Stage 2 LRT construction closer to getting urgently needed funding

In the shadow of an ongoing public inquiry into the first stage of Ottawa's light rail system, councillors on the city's powerful finance committee have approved an urgent $60-million cash infusion for the ongoing construction of Stage 2.

In the lead-up to Tuesday's meeting of the finance and economic development committee (FEDCO), city staff said the money is needed "immediately" for Stage 2 construction of the O-Train.

According to staff, $25 million of that amount has already been used to top up a contingency fund that's almost empty, long before any of the three rail extensions have opened.

The other $35 million is needed to move utilities after it was determined that an unexpected number of hydro and gas lines had to be relocated during construction, staff said.

Mayor, Menard share tense exchange

At the start of Tuesday's meeting Ottawa Mayor Jim Watson checked if councillors were prepared to approve the extra funding without discussion, an offer Capital ward Coun. Shawn Menard declined.

Menard criticized the public-private partnership (P3) model used to build Ottawa's LRT system and other major projects including Lansdowne Park, and asked staff if there's a re-think happening at city hall. 

"We've repeatedly seen the large P3 projects like that fail to protect the city's financial and operational interests," said Menard. "At what point will we stop recommending this large P3 model that is producing such risk for us?"

Ottawa Mayor Jim Watson interjected and told Menard "ultimately councillor, that will be a council decision, not a staff decision."

Their exchange escalated from there.

Menard: "I do hope we have more professional analysis coming to us, mayor, from our staff"

Watson: "I have confidence in our staff and I don't think denigrating them in public is a wise human resource policy."

Menard: "Nobody is denigrating staff mayor."

Watson: "You called their presentation 'unprofessional'."

Menard: "No. I'm asking for our professional staff, not you, to come back and talk to us about the risk issues about P3s." 

Eventually the motion was carried unanimously and now heads to full council for approval on July 6. 

The $60 million would mainly be funded through debt, said staff, noting that any extra funding needs for Stage 2 LRT will be reassessed in 2023.

The request for more funding comes as a public inquiry investigates the financial and technical dealings during Stage 1 of the LRT in great detail. The inquiry has heard during public hearings that the $2.1-billion price tag for the initial trunk and tunnel of the Confederation Line was only an early estimate, but politicians turned that began regarding it as the budget to which the project was held.