I don't see how that is a fair exchange.

There's every chance that Sidewalk Labs would get to build infrastructure that would otherwise be illegal, and collects data that people don't want collected, just because nobody outside Sidewalk Labs managed to get access to the data.

Even people inside Sidewalk Labs shouldn't have the data. The data shouldn't be collected in the first place.

If they can build a stable, private, secure system which can increase the quality of life, then I am all for it.

The data seems to be needed to be able to adapt to the ever changing conditions.

Two big issues they can help alleviate, homelessness and addiction.

Ok I'll bite. How can collecting this data, in any way, help alleviate homelessness or addiction?

If you don't try to enact these projects how are you going to know the value they derive. The data collection is a necessary part of optimizing the solution.

Edit: The Sidewalks Lab project is building a city. Toronto can move any people who need assistance into the society. It almost sounds like a thought experiment, but with the resources they have access to, they would be better able to assist than the city.

For example, Toronto doesn't have enough safe injection sites. The data would help to highlight that if it is collected.

A fairer exchange would be that all data collected be made public at the most granular level. If there are concerns that it could be abused or is an invasion of privacy, then they're collecting too much.