Quayside: Revitalizing the Toronto Smart City Project
By: Albi Nani & Liam Deschamps
The Ivey Business Review is a student publication conceived, designed and managed by Honors Business Administration students at the Ivey Business School.
A Failure Unturned
In 2017, Waterfront Toronto (Waterfront), entered into an agreement with Sidewalk Labs (Sidewalk), a subsidiary of Alphabet, to take the decrepit Quayside waterfront property and turn it into a smart city block. This initiative would propel Toronto’s emergence as North America’s next technology hub and provide a blueprint for the future of urban innovation. However, only three years later in 2020, the project was abruptly terminated by Sidewalk, citing financial difficulties from the COVID-19 pandemic.
The downturn allowed Waterfront to swiftly exit the Quayside project without acknowledging its failures. By allowing Sidewalk to drive the narrative, Waterfront was unable to quell concerns surrounding data collection and usage, incurring protests from the surrounding communities.
Sidewalk’s exit from Quayside prompted Waterfront to re-evaluate their project development strategy and re-establish their presence as the controlling party. Following Sidewalk’s withdrawal, Waterfront announced their intention to continue with creating a smart city block — this time placing inclusivity, accountability, and sustainability as guiding principles. To capitalize on this second chance, it is vital that Waterfront works with specialized firms in infrastructure and traffic management to implement technologies that meet local needs while maintaining robust data governance.
6ix in the City
The city of Toronto is the fourth-largest in North America, with a population of 2.9 million as of 2019. Regarded as the world’s next ‘tech hub’, Toronto was considered an ideal candidate to host a smart city project due to its abundance of tech talent and plots desperately needing development. The Quayside zone where the project was proposed had been mismanaged for decades and littered with abandoned facilities, providing minimal value to the city and the public at large.
Waterfront is uniquely positioned to take ownership of this opportunity. As an organization built in collaboration with the Government of Canada, Government of Ontario, and City of Toronto, it has financial and political backing from all levels of government to drive meaningful action. However, concerns remain that ambitious urban design might be stymied by bureaucracy and the increased public scrutiny that accompanies public-sector projects.
Building the Toronto of Tomorrow
For the Quayside project, Sidewalk planned to implement a variety of smart technologies, including heated sidewalks, heated bike paths, underground freight delivery using drones, universal Wi-Fi, and using an all-wood building method that was intended to be cheaper and less carbon intensive. Sidewalk also intended to install cameras covering all of Quayside’s public spaces to analyze traffic patterns. However, the public was understandably concerned by this level of surveillance.
These technologies were extremely ambitious. While heated sidewalks do exist in Nordic cities like Helsinki, Oslo, and Reykjavik, they have never been implemented on Sidewalk’s intended scale. Similarly, no neighbourhoods have ever been built using all-timber construction frames and underground delivery systems were a novel concept. While the city of Toronto has tested automated water meters, as well as a free-wifi pilot project that provides an internet connection to 25 apartment buildings in low-income neighbourhoods, the proposed technological advances are new to Toronto. Sidewalk wanted Quayside to feel futuristic and innovative, however, their project plan resembled science-fiction more than 21st century realities of the challenges within cities.
Profits Over Privacy
Perhaps the most exciting prospect — and simultaneously the biggest drawback — of the original Waterfront-Sidewalk partnership was working with Alphabet. While working with the tech giant unlocked several data capabilities and opportunities that would have otherwise been unavailable, it also presented an unbalanced power dynamic. With a market capitalization of $2 trillion and expertise in smart technologies, Alphabet was the leading party on the Quayside project.
Waterfront’s only option for exerting influence was through policy. Decisions over data governance were particularly divisive. While Alphabet needed access to consumer data to deliver the full potential of smart technologies, they were met with public backlash centered around privacy concerns. Philosophical tensions caused the project to deteriorate, with Ann Cavoukian, an advisor on the project who served as Ontario’s information-and-privacy commission for 16 years, resigning from her role. Despite her initial support for the project, she believed that a private tech giant was incapable of using the data to serve public interests. This was followed by a reduction in Quayside’s scope, from a 190-acre smart-city project to 12 acres of modernized development, and a complete rejection of Alphabet’s claim to data ownership.
The largest point of friction was Sidewalk’s proposal for an urban data trust. Similar to a trust fund, Sidewalk would act as the steward for all data collected and distribute the data to its partners when necessary. However, Sidewalk’s plan included no mention of Waterfront’s role in the data infrastructure, removing the chances for Waterfront to ever have the project be developed in their own vision.
An urban data trust could solve a plethora of data governance problems if controlled by the appropriate party. If Waterfront were to fulfill the role of trustee on behalf of its citizens, corporate partners could use the data in a controlled capacity that protects residents from needless data harvesting. To realize the potential of a shared data-governance approach, Waterfront should change their partnership strategy from a bilateral approach to a multilateral arrangement that involves the public, private, and social sectors. Waterfront should recognize that no single organization has the requisite knowledge to make Quayside work; Sidewalk may have had Alphabet’s big data capabilities, but they were not experts in urban development. Waterfront’s best option is a collection of niche, collaborative entities that function under a unified governance model.
The Quay (Key) to Data Governance
Successfully executing an urban data trust requires that the infrastructure match the power dynamic of the Quayside project. With Sidewalk no longer involved in the project, Waterfront can distribute data access based on their own set of criteria. As the steward, Waterfront would determine which partners have access to certain segments of data. Given that up to 73 percent of data collected by organizations goes unused because of collection redundancies, having one party responsible for distributing the data would also improve efficiency and incentivize beneficiaries’ participation.
Concerns over data privacy will undoubtedly continue. Therefore, it is crucial for Waterfront to give citizens agency over their own data. The “Aware Home” project already proved this was possible at a smart home scale. The initiative offered the functionality of a smart home while ensuring the data collected was proprietary to the user by remaining in a closed loop and was only used with the user’s permission. Consequently, only the user and the firms immediately using the data have access to user information. While this model was limited in scope, having Waterfront responsible for expanding the loop while keeping it closed enabled scalability that was previously not feasible in a pro-privacy model. Addressing the privacy concerns of citizens will consequently appease activist groups that prevented Quayside from progressing when Sidewalk was involved.
Most crucially, Waterfront’s corporate partners must be convinced that giving up ownership of data is beneficial. This is a substantial reason why Waterfront would be better served finding various niche partners rather than relying on a few industry giants like Google — the former is much less inclined to engage in data-heavy platform envelopment strategies than the latter. With Waterfront acting as the data’s steward, Quayside would save smaller beneficiaries the trouble of cleaning up the data, which takes up nearly 80 percent of a data scientist’s time. This process ensures the private firms that are partnering with Waterfront can spend their time generating insights they can use to create knowledge proprietary to their firm. For instance, if Bell acted as Quayside’s network infrastructure partner, they could be given data on network traffic and connectivity heat zones to determine where they could best allocate future network capacity resources. In contrast, a traffic management firm such as Geotab would only be given access to location and density data to ensure their data analytics pertain to Quayside’s road infrastructure.
Granted, there are still problems with giving Waterfront control over the urban data trust. While surveillance concerns with private partners can be dealt with using the aforementioned closed-loop model, this may not alleviate fears of privacy breaches at the government level. Even if the current governing body was anti-surveillance, this might change in the future when a new city council is elected. However, prior resistance to the Quayside project was primarily directed at Alphabet’s propensity for surveillance, not Waterfront’s. Torontonians want to be able to trust Waterfront to take action and give it the power necessary to innovate.
Building the Toronto of Tomorrow (Take Two)
Quayside’s technologies need to be affordable, realistic, and feasible to justify its own expansion over time. While Sidewalk did initially propose heated sidewalks, their project scope was unrealistic; fortunately, they are not overly ambitious to install. Heated sidewalks are a useful technology for northern cities, as snow and ice buildup can be costly for cities to clean up, and can reduce safety hazards for pedestrians and cyclists. While cost can be a burden, this should not be an issue for Waterfront. The projected cost of implementing heated sidewalks in Quayside would be an approximately $8 million investment upfront, with up to $80,000 in costs per year for maintenance and operations. For an organization with nearly C$245 million in capital funding, this can certainly be afforded.
Second, Quayside should employ a traffic management system. These systems would gather traffic data at intersections to improve the signalling and safety of cyclists and pedestrians. The city of Pittsburgh has begun to use the system at 50 intersections across the city that use video and radar to detect traffic and adjust signals in real-time. This has led to reduced travel times, wait times at intersections, and vehicle emissions. These systems are not only efficient, but they are environmentally friendly and have clear precedence. A traffic management system is something that would greatly improve life in Toronto, especially considering Toronto is the second-worst city in Canada for congestion.
Putting the Tech in T.O.
Toronto is positioned uniquely in the smart city market; the city ranks 20th on the global urban mobility index despite having little of the smart infrastructure implemented by other members of the top 20. This is less an indication of Toronto’s lack of technological expertise, and more a statement of Toronto’s potential to be one of the world’s top cities if smart technologies are successfully integrated.
Quayside represents an important first step in that integration process. With an opportunity to pilot experimental technologies separate from the rest of the downtown core, Waterfront can afford to take risks with Quayside. Should these technologies prove to better serve the city and its goals, they can then be scaled across the downtown core and its neighbouring boroughs. However, this is contingent on Waterfront successfully implementing an urban data trust that focuses on high-impact and feasible technologies that strengthens Quayside’s reputation in smart city development. Waterfront has an opportunity to be a model for private-public relationships, and this collaboration is key to unlocking Quayside’s potential.