Mulroney says she told Hamilton about LRT overruns in September 'in good faith'

Ontario's transportation minister says she told city reps in September "in goodwill and good faith" that Hamilton's light-rail transit system was more expensive than anticipated.

Caroline Mulroney said she met twice with the mayor to make him aware LRT would be billions more than initially thought. She wanted to keep the city apprised.

Hamilton mayor Fred Eisenberger defended his decision not to tell city council or the public about those meetings, because he thought the numbers were inflated and that doing so would have jeopardized the bidding process.

"The province reached out to the City of Hamilton in good faith, with goodwill and transparency," Mulroney told CBC News. "We shared what we could at the time."

• Hamilton LRT estimates: document 1, document 2

Mulroney came to Hamilton Monday to announce that she was cancelling the city's long-awaited LRT project. It would have run 14 kilometres from McMaster University to Eastgate Square starting in 2024.

Metrolinx had already spent $165 million and bought 65 properties for it. Three consortiums were bidding to design, build, finance, operate and maintain it, and those bids were due in early 2020. Infrastructure Ontario cancelled the RFP Wednesday, and the three consortiums bidding will get "a stipend according to their involvement."

The province says it will still give Hamilton $1 billion for "transportation" projects, determined by a task force.

Mulroney shared a "high-level" document in September of what it would cost to build and operate LRT. The province won't say what third party did the estimate, but the cost then was $2.3 billion to build the system, more than double the previous $1 billion estimate.

By Monday, the numbers had changed again. The new estimate for the capital cost was $2.8 billion. The province also lumped in operating and maintenance costs over 30 years to reach a total of $5.6 billion.

For Eisenberger's part, he said Monday that the announcement was a shock, even though he had seen the new costs months earlier. 

He didn't tell council about the September numbers because it "would have compromised the request for proposal (RFP) process which was ongoing at that time," he said in a statement. 

The estimates are inflated, he said Tuesday and the bidding process would have proven them wrong. 

"There's no question there are added numbers in there," he said. The province also asked him to sign a non-disclosure agreement, which he did not.

Eisenberger also says the province provided some preliminary cost estimates late last Thursday, but didn't give the city a chance to respond before Mulroney came to Hamilton Monday to cancel LRT.

Coun. Brad Clark of Ward 9 is one of several councillors who opposes LRT. Other councillors who have been conditional supporters, such as Tom Jackson from Ward 6, say they would have stopped supporting it if they'd heard the estimates.

Clark says Eisenberger still should have told council about the numbers. "There was, in my mind, an obligation to tell us."

If council had known, it could have found a strategy to save the project, he said, like asking the federal government for money. The project could have been saved in that time, he said.

Chad Collins of Ward 5, one of the conditional supporters of LRT, doesn't think so. He always doubted that the Ontario PCs supported LRT.

Cancellation 'was in the cards'

"Most people anticipated the decision that was made on Monday last year," he said. "It was in the cards."

Nrinder Nann, a Ward 3 councillor and staunch LRT supporter, says the projections Eisenberger saw weren't reliable anyway.

"We have no way of knowing how much the project was going to cost without the bid processing completing and being able to see actual numbers proposed by consortiums/companies bidding for it," she said. "I do not trust the projections the province gave."

Eisenberger isn't ready to give up. The city asked the province for more information on the cost overruns, he said, and didn't get it. The project was merely cancelled.

"Hamilton is reeling from your decision to cancel Hamilton's massive LRT investment," he said in a Wednesday letter to Premier Doug Ford.

"This investment would have created hundreds of jobs, economic uplift, increased affordable housing, cut CO2 emissions and built a City of Hamilton ready for the future.

'I thought you were a man of your word'

"Instead, millions of dollars have been wasted doing advance engineering work and preparations. Metrolinx is now one of the largest landlords in the city after acquiring dozens of properties needed for the route."

"I thought you were a man of your word, but I was wrong. That is why I now call this a betrayal."

The mayor and Ontario NDP leader Andrea Horwath, who is also Hamilton Centre MPP, have demanded the province release the third-party report. They want to know the cost methodologies and other details. 

Mulroney said the report is confidential because it contains "proprietary information." 

As for why the province did a third-party review for Hamilton and not longer LRT projects with apparently lower construction costs, like Mississauga, Mulroney said "proponents" in "the market" sounded the alarm to her about the Hamilton project.

Joseph Mancinelli, vice-president of LiUNA International, tweeted Wednesday afternoon that LiUNA "has begun commissioning a number of studies together with our investment arm, contractors and engineering firms to investigate the $5.5 billion dollar number that the government used to cancel the @HamiltonLRT.

"We deserve answers," he wrote. "We deserve the truth."