Regina land deal 'looks like it's not a normal transaction': auditor

Saskatchewan's provincial auditor says land transactions involving the provincial government and uncovered by CBC's iTeam "may require us to have a little bit more of a look."

"This might be a transaction that we should probably have a closer look at because it looks like it's not a normal transaction," said Judy Ferguson.

In February 2014, the Global Transportation Hub, a government-owned industrial park, purchased 204 acres of land on the west side of Regina for two to three times more than government appraisals said the property was worth.

The GTH paid $103,000 an acre when government-commissioned appraisals said the land was worth between $30,000 and $65,000 an acre.

The minister responsible for the GTH said he asked the Crown corporation to purchase the land because it was required to help complete the planned West Regina Bypass. The Ministry of Highways was planning to build an interchange on the bypass that would allow trucks to drive into the GTH without traffic lights.

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One month after the GTH acquired the land it sold 58 acres of it to the Ministry of Highways which is the land it required for the interchange. The ministry purchased the land for $50,000 an acre which is less than half what the GTH paid for it just one month earlier.

Referring to the series of transactions, Ferguson said "we just have to make sure is it normal or not. We don't have that information at this point in time, but there's enough there to make us pause."

"The government usually isn't in the business of buying and selling land," she said.  

Why didn't the Ministry of Highways expropriate the property?

Critics have wondered why the government asked the GTH to buy the land when the Ministry of Highways could have expropriated at a lower price. Ferguson said that caught her eye too. 

"In the articles it's indicating that instead of the Ministry of Highways taking the expropriation route which is often the route they use when they need lands to expand the highway structure or change the highway structure it looks like they're taking a different route here," Ferguson said. 

"So we'll pause on that and make sure that we understand what's going on." 

She said while expropriation is the normal route, "we are aware that from time to time there's needs to buy it through different means." 

Bill Boyd, minister responsible for the GTH, explained that the seller of the 204 acres had an appraisal showing the land was worth $125,000 an acre, once developed as an industrial subdivision. 

"So there's a pretty big risk to the taxpayer, I would say, that if we expropriated that it would be challenged at some point in the future in a court," Boyd explained. "That appraisal would be presented at that point and we could lose."

Ferguson said in her routine annual audit of government finances, her office always looks at the buying and selling of land. She said as part of that process, her office examines transactions that stand out. 

"If things sort of stick out we spend a little more time on them."

Ferguson said her office examines files to make sure that decisions were made with the best interest of taxpayers in mind. "We're also hoping that when there is two agencies involved that there is an open line of communication between those two agencies so in essence the left hand knows what the right hand is doing." 

Ferguson said the staff member who deals with area is currently on vacation. She said that before deciding whether to take next steps she will need to consult with that worker to see what has been done so far. 

Ferguson said "our starting point will likely be the Ministry of Highways and Transportation because it all links to the bypass and then we'll see where it takes us." 

She says her office has the ultimate responsibility for auditing the GTH, though the Crown corporation uses a private auditing firm. 

She said the private auditor will likely serve as the "front line" in her review but she does point out that her office has the ability "to go in and do work directly." 

She said the findings would be published in her December 2016 report.

Saskatchewan Premier Brad Wall also addressed the potential of a review by the auditor.

"We welcome it. We welcome any scrutiny of the transactions," Wall told reporters on Friday.