Ottawa

Costs for LRT expansion keep rising, but there's no going back

Councillors are meeting to discuss ongoing legal problems related to LRT construction, just days before they're set to approve a higher budget for Stage 2 based on new, unforeseen costs.

Capital budget now up to $4.91B as construction lags behind schedule

A red and white public transit train on a rainy autumn day.
The costs for the next stage of Ottawa's light-rail transit system are rising. (Jean Delisle/CBC)

Ottawa's light-rail transit system is again bursting beyond its budget, with members of the city's finance committee meeting to rubber stamp an additional $152 million based on new, unforeseen costs. 

The increase happens amid looming concerns over ongoing legal challenges, which councillors will discuss on Friday afternoon at a special council meeting. 

"It's incredibly frustrating, but we need to finish this project. And we're doing everything we can to protect taxpayer interests," Mayor Mark Sutcliffe said to reporters last week. 

"When you embark on a project of this nature, you have choices. You can either stop the project, or you can keep going and invest whatever funds are required." 

The contingency fund, set up to cover costs that "were not contemplated or known at the outset of the project," was set at $152 million. Councillors had to boost it to $177 million last year. 

Now, it's almost entirely exhausted — again. 

A man sits behind a microphone.
While Mayor Mark Sutcliffe says the hike in costs is frustrating, he argues it's inevitable. (Michel Aspirot/CBC News)

Nowhere to go but up

When the Stage 2 expansion was pitched to residents, they were told it would be funded by equal contributions from the municipal, provincial and federal governments. 

That was already out the window by the time council approved the $4.66-billion budget in 2019.

The latest report to councillors confirms the situation has grown worse, with the city now on the hook for 51 per cent of the $4.91-billion funding plan.

The report also suggested further investment from the city might be necessary.

Sutcliffe called the hike in costs "inevitable." 

"It's a big infrastructure project," Sutcliffe further explained. "All over North America and around the world, we've seen projects that, as a result of COVID, as a result of supply chain issues, as a result of inflation and other rising cost pressures, are requiring more funds to complete them." 

He also said the closer the city gets to the end of the project, the more certain the final price tag will be. 

People stand in a full public transit train in a tunnel.
Inflation and supply chain issues have factored into rising construction costs, but the city says it has also had to make unforeseen changes to respond to issues in the project's first stage. (Andrew Foote/CBC)

Where is the money going?

This next stage of the LRT includes the reopening of the newly expanded north-south Trillium Line, now expected to reopen in spring 2024. It will also extend the eastern and western ends of the Confederation Line, with the completion of those projects now set for early 2025 and late 2026, respectively. 

The extra funding would be split among the projects and financed by debt. 

Staff laid out that $42 million is slated for project oversight, based on costs tied to the delays and legal claims. 

A separate $110 million will be added to the contingency fund to pay for cost overruns on new sound barriers, to manage 2.4 million cubic metres of soil excavated from Confederation Line construction, and to anticipate further "lessons learned" from the LRT's ongoing challenges.

Members of the finance committee signed off on the added costs last week, sending the item to council without debate. Sutcliffe said that indicates nothing, except that councillors were adequately briefed before the meeting. 

A man in a blue shirt leans forward in his chair to speak into a microphone.
Coun. Shawn Menard says public-private partnerships aren't adequately protecting Ottawa taxpayers from financial risks. (Michel Aspirot/CBC)

Coun. Shawn Menard said it does deserve attention given the scope of the change. 

"Obviously there's a concern there with how much money we're pouring into the project, and the cost escalating after we signed a public-private partnership deal that is supposed to keep us free of risk," he said.

Legal problems aren't behind us

Menard pointed to the litany of problems with the launch of the new system, which caused costs to balloon. 

"We saw Lansdowne, another public-private partnership balloon in cost, and now we're seeing LRT Stage 2, a third public-private partnership that is also going up in cost," he said. "There doesn't seem to be a lot of protection." 

A red train enters a dark building from a sunny exterior.
The north-south Trillium Line and extensions to the Confederation Line remain behind schedule. (Spencer Colby/The Canadian Press)

Ottawa's transit system has also been mired in legal issues. 

Councillors signed off on a settlement with partner Rideau Transit Group, a consortium of major engineering and construction firms, earlier this year. The details remain secret. 

Friday afternoon's meeting will likewise happen behind closed doors, with no indication of which claims council will discuss and whether another settlement is in the works.

Corrections

  • A sub headline in a previous version of this story stated that the capital budget has increased to $4.91 million. In fact, the budget is $4.91 billion.
    Nov 17, 2023 8:53 AM ET

ABOUT THE AUTHOR

Elyse Skura

Journalist

Elyse Skura is a reporter based in Ottawa. Since joining CBC News, she's worked in Iqaluit, Edmonton and Thunder Bay. Elyse spent four years reporting from Tokyo, where she also worked as a consulting producer for NHK World Japan. You can reach her at elyse.skura@cbc.ca.