WINNIPEG – Former Winnipeg mayor Sam Katz faced questions at a public inquiry Thursday about money he received from a contractor leading a major construction project that ran over budget.
The inquiry is examining the city’s development of the headquarters for the Winnipeg Police Service, which ran more than $70 million over its $135-million budget by the time it was completed in 2016.
Caspian Construction had been awarded the project in 2011, and at around the same time, companies owned by Katz and the city’s chief administrative officer, Phil Sheegl, received $327,000 from a Caspian executive.
Sheegl and Katz have said the money was for an unrelated land transaction in Arizona, where they sold their interests in a property to the executive.
The sale was not disclosed to city council, and in a civil case, a Manitoba judge said the money received by Sheegl, who had been given authority to grant the contract to Caspian, was a bribe.
The judge said the explanation of a land transaction was “incredible” as there was no documentation of negotiations and the sale price of the land was about six times higher than what Katz, Sheegl and other co-investors had paid for it several years earlier.
Katz was not the subject of the city’s lawsuit against Sheegl and others.
Under questioning by city lawyer Michael Finlayson on Thursday, Katz repeated comments he made several years ago — that he should have disclosed the sale.
“At that point in time, it wasn’t anything I thought about. It was a small transaction,” Katz said.
“And as I said earlier … obviously it should have been (disclosed).”
The payments came at roughly the same time city council authorized more money to meet the growing project costs, Finlayson said.
Under questioning by Sheegl’s lawyer, Evan Roitenberg, Katz said the land sale was one of many deals that Sheegl would put together and informally ask investors to join.
“Many times, these were handshake or phone call arrangements. Would that be fair?” Roitenberg asked.
“Almost all the time,” Katz replied.
Katz told the inquiry the money he received had no influence on his votes on the project, and he was hurt by the description of the land sale as a bribe.
“I’m offended and disappointed. I take great offence. To me, the key thing in life is your reputation and your credibility.”
Katz said he called a meeting with the police chief and others on the steering committee overseeing in the project in 2011, and told them the project was not to rise any further beyond a maximum guaranteed price that had been agreed upon.
He said he told the steering committee to find a solution to rising costs, but they never found a solution and costs rose again.
Sheegl appealed the civil court ruling and lost. The Manitoba Court of Appeal said Sheegl’s actions amounted to “disgraceful, unethical behaviour by a public servant.”
Sheegl is scheduled to appear at the inquiry next week.
This report by The Canadian Press was first published Feb. 12, 2026.
