City of Ottawa escalates legal pressure on LRT contractor

The city of Ottawa is ratcheting up the pressure on its LRT contractor, with a key committee voting to issue a notice of default to Rideau Transit Group after two derailments in six weeks.

In addition, the city’s finance committee voted to deliver a ‘notice of dispute,’ which could result in more legal fighting.

Councillors voted after more than three hours meeting behind closed doors with legal counsel.

The Confederation Line has been shut down since the second derailment on Sept. 19. The city issued the notice of default on Sept. 24, but it was only made public today.

"This should set off a bunch of alarm bells for them because it's no longer a dispute just between us," transit commission chair Allan Hubley told Newstalk 580 CFRA. "If this ends up in court that means a judge is going to make a ruling, and hopefully rule in favour of the city and our ridership. And say that we deserve better, we paid for better, we should be getting better."

The ‘notice of dispute’ is essentially the city signaling it’s not satisfied with RTG’s response, and could take more legal action.

The city says RTG submitted a plan and schedule to “remedy its breaches” while disputing the default, but the city found that plan and schedule “unsatisfactory under all of the circumstances,” according to the motion presented at committee.

"This is RTG's problem to solve and if RTG continues to abdicate its responsibilities the City will need to take the strongest possible actions under the Project Agreement and at law," said a Sept. 24 letter from the city to RTG released Tuesday.

RTG is also replacing its vehicle maintenance manager, according to a memo to council. The scathing seven-page letter details the city's problems with the maintenance of the vehicles, rather than the vehicles themselves.

"The city's confidence in RTG's ability to deliver the maintenance services has been seriously eroded."

This is not the first notice of default the city has issued RTG a default notice. It issued one in March 2020 after myriad problems with the train in its first year of service. Millions of dollars have been spent on that legal fight.

Council will still need to approve the moves at its next meeting on Oct. 13.

The moves on Tuesday fall short of the actions some other councillors are calling for, also scheduled to be discussed at council next week.

Coun. Diane Deans is asking city staff to report on the cost of scrapping the 30-year maintenance contract with Rideau Transit Maintenance, RTG’s maintenance arm.

And Coun. Catherine McKenney is pushing for a public judicial inquiry into the LRT procurement process.

“Taxpayers paid $2.1 billion for this system, and they want to know what went wrong,” McKenney told CTV Morning Live on Tuesday. “What was in that contract, and what were the decsions made between then and today that have led us to a place where we don’t have a functioning rail system?”

McKenney estimated an inquiry could cost up to one million dollars, but in the context of the $2.1 billion project, said it’s worth it.

“At this point, the public certainly doesn’t have the confidence that they need in our transit system to continue to support it,” they said. “We have a system that is dysfunctional, that simply in two years has never worked consistently, and the issues are only getting worse.”

There is still no timeline on when LRT service will resume.

City Letter to RTG Re Project Co Events of Default by CTV Ottawa on Scribd