Hamilton at risk of having to repay $70M if it rejects LRT, mayor says

Toronto repaid Metrolinx $75 million after it voted down an LRT system. There are some parallels.

Toronto repaid Metrolinx $75M after it voted down an LRT system

Toronto planned to replace and extend its Scarborough rapid transit line with LRT, but opted to extend its subway system instead. The debate raged on for years and cost Toronto millions. Among those costs: $75 million to pay back Metrolinx for money it spent planning LRT. (Giordano Ciampini/Canadian Press)

Metrolinx has spent as much as $70 million on Hamilton light rail transit (LRT) so far. And if city council kills the project, the mayor says, there's a good chance local taxpayers will have to pay that back.

There's a reasonable expectation that, if the will of council is to walk away from this thing, there's a bill to be paid.- Mayor Fred Eisenberger

Mayor Fred Eisenberger says Hamilton could end up like Toronto, which had to repay Metrolinx $75 million when it cancelled a Scarborough LRT project.

Metrolinx and the city have been working together on the $1 billion system "in good faith," Eisenberger said. Last summer, council voted to establish a joint LRT office. Earlier this year, they signed a memorandum of agreement.

Show-stopping details could still emerge, Eisenberger said. Otherwise, it's "not unusual" that the city would have to pay the money back. In this case, the amount is nearly twice Hamilton's contribution to its new Tim Hortons Field stadium.

"There's a reasonable expectation that, if the will of council is to walk away from this thing, there's a bill to be paid," he said.

Earlier this year, T2 Utility Engineers scanned for and marked utilities and water and sewer lines under Hamilton streets. It's just some of the roughly $65 million in work Metrolinx has done on LRT. (Samantha Craggs/CBC)

Metrolinx doesn't deny this. Spokesperson Anne Marie Aikins said Wednesday that the agency would analyze the situation if Hamilton backed away.

There were costs we couldn't get back.- Anne Marie Aikins, Metrolinx 

But Scarborough is an example of how the agency handles such cases, she said.

"There were costs we couldn't get back," she said, and "they had signed a contract." 

Aikins said a memorandum of agreement would qualify. Paul Johnson, the city's LRT project head, assured councillors this year that the memorandum was "non-binding," but "that doesn't mean that it isn't important."

This month, municipal lawyer George Rust D'Eye warned council not to reverse its LRT decisions without "thorough consideration and legal advice with respect to the implications."

$75 million to build nothing

There were certainly implications in Toronto. The city planned a Scarborough LRT line to replace an older rapid transit line. It also wanted to extend the line to Sheppard Avenue.

(It would be) an astronomical amount of money for nothing.- Sam Merulla, Ward 4 councillor

The project got as far as a request for qualifications for companies to build it. Then in October 2013, Toronto city council voted 24-20 to extend the subway system instead. (As of July, the LRT debate still raged.)

The city had to repay $75 million to Metrolinx for work it did on the project, the Toronto Star reported. One headline dubbed it "$75 million spends to build … nothing."

This map shows the future LRT route and its stops. (City of Hamilton)

Hamilton councillors asked staff this week about potential off ramps. In the spring, for example, council will vote on an updated environmental assessment. And procurement won't start until next year.

But the costs Toronto is repaying include staff salaries and money for consultants. Those are the same costs Johnson cited this week when he said Metrolinx has spent $60 million to $70 million so far.

It would be "an astronomical amount of money for nothing," said Coun. Sam Merulla of Ward 4, who wants LRT. Aidan Johnson, a Ward 1 pro-LRT councillor and lawyer, called it "an argument for not abandoning LRT."

Dollar figure would 'hold us hostage'

"Once you've spent $60 million on a plan," he said, "you have to have a really good reason for abandoning that plan."

It wouldn't surprise me if they held us hostage with that figure, whatever that figure is.- Chad Collins, Ward 5 councillor

Even with the money spent, Coun. Chad Collins of Ward 5 said it's important to know what Hamiltonians think. Collins stopped supporting the project after the last municipal election, when he says residents overwhelmingly told him they were against it.

Collins wanted to push for a referendum. He dropped that after Rust D'Eye said it required two thirds of council to vote to reconsider LRT. But he still thinks there should be one.

As for repaying the money, "it wouldn't surprise me if they held us hostage with that figure, whatever that figure is," he said.

"I think they're intent on moving forward with this project irrespective of how we feel locally."

samantha.craggs@cbc.ca | @SamCraggsCBC


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