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Toronto streetcar contract in jeopardy

Despite cash from the city and province, deal will die in a week if federal government doesn’t put up a third of the money.

By Jennifer Lewington
City hall bureau chief

With only one week left to reach a $1.2-billion streetcar deal for Toronto, the city and the province are pulling out all the stops to bring the federal government on board.

The full-court press intensified yesterday, after Premier Dalton McGuinty announced his government’s one-third share of $416-million - matching a city pledge made last December - for 204 streetcars to replace Toronto’s aging fleet between 2012 and 2018.

Now the political spotlight falls squarely on the federal government, which has yet to confirm whether it will or won’t put up funds for the final one-third of the project by June 27. That’s the drop-dead date for the Toronto Transit Commission to sign a contract with the winning bidder, Bombardier Inc. of Montreal.

“The contract can only be signed with full funding,” said Michael Hardt, vice-president of services for Bombardier Transportation North America. “We all know the deadline, and know the effort that all funding partners are putting in to make it happen.”

If the deal dies, the TTC would have to retender at a higher price and risk delays in completing the largest streetcar project in North America.

Yesterday, flanked by a jubilant Toronto Mayor David Miller at the Thunder Bay assembly plant that would build the streetcars, Mr. McGuinty told a cheering throng of workers he is “optimistic” about Ottawa’s buy-in.

“We have some time and we will do everything that we can to convince, invite, prod, provoke, cajole, encourage, whatever we might, to encourage the federal government to come to the table,” he vowed.

Mr. Miller added that “this project is too important to let it fail. I am confident, like the Premier is, that it will go ahead and I think we will have an ally in Ottawa.”

He refused to speculate, like others, on the consequences of a flat-out no from Ottawa.

Despite blunt words this week from John Baird, federal Transport, Infrastructure and Communities Minister, that Toronto’s proposed purchase does not qualify for a special federal stimulus fund (in part because the work would not be completed in two years), the minister made clear his enthusiasm for the “fantastic” project.

In a conciliatory gesture, Mr. Baird indicated there could be others ways for Toronto to indirectly tap federal stimulus dollars, such as moving up the timing of public works projects and use the savings to cover Ottawa’s share.

“We’ve got a significant amount of resources left for the stimulus program,” the minister told The Globe and Mail on Thursday. “We’re very keen to work with Toronto and support projects in Toronto that will benefit taxpayers and get a boost to the economy.”

A spokesman for Mr. Baird declined comment on Ontario’s announcement, citing the minister’s earlier statements.

The significance of the streetcar deal lies well beyond the purchase of new low-floor, air-conditioned vehicles, with 25 per cent Canadian content, that would carry twice the capacity of the existing vehicles.

The proposed deal includes an option for the TTC to purchase an additional 400 light-rail vehicles, with 50 per cent Canadian content, for Toronto’s Transit City expansion plan, with provincial funds pledged for new lines and vehicles. (Ottawa has agreed to pay one-third of Sheppard Avenue East, the first line of Transit City, and the vehicles to go with it.)

If Bombardier gets the nod for the 400 vehicles, it would be in a strong position to bid on three dozen or so light-rail projects in the works across North America.

Toronto Board of Trade president Carol Wilding said “we need federal investments to ensure we are putting streetcars on the tracks we are building,” but also urged that transit dollars flow equitably throughout the region.

With reports from Steven Chase and Karen Howlett