LRT Stage 2 – Why so fast? What is the rush?
by David Brown
FForty-four kilometres of new rail, twenty-four stations and the ability to travel on the Confederation Line from Trim Road in the east to Moodie and Algonquin College in the west, all without creating a single co2 emission.
Sounds great, so why did Council meet on February 27th for over five hours to discuss this?
First, we found out that the estimated cost of the project increased by almost 37%. That increase represents $1.2 billion. What a burden to place on our families!
During last week’s Council Meeting, Councillor Carol Anne Meehan asked what the lifetime borrowing cost for Stage 2 would cost Ottawa’s taxpayers. This includes the interest payments charged to the City. Taxpayers found out that the City will borrow $1.621 billion at what we hope will be a 3.5% interest over 30 years.
Although Staff were not able to provide an accurate estimate to answer Councillor Meehan’s question, a simple amortization calculation will tell you that taxpayers will pay $2.6 billion over 30 years, bringing the real cost of Stage 2 to over $5.6 billion, in addition to the $2.1 billion already spent on Stage 1.
These costs alone represent more than $20,000 worth of spending per household in Ottawa.
What about funding OTHER necessary projects?
Since 2010, Ottawa’s debt has exploded by 164% and now sits at over $2.2 billion.
City Staff are hoping that borrowing costs do not increase over the next six years of this project – we can’t live on hope!
Staff have admitted that both property and transit taxes will need to be raised every year until 2048 to fund Ottawa’s transit network adequately.
Most people would agree that Ottawa needs better public transit options, but this project should not sacrifice the City’s ability to provide existing municipal services to fund what is fast becoming a financially unsustainable transit plan.
At a time when Council is raising taxes to repair Ottawa’s existing crumbling infrastructure, costing Ottawa’s families millions of dollars, can we justify borrowing this kind of money?
Let’s take a few months to re-examine this expenditure.
On Wednesday, we can only hope Councillors will do the right thing and defer awarding the Stage 2 contract until Councillors have thoroughly reviewed this project.