David George-Cosh

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Alphabet Inc.'s Sidewalk Labs is pulling out of Toronto's Quayside development, marking an end to a two-year-long urban design project that faced backlash over surveillance and privacy concerns. 

In a blog post May 7, Sidewalk Labs Chief Executive Officer Dan Doctoroff said the company informed Waterfront Toronto, the multi-government agency responsible for development on the planned site, it would no longer move forward with the project. 

"As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan we had developed together with Waterfront Toronto to build a truly inclusive, sustainable community," Doctoroff wrote in the post. 

Toronto awarded Alphabet's Sidewalk Labs 12 acres of development along its waterfront in October 2017 to design a high-tech smart city development that would provide an example of how to incorporate buildings, autonomous vehicles and state-of-the-art wood-frame towers into an urban development. 

In a statement released on Thursday, Toronto councillor Joe Cressy said the city will continue to move forward with developing the Quayside neighbourhood, albeit with a different perspective following Sidewalk Labs' departure. 

"While this does mean that Waterfront Toronto will start again to reimagine Quayside, none of this work will go to waste," Cressy said. "The engagement and feedback we have received from residents and community organizations has given us a solid framework that will shape our work going forward."

But the project was marred by frequent criticism from local opponents as well as well-known technology investors such as Roger McNamee who decried how Sidewalk Labs planned to use the massive amount of data it planned to collect from the development. 

"The quantity of data collected will be unprecedented, as will be the potential for abuse. There are currently few restrictions on the commercial exploitation of private data, leaving consumers with no hope of safety and little recourse for harm," McNamee said in a letter submitted to Toronto city officials last June.

In response to the privacy concerns, Sidewalk Labs had proposed that data collected in public spaces be overseen by an independent data trust.

Toronto Mayor John Tory said in a statement that the city will continue to seek partners to develop the Quayside area and include affordable housing and sustainability features. 

"Our goal remains to ultimately build a neighbourhood focused on innovation in Quayside that will be the envy of cities around the world and a beacon for the future," Tory said.