Manitoba government asks auditor general to review daycare project connected to PC campaign director's company

The province has asked Manitoba's auditor general to review a $100-million daycare construction project initiated by the previous Progressive Conservative government in partnership with a company that paid millions of dollars to a separate company co-owned by the director of the PCs' 2023 re-election campaign. 

In 2022, the province announced a $70-million "partnership" that included John Q Public Inc., a company owned by 12 rural municipalities, which are listed as shareholders.

"The total project managed by John Q was valued at almost $100 million and may not have followed normal provincial or municipal procurement practices," says an April 16 letter from Brian O'Leary, deputy minister of education and early learning, to the auditor general, which was tabled during question period Thursday.

John Q entered into a contract with Boom Done Next, a management consulting company, according to Colleen Sklar, CEO of John Q Public Inc. 

Boom Done Next is owned by Joe Leuzzi and Marni Larkin, the PCs' campaign manager in 2023.

Twenty-two daycares were built.  All but one have since opened, according to John Q. 

On Thursday, Manitoba Education and Early Childhood Learning Minister Tracy Schmidt stood up in the legislature and said former premier Heather Stefanson and former education minister Wayne Ewasko "awarded" child-care project deals to Boom Done Next, which overlapped with the time Larkin was running the PC Party campaign.

Schmidt said in question period that Larkin's company received $2.8 million from taxpayers. 

"John Q is an umbrella organization that awarded many contracts to many subcontractors. Boom Done Next is one of those subcontractors, and Marni Larkin is listed as the owner and director of Boom Done Next," said Schmidt outside the legislative chamber. 

It is not clear why the minister said the money paid to Boom Done Next was "awarded" by the former premier and education minister, when they were contracted by John Q.  

CBC News had been asking questions about the daycare project and the involvement of Boom Done Next for more than a week. The province has not yet answered a number of those questions.

When CBC News interviewed Schmidt on April 10, the minister didn't appear to know much about the daycare project. At the time, she said she assumed the contract to John Q was tendered or awarded through a request for proposal, or RFP.

The province has not confirmed if either a tender or RFP happened.

In the April 10 interview with CBC News, Schmidt was asked about details of the daycare project and said, "I'm not here to question the decisions made by other governments." 

Daycare project was John Q's idea

Sklar said John Q pitched the ready-to-move daycare project to the province in 2021, which would see millions in government grant money given to build 22 daycares in rural municipalities. 

Sklar says the province agreed to the partnership after multiple meetings with provincial staff.

"Actually, Joe [Leuzzi] helped us in the very beginning understand what was necessary to do this project," said Sklar in an interview with CBC News. "We don't do construction. We needed to understand how do we manage construction."

When asked if it was Leuzzi's idea or hers, Sklar said, "it was a collaborative idea."

"It's our idea, and Joe helped us with that, and it was really important to have that type of insight," said Sklar.

She said she reached out to Leuzzi after learning he worked on the Bruce Oake Recovery Centre, an addictions treatment facility built on city land. The city sold the land to the province in 2018 with the agreement it would be leased to the treatment centre for $1 per year for 99 years.

Sklar said she wanted to know how they got such a great agreement. 

"I wanted to know how they got the land … with the city as a way to leverage the build," said Sklar.

In an email to CBC News, Leuzzi said Boom Done Next was brought into the project because "we deliver results."

He said Larkin, his business partner, recused herself from the project and played no role.

"The suggestion that our role in this important work is somehow suspect in any way is disappointing and frankly, disheartening," wrote Leuzzi.

He called the province's letter to the auditor general "a political narrative to generate headlines" and said it was "not only unfair to the many professionals who contributed to this effort — it also does a disservice to the families who are now benefiting from greater access to high-quality, affordable child care."

The daycare project was managed by JQ Built, a spinoff company of John Q Public. Sklar said JQ Built paid Boom Done Next to provide oversight of the construction contract to build 22 daycares.

The building contract was awarded through a public tender to Pretium Projects, whose president, Justin Bova, is the son of Joe Bova, who co-chaired the PC Party's failed re-election bid in 2023. 

Sklar did not say if Pretium was the lowest bidder, but did say it was the highest ranked. 

On the night of her party's defeat in October 2023, Stefanson thanked Joe Bova, as well as Larkin, whom she called her campaign manager and friend. 

John Q's website says its profits are split between its shareholder municipalities. CBC News reached out to the 12 rural municipalities listed as shareholders and only heard back from two. 

The RM of Rosser said no money has been received so far by the municipality from John Q.

The RM of St. Andrews says it also has not received any funds from John Q.

In a brief interview Thursday afternoon, Brad Erb, reeve of RM of Macdonald and chair of John Q, said no RM has received distribution of any profits from John Q. He would not explain why, but said he looks forward to the auditor general's review process and that he had no further comment. 

Former education minister Wayne Ewasko said in a news conference after question period he was not aware about the contract with Boom Done Next. He said he never met with Sklar about the daycare project and Boom Done Next did not work on his 2023 re-election campaign.  

"I don't personally have any concerns," Ewasko said.