Why Canada gets less for more when it comes to building transit

OTTAWA — In early September, Conservative candidate Jennifer McAndrew stood outside a suburban Ottawa transit hub in the battleground riding of Kanata-Carleton to make a major campaign promise.

“A Conservative government will support and prioritize Phase 3 of the LRT extension right here to Kanata and beyond,” a smiling McAndrew said in a video posted to her Facebook page on Sept. 2, just as the campaign was heating up.

Not a day later, her Liberal opponent, Jenna Sudds, posted her own video to make the very same promise. 

While some transit advocates would be overjoyed to see cross-party commitments to build new light-rail infrastructure, it was a disappointment to Toronto transit researcher Stephen Wickens who spent more than a year warning governments against those kind of campaign promises.

The reason is that Canada pays a higher price to build light-rail transit compared to our international counterparts, driven chiefly by the depth of underground tunnels, the grandiosity of the stations and labour costs. 

But several experts agree it has just as much to do with something else: politics.

“That’s the heart of it,” said Wickens, who authored an investigative study on the soaring cost of Toronto subway projects commissioned by the Residential and Civil Construction Alliance of Ontario last year. 

Alon Levy, a Berlin-based transit researcher and writer, calculated that globally, the median construction cost for an urban subway was less than $300 million per kilometre in 2019.

But in Canada, the costs seem to go off the rails.

By Levy’s calculations, Toronto’s Ontario Line should cost $735-million per kilometre. The Blue Line extension plan in Montreal? About $775-million per kilometre. Vancouver’s Broadway SkyTrain seems almost reasonable at nearly $500-million per kilometre.

Political meddling at all levels of government — by all parties — can cause a knock-on effect on the price tag of projects.

For example, the cheapest tunnelling method is also the most annoying for the neighbours, so local councillors will up the cost to avoid complaints from constituents.

Just over a decade ago, Vancouver opted for a cheaper tunnelling option when it built the 19-kilometre Canada Line by digging a trench at street level and covering the top. The cut-and-cover method, as it’s known, led to big savings, but also disruptions, controversy and even lawsuits.

“The memories apparently remain so unpleasant that city leaders have made clear the Broadway Line will be entirely tunnelled, even with project estimates running at about $500 million per kilometre, or about 4.5 times what was paid for the Canada Line,” Wickens wrote in his report.

Political promises can also lock governments into commitments that may not offer the best value. As a 2019 study by the Institute of Municipal Finance and Governance put it, the best projects based on the available evidence take a back seat to political considerations. Civil servants are forced then to give what researchers dub “decision-based evidence” to justify a political promise.

“Who is a lowly engineer to say ‘we don’t actually need that’ or ‘let’s cut this station,’ or ‘I know you’ve promised this interest group something so you need to break that promise because that’s going to cost us another half a billion dollars,'” said Levy in an interview with The Canadian Press.

It’s not just a Canadian phenomenon. 

Levy and other researchers at the Marron Institute of Urban Management at New York University have found Canada, the United Kingdom, Australia and United States overpay compared to peer counties like Spain, Italy and France.

Marco Chitti, a Montreal-based associate researcher on the project, said one domestic factor that may drive up costs is our federal political system that offers significant power to single parties trying to win votes from the public.

He said parliaments of other nations are afforded more power to water down proposals from the ruling party and get more bang for their buck.

Another problem is that Canadian cities and provinces often lack the in-house expertise to offer technical advice and oversee projects, Chitti said. He pointed to Italy where civil servants with technical expertise  draw up detailed, costed plans before politicians make any commitments.

Chitti said the path to lowering costs on transit projects starts with admitting there is a problem that needs fixing.

“Most politicians in Canada are not aware that Canada has a huge problem, a huge, tremendous problem on cost,” Chitti said. 

“I really hope that in a couple of years there will be much more discussion in Canada about the fact that we have ballooning costs, and that they are really out of control.”

This report by The Canadian Press was first published Dec. 26, 2021.

Laura Osman, The Canadian Press