10/03/2011 10:35 EDT | Updated 12/03/2011 05:12 EST

Hazel McCallion Inquiry: Mississauga Mayor Found To Be In Conflict Of Interest

Flickr: Églantine

MISSISSAUGA, Ont. - The "significant concerns" raised by a conflict of interest inquiry did little to rattle Mississauga's long-serving mayor Monday, with 90-year-old Hazel McCallion maintaining she had the city's best interests at heart even when advocating a land deal that would have benefited her son.

The judicial inquiry, which took nearly two years to complete, was primarily trying to determine whether McCallion should have been promoting World Class Developments — a failed multimillion-dollar development contract involving her son’s company.

"I find that her actions in promoting (World Class Developments) amounted to a conflict of interest, both real and apparent," said Justice Douglas Cunningham in the lengthy report released Monday.

Cunningham went on to recommend tighter conflict of interest regulations for municipalities, saying McCallion ought to have recognized how far she was using her public office to forward a deal that would financially benefit her son.

However, the report didn't say the mayor breached the existing Municipal Conflict of Interest Act — a fact McCallion noted several times Monday.

"I really believe that the citizens of Mississauga have confidence that I've always put Mississauga first in all negotiations that have taken place over the last 33 years that I've been mayor," McCallion said at a news conference.

"The commissioner and his lawyer stated that I did not breach the act and the act did not apply to my discussions with the private parties, however he found that common law principals applied to these discussions."

McCallion added that she'd be happy to apologize to citizens who thought she might have breached the act, but reacted strongly when asked if she planned to step down given the findings of the report.

"No, by any means, because I complied with the conflict of interest act as the commissioner has confirmed," she said.

Cunningham's report did however recommend a number of changes to the Mississauga code of conduct and tried to define a role for an integrity commissioner in the city. It also highlighted the need for "substantive" legislative reforms at the provincial level.

"Those who are fortunate to enjoy friendships with the mayor have derived benefits from those friendships," wrote Cunningham.

He noted however that the situation in Mississauga didn't appear to have garnered significant controversy in the city where McCallion is serving her 12th term in office.

McCallion said she supported the changes suggested by Cunningham and would work to implement them.

"I believe his recommendations benefit both the citizens and the elected people, and I endorse them," she said.

McCallion, known affectionately as Hurricane Hazel, was first elected to lead Mississauga in 1978.

Now serving what she has said is her last term in office, it's clear, despite the report's findings, that McCallion is held in high regard, even by Cunningham.

The head of the inquiry even went as far as to say he made his findings with a "measure of regret" given McCallion's long and largely positive history as the mayor of Mississauga — a city the report referred to as "one of Canada's great urban success stories."

McCallion had previously said she didn't know that her son Peter was a principal shareholder of World Class Developments and its real estate agent.

After attracting scores of Fortune 500 companies to Mississauga, she said she believed she was just doing her job as mayor when she tried to get a five-star hotel-convention centre to locate in the city’s downtown.

Council voted to call an inquiry into the failed hotel deal in November 2009, with McCallion's detractors demanding more transparency between the mayor’s office and the private sector.

As far as McCallion's involvement in the project goes, the report found the mayor convinced landowners to negotiate with WCD despite their concerns over the project's viability.

"It was the mayor and not WCD who almost single-handedly promoted the project and kept the deal alive through 2008," the report said.

The report did acknowledge that McCallion's enthusiasm for the project was driven by her desire for a four- or five-star hotel in the city, but pointed out that the mayor knowingly used her public office to influence landowners to agree to concessions that benefited her son's project.

"She knew her son Peter McCallion stood to gain financially if the deal succeeded," it said. "For this reason the exercise of influence put her position of conflict, both real and apparent."

Mississauga is the third largest city in Ontario and the sixth largest in Canada, with a population of 734,000.