Construction company faces 260 charges after failed Fort McMurray rebuilds

Service Alberta has laid 260 charges in connection with a failed construction project that promised to rebuild homes incinerated by the 2016 wildfire in Fort McMurray. 

Now bankrupt Edmonton-based builder MCG Construction Ltd., MCG Building Systems Canada Ltd. and three individuals have been charged under the Consumer Protection Act of Alberta. 

An email from a Service Alberta investigator obtained by CBC confirms the accused parties have been served and are due in provincial court in Fort McMurray on Friday. 

The charges relate to allegations of unfair business practices, including deceiving a consumer, suggesting that building products have attributes that they do not have and telling customers that goods or services will be supplied within a stated period when the supplier knows or ought to know that they will not. The allegations have not been proven in court. 

Service Alberta said it could not comment on the case because it's before the court.

The investigation, which dates back to 2017, involved 15 homeowners including Lorie Veitch, who lost her three-bedroom, wood-framed home in the Abasand neighbourhood in the Fort McMurray fire. 

That home is still under construction, but MCG Construction is no longer the builder. Instead, Veitch is in charge. 

Veitch, who has no construction experience, said she was forced to become a licensed home builder after firing MCG Construction in 2017. 

Jamie Malbeuf/CBC

The company had agreed to rebuild her home using fire-resistant pre-fabricated concrete and other materials. She said the company promised that she would be one of the first residents to move back into the neighbourhood. 

A random inspection by the Regional Municipality of Wood Buffalo in 2017 found that her foundation wasn't heated during construction and Veitch refused to let MCG back on site and began demanding a Service Alberta investigation.

"My foundation was the only one that they put in and after they put it in I had to pull it out with my own money at $34,000," Veitch said in an interview with CBC News on Wednesday.

Veitch has sunk about $300,000 into the build. All the while she's been paying the mortgage on her own property and rent on another home, at a cost of about $5,000 a month. 

She said she had to pull one of her children out of college because she couldn't pay for it anymore. 

"I've pulled out everything. Every credit card is maxed," said Veitch. 

With MCG Construction filing for bankruptcy last year, there is no chance of recovering her lost deposit or pursuing the matter in civil court. 

Veitch said she hopes her ordeal will prompt legislative changes that ensure construction companies are held accountable. 

"I've had to take every single cent of my retirement out to build this house or the bank was coming to take it," she said

"I'm just hoping that now our system is going to go forward because they let them go bankrupt and I don't understand how." 

Jamie Malbeuf/CBC

Fort McMurray-based lawyer Christine Burton, who has six of the affected families as clients, said the MCG build was troubled from the beginning. 

Some clients paid up to $300,000 in individual deposits to the company and "never got their homes back," Burton said.  

Homeowners grew increasingly concerned with the stalled construction of their new homes and began seeking legal advice in 2017, she said. The following year, they received notice that the company and its affiliate had filed for bankruptcy, she said.  

"People had used their insurance proceeds to put deposits down on these houses and nothing happened," Burton said.  

"There was no construction. The municipality had issued building permits on a couple of them … that's when I followed up with the Canadian Standards Association to see if these concrete panels had been approved for residential construction and that's when I found out they were not." 

'Way too late'

Burton said her clients are relieved about the charges but frustrated by delays in the investigation and a bankruptcy declaration that prevents any further civil action against the company.  

"This was way too late," Burton said. "We understand they had to do their investigation, there was a mountain of information, but if they had stepped in earlier and protected these consumers maybe these people would not have lost their deposits or more families wouldn't have been sucked in.

"There were a lot of creditors with these two companies and our clients got nothing." 

MCG Construction will be in court on Friday for its first appearance. 

CBC was not able to reach any company officials for comment.