TORONTO — A damning forensic audit has revealed that Toronto taxpayers paid nearly $56 million more than expected for the city’s controversial snow-clearing contracts, raising serious concerns about procurement practices, oversight failures, and accountability at City Hall.
The report, conducted by KPMG, examined Toronto’s $1.5-billion snow-clearing program and found what it described as an “unusual and unexpected” contracting process that led to inflated costs and operational inefficiencies.
While auditors found no clear evidence of wrongdoing, they identified multiple red flags pointing to fraud and misconduct risks, along with systemic governance failures.
At the centre of the issue is how the contracts were awarded. When the city launched its procurement process in 2021, several experienced contractors were disqualified, leaving major service gaps. Under pressure to finalize agreements before winter, the city resorted to sole-sourced contracts, ultimately driving costs far beyond original estimates.
Toronto Mayor Olivia Chow said it is too early to determine whether the contracts should be cancelled, but acknowledged the seriousness of the findings.
The audit uncovered a series of decisions that further worsened the situation. Contractors initially faced $13 million in penalties for delayed work, but those fines were drastically reduced—from $200 per minute to just $10—following intervention by a senior city official.
In another major policy shift, subcontracting limits were increased from 25 per cent to 50 per cent, despite earlier warnings that higher limits could encourage bid-rigging practices.
Auditors also found that contractors substituted cheaper equipment than promised without any reduction in the rates paid by the city. Meanwhile, land leased by the city to contractors for equipment storage was priced at just $40,000 annually—without any proper market valuation.
Further concerns were raised about a “revolving door” between City Hall and contractors. Several municipal employees moved directly into roles with private companies involved in the contracts, with mandatory cooling-off periods waived in some cases.
Perhaps most troubling, the audit revealed that many of the companies awarded contracts were closely interconnected, creating a complex web where competing bidders ultimately benefited from the same work through subcontracting arrangements.
Councillor Paul Ainslie described the issues as “systemic”, emphasizing that the problem lies not with individuals but with flawed processes.
“The procurement suffered from serious governance weaknesses,” he said, calling for stronger oversight and transparency moving forward.
The findings come after widespread criticism of Toronto’s snow response during the 2025 winter storm, which left large parts of the city paralyzed and prompted calls for accountability.
As pressure mounts, the audit has intensified scrutiny on how major municipal contracts are awarded — and whether taxpayers are getting value for money in essential city services.