SmartTrack Stations Program - Update

In November 2024, the Ontario Minister of Transportation sent a letter to Mayor Chow formally notifying the City of cost pressures that exceed the approved Program Budget. The Province noted that global market conditions driven by rising interest rates and escalating prices for materials, skilled trades and labour are resulting in higher costs for the Program. After receiving this notification, the City, Province and Metrolinx met to assess options to address these cost pressures. Confidential Attachment 1 includes the letter to the Mayor from the Province, current cost pressures provided by the Province, and all options assessed by City, Provincial and Metrolinx staff to address the cost pressures along with incurred costs to date provided by Metrolinx. Based on the assessment completed by City, Provincial and Metrolinx staff, the following two options emerged that stay within the Program Budget, while maximizing the number of stations prioritized (three stations): Option 2a - East Harbour, Bloor-Lansdowne and Finch-Kennedy. Option 2b - East Harbour, Bloor-Lansdowne and St. Clair-Old Weston. Both these options maintain East Harbour and Bloor-Lansdowne. East Harbour is critical to the transit network, providing both subway and GO transit connections, as well as to significant planned employment and residential development. The Bloor-Lansdowne construction contract has been awarded and as both the design and early construction works are underway, there would be financial penalties for cancellation. Staff recommend option 2b which prioritizes the delivery St. Clair-Old Weston over Finch-Kennedy (option 2a). The St. Clair-Old Weston station is required to ensure delivery of the City's St. Clair Transportation Master Plan, provides higher-order transit to a Neighbourhood Improvement Area, and has significant development, housing including future Transit Oriented Communities, and employment growth potential. Financial details for options 2a and 2b, along with all other options assessed are outlined in Confidential Attachment 1. Since Finch-Kennedy and King-Liberty stations will benefit the Province through increased ridership on the GO system, and as the Province will own and maintain the stations, the City continues to maintain that the Province, through Metrolinx, should deliver all five SmartTrack Stations. As such, this report seeks Council authority to request the Province identify a funding solution, including exploring funding opportunities with the Government of Canada, to deliver the remaining two stations, King-Liberty and Finch-Kennedy at no cost to the City. To ensure the three prioritized stations (option 2b) can be delivered within the Program Budget, this report recommends City Council direct the City Manager to request the Province ensure that the Government of Canada maintains its full funding commitment of $585 million. Direction from Council is required before Metrolinx can proceed to award construction contracts for St. Clair-Old Weston and East Harbour, which are planned for the first and second quarter of 2025.

2. City Council direct the City Manager to request the Province of Ontario to identify a funding solution, including exploring funding opportunities with the Government of Canada, to deliver the remaining two stations in the Program scope, Finch-Kennedy and King-Liberty at no additional cost to the City. 3. City Council direct the City Manager to notify the Province, Metrolinx and the Federal Government of City Council's decision as set out in Recommendations 1 and 2 above. 4. City Council direct the City Manager to request the Province ensure that the Government of Canada maintains its full funding commitment of $585 million towards the Prioritized Program Scope and convene ongoing tri-partite discussions between all three orders of government to confirm delivery of the Prioritized Program Scope within the Program Budget. 5. Subject to the Federal Government confirming its decision to maintain its full funding commitment of $585 million towards a Prioritized Program Scope, City Council authorize the City Manager, in consultation with the City Solicitor and any other relevant City Officials, to negotiate, enter into and execute a second amendment to the Revised Ontario-Toronto Agreement in Principle, as amended, with the Province necessary for the implementation of the Program (the Amending Agreement 2), in accordance with Recommendation 1 above, to reflect the funding solution, if any, identified by the Province to continue to deliver Finch-Kennedy and King-Liberty stations in accordance with Recommendation 2 above, and on such other terms and conditions satisfactory to the City Manager and in a form satisfactory to the City Solicitor. 6. Subject to entering into the Amending Agreement 2, City Council authorize the City Manager to negotiate and execute an amendment to the SmartTrack Main Agreement with Metrolinx, in accordance with the Amending Agreement 2, and on such other terms and conditions satisfactory to the City Manager, and in a form satisfactory to the City Solicitor. 7. City Council direct that Confidential Attachment 1 remain confidential at this time, as it contains commercial information, supplied in confidence to the City, which, if disclosed, could reasonably be expected to prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization and involves the security of the property belonging to the City of Toronto, and contains information explicitly supplied in confidence to the City of Toronto by the Province of Ontario. 8. City Council authorize the public release of Confidential Attachment 1 following the City Manager's confirmation of completion of the Program.