Skip to content

The Monitor Progressive news, views and ideas

Taking a hammer to Steeltown: Ontario government cancels funding for Hamilton’s LRT project

December 20, 2019

4-minute read

With virtually no prior warning, the Ontario government announced on Monday, December 16—five days ago—that they had cancelled the Hamilton Light Rail Transit (LRT) project, a long-planned 14-km rapid transit line running east-west across Hamilton between McMaster University and Eastgate Square.

Adding insult to injury, Ontario Transportation Minister Caroline Mulroney tried to keep the public away from the downtown Hamilton press conference where she was going to make her announcement. When a large group of residents and local Council members showed up anyway, she cancelled the presser and snuck out the back door with a police escort, leaving a visibly shaken Mayor Fred Eisenberger to deliver the bad news.

In a subsequent media interview, Minister Mulroney claimed that the LRT’s cost had ballooned from an original estimated $1 billion to a staggering $5.6 billion, shocking everyone familiar with the project. She refused to provide any details about this new cost estimate, saying only that a confidential third party prepared it for the government after they received a tip that the costs for Hamilton’s LRT might be increasing. 

Based on the dribble of information Mulroney did provide, the estimate is absurdly disingenuous for several reasons. 

First, it conflates the capital cost to build the system with an additional 30 years of operating costs to imply that the previous Liberal government had vastly underestimated their funding envelope. 

Second, it estimates that the total cost for construction, property appropriation and other construction services will somehow come to $3.62 billion, a number vastly out of step with other recent LRT projects in Ontario. 

On top of that, it claims that 30 years of operations will come to a further $1.934 billion. That works out to $64 million a year in operating costs!

We can’t assess how the ‘third party’ arrived at these numbers, because the provincial government refuses to share the analysis or even the name of the organization that prepared it. But according to Joe Mancinelli, President of LIUNA, the three consortiums that were bidding on the LRT project are saying the costs seem way off.

Ironically, Hamilton was only three months away from the conclusion of the Request for Proposals (RFP), a competitive bidding process among the three qualified agencies looking to build and operate the system for Metrolinx. By March, the actual capital and operating cost numbers would have been available—instead of this dubiously-sourced estimate.

Metrolinx already has a process for circumstances in which all the bids for a project come in over budget: they look for ways to scale back the project or otherwise cut costs in order to fit the budget. This recently happened in Mississauga, when the Hurontario LRT bids came in over the $1.4 billion capital budget. In response, Metrolinx removed a planned loop around Mississauga City Centre, eliminated three stops and deferred a pedestrian bridge. With these cost savings in place, the province finalized the contract in October and construction will start in 2020.

Another option would have been to ask the federal government to help cover any funding shortfall. Catherine McKenna, the federal Minister of Infrastructure and Communities, has already signalled that the federal government would be willing to work with Queen’s Park on Hamilton’s LRT. 

But none of these options were pursued or proposed. The province simply pulled the plug, despite the fact that less than a week earlier, they were still meeting with the Hamilton Chamber of Commerce to discuss the LRT implementation.

So much for being “transparent” and “open for business”. So much for an open, competitive bidding process. Instead, Hamilton residents are being told they must accept arbitrary decisions made behind closed doors using secret numbers.

The province has said they will still invest $1 billion for transportation in Hamilton and establish a “task force” to determine how the money will be spent. But don’t expect a billion dollars’ worth of stocking stuffers any time soon. That promised money was never just sitting in a bank account, earmarked for Hamilton. Under the terms of the P3 contract, the consortium that wins the contract will finance the system as well as building and operating it. In turn, the Province agreed to make regular payments to the consortium over the 30-year contract term and would  recover that money through fare revenue and new tax assessment on economic growth and development spurred by the LRT line. 

This entire process has been profoundly unfair to Hamilton. It is the only city whose LRT plan was subjected to this additional ‘third party analysis’. It is the only city whose LRT plan did not get the opportunity to receive final competitive bids or to find cost savings if those bids came in over budget. It is the only city whose capital cost was conflated with its 30-year operating costs to justify the narrative of out-of-control spending.

This also represents a blow to civic engagement and the local democratic process: over the past 12 years, thousands of Hamiltonians from all walks of life and every part of the city advocated and campaigned for, debated on and were part of the approval process of this transformational project. Perhaps worse, in the face of the global climate emergency, the decision to kill a clean, electric mass transit system is a profound betrayal of our duty to hand our children and grandchildren a liveable planet. 

Last year’s municipal election became a de-facto referendum on LRT when incumbent Mayor Eisenberger faced off against a well-funded opponent whose entire campaign centred around cancelling the LRT project. After Eisenberger won a commanding majority, Premier Doug Ford responded, “When people democratically elect someone, if he wants an LRT, he's gonna get an LRT."

Another promise made, another promise broken. 

Ryan McGreal is the editor of Raise the Hammer, a civic affairs website in Hamilton, Ontario, and a founding member of Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. He has also written for Hamilton Magazine, the Hamilton Spectator, The Walrus, HuffPost and Our Schools/ Our Selves.


Topics addressed in this article

Related Articles

Canada’s fight against inflation: Bank of Canada could induce a recession

History tells us that the Bank of Canada has a 0% success rate in fighting inflation by quickly raising interest rates. If a pilot told me that they’d only ever attempted a particular landing three times in the past 60 years with a 0% success rate, that’s not a plane I’d want to be on. Unfortunately, that looks likes the plane all Canadians are on now.

Non-viable businesses need an"off-ramp"

Throughout the pandemic, many small- and medium-sized businesses have weathered the storm, thanks to federal government help. In his deputation to Canada's federal Industry Committee, David Macdonald says it's time to give those businesses an "off-ramp".

Truth bomb: Corporate sector winning the economic recovery lottery; workers falling behind

This isn’t a workers’ wage-led recovery; in fact, inflation is eating into workers’ wages, diminishing their ability to recover from the pandemic recession. Corporate profits are capturing more economic growth than in any previous recession recovery period over the past 50 years.