Cost of Ontario's land registry project escalates out of control

Converting Ontario's land registry documents to an electronic format could take another 10 years and the provincial auditor says it could end up costing $1 billion.

But the company tackling the automation process says the original estimate of just how many documents had to be converted along with inconsistent paperwork at the province's 55 registry offices have translated into continued delays for the project first begun a decade ago.

"It has been known for many years that this would be much more expensive than we thought, only because the work has been much harder," said Aris Kaplanis, president of Teranet Land Information Services Inc., the Toronto-based firm enlisted by the province to transfer all property records online.

The project's ultimate goal is to automate all land records to permit searching and registration of real estate documents using computers. So far Teranet has electronically filed documents for more than three million properties and was to finish the job this year.

Teranet was one of the first private/public sector partnerships in the province, principally owned by Miralta Capital - a Quebec-- based venture capital group.

But when the original contract was signed in 1991 there were only about three million land records in the province.

"We have 1.4 million left to go and nobody really knows how many parcels (of land) are out there," said Kaplanis. "There are over 25 per cent more properties than anybody knew about - so that's a big piece of it."

Teranet estimates there are about 350 million pieces of paper in the system - some dating back 200 years.

"Some of the filing cabinets in the registry offices were literally causing the floors to cave in because there was so much paper," Kaplanis said.

The escalating cost of the project became public in November when the provincial auditor, Erik Peters, released a report. But it wasn't news for those working close to the project, including the Ministry of Consumer and Commercial Relations, the body that handed the project over to Teranet in 1991.

Long before Peters' report grabbed headlines, the province knew costs were skyrocketing.

While the initial estimate to complete the job was $275 million in 1991, warnings were being sounded two years ago when costs were expected to reach $560 million. And in April 1999, the tally was more than $700 million. Other scenarios put total project costs in excess of $1 billion.

Peters said he made no recommendations for the project, saying it was up to the ministry which had already agreed there was a problem.

"When they get notice from Teranet itself saying it is now going to cost,$700 million to complete and take to 2010 to do the job, then my suggestion is the ministry should take a very close look at this and have a strategy and a plan, to ensure its obligation of having a land registry system in place is met," Peters said.

The ministry says it is examining various options to speed up the process. "We are looking at how to get the work completed in a way that is cost effective without losing anything involved in the integrity of the land records," said Lisa Elliott, a spokesperson with the Ministry of Consumer and Commercial Relations.

"Its a complicated thing and fortunately or unfortunately we are the first jurisdiction to do this so there are not a lot of benchmarks. It's not as if we could call up another jurisdiction and say 'What was your experience with this?.'"

Electronic registration of new documents began with a pilot in Middlesex County Southwestern Ontario and has progressed from there. Elliott says that pilot "was very carefully reviewed" and others followed in three other regions.

In its defence, Kaplanis says Teranet is tackling an unpredictable job. "If you have 350 million pieces of paper and there's a one per cent error rate, that's 3.5 million errors," he said. "It's just so big - you're going through 350 million records that don't always correlate properly. Some of the papers are literally a couple hundred years old."

Of the 55 land registry offices in Ontario, just 17 are now online after 10 years. "We've completed the work where the predominant activity is - the Metro Toronto and Golden Horseshoe area. As you go into the smaller offices there isn't a lot of activity but that's where the records are in the worst shape and that is where the expense comes in," said Kaplanis. "It's an automator's nightmare. Every land registrar had their own fiefdom and filed in their own way."

Kaplanis believes the provincial auditor's estimate of $1 billion for completing the job was unrealistic.

By Jennifer Brown

Special to Technology in Government

Copyright Plesman Publications Ltd. Feb 2001
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