Budget 2023: A Cautionary Tale
An opinion piece came out in the Globe & Mail last week about the origin of the failings of Ottawa’s LRT. One of the article’s co-authors is Bent Flyvbjerg, often referred to as the most cited scholar in the world on infrastructure mega-projects. So, there’s some credibility when the article’s main point is “Ottawa’s LRT didn’t go wrong. It started wrong.”
The article suggests that the central flaw with our city’s largest-ever infrastructure project was the nature of the contractual agreement between the City of Ottawa and Rideau Transit Group (RTG), the consortium hired to design, build and maintain our light rail system. This public-private partnership agreement (also known as a P3) ultimately put the City and RTG into a combative and litigious relationship as the inevitable construction problems arose, rather than see the partners work collaboratively on their mutual interest of realizing the best project possible. When you add the element of former Mayor Jim Watson underestimating both the cost and the timeline for the project but nevertheless applying political pressure to get it done “on time and on budget”, it set the stage for where we are today, with an LRT that continues to experience technical disruptions.
So, what does all of this have to do with the City of Ottawa’s proposed draft 2023 budget?
Among the documents tabled for the 2023 budget is a “statement of principles” which forms the basis of the mayor’s campaign promise “to launch a strategic review of existing city spending”. The aim of the strategic review is to find budget savings of between $35 and $60 million. One outcome of the strategic review of the City’s programs and services will be to assess whether they’re best done in-house, by a contractor, or through a public-private partnership (P3), in order to “optimize the delivery of services and provide the best overall value for taxpayers and ratepayers.”
But as Ottawa architect Toon Dreesen likes to frequently remind me, cost does not equal value. You get what you pay for.
As our LRT experience has shown, City Council should exercise caution when it comes to P3 agreements. When a private contractor hired to provide a service for the public good is ultimately focused on their bottom line, the public good might not always be best served.
There is much in the draft 2023 budget that I’m pleased to see, which I’ll discuss in the next newsletter. I was very happy to hear Mayor Sutcliffe reinforce the principles of fiscal responsibility and compassion in his budget.
But there are several items in the draft budget which cause me concern, including spending tens of millions to widen the Airport Parkway, and a significant increase to the Ottawa Police Services budget (which includes the construction of a new mega-station). During my electoral campaign, I can count on one hand the number of times that residents told me they wanted more policing, and absolutely no one expressed a desire for road widening.
The single greatest demand from Ward 9 residents during my election campaign was fixing OC Transpo. The draft 2023 budget is predicated on finding $54 million in savings city-wide, including $47 million in cuts from OC Transpo. At a time when we need to increase transit ridership, to get more buses and trains and people into circulation, this concerns me.
I know that residents and the city are in a difficult time financially, and that Mayor Sutcliffe’s budget is based on the need for the city to “tighten our belt”. While I agree that we should be thoughtful and responsible with our finances, let’s not tighten the belt so much that we cut off circulation.