COLLINGWOOD, ONT. — A judicial inquiry into the sale of half of this town’s electrical utility — and how council spent some of the proceeds — has begun six years after the deal went through.

While there is fierce disagreement on whether an inquiry is needed, many hope the public airing will lift the cloud of scandal — exacerbated by an ongoing Ontario Provincial Police investigation — hovering over this booming vacation-retirement community on the southern shore of Georgian Bay.

At an introductory session last week, Frank Marrocco, the Ontario Superior Court associate chief justice who is presiding, told residents packed into a library room that the inquiry, which will include sworn testimony, is not a trial.

“No one is charged with criminal activity. No one is being sued,” Marrocco reiterated the next day at a hearing to consider requests from people to participate and, in some cases, to receive funding for legal representation.

After public hearings, Marrocco will prepare a report that will be turned over to the Town of Collingwood. Janet Leiper, Toronto’s former integrity commissioner, is lead counsel tasked with running the proceedings.

Supporters of the inquiry, including Deputy Mayor Brian Saunderson, insist it is “absolutely a necessity. We owe it to our residents to understand what happened.” He pushed for and voted last February to ask the province to convene the probe.

A lawyer running for the Collingwood mayor’s job in this fall’s election, he was not on council when it decided to sell a 50 per cent stake in the power utility for $8 million.

Nor was Saunderson on council when it voted to use some of the proceeds to award a sole-source $12.4-million contract to a construction company that installed a “tension fabric membrane” on top of an ice rink and community pool.

The decision resulted in a $756,740.42 payday for former Liberal MP Paul Bonwick, brother of current Mayor Sandra Cooper, for his work as a consultant on the project. Cooper voted in favour of the contract. Her brother’s role was not disclosed publicly at the time.

Cooper’s lawyer declined to comment to the Star for this article. Cooper has previously denied any wrongdoing.

She opened the June council meeting by reading a prepared statement saying she was unaware of any family member being involved in the recreation facility deal.

David O’Connor, Bonwick’s lawyer, said while he believes the inquiry was pushed by people trying to ruin Bonwick’s reputation with “false accusations and allegations,” his client welcomes the chance to clear his name.

“We are looking forward to the public in this community hearing the real truth about what happened,” O’Connor said, adding that his client “should be applauded” for helping bring the recreation facilities to the town.

A July 2014 “information to obtain (ITO)” document, produced by the OPP and unsealed by a judge in Barrie earlier this year at the request of CBC News, alleged the payment to Bonwick was “shrouded in various layers of secrecy and is evidence of fraudulent activity — to which the ... Town of Collingwood is the victim.”

ITOs are filed by police when they are requesting a court’s authorization to perform certain tasks, such as obtain a search warrant.

None of the allegations contained in the document have been tested in court, and the OPP have laid no charges in the matter.

O’Connor said the ITO included allegations in order to obtain banking records, which did “absolutely nothing to advance their investigation.”

Saunderson, the deputy mayor, said answers are needed on “who, if anyone, benefited from that (utility sale) transaction and then how those proceeds were spent.”

Opponents of the inquiry see it as part of a continued “witch hunt,” driven by a crop of council candidates running in the upcoming municipal election. Cooper is not running for re-election.

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“All this happened six or more years ago, yet there are still some people in the community who are angry about those decisions,” said former Collingwood councillor Ian Chadwick, who is running for deputy mayor.

“The current council has had three years to request an inquiry into those decisions, yet it was called for only a few weeks before nominations opened for the upcoming municipal election. Doing so now was clearly politically motivated.”

Saunderson scoffs at that assertion.

“There’s not many politicians that would want to be spending $1.5 million of town money ... at the time of an election to pursue something like this,” he said.

Steve Berman, a Collingwood resident running for council, began filing freedom of information requests to the town when he started reading about the sole-source contract, “which didn’t pass the smell test,” he said.

He provided that information to OPP investigators and now hopes the inquiry can clear the air.

“If it’s all fine, if this is the way things are done, then the inquiry will come forward with a set of recommendations that hopefully the next council will adopt and we can make things more transparent.”

Berman believes what’s happening in Collingwood has broader application to towns across Ontario that are transitioning to a more businesslike and transparent way of operating.

O’Connor, Bonwick’s lawyer, acknowledged the “optics” weren’t the best, given that his client is the mayor’s brother and also played a role as a consultant to PowerStream, the company that purchased a 50 per cent stake in Collingwood’s power company, Collus, in 2012.

Yet he noted that at the time, the Municipal Conflict of Interest Act didn’t require the mayor to declare a conflict, because siblings were not included.

Before the sole-source contract was signed, the town wanted to upgrade its recreational facilities but did not have the money to pay for a proposed $35-million facility. Bonwick helped to put together an alternative solution that cost roughly a third as much, O’Connor said.

The construction company agreed to pay him a percentage of its contract with the town, which was a 6.5 per cent commission, and he fulfilled his obligation to them and was paid, he added.

“I think what the inquiry is going to find out is the mayor didn’t even know her brother was involved. That might seem far-fetched, but if you know the mayor, it’s not. She’s a very innocent, lovely woman.”