Hurontario-Main LRT

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Tracking Metrolinx Project Costs

Tracking the costs of Metrolinx projects with publicly available data is not an easy task. They are a secretive organization, and present ongoing costs in a way that hides the eventual total cost of construction and operations. When anyone talks about “on budget”, there is no way to verify the claim because no overall budget figure is given for any project.

Instead, what we see are the cumulative value of contracts that have been awarded as well as spending to date. The rest, assuming that there even is a “budget”, is hidden on the grounds that telling would-be bidders how much money might be on the table will only encourage them to bid to that level. This is nonsense because, except for a few huge P3s, most projects are broken into many smaller contracts and knowing that there are billions available across a project’s allocation gives no hint of how much is earmarked for each component.

The situation is even more opaque in the case of contracts that mix design and construction (a finite capital cost) with operations and maintenance (an ongoing operating cost) over an extended period. Comparison with projects elsewhere is difficult because the components are not segregated.

With the Eglinton and Finch projects now shifting from construction to operation, there is a chance to see what the split would be with the building largely complete. There will be some ongoing capital costs for project cleanup, but costs to date should largely represent the amount spent on the construction phase.

Many other projects are also in flight and there is no way to know if all of their components have been awarded and the values included in the “baseline” cost shown in financial reports.

This article consolidates the reported budgets, later renamed as “baselines”, as well as actual spending in the quarterly Metrolinx Capital Projects reports.

Some projects actually had projected in-service dates, at least in the early years, but these vanished long ago. Metrolinx promised big things once upon a time, but has been much slower to deliver, and at much greater cost than anticipated.

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Tracking Metrolinx Project Costs

The Province of Ontario is not exactly transparent when it comes to reconciliation of announced project costs and actual spending, let along the changes that might occur along the way. A project, or group of projects, might be announced with a value in then-current dollars, and without necessarily including all future contract costs. There are various reasons behind this approach including:

  • The government does not want to tip its hand on the amount of money “on the table” to prospective bidders who might tailor their bid to the perceived level of funding.
  • Some contracts include future operating and maintenance costs as well as capital costs. In some case the announced cost does not include the O&M component, only the estimated capital portion.
  • Provincial projects are typically quoted in then-current dollars with future inflation to be added as it occurs, at least to the point where there is a contract in place which includes that provision.

This approach hides the likely as-spent costs and makes provincially run projects appear cheaper, at least in the short run.

This is fundamentally different from the way the City of Toronto tracks projects and how TTC requirements are reported. Specifically:

  • City project cost estimates include inflation to completion because this is factored into future funding requirements.
  • City projects do not bundle future operating costs with capital, but report them separately.

Note that cost estimates shown in the Infrastructure Ontario market reports do not necessarily match values shown by Metrolinx because IO shows these values on a different basis. Future operating and financing costs are no longer included in IO estimates so that a project’s value reflects only design and construction costs, a value that gives potential construction bidders a general size of the project’s scope.

Infrastructure Ontario notes on the November 2022 Market Update that we have modified the methodology used to calculate the estimated costs as presented on the chart. In May 2022, and for Market Updates prior to that, we used the Estimated Total Capital Costs. For the latest update, and going forward, the costs listed only include Design and Construction costs.

These changes were adopted after feedback from our construction industry partners found that including only design and construction costs provided them with a better sense of the scope of the project and would assist in determining if they wished to participate in the bidding process.

Email from Ian McConachie, Infrastructure Ontario, Manager, Media Relations & Communications, November 24, 2022.

This can be confusing with “bundled” projects such as the Ontario Line RSSOM contract which includes both provision/construction of vehicles and infrastructure, as well as future O&M costs. This is probably the reason, or a good chunk of it, for the very large increase in the RSSOM contract value between the initial estimate cited by IO and the contract award. However, the way these contracts are handled generally makes it impossible to know how much of the change is simply due to inflation in materials and labour costs, and how much is due to underestimates or scope changes.

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Ontario Funds 100% of the Hurontario-Main LRT

The Ontario government has announced that it will fund 100% of the proposed Hurontario-Main LRT line, although they would happily receive contributions from other partners such as the Federal government should it be so inclined.

If the Hurontario-Main project proceeds as expected, detailed design will get underway soon, construction will begin in 2018, and revenue service would start in 2022. Whether there  might be staging options for the route would likely come out of the detailed design work. The line has its challenges and intriguing design choices including side-of-the-road running and mixed streetcar-like operation where road space is scarce. Will the province champion this project over local objections, or does this line face years of carping about the “St. Clair disaster” and other fictional effects of LRT?

The Transit Project Assessment for this route was approved in August 2014, but the debate remained on who would pay the estimated $1.6-billion cost. Ontario is already funding 100% of the Eglinton-Crosstown project in Toronto, and a chorus of “me too” understandably arose in Mississauga and Brampton.

A provincial commitment at this level raises obvious questions about and comparisons to the stillborn Toronto projects on Sheppard, Finch and the Scarborough RT replacement. These lines are all but dead thanks to a lack of provincial leadership on LRT not to mention the vote-buying embrace of the Scarborough subway option. If that subway proves too rich for Toronto (or for an increased provincial contribution), the LRT scheme might reappear, but that’s a very long shot. As for Finch West, as an isolated route it could have trouble finding a political market unless it is extended beyond the originally proposed Humber College terminal.

Another obvious question is the future of LRT proposals elsewhere that have only partial provincial funding, or no money at all. Has 100% provincial funding become the new standard and goal for transit expansion in the GTHA? How will this affect planning for other routes, not to mention the substantial demands for better local transit operations to feed expanding regional networks? Queen’s Park still appears to be making up policy as it goes along, and refusing to engage in the larger question of how all of the transit we need will be paid for.