Toronto to cover gap in C$1.2 billion streetcar deal
By Frank Pingue and John McCrank
TORONTO (Reuters) - Toronto reluctantly agreed on Friday to pay about C$400 million more than it had planned to buy streetcars from Bombardier Inc after the Canadian government refused to help fund the C$1.2 billion ($1.04 billion) project.
The deal with Bombardier would have expired if Toronto had not completed arrangements to fund the fleet of 204 streetcars by Saturday, and the city would have had to issue another call for bids.
Councilors in Canada's biggest city agreed in a raucous eleventh-hour meeting on Friday to defer other transit projects to beyond 2018 in order to cover the funding gap.
Toronto will now pay nearly C$800 million toward the streetcar project, while the province of Ontario has pledged C$416 million.
The city had initially expected about one-third of the money to come from Ottawa, but federal politicians said the project did not meet the requirements of its infrastructure stimulus fund.
"We have just secured the transit future for this city for a generation," Toronto Mayor David Miller told reporters.
"Was it unfortunate the federal government, at the very end of the process said no (to the funding)? ... Yes, of course. But as you can tell, the provincial government reads the stimulus guidelines to say this fits."
Federal Finance Minister Jim Flaherty said on Friday that the streetcar project would not be in place fast enough to tap into its C$4 billion stimulus fund. Continued...