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Ottawa rejects Toronto's plea for streetcar funds

Baird says light-rail contract isn’t eligible for stimulus, but Miller claims talks are continuing

By Steven Chase, Jennifer Lewington and Brodie Fenlon

Ottawa is standing firm in its refusal to give Toronto $400-million in stimulus money for the largest light-rail contract in North American history, raising questions about the fate of a project with huge economic spin-offs for Canada’s beleaguered industrial sector.

Instead, Infrastructure Minister John Baird offered the city a way it could indirectly tap the stimulus fund: Move up construction projects that can be completed in two years and use the savings to pay the federal share of the $1.2-billion streetcar contract.

Mr. Baird’s conciliatory gesture comes as Ontario Premier Dalton McGuinty and Toronto Mayor David Miller head to Thunder Bay today to pledge their financial support for a deal with Bombardier Inc. of Montreal that is set to expire in just over a week.

Amid strenuous efforts in recent days by the city and the province to get Ottawa on board, Mr. Baird continued to insist that the city’s pitch to replace 204 aging streetcars does not qualify for his government’s $4-billion federal Infrastructure Stimulus Fund.

“It’s a fantastic project,” he said of the streetcar initiative. “It’s just not eligible for this program. And [that’s] not just a technicality.”

He said the federal stimulus funds are intended for projects that create local jobs over the next two years. By contrast, jobs for the streetcar project would be mostly in a Bombardier assembly plant in Thunder Bay, not in Toronto.

The streetcars would not be fully delivered until 2018, but Toronto deputy mayor Joe Pantalone rebutted suggestions the project does not qualify for the federal stimulus fund.

“This is not about technicalities,” he said. “This is about the substance of what is required for economic stimulus and to make sure this country is in a position to have a good quality of life and good jobs.”

Despite the most emphatic no yet from the federal minister, a spokesman for Mr. Miller said “we remain in discussions” with Ottawa. Deputy press secretary Stuart Green added, “we have not received a formal response yet.”

At Queen’s Park, an Ontario government official said “there is no strong sense from the federal government about what direction they’re going.”

Neither the Ontario official nor Mr. Miller’s spokesman would explain how the deal could go ahead with only two-thirds of the funding so far in place.

The city is already on board for one-third of the cost - with the province expected to match that share today - but the deal with Bombardier Inc. of Montreal is set to expire June 27 if all the funding isn’t in place.

That date is also key because, without a deal on streetcars, the city cannot exercise an option to purchase up to 400 light-rail vehicles for “Transit City,” the mayor’s ambitious plan to install new streetcar lines across Toronto’s inner suburbs over the next decade.

The streetcar funding request was the only application Toronto made for stimulus cash - a gamble that last week drew a profanity-laced critique from Mr. Baird for which he apologized the next day.

Although the deadline for cities to apply for stimulus aid passed May 1, Mr. Baird said he’s willing to reopen the deadline for Toronto so it gets its fair share of funds.

“I am happy to sit down and work with them, but the projects have got to be eligible,” he emphasized.

He suggested Toronto could apply for stimulus cash to pay for infrastructure projects set for three or four years from now. By moving up public works like road or bridge repairs that meet Ottawa’s two-year eligibility timeline, he contends, the city could redirect the funds to streetcars.

For workers in Thunder Bay, Quebec and Manitoba, a lot is riding on the deal.

A report commissioned by Bombardier concluded the streetcar contract would create 5,700 jobs, mostly in Ontario, but with spin-offs in Quebec and Manitoba as well.

Word of today’s announcement was kept so quiet that Thunder Bay Mayor Lynn Peterson didn’t learn something was up until late Wednesday.

“This is 10 years of work for hundreds of people here and spin-offs for thousands of people across Ontario,” she said. “And Toronto gets much needed rail cars. So it’s a win-win-win all the way around.”


Toronto’s bumpy road to buying new streetcars began more than two years ago:

March, 2007

Toronto Transit Commission decides to replace its aging fleet of streetcars with 204 replacement vehicles, later setting a requirement for 25-per-cent Canadian content.

January, 2008

TTC issues a request for proposals, but later decides the two bidders fail to meet the narrow-track requirements in Toronto. In August, a new competition goes ahead.

April, 2009

Federal Transportation Minister John Baird says Toronto’s streetcar project may not qualify for Ottawa’s stimulus funds that set criteria for local jobs and quick completion.

April, 2009

In a revised bid process, the TTC selects Bombardier Inc., of Montreal, for the streetcar order, with no sure funding in place from the federal and Ontario governments.

May, 2009

Ottawa puts up one-third of the cost of the $950-million Sheppard Avenue East light-rail line (with two-thirds from Ontario), the first leg of Toronto’s “Transit City” lines.

June, 2009

Ontario Energy and Infrastructure Minister George Smitherman blasts Toronto for awarding the contract without first securing funds from other governments.

June, 2009

Federal Transport Minister John Baird utters profanities about Toronto’s request for federal stimulus funds for streetcars, apologizing to Mayor David Miller the next day.

June 27, 2009

The expiry date for the proposed order from Bombardier, with fixed prices and other conditions. After that, a new contract will have to be negotiated between the parties.


The first of the replacement streetcars are expected to be put into service, with the final delivery by 2018.

Toronto’s transit future

An ambitious plan to revamp Toronto’s transit system over the next seven years begins with a proposal to purchase 204 new streetcars to replace the existing fleet. The Transit City plan, shown at right, calls for the construction of light-rail corridors on Eglinton Avenue, Finch Avenue and Sheppard Avenue East and will require the purchase of an additional 400 vehicles.


The first 204 cars


$993-million including taxes, or about $4.9-million per car


The TTC is proposing to buy 204 European-style streetcars to replace 248 that have been in service since the 1970s and 1980s and are near the end of their life. The deal requires 25 per cent Canadian content. In addition, it provides for another $293-million for a new maintenance facility and $13.3-million for spare parts.


The additional 400 cars


Although a price hasn’t been negotiated, it will likely top $5.5-million per vehicle, excluding taxes.


If the contract for the 204 replacements is a go, the TTC has an option to purchase up to 400 more cars for its new “Transit City” network of light-rail lines in suburban areas of the city. These cars would require 50 per cent Canadian content and some design changes. The province, with some help from the federal government, has committed to the first option of 196 vehicles as part of its funding of the Sheppard Avenue East, Eglinton and Finch light-rail lines.

The Transit City plan



A 23-kilometre light-rail line from Highway 27 in Etobicoke to Finch subway station on the Yonge line that continues east from Finch station to Don Mills subway station on the Sheppard line. Current cost estimate: $1.2-billion Completion date: 2013



A 31-kilometre light-rail line from Kennedy station to Pearson airport, with a 13-kilometre tunnelled section from approximately Leslie Street to Keele Street. Current cost estimate: $4.6-billion Completion date: 2016



A 15-kilometre light-rail line from the Don Mills subway station to Meadowvale Road. Construction is expected to start at the end of this year. Current cost estimate: $950-million Completion date: 2013