Transport Minister John Baird has sent a letter to Toronto Mayor David Miller indicating that he will not be granting the city's application to use stimulus funds to purchase streetcars because it does not fit the criteria laid out by the government.
In the letter, Baird spells out exactly what he believes is wrong with the city's request for funds from the Infrastructure Stimulus Fund, to help pay for 204 next-generation streetcars that will be built in northern Ontario.
"The project that your officials tried to submit clearly did not meet the criteria and so could not be submitted," Baird says in the two-page letter, addressed to Miller but also sent to Toronto councilors on the weekend.
Specifically, all stimulus-funded projects must be completed by March 31, 2011 and the money must be spent building infrastructure in the municipality where the application is granted.
Because the streetcars Toronto intends to purchase "will not even be delivered until late 2012 at the earliest and the project will not be complete until 2018," Baird said they do not qualify for stimulus funding.
Additionally, the streetcars won't even be built in Toronto, meaning the stimulus money would end up "re-tooling a Bombardier plant in Thunder Bay," Baird said.
"This fund was created to build public infrastructure, not modernize factories," he added.
Toronto had planned to use federal stimulus money to pay for one-third of the $1.2 billion cost of building 204 new streetcars, even going as far as to announce the purchase of the streetcars on Friday, despite the fact that the federal money had not yet come through.
So far, Toronto and the province of Ontario have each agreed to fund one-third of the costs of the streetcars, hoping that the federal government would pick up the remaining cost, as part of a tentative deal that may fall apart if the money does not come together before a June 27 deadline.
The city had also planned to use the federal money to help build a new carhouse for incoming streetcars.
While the transport minister admits that "the proposed project may well be an excellent project of great benefit to the people of Toronto," Baird said it cannot be funded using infrastructure stimulus money.
Baird suggests to Miller that Toronto likely has "many other worthwhile projects ready to go today to improve and renew Toronto's infrastructure," and that he hopes the mayor will be able to find other projects that fit the criteria for stimulus money.
"It would be a tragedy if the federal government spent $4 billion on infrastructure stimulus across the country but was unable to spend any of this on projects in Toronto," Baird closes in the last paragraph of his letter. "I will not let this happen. I hope that the federal government will have a co-operative partner in the City of Toronto."
Baird's frustration with Toronto's request for stimulus funding was evident earlier this month, when a reporter overheard him saying the city was the only one out of 2,700 applicants that didn't meet the eligibility criteria.
