Toronto on hook for $100 million for improvements related to rail expansion

City taxpayers will have "several" years to pay Metrolinx for its share of items such as roads and utility work on the Georgetown-Union-Pearson rail line.


Thestar.com
March 3, 2015
By David Rider

Toronto faces future bills for regional rail expansion costs beyond the $95.4 million bill that has flummoxed city politicians.

Mayor John Tory’s executive committee heard Monday that the city owes that big sum for road and utility work done by the provincial Metrolinx agency on crossings for the Georgetown South and Union-Pearson Express line.

But the city faces shared costs to improve city infrastructure, such as crossings and utilities along other GO lines emanating from Union Station, as well as for Tory’s SmartTrack plan, which will use GO tracks, and for the Eglinton Crosstown LRT line.

“We are having the same kind of cautionary discussions with the city on other projects, so there's nothing particularly unusual about this,” Metrolinx CEO Bruce McCuaig said Tuesday.

“When we are impacting linear infrastructure that crosses miles and miles of cities, we also impact assets that are owned by municipalities. In some cases, they contribute to the upgrade or rehabilitation or change to those assets.”

Municipalities traditionally share such costs, he said, adding the province usually picks up 85 per cent of the cost of building an underpass or overpass.

Behind closed doors Monday, city manager Joe Pennachetti briefed executive committee about the $95.4 million bill. Sources say some councillors were shocked by the size of the tab, and that more bills will follow.

The Star has learned committee members received a confidential report that states the province originally wanted about $170 million from the city for Georgetown-Pearson costs, and city staff negotiated the cost down.

Councillors were also told that the city could pay this first of several expected Metrolinx bills from reserve funds - general capital reserves, Toronto Water capital reserves and a debt reserve from transportation services.

The sobering news came on top of a public revelation that the provincial and federal governments are refusing to pay the city’s request for a total of $60 million in cost overruns for Union Station revitalization.

Pennachetti suggested that negotiations with the province at the staff level are finished. Tory insisted that discussions continue over the size of Toronto’s tab.

At Queen’s Park, Transportation Minister Steven Del Duca said Toronto knew the Georgetown costs were coming and that the city is on the hook for any Union Station overruns.

“The province of Ontario is supporting the Union Station revitalization to the tune of $172 million,” he told reporters. “It's my understanding the city has been well aware from Day 1... they would be responsible for cost overruns.”

McCuaig believes $95.4 million is a final figure but needs to be confirmed by city council and the Metrolinx board, likely at its next meeting in June.

The confidential report to the executive committee also says that city staff discovered Toronto seems to be overpaying, relative to its neighbours, an annual contribution to GO’s capital budget. Staff have suggested that Toronto suspend the payment, noting it coughed up $20 million in 2013, compared with only $13.3 million for the rest of the Greater Toronto/Hamilton area.

McCuaig said it was his understanding that Toronto might pause its payments to the fund, which is meant to contribute to GO’s growth. He said that might allow it and other communities in the region to come up with a sustainable approach going forward.