‘Delays, dysfunction and rising costs’: Finch West LRT enters court

The consortium of companies building the Finch West LRT is warning the Ford government that the project is fraught with “increasing dysfunction, costly delays and rising costs” resulting from the ongoing dispute with Metrolinx and the TTC.

The lawsuit, filed in early August by Mosiac Transit Partners, alleges that Metrolinx “breached its contractual obligations” by entering into a separate operator agreement with the TTC to operate the line, which the consortium claims is “inconsistent” with the original construction agreement it signed with the province.

In return, Global News has learned, Metrolinx is withholding about $500 million from Mosiac until the project is substantially completed, a technical milestone necessary for the TTC and Metrolinx to officially take over the line.

The complaint that the TTC is effectively interfering with the completion of the Finch West LRT appears to mirror a similar lawsuit and complaint brought by builders of the much-delayed Eglinton Crosstown LRT last year.

The similarities raise the specter of major delays at Finch West – so far the less controversial of the government’s LRT projects.

The Ford government, which is not specifically a party to the lawsuit, expressed optimism that the situation could be resolved.

“We are building the largest transit expansion in North America, including Finch West Light Rail Transit, which will give northwest Toronto residents what they have long wanted – a transit system with more options for traveling on their own schedule,” the director of relations said in a statement with the media of the Minister of Transport.

“We expect the parties to work together to deliver this project for the thousands of residents who will rely on it every day.”

Construction of the 11-kilometer Finch West LRT line, connecting the Humber Polytenchique campus with the Finch West metro station, began in 2019 at an initial cost of $2.5 billion.

When the contract was awarded, it was expected to open in 2023.

In September 2024, the Ford government announced that all 18 stops and stations on the line had been completed, bringing the project much closer to operation.

“We are currently in the training process, making sure the systems and rails will work for the TTC,” Transportation Minister Prabmeet Sarkaria said of the current stage of the LRT.

However, at the press conference, Sarkaria declined to provide a timeline for when the expected 46,000 passengers would actually be able to use the line.

Sarkaria’s office did not provide a current schedule for the Finch West LRT to open to the public.

Behind the scenes, while the government was touting the success of construction along Finch Avenue, legal troubles were brewing, typified by cases that caused yet more misery on the Eglinton Crosstown LRT.

In early August, Mosaic Transit Partners filed an application with the Ontario Superior Court of Commerce seeking “declaratory relief” as the contract dispute escalated.

The court’s Commercial List Division describes itself as “a team of judges who are experienced in handling complex commercial disputes.”

The crux of the argument: Mosiac’s relationship, Metrolinx and the TTC’s involvement.

The lawsuit argues that when Metrolinx struck a deal with the TTC to operate the Finch West LRT once it opened, it excluded builders from those discussions. As a result, Mosaic argues, the TTC is failing to fulfill key tasks that an operator must undertake before the line is completed – without implementing any accountability measures

The agreement reached with the TTC, the lawsuit alleges, is “grossly defective and inconsistent” with the original contract signed by Mosiac and “imposes virtually no obligations on the TTC.”

Builders say the TTC’s alleged lack of accountability for the original contract or failure to meet key operators’ requirements jeopardizes the project.

“This is contributing to increasing dysfunction, significant delays and rising costs that are increasing almost daily, with a potential value of many millions of dollars,” the legal documents state.

The builders are asking the court to rule whether the government and Metrolinx are in breach of the contract and ultimately to determine whether Mosaic is entitled to relief from some of its liabilities or damages.

Until the project is deemed complete by Metrolinx and accepted by Mosaic, the provincial transit agency may withhold the final payment, which Global News estimates is approximately $500 million.

Once this fee is paid, builders actually put the project into operation for Metrolinx and the TTC. Like the Eglinton Crosstown LRT, the transit agency is cautious about releasing that money until the TTC, as the group that operates the line, is satisfied that it is completed.

Because Mosiac had signaled that it was struggling with liquidity problems earlier in the year, Mosiac was offered a major boost. This payment has been offered for 10 months and the builders have neither accepted nor rejected it, government sources said.

As the dispute intensified, construction on the line continued, but Metrolinx had not yet considered it substantially complete and had not paid the consortium the remaining $500 million it believed was owed.

The government maintains that Metrolinx acted correctly and that Metrolinx and Infrastructure Ontario were supposed to act as the link between the TTC and Mosiac.

Some Metrolinx employees in particular are frustrated by the lawsuit, suggesting that the transit agency has made a special commitment to the Finch West project, regularly visiting the facility and helping to resolve problems.

Despite apparent attempts by the agency to get more involved in Finch West than in the Eglinton Crosstown LRT portion, the builders took the matter to court.

In a brief statement, Mosaic told Global News it is working with Metrolinx to complete the project.

“We are working hard to support Metrolinx and the Government of Ontario to ensure all parties can open this important TTC-operated LRT line to the public as quickly as possible,” the statement read.

The central claim in the Finch West lawsuit – that the TTC is making demands without a contractual stake in the project – is reminiscent of a separate case filed last year against Metrolinx by Crosslinx Transit Solutions, the group building the still-unopened Eglinton Crosstown Line.

The lawsuit, first reported in May 2023, characterizes the TTC as out of control and making a series of demands that are inconsistent with the project’s intent.

“Without a contract… the TTC is left without clear contractual guidance, boundaries and responsibilities,” the lawsuit claims. “Crosslinx finds itself in an impossible position in which it must fulfill obligations that depend on the actions of another party that has no reciprocal contractual obligations.”

More than a year after the lawsuit was filed, the Eglinton Crosstown LRT still has no opening date, years of delays and a political stick with which opposition parties can defeat the government.

Already a year behind schedule, officials hope to quickly resolve the Finch West dispute and avoid additional delays on the line.