “Smart cities” rely on IP and data to make the vast array of city sensors more functionally valuable, and when under the control of private interests, an enormous new profit pool. As Sidewalk Labs’ chief executive Dan Doctoroff said: “We’re in this business to make money.” Sidewalk also wants full autonomy from city regulations so it can build without constraint.

Read more: Sidewalk Labs reveals Toronto neighbourhood site plan, sidestepping major criticisms

You can only commercialize IP or data when you own or control them. That’s why Sidewalk, as a recent Globe and Mail investigation revealed, is taking control to own all IP on this project. All smart companies know that controlling the IP controls access to the data, even when it’s shared data. Stunningly, when Waterfront Toronto released its “updated” agreement, they left the ownership of IP and data unresolved, even though IP experts publicly asserted that ownership of IP must be clarified up front or it defaults to Sidewalk. Securing new monopoly IP rights coupled with the best new data sets creates a systemic market advantage from which companies can inexorably expand.

A privately controlled “smart city” infrastructure upends traditional models of citizenship because you cannot opt out of a city or a society that practises mass surveillance. Foreign corporate interests tout new technocratic efficiencies while shrewdly occluding their unprecedented power grab. As the renowned technologist Evgeny Morozov said: “That the city is also the primary target of big tech is no accident: If these firms succeed in controlling its infrastructure, they need not to worry about much else.”

What happens with Toronto’s waterfront infrastructure will have profound and permanent impacts on the digital rights and prosperity of all Canadians because IP and data – our century’s most valuable extractive resources – spread seamlessly. Data has already been used as a potent tool to manipulate individuals, social relationships and autonomy. Any data collected can be reprocessed and analysed in new ways in the future that are unanticipated at the time of collection and this has major implications for our privacy, prosperity, freedom and democracy.

From the start, this project should have been debated publicly and involved experts in IP and data. Instead, Waterfront Toronto continues to weaponize ambiguity while making irreversible decisions that will have major negative effects on all Canadians. Is this how we want our cities and the future of our country managed?

Waterfront Toronto – a profile in mismanagement

In a recent brief to the federal government, the National Research Council warned that Canada was at risk of becoming a nation of “data cows,” leaking our most valuable national resource to companies such as Amazon, Google and others. Waterfront was undeterred by such warnings and rushed to create a contract with Sidewalk without any input from city staff. The agreement was so flawed Waterfront Toronto’s board tried to keep it secret for months while the Toronto City Council got a report making it clear the council didn’t know what Waterfront was doing. The unsuspecting public and public office holders were alerted to it by the board’s only elected official, city councillor Denzil Minnan-Wong, who said: “I know enough about the agreement that I think you would like to know more about the agreement.”

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The charitable among us would call these approaches incompetent, given that Waterfront has no experience or expertise commercializing either IP or data. The more astute would say this is a pattern of deliberate effort to make sure that Sidewalk comprehensively claims all the project-related IP and systemically extends its control of citizen data. After all, a Waterfront board member recently quit in protest over their relinquishing too much control to Sidewalk.

Sidewalk is currently hosting public consultations on Waterfront’s behalf, a curious governance arrangement to say the least. As media outlets including Wired reported: “The planning process is being paid for by Google, and Google won’t continue funding that process unless government authorities promise they’ll reach a final agreement that aligns with Google’s interests.” Those interests include Sidewalk’s desire to expand its Toronto experiments beyond the project’s 12-acre Quayside plot to adjacent land.

Meanwhile public consultations have been called “a masterclass in gaslighting and arrogance” because they deliberately avoid addressing citizen concerns about data and IP. For its part, Waterfront struck a committee of digital experts but cynically made their advice non-binding and mandated that they sign aggressive and overreaching confidentiality agreements which compelled resignations from prominent independent experts. It has also engaged a privacy expert who remains silent on the questions of ownership and residency of data, key determinants of privacy. On the issue of data collection and control, Waterfront Toronto is promising “meaningful consent” – whatever that means. No sooner than these empty declarations were made, an Associated Press investigation revealed that Google tracks users even when they don’t consent to being tracked.

Smart citizens deserve smart leadership

A year later, we are at a point where a secretive, unelected, publicly funded corporation with no expertise in IP, data or even basic digital rights is in charge of navigating forces of urban privatization, algorithmic control and rule by corporate contract. Civic and data experts have called Waterfront’s public engagement a “fundamental lack of democratic participation in the process,” and in her resignation from the Digital Strategy Advisory Panel on Thursday, Saadia Muzaffar pointed to “Waterfront Toronto’s astounding apathy and utter lack of leadership regarding shaky public trust and social licence.” Also this week, The Logic reported that the Ontario Auditor-General is investigating Waterfront Toronto. But if we want Toronto to be truly better governed and to have a more vibrant and prosperous future, we also need investigations into Waterfront’s RFP process for Quayside, its governance, its “secrets about secrets” in public engagements and value for money.

If we are to build viable digital cities for the benefit of Canadian citizens, we will need transparency and accountability between the government and its citizens, not a secret deal between an unelected, rogue public corporation and a foreign multinational in the business of mass surveillance. Waterfront’s current approach needs more than a complete overhaul. It requires a restart with a new RFP that accurately frames the urban issues Toronto is trying to resolve and the vision its citizens have for this particular piece of land, their demands for municipal control of data and digital infrastructure and the protection of their digital rights. If this project is to be a model to be exported around the world, as the Prime Minister said it will be, then maybe we can try engaging with Canadian innovators already providing smart cities technologies around the world rather than growing Alphabet’s bottom line.

Smart cities need to involve experts who protect us from enamoured politicians who continue to give away Canada’s most valuable intangible assets to foreign tech giants. As parent company, Alphabet, reminded us at the announcement a year ago, if Canada retained ownership of the taxpayer-funded IP and data we recently transferred to them, we would still have untold billions of dollars available for our cities' infrastructure and services. A sovereign strategy for smart cities presents an enormous opportunity for Canadians to develop new technologies, and new physical and digital infrastructure to serve the public interest, promote inclusive prosperity and even create new and better models of urban governance.

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As long as Waterfront remains clueless about IP and data while deferring to Sidewalk on all the critical decisions, Canadians will continue to be treated to glitzy images of pseudo-tech dystopia while foreign companies profit from the IP and data Canadian taxpayers fund and create. Sidewalk Toronto is not a smart city. It is a colonizing experiment in surveillance capitalism attempting to bulldoze important urban, civic and political issues. Of all the misguided innovation strategies Canada has launched over the past three decades, this purported smart city is not only the dumbest but also the most dangerous.