Toronto could face millions of dollars in 'sunk costs' if Waterfront LRT isn't funded, city staff say

Toronto city councillors are being asked to push forward on a long-planned waterfront transit line, but the multi-billion dollar light-rail train proposed to connect the developed Port Lands to downtown remains unfunded.

A report on the Waterfront East LRT comes to Mayor Olivia Chow's executive committee on Tuesday. City staff are recommending council approve an alignment for the nearly four-kilometre line and give staff the okay to advance the project to 60 per cent design completion. That means staff can proceed with some early work and further refine their cost estimates.

The report projects the line will now cost as much as $2.6 billion, up from earlier estimates of approximately $2 billion in 2021. 

Deputy Mayor Ausma Malik, who represents one of the wards which will be home to the LRT, said the request comes at a critical moment.

"The city is showing leadership, showing that we're serious about this project," she said, adding. "It's really critical and a crucial opportunity for us as we build a more sustainable, more affordable and a more prosperous city in the decades ahead.

The line is proposed to run south from Union Station on Bay Street to Queen's Quay and then east along Lake Shore Boulevard to Villiers Island. The city projects that the light-rail line will provide over 50,000 daily trips and support 100,000 people it expects will live in the area when the work to redevelop the Port Lands is complete.

The city, TTC and Waterfront Toronto have spent $36 million to-date developing the transit line. Another $36 million in unspent money has been budgeted to the project and staff are asking for over $63 million more to continue advancing the design. 

But, they warn, that money could be lost if the project remains unfunded.

"Should construction not proceed, the $63.6 million of funding related to the works, identified in this report would be sunk costs for the city, along with life to date expenditures of $36.1 million," the report notes.

City staff say the report takes into account Toronto's challenging financial position as it faces a $1.5-billion budget gap this year. Staff are recommending "an approach to advance the project while reducing immediate costs by phasing segments."

Coun. Jennifer McKelvie said there is always a risk the province and federal government don't step up and fund the project. The city has endorsed Ontario's goal of building 285,000 homes in Toronto over the next decade, and transit will be needed for people living in the Port Lands, she said.

"We're going to have to build the transit for those people to get around our city," she said. "So, it's important. It's a priority of the city and it needs to be a priority of both the provincial and federal governments."

She said it appears the province is focused on advancing the Ontario Line subway project, and that this project may not be top of mind.

"I'm hopeful that when we start to see (the Ontario Line) advancing at a much quicker rate, they'll start to flip over their attention to the other priority projects that we have in our city," she said.