Province doubles down on $5.5 Billion LRT price tag

The provincial government has doubled down on its estimate that the Hamilton LRT would cost $5.5 Billion. Earlier this month the province released a heavily redacted report from the consultants the government had hired to double check the cost of the Hamilton LRT project. Some of the numbers in the document appeared to be at odds with the $5.5 Billion price tag the ministry had released to justify cancelling Hamilton LRT last December. The Bay Observer contacted Transport Minister Caroline Mulroney’s office to get clarification on the estimated costs for the Hamilton LRT project.

A spokesperson in the Ministers office responded as follows: “An independent, expert analysis found that the total cost of the previous Hamilton LRT project would be $5.5 billion, adding”

•             “This figure is billions more than anything that the previous government committed to this project.”

•             “Taxpayers in Ontario expect us to be responsible when it comes to building major infrastructure projects – a project that runs billions over the expected cost without any true accountability may have been acceptable to the liberal government, but it is not to our government.”

•             “We have been clear that we want to get transit built for the people of Hamilton, and our government has always been clear that we would be providing $1 billion to do just that.”

•             “Our independent task force brought forward recommendations for analysis that will fit within the scope of that funding and ensure that transit gets built that works for the people of Hamilton, and respects the taxpayers funding this project.”

•             “Our government has already directed Metrolinx and Infrastructure Ontario to conduct a technical and financial review of these recommendations to determine which of these projects will best serve the needs of Hamilton.”

•            ” Moving forward we will explore all options to leverage our $1 billion in funding with any potential funding partners, including the federal government, in an effort to get transit built.”

The spokesperson then went on to address the issue of operating and maintenance costs which would be the responsibility of the City of Hamilton: “The expert analysis also shows that almost $1 billion in operating costs for the previous LRT would be paid for directly by the City of Hamilton. Any increased costs incurred by the City would be paid for directly by residents of Hamilton.” Adding, “It would be irresponsible for any government to put a burden of this size directly on the residents of a city in an attempt make up for a lack of accountability and oversight when it came to this project.”

Sources have told the Bay Observer that contrary to the hope of some members of Hamilton City Council, the province is not going to make a final determination. Council will be presented with an analysis that will lay out the amount of LRT that can be obtained for $1 Billion, and the amount of Bus Rapid Transit and other conventional transit that can be purchased for the same amount. If council wants to proceed with LRT, the province will make the necessary application to the federal government for a matching share, but it would still leave roughly $1 Billion or more to be made up by Hamilton. The existing federal transit program that was used for the Kitchener LRT and the Ottawa LRT involves the municipality paying a share. A report in the Hamilton Spectator quotes LIUNA suggesting that funding could be obtained from the Federal Infrastructure Bank, but any borrowing whether from the Infrastructure Bank or a private source, would have to be added to the city’s debt total. In past, members of Hamilton City Council had stipulated that their support for the project was contingent on Hamilton not paying anything for LRT construction.

In the Spectator story, the provincial contribution was described as $1.2 Billion which would trigger a similar contribution from Ottawa; however, the note from the Minister’s office three times referred to the Provincial contribution as $1 Billion only, leaving another potential $400 Million of senior government funding in limbo.

One of the key arguments made by LRT proponents is that LRT is much more than just a transit project—that it is an economic development catalyst. However, during the twelve year odyssey of Hamilton LRT, no detailed study has been presented to assess the potential economic uplift of Bus Rapid Transit, possibly electrified,as the Task Force had suggested,with at-level stations, but running on rubber instead of fixed rail.