Thursday, July 18, 2024

Denley: Ottawa’s LRT settlement sacrifices accountability

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The broad perception is that secret settlements are cheaper than those that are made public.

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Ottawa Council’s decision to seek yet another secret legal settlement with companies building the LRT violates the basic principle that taxpayers must be told how their money is spent. Without that, there can be no accountability.

After a lengthy in-camera meeting last week, councillors authorized the city manager to start new settlement talks to resolve issues with companies building Stage 2 LRT. What issues? The city didn’t specifically say. What contractors? That’s confidential. What would the settlement cost? You’ll never know. Who pays? You do.

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Taxpayers can expect a substantial bill for something they know nothing about. The potential sum is so large that the city says it will ask the federal and provincial governments to help pay it.

It’s an outrageous situation, but councillors have a semi-plausible reason for handling it the way they have.

After the meeting, Mayor Mark Sutcliffe said, “It’s unfortunately a normal part of infrastructure projects that are being worked on during COVID, and we’re trying our best to resolve them in the best interest of taxpayers.”

In this case, best interest of the taxpayers means paying the least amount of money to settle the claim, even if it means sacrificing the transparency and accountability one would normally expect from a city government.

Unfortunately, governments have already set a precedent by covering part of the additional costs due to COVID-related delays. The provincial Crown corporation Infrastructure Ontario has settled 67 claims for COVID construction delays and has a policy of keeping them secret.

Only a few COVID delay claims have been reported publicly, and they’re huge. In 2021, Metrolinx and Infrastructure Ontario paid $325 million to cover COVID delays on Toronto’s Eglinton Crosstown LRT, a $5.5-billion project. In January of this year, the federal government agreed to pay an additional $700 million to compensate for delays in building Windsor’s Gordie Howe Bridge, which links that city to Detroit. The project was originally budgeted at $5.7 billion.

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Stage 2 of Ottawa LRT is expected to cost nearly $5 billion. Every situation is different, but delay costs here could easily be in the hundreds of millions. It’s easy to see why city councillors want to keep the costs down and are counting on federal and provincial help. Those governments made the COVID rules, not the city.

The perception is that secret settlements are cheaper than those that are made public. The theory is that as long as the deals are confidential, the people settling the next one won’t know what the companies are prepared to accept. It’s an argument undermined by the number of secret deals that Infrastructure Ontario has been involved in. Surely the Crown agency knows the going rate for settlements by now.

The secrecy benefits both those paying the settlements with public dollars and those receiving the cash. With limited public reporting, taxpayers remain unaware of the huge sums paid to construction companies for pandemic-related delays. Were the true total known, the public would be outraged and other companies that suffered pandemic damage might wonder when they could collect.

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City councillors have decided that the benefits of secrecy trump the virtues of public accountability. They could argue that the city is just a cog in a system that treats infrastructure contractors generously and the number of secret settlements already made left them with little choice.

That doesn’t explain why their chose secrecy last year when the city reached a settlement with Rideau Transit Group, the people behind the ill-fated first stage of the LRT. The city had withheld maintenance payments to the contractor due to poor service, and rightly so. In the end, a deal was cut but the financial details were never publicly released. That problem wasn’t the result of unforeseen COVID delays.

Secrecy on this latest deal was a sure thing. It’s best for councillors who don’t want to justify the payout and best for the companies who want to keep their sweet deals out of sight. We’ll never know if it was best for taxpayers.

Randall Denley is an Ottawa journalist and author. Contact him at

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