Report finds construction company got $42M in excess claims on Winnipeg police HQ

WINNIPEG – The commissioner of a public inquiry into the development of Winnipeg’s police headquarters has found that the city was overcharged and overpaid tens of millions to the lead construction company. 

Garth Smorang wrote in his final report he is satisfied the evidence presented during the inquiry, which began earlier this year, suggests Caspian Construction received approximately $42 million for excess claims, while another $1.3 million was paid to an employee of a consulting firm for project costs but was diverted elsewhere. 

The inquiry is examining the city’s development of a headquarters for the Winnipeg Police Service, which ran more than $70 million over budget by the time it was completed in 2016. 

Smorang says had the city not been overcharged, the project’s final costs would have fallen well within the total that was approved by council in 2011. 

The purchase and renovation of the former Canada Post building was the subject of an RCMP investigation into fraud, but no charges were laid. 

A judge in a civil court case, launched by the city, found in 2022 that Phil Sheegl, the city’s former chief administrative officer, accepted a bribe from the owner of Caspian. 

Sheegl had said the money was for an unrelated real estate transaction in Arizona, in which the contractor bought equity and the proceeds were split with former Mayor Sam Katz, who was a co-investor in the property.

Katz told the inquiry that he should have disclosed the sale. 

He said the money he received had no influence on his votes on the project, and he was hurt by the description of the land sale as a bribe.

Smorang issued 25 recommendations relating to procurement policies and how the city handles major projects, including improving the city’s request for proposals on large-scale projects. 

This report by The Canadian Press was first published Oct. 19, 2026.