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Ontario auditor general to probe Hamilton light rail costs as questions about cancellation linger


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December 27, 2019 by Shawn Jeffords, The Canadian Press

The route of the now-cancelled light rail system. PHOTO: Infrastructure Ontario

TORONTO—Ontario’s auditor general will investigate the “reasonableness” of government cost estimates for Hamilton’s now cancelled light-rail line, as questions remain about the figures used to justify scrapping the transit project.

Bonnie Lysyk said Dec. 20 she will probe the estimates quoted by Premier Doug Ford’s government as part of a larger audit her office is already conducting on the province’s regional transit agency, Metrolinx.

NDP Leader Andrea Horwath wrote Lysyk earlier this week to ask her to investigate the costs, which the Progressive Conservative government said have ballooned from $1 billion to $5.5 billion.

“As part of this audit, we will be looking at the reasonableness of the cost estimates for rapid transit projects, including the Hamilton LRT,” Lysyk said in a letter to Horwath, without giving a timeline for the release of her findings.

The government created a firestorm of controversy earlier this week when it backtracked on a campaign promise to fund the 14-kilometre transit line, saying it could no longer afford to pay for it.

Transportation Minister Caroline Mulroney said she would strike a task force to help her decide how to spend a billion on other transit projects for the city.

But Horwath — who represents a Hamilton riding — has been amongst a group of vocal critics, including Hamilton’s mayor, questioning the new cost estimates and calling the cancellation a betrayal of the city.

Earlier this week, Horwath asked the auditor to look at the project, saying the costs are out of line with similar projects being built in other parts of the province.

“It appears that the minister is comparing apples to oranges by including operations and maintenance costs over 30 years, as well as other non- construction costs, such as property acquisition, pre-construction municipal infrastructure upgrades and HST,” she said in a letter to Lysyk.

Horwath has also called on the government to release a third-party consultant’s report it used to justify scrapping the project. The government has said it will not release the document because it contains information that is commercially sensitive.

The province will also not release details about so-called “break fees” that must be paid to bidders on the project now that it has been cancelled.

The government has instead released a one-page summary of the project cost estimates, which factors in $950 million in operating expenses which were to have been paid by the city over 30 years.

A spokesman for Mulroney blamed the previous Liberal government for hiding the escalating costs of the project from public view.

“When our government assumed office, we learned the previous government was not transparent with the people of Hamilton about the true costs of this project,” Callum Elder said in a statement. “Our government completed its due diligence and commissioned an expert third-party to conduct a detailed cost estimate. We have confidence in these numbers.”

The 17-stop project was estimated to cost $1 billion when the previous Liberal government committed to funding it in 2014. The Progressive Conservatives promised during the 2018 election to move ahead with it, then recommitted to it in their 2019 budget last March. The government quoted the costs of the project in the budget as $1 billion.

A government list of pre-procurement projects issued in September by Infrastructure Ontario also continued to list the project’s price-tag as $1 billion.

Liberal legislator Michael Coteau has asked the province’s Financial Accountability Officer — another legislative watchdog — to probe the matter and determine the true costs of the project.