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September 29, 2004
HAMILTON'S LAWSUIT AGAINST OTTAWA
Statement of Friends of Red Hill Valley
The City of Hamilton is suing the federal government for $75 million for alleged costs arising from the federal environmental assessment of the Red Hill Creek Expressway. In its lawsuit, the city claims that the assessment delays have increased the cost of the valley expressway by $50 million.
We have four comments:
ONE: Note that the lawsuit isn't just against the federal government or some politicians. It also specifically names as defendants over 60 employees of Environment Canada and the Department of Fisheries and Oceans. This suggests that the real aim is to punish these civil servants for attempting to do their job and protect the Canadian environment. This is vicious and despicable behaviour by the City of Hamilton. One illustration of how sick it is, is shown by the fact that at least one of the named defendants died several years ago.
TWO: When governments sue governments, the taxpayers always lose. Only the lawyers gain. We believe this lawsuit is primarily about the lawyers filling their faces at the public trough. We also note that the taxpayers of Hamilton had no say or no knowledge of this lawsuit which apparently was filed last April. So the council is not only wasting our money, it's doing it in secret.
THREE: The cost of the expressway has not gone up. The facts from the city's own documents shows that it has actually gone down. Thus the entire lawsuit is based on an enormous lie.
FOUR: The lawsuit is completely unjustified from a legal and moral perspective, but don't be surprised if the City "wins".
Points THREE and FOUR are explained below.
The Cost of the Expressway
Curiously, the Hamilton Spectator and other local media are reporting this $50 million figure as though it is a fact. But for most of the last decade, the media has reported the cost of the north-south expressway as $200 to 220 million. The 2004 city budget states that the total cost of the expressway today is $207.3 million.
This suggests that the cost has actually gone down, not up, and this is proven by a historical review of the published expressway cost estimates.
In 1989, the Region of Hamilton-Wentworth published its budget for the combined east-west (Linc) and north-south expressways. The total was $392.4 million. The 2004 city budget gives the total cost of the two expressways today as $399.6 million. Inflation between 1989 and 2004 was 39.35% which suggests the 2004 cost of the two expressways could be $546.8 million.
As far back as 1994, the cost for the north-south expressway was given as $191 million. Thus when David Crombie proposed his alternative roadway in March of that year, and costed it at $110 million, the provincial government offered an additional package of $80 million in benefits to Hamilton . Inflation since 1994 has increased prices by 22.34%. This means $191 million in 1994 would rise by over $42 million to a new total cost of $233 million. So if the cost today is only $207.3 million, it has actually fallen by more than $25 million!
In 1997, the municipality and the province had a big dispute about the cost of the expressway (including the final spending on the Linc which opened in October 1997). The province said it was $200 million, the Region said it was $230 million. They hired a consultant to find out the truth. The consultant said it was $262 million. This led the regional transportation commissioner to find $40 million in "savings" for the north-south expressway. He never explained where these savings came from. Friends of Red Hill Valley warned at the time that this would come back to haunt the taxpayers.
The federal environmental assessment began in May 1998. At the beginning of that month, the municipal government adopted a capital budget which stated that the "gross expenditures" on the "north-south section" of the expressway would be $169 million. This number specifically excluded the cost of the QEW interchange which by that time had been taken over by the provincial government. The municipality went to court to stop the expressway in July 1999. The court decision was reached in April 2001. On April 27, 2001 , the City released its capital budget. It listed the projected cost of the north-south expressway as $172.5 million.
Thus between the beginning of the federal assessment and the end of the federal assessment, the price tag rose by $3.5 million - exactly the amount identified by the city as its legal costs in the court battle about the federal assessment. Since there was also inflation over these three years, it appears that the construction costs of the expressway actually went down during the federal assessment.
A year AFTER the court decision on the federal environmental assessment, the budget for the expressway suddenly started to go up. In the 2002 budget it is listed as $192.3 million, and in 2003 it jumped again to $207.3 million.
But as we noted above, these facts don't necessarily mean that the City will lose its lawsuit. Other facts must be kept in mind, including the following:
- the law firm representing the city (Gowling Lafleur Henderson) was one of the largest financial contributors to Paul Martin's campaign for the leadership of the Liberals last year. Disclosure records at http://strategis.ic.gc.ca/epic/internet/inoec-bce.nsf/en/oe01379e.html show that Gowlings gave Martin $16,000, putting it in the top 5% of donors. Check through the full list and you'll also find quite a few Hamilton developers who also fill the campaign coffers of many of the members of City Council.
- the House Leader in the federal cabinet is Tony Valeri, a man who has built his local political career on supporting the Red Hill Creek Expressway and who publicly attacked his own government in 1999 over the federal environmental assessment.
- Under the banner of fixing health care, Paul Martin has recently given away billions of federal dollars to Ralph Klein and his provincial counterparts in an unprecedented erosion of the authority of our national government.
- it is well known that Paul Martin has no affection for Sheila Copps, David Anderson or the other former cabinet ministers named in the lawsuit.
This is the sad face of Hamilton politics.
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