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Toronto may leave $121M unspent in federal transit funding

City staff warn that they might not be able to meet the 2019 deadline to spend all of the $856 million allocated to Toronto.
Oct. 23, 2017
By Ben Spurr

The city says it could be forced to leave millions of dollars in federal infrastructure funding unspent unless Ottawa agrees to extend the deadlines for using the money.

Last year the Liberal government gave Toronto's transportation plans a huge boost by allocating the city $856 million from the first phase of its $3.4-billion Public Transit Infrastructure Fund.

However, the funding came with strings attached - it can only be spent on projects scheduled to be complete by March 31, 2019, and a maximum of 40 per cent of the money can be spent in the final year of the program.

Council has identified 87 projects to spend the money on, the majority of which are for the TTC. They include subway track maintenance, upgrades to TTC stations, design and construction of rail yards, and the purchase of nearly 800 new buses. The money must be matched by municipal spending.

A report going to Mayor John Tory's executive committee on Tuesday says not all of the projects will be able to meet the federal government's requirements. City staff have identified about $121.5 million in federal money that is "currently at risk" for not being spent within the fund's guidelines

The report, which was authored by the city manager and the acting chief financial officer, also warns that 37 per cent of the funding is projected to be spent in the program's final year, leaving just a 3 per cent cushion to avoid breaching Ottawa's 40-per-cent limit.

"As a result, there is limited contingency for slippage in project delivery," the report says.

Staff are recommending council ask Ottawa to extend the deadline for the fund by one year, to March 31, 2020, and to increase the portion of the program that can be spent in the final year to 70 per cent.

If the federal government doesn't agree to "additional program flexibility," the city might have to remove some projects from the list, which would leave Toronto taxpayers on the hook for the entire cost of the work.

A spokesperson for Mayor John Tory said while the city is spending the infrastructure money "in an efficient and responsible way," ever since the program was announced "staff have warned that it would be difficult to roll out millions of dollars in projects in such a short timeframe."

"Staff have advised that the city should be asking the federal government for more flexibility with the timeline so we can make sure we deliver these projects. We don't want to leave any money on the table and we're confident the federal government doesn't want to either," said Don Peat.

In an email, Brook Simpson, the press secretary to Minister of Infrastructure and Communities Amarjeet Sohi, didn't slam the door on the possibility of loosening the guidelines.

Simpson said the minister has the power to grant extensions on individual projects "where there is a demonstrated need," and noted other municipalities have also signalled they want a "program-wide extension."

"We will continue to work with our partners to respond to their needs and timelines under our existing programs," Simpson said.

As a backup plan, the report says, the TTC is negotiating with vendors to speed up the purchase of new buses. That could cut the amount of funding that risks going unspent to $84.8 million.