A daycare owned by an organization created to benefit Peguis First Nation promises dozens of new daycare spots for families when it opens its doors — but not for the First Nation in Manitoba’s Interlake region, which is in dire need of child care.
Instead, the project, touting 74 new spaces for children, was built in East St. Paul, northeast of Winnipeg and more than 150 kilometres south of Peguis.
“Why wouldn’t you bring it to Peguis here and build it here, when we need it here?” said Bruce Sinclair, a Peguis elder who is concerned by lack of daycare spots on the First Nation.
The daycare, which is still not operational, is built on part of a plot of land that was formerly a private golf course called The Meadows in East St. Paul.
The 75-hectare parcel of land was purchased in 2021 by the Peguis First Nation Real Estate Trust, an arm’s-length entity formed to acquire real estate for investment and housing for the benefit of band members, according to its founding documents.
The Peguis daycare in East St. Paul is part of a project initiated by Manitoba’s former Progressive Conservative government to build more than two dozen daycares. The current NDP government has asked the province’s auditor general to review whether that project followed procurement rules.
It’s unclear when the East St. Paul daycare will open its doors. With the project experiencing “significant delays,” according to Education Minister Tracy Schmidt, funding for the East St. Paul project stopped flowing in November 2024 in order to complete a review.
“We discovered some, what I would call, irregularities in the administration of the contract,” Schmidt said at a press conference at the Manitoba Legislature near the end of April.
In addition to the education department’s concerns, the builder filed a lien for $2.4 million against the property.
The trust’s former chair says the daycare building is finished and the province is holding up the opening.
“It is completed and ready for occupancy. We just need the province to finalize the payment to [the builder] to get it operational,” said Greg Stevenson, who was the chair of the Peguis trust from July 2021 until early January 2025.
Initially, the Peguis First Nation Real Estate Trust wanted to build a 2,000-home mixed-use development on the former Meadows golf course in East St. Paul, combining housing with commercial businesses.
With guidance from Winnipeg developer Andrew Marquess, the trust purchased the former course for $12.3 million in 2021.
The trust had been set up less than a month earlier. Former Peguis chief Glenn Hudson and the band council at the time appointed its initial five trustees, who were replaced by an entirely new board in January.
The land purchase used $10 million from a $64-million settlement awarded to the band by the federal government in 2008, according to a statement of claim filed in an unrelated lawsuit.
Extra money for the development came from a $5.5-million loan from a company owned by Maureen Diamond, Marquess’s wife, after the trust could not obtain financing from a bank or credit union, according to court documents. The same court filing shows terms of the loan requiring monthly interest-only payments of $26,000 per month.
But the Rural Municipality of East St. Paul didn’t approve the housing project. It had suspended all new developments back in 2020 because of a lack of infrastructure.
In March 2022, the municipal council voted down the trust’s proposal due to the lack of sewer capacity, among other issues.
Nine months later, the trust decided to proceed with the daycare project.
During a two-year span, which includes when the daycare deal was being made, Winnipeg developer Marquess was being paid an average of $158,000 a month as a consultant for Peguis First Nation, according to a list of payments provided to CBC News by the band’s current chief and council.
Peguis First Nation Real Estate Trust signed a deal with the province in November 2022 that required the trust to provide 15 years of free rent to a non-profit child-care provider, plus pay for snow-clearing, according to the funding agreement that CBC News obtained through a freedom-of-information request.
Elder Bruce Sinclair, who is part of the group that opposed the re-election of Glenn Hudson in 2023, says he questions what Peguis members get out of this daycare deal.
“It’s not a good deal for Peguis,” Sinclair said. “Why should we have to be paying and paying?”
Family members pitch in to take care of his great-grandchildren, ages one and two, while his granddaughter works as a nurse at Percy E. Moore Hospital near Peguis.
His great-grandchildren were on the waiting list for the existing 42-space on-reserve daycare until last month. According to its director, the daycare has 29 children waiting to get in, with a wait time of one to three years.
The children were offered spots at the on-reserve daycare last month, but were forced to decline because the daycare only gave them a week lead time to start attending — something nearly impossible for the family, who have been living in Winnipeg since being forced out of their home during the 2017 flood.
Sinclair is also upset that $10 million in Peguis land settlement money is tied up in the East St. Paul land.
“That’s not right. I don’t know how they can say they’re right in what they’re doing.”
The East St. Paul daycare is one of 22 daycares that were project-managed by JohnQ Public Inc., a company owned by 12 rural municipalities.
WATCH | A look at the Peguis daycare:
Peguis trust built daycare on $12.3M property more than 150 kilometres away from First Nation
The price tag for the daycares was nearly $100 million, according to the province.
Last month, the NDP government asked the province’s auditor general to review all the JohnQ daycares.
Deputy education minister Brian O’Leary said in an April 16 letter to the auditor general that the project “may not have followed normal provincial or municipal procurement practices,” and asked for a review of that, as well as how child-care spaces were doled out, given none were in the city of Winnipeg.
Auditor General Tyson Shtykalo said he is reviewing the request and has asked for more information before determining what action, if any, his office will take.
The 22 JohnQ daycares were part of a larger effort by Manitoba’s Progressive Conservatives to get 25 child-care centres built in the province.
JohnQ and the trust awarded the contract for running the Peguis daycare in East St. Paul to Created 4 Me Early Learning Centre, a local non-profit, in October 2024.
It already operates a 36-space facility in the area and has an existing list of 500 children who have been waiting up to three years for a spot. Kids on that waitlist will get spaces at the Peguis daycare when it opens.
“This will allow for 74 more spaces in our community to open up, meeting that need,” executive director Laura Van Landeghem said in an interview with CBC News.
The daycare is still going through the licensing process. There’s no set date for opening.
The Peguis trust was tipped off in the summer of 2022 that the province had new funding for daycares.
In a report to Peguis’s current chief and council, obtained by CBC News, Marquess said his “contacts at the province” told him at that point they were moving forward with a daycare program.
In an emailed statement sent to CBC via his lawyer, Marquess has since backtracked from this statement. He now says it was Colleen Sklar, JohnQ Public’s chief executive officer, who informed him about the program to build daycares.
Sklar did not respond to a request for comment.
Stevenson, the former chair of the Peguis trust, corroborated Marquess’s account.
“Andrew [Marquess] then told us there was a possibility that [the trust] could get a daycare. We liked the idea and talked to chief and council, who also liked the idea,” Stevenson told CBC News in an email.
He said Peguis’s former chief and council approved the project, even though the daycare would not be built in their community.
“We understood from JQ Public that the daycare was for the East St. Paul area,” Stevenson said.
When asked how the daycare benefits Peguis members in light of its distance from the reserve, Stevenson said Peguis received a $5-million building “that cost nothing to build from the trust” and will generate rental revenue in 15 years, after the rent-free period for the child-care provider ends.
Stevenson said the benefits to the community go beyond the daycare itself, because the goal of the trust is to develop land and return profits to Peguis.
“Since we owned the land in [East St. Paul], it made sense to put a building there to start the process of our vision for that land,” said Stevenson.
He said the initial trustees took on the role because they believed that the trust could become “one of Manitoba’s competitive developers” as it grew in knowledge and experience.
The province said it dealt with the trust rather than the First Nation because former Peguis chief and council passed a resolution in favour of that arrangement in November 2022, according to a statement from an unnamed provincial spokesperson.
Marquess says his involvement in the daycare project was limited to informing the trustees and former chief and council about the opportunity to obtain one of the proposed daycares, and providing advice to the trustees from time to time as the project progressed.
“I also encouraged them to pursue the project because I believed it was a win-win for the trust, Peguis First Nation and the community of East St. Paul,” Marquess said in an email from his lawyer.
“I had no involvement in the construction of the daycare,” Marquess said in the email. That was handled by JohnQ and the general contractor, he said.
A Winnipeg company called Pretium Projects Ltd. won two tenders issued by JohnQ to build 22 nearly identical daycares. The structures were largely prebuilt and then assembled on site.
Peguis’s daycare started with a budget of just under $4 million. In August 2024, then education minister Nello Altomare approved a budget increase to $5.5 million.
Pretium said it’s still owed money by the Peguis trust for its work on the daycare. It has placed a $2.4-million builder’s lien on the property.
While the daycare occupies nearly a hectare, the lien is applied against most of the nearly 75-hectare parcel of land that was formerly the Meadows golf course.
A lawyer for Pretium said the money owed is due to construction change orders communicated and authorized through the appropriate channels prior to the start of construction.
“The Peguis [trust’s] daycare was then constructed within budget,” said Pretium’s lawyer.
The start of construction was delayed by the trust by 18 months, according to the lawyer.
There were no construction-related delays and the daycare was delivered one month ahead of schedule, the lawyer said.
There are differing accounts on how JohnQ and Pretium were selected for the Peguis project.
Former trust chair Stevenson said JohnQ, Pretium and the province ran the project, not the Peguis trust — and the trust didn’t choose JohnQ.
The construction project “was already structured and operational prior to the trust having it awarded to us from the province,” Stevenson said.
Meanwhile, the province says all 22 of the communities with daycare construction projects run by JohnQ chose the company as project manager.
An unnamed provincial spokesperson said the Peguis trust let the province know it selected JohnQ in August 2022.
Stevenson also accused the province of holding up the certification, licensing and permits for the daycare.
“The province quit funding the construction invoices at the end of project but never told [the trust] that they were withholding funding for the project,” wrote Stevenson in an email to CBC News.
Naline Rampersad, the spokesperson for Education Minister Schmidt, said the province “formally advised” Stevenson at the beginning of November that it was starting “a due diligence process.”
The lawyer for the newly elected board of trustees of the Peguis real estate trust, Sonny Cochrane, did not respond to requests for comment.
John Gailus, the lawyer who represents Peguis First Nation and its members, said he has nothing to say because he hasn’t been kept informed of the trust’s activities.
Peguis First Nation “has been kept in the dark on this (and other) projects,” Gailus said in an email.
