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What Toronto can learn from the ‘smart city’ that never materialized
June 24, 2020
Rosa Saba

The failure of Toronto’s Quayside smart city project boils down to two “original sins,” according to former Research In Motion co-CEO and Centre for Digital Rights founder Jim Balsillie: a lack of regulatory oversight and a lack of citizen input.

But that doesn’t mean Toronto can’t have a smart city -- under the right conditions.

According to Balsillie and York University assistant professor Natasha Tusikov, those original sins point the way forward to ensuring any future smart city projects don’t infringe upon citizens’ digital and privacy rights.

The sins of Sidewalk Labs

The Quayside project, a proposed smart city in the underused Port Lands area of Toronto spearheaded by Google sister company Sidewalk Labs, sounded appealing at first, said Balsillie.

The project promised a high-tech neighbourhood with sensors everywhere, gathering data on weather, movement, traffic and more.

But just months after a panel was formed in April 2018 to help Waterfront Toronto tackle data privacy and safety issues, experts on the panel started resigning, citing concerns over how the data would be collected and controlled.

And in May 2020, Sidewalk Labs pulled out of the project, blaming COVID-19.

Balsillie and Tusikov both say the Quayside development was flawed from the start, in two major ways.

The first was that it was allowed to move ahead without a proper regulatory framework, instead giving the regulatory power to Google’s parent Alphabet Inc., said Balsillie.

The second was that it didn’t involve citizens right from the start, he said.

He described the project as an example of “surveillance capitalism,” which infringes upon people’s basic rights to privacy.

The “hands-off attitude” by Waterfront Toronto led to “huge governance problems,” said Tusikov, who is currently studying data governance in smart cities using Toronto’s Quayside project as a case study.

“Everything about this was studded with data-collecting sensors,” she said, from health-care data to data about transportation and waste -- all for laudable purposes like environmental monitoring and safe traffic systems.

“The problem was, we didn’t know where this data was flowing,” she said.

Growing privacy concerns led to resignations throughout the project, such as that of tech entrepreneur Saadia Muzaffar, who left her role in October 2018, citing concerns that Sidewalk Labs, rather than Toronto, would have control over the valuable data stemming from the project.

Google wasn’t forthcoming about its intentions for the project, said Tusikov. And Toronto was taking on much more risk than the other players involved, essentially becoming a “test case” for Google -- not so much for the technology, but for standard-setting, she said.

“In our modern economy, control over data is central for economic dominance,” Tusikov said.

“Toronto would be a test case, a test case for the development of products, services and standards that would be exported elsewhere.”

What do Torontonians want?

Those two flaws highlight what needs to change before Toronto embarks on another smart city project -- something both Balsillie and Tusikov believe is possible, if done right, though the city hasn’t announced any plans yet.

If a new plan is proposed, Tusikov said, it must start with the question: “What do Torontonians want?”

That way, the technology will be based on what citizens need, instead of what companies want to test, she said.

Alongside that process, there must be a regulatory framework concerning data and the role of government and private actors in collecting and using that data, she said.

Balsillie said the regulatory framework necessary would include some serious updates to privacy legislation in Canada, and severe penalties for companies that “steal” and trade in information. Just like governments have made laws throughout history to mitigate the negative side effects of capitalism, such as child labour laws, similar rules need to be established to prevent the side effects of a data-driven economy, he said.

Balsillie said Toronto could have looked to Vienna, Amsterdam or Barcelona as examples where smart city pilot projects were approached in the right manner.

“For some reason Toronto chose to break all of the established, high-functioning rules.”

What happens to the data?

In this new smart city, could the data collected still be sold? Balsillie and Tusikov both say yes, there’s room for the data to be a commodity -- with restrictions.

Tusikov said with the proper regulatory framework, citizens may be more likely to trust that their data is being collected and used in a responsible manner that doesn’t violate their privacy.

She said she envisions an “open system,” where multiple parties have access to the collected data, creating competition instead of a monopoly.

Balsillie believes that while regulating data collection might sound like a new frontier, it’s no different than the way various resources have been regulated throughout history to protect consumers’ rights.

“When this data is in the public realm, it really is about power, and whoever has the power is fundamentally the government,” he said. “So, if there is profit, it has to be very carefully regulated with very, very careful oversight akin to what we do to water treatment plants or electrical utilities.”

Balsillie said he does believe there is room for profit from data in a potential smart city, as long as it’s founded on proper governance and not surveillance capitalism. And while data as a commodity sounds intangible to many, it’s just another new resource that needs regulation, he said.

“We’ve done it before,” he said. “We know the playbook.”

Balsillie’s Centre for Digital Rights is holding a two-part video series on surveillance capitalism, of which Tusikov is a part.

In the first video, posted June 17 and titled “Beyond Surveillance Capitalism,” Balsillie and Harvard business professor Shoshana Zuboff talk about the roots of capitalism and how it has led to today’s surveillance capitalism, exemplified by the failed Toronto project by Sidewalk Labs.

The second part of the talks, a panel titled “Beyond Smart Cities” and hosted by Zuboff, comes out June 24.

That conversation aims to address whether it’s possible to have smart cities in the “age of surveillance,” and what can be learned from the Quayside project, said Tusikov.