Feds held back LRT Stage 2 money for months because of concerns

The federal government was so worried about issues concerning Ottawa's Confederation Line earlier this year that it temporarily held back funding payments to the city for the light rail system'sStage 2 expansion.

Infrastructure Canada "has delayed reimbursing Stage 2 claims submitted since the derailments and launch of the public inquiry in order to assess payment implications, including potential public sensitivity," according to a ministerial briefing note completed on March23.

The government ultimately decided to paythe city's quarterly claimfor the massive light rail extensionand the city has told CBCthe federal government has transferred all $576 million due so farfor Stage 2.

But documents spanning from November 2021 to March 2022, obtained under access to information laws by researcher Ken Rubin, paint a picture of concern about the LRT among federal officials.

No wonder.

The 12.5-kilometre east-west light rail system that opened in 2019 derailed twice last year, shutting downthe service for weeks.

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That prompted twoTransportation Safety Board of Canada investigations and led the province to imposenew conditions on thecity last November before it released thefinal $60 million in fundingfor the massive project.

Ontario Minister of Transportation Caroline Mulroney followed that up by calling a public inquiry into the Confederation Line, which is ongoing and awaiting its final report.

The transportation ministrysaid it won't comment on payments until theinquiry concludes.

Feds looked at 4 'risks'

Officialsat Infrastructure Canada, who oversee the $1.1 billion the federal government pledgedto LRT Stage 2,drafted a list last November of four potential "risks" to the extension project. They were:

• The Alstom Citadis Spirittrain: The light rail vehicles operating on the existing Confederation Line were already approved and purchasedfor Stage 2 for about $300 million 2017.
• Potential design and construction issues: Infrastructure Canada pointed out that the city itself suggested in its notice of default that there could be design or construction issues with the Confederation Line. Theinquiryrevealed thattrain-maker Alstombelieves the sharp curves on the trackcontributed to the August 2019 derailment, although the theory is being disputed by Rideau Transit Group (RTG).
• Relationship woes between the city and SNC-Lavalin: The Montreal-based engineering giantis one of the key partners in RTGand is the sole contractor for the north-south Trillium Line's Stage 2 extension. In its document, Infrastructure Canada points outthat the city and SNC-Lavalin were "havingdifficulty reaching consensus on who is to blame for current Stage 2 schedule delays," adding that "recent escalations between cityand RTG will not help."
• Public sensitivity: The government was concerned about the public's "openly voiced frustration with the system," noting that the LRThad "garnered significant negative media attention."

By March 2022, officials appeared satisfied that "none of these linkages provide grounds for federal funds to be withheld for Stage 2 claims" but added that "future payments will be subject to ongoing monitoring."

They also wrote they believedthe city had taken the appropriate measures, including by hiring external consultants TRA Associates, to get the system back on track.

WATCH | Video of September's derailed train:

Train scrapes against platform leaving Tremblay station, inquiry sees

2 years ago

Duration 0:56

Alstom lawyer Michael Valo asks Rideau Transit Maintenance CEO Mario Guerra about how employees responded to the derailment.

Concerns about optics

Among the government's biggest concerns appeared to be the optics of the federal government continuing to paythe city for Stage 2when there were so many big questions around Stage 1.

• Western LRT extension, north-south Trillium line face new delays, says rail director

"There is potential for negative public reaction should it become publicized that Stage 2 payments are being made in thecurrent context," the documents said.

The March briefing notes pointed out that the Stage 2 project is"notably delayed" and that even though the two stages of the LRT are distinct projects, that "is not so clear to the general public."

City still out $120M on LRT Stage 1

While LRT Stage 2 payments from the upper levels of governmentappear on track, the city is still waiting for the last $120 million for Stage 1.

Theprovincial and federal governments each pledged $600 million to the first stage.Because of the way the funding was devised,the federal contributions cannot exceed those of the province.

That means if the province is holding back its last $60 million, then the federal government hasto do the same.

However, according to the released documents, Infrastructure Canada supported the letter from the provinceas it "ensures that neither the remaining federal nor provincial funds for Stage 1 will flow until outstanding issues are addressed."