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Hamilton LRT Cancellation Cost Tops $476 Million

Posted January 28, 2020

As more and more information comes out about the Provincial Hamilton LRT fiasco, the full costs of cancellation are starting to emerge. All told, between sunk costs, break fees, forgone infrastructure investment and property uplift, the cancellation cost of Hamilton LRT has risen to at least $476 Million.

This total includes:

  • $200 million in deferred and planned infrastructure renewal including:

    • Sidewalks, roads and light standards that would be replaced along the corridor as part of this project (There are about 44 lane kilometres of roadway within the LRT corridor.
    • About 10 kilometres of underground infrastructure (sewer/water) would be renewed.
    • Metrolinx would replace the 62-year-old Longwood Road bridge (over Highway 403).
    • Metrolinx would build the Frid Street extension (from Longwood Road to Chatham Street), which the city has planned since 2006 through the Kirkendall traffic management plan. The city did an environmental assessment for it in 2008 but didn't have money to proceed.
  • $162 million spent on the project so far.

  • $34.2 million for a new bus terminal and parking garage at McMaster University.

  • $30 million in anticipated building related fees for the city.

  • $29 million in increased assessed value on properties on or near the line.

  • $22 million in new taxes paid by condo dwellers and businesses.

  • $1.5 million in break fees for the consortiums bidding on the project.

LRT Cancellation Tax: The cost to Hamilton households

The $200 Million in deferred infrastructure renewal was going to be covered by the Province as part of LRT construction, but now it's on the local property tax base. On top of that, we have $52 Million in foregone revenue in fees and taxes that the City was expected to collect as a result of LRT. All told, that's a $252 Million immediate, direct shortfall.

Thanks to recent budget discussions, we now can get an idea of what a budget shortfall means to the average homeowner in terms of property tax.

To put the $252 Million in perspective, each Hamilton household would need to pay about 27 percent more in property taxes, or $950 per house, to cover the shortfall. Further, this impact is only the tip of the iceberg due to the domino effect of other projects that were going to be funded because of freed-up money due to the infrastructure LRT was going to cover.

While we could spread out the $252 Million shortfall over a number of years, the fact is we are still going to have to cover it ourselves instead of the Province. As more information comes out, it looks like Hamilton taxpayers are going to be paying the growing cancellation cost of Hamilton LRT for years to come.

Hamilton Light Rail has launched a campaign calling on Hamiltonians to send Premier Ford a message to fix Minister Mulroney's mistake and get the Hamilton LRT back on track. Please join the call to action and make your voice heard.

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