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

A consortium of companies building the Finch West LRT is warning the Ford government that the project has been saddled with “growing dysfunction, expensive delays and ballooning costs” stemming from an ongoing dispute it has with Metrolinx and TTC.

A legal challenge, launched in early August by Mosaic Transit Partners, claims Metrolinx “breached its contractual obligations” by entering into a separate operator contract with the TTC to run the line which, the consortium believes, is “inconsistent” with the original construction agreement signed with the province.

In return, Global News has learned, Metrolinx is withholding roughly $500 million from Mosaic until the project reaches substantial completion — the technical milestone required in order 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 launched by the builders of the heavily delayed Eglinton Crosstown LRT last year.

The similarities raise the spectre of serious delays impacting Finch West — until now, the less controversial of the government’s LRT projects.

The Ford government, which is not specifically a party to the lawsuit, said it was optimistic the situation could be resolved.

“We are building the largest transit expansion in North America including the Finch West Light Rail Transit, which will give those in northwest Toronto what they’ve wanted for a long time — a transit system that offers more choices to travel on their own schedule,” the media relations director for the Minister of Transportation said in a statement.

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

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

When the contract was awarded, it was due to be completed in 2023.

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

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

At a news conference, however, Sarkaria refused to provide a timeline for when the expected 46,000 passengers will be able to actually ride the line.

Sarkaria’s office has not provided an updated timeline for when the Finch West LRT will open to the public.

Behind the scenes, as the government touted the construction success along Finch Avenue, legal trouble has been brewing, with hallmarks of the cases that piled more misery on the Eglinton Crosstown LRT.

In early August, Mosaic Transit Partners filed an application with the Ontario Superior Court of Justice’s Commercial List asking for “declaratory relief” in an escalating contractual battle.

The court’s Commercial List division describes itself as “a team of judges who have experience in managing complex commercial litigation.”

At the heart of the dispute: the relationship between Mosaic, Metrolinx and the involvement of the TTC.

The lawsuit argues that when Metrolinx entered into a contract with the TTC to operate the Finch West LRT when it opens, it excluded the builders from those conversations. As a result, Mosaic argues, the TTC has been failing to fulfill key tasks that the operator has to undertake before the line can be complete — with no accountability measures in place

The agreement reached with the TTC, the lawsuit alleges, is “grossly deficient and inconsistent,” with the original contract Mosaic signed, and “imposes virtually no obligations upon the TTC.”

The builders argue that the alleged lack of accountability for the TTC to the original agreement, or to fulfill key operator requirements is jeopardizing the project.

“This is contributing to growing dysfunction, extensive delays and ballooning costs which are increasing on a near daily basis with a potential value of many millions of dollars,” the legal documents claim.

The builders are asking a court to decide if the government and Metrolinx are breaching the terms of their contract and, eventually, to determine if Mosaic is entitled to relief from some of its obligations or compensation as a result.

Until the project is deemed complete by Metrolinx, the provincial transit agency is able to withhold a final payment from Mosaic — a figure of roughly $500 million, Global News has learned.

Once that fee is paid, the builders effectively hand the project over to Metrolinx and the TTC to operate. Similar to the Eglinton Crosstown LRT, the transit agency is cautious of releasing that money until the TTC is satisfied it is complete.

With Mosaic hinting it was facing liquidity issues at the beginning of the year, a substantial advance was put on the table for Mosaic. That payment has been on offer for as long as 10 months, with the builders neither accepting nor rejecting it, government sources contend.

In the time the dispute has bubbled, construction on the line has continued, but Metrolinx is yet to deem it substantially complete — and hand the consortium the remaining $500 million it believes it is owed.

The government maintains Metrolinx has acted properly, with Metrolinx and Infrastructure Ontario supposed to act as the link between the TTC and Mosaic.

Some at Metrolinx in particular are frustrated with the lawsuit, suggesting that the transit agency has been especially hands-on with the Finch West project, regularly visiting the site and helping to troubleshoot.

Despite the apparent attempts from the agency to get more closely involved in Finch West than it was in parts of the Eglinton Crosstown LRT, the builders have taken the issue to court.

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

“We are working hard to support Metrolinx and the Government of Ontario to ensure that all parties can get this important TTC-operated LRT line open to the public as soon 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 similar to a separate case filed against Metrolinx by Crosslinx Transit Solutions last year, the group building the still-unopened Eglinton Crosstown line.

That lawsuit, first reported in May 2023, characterizes the TTC as out of control and making a series of demands that are not in line with the project’s blueprint.

“Without a contract … the TTC is left without any clear contractual direction, boundaries or responsibilities,” the lawsuit claims. “Crosslinx is left in an impossible situation where it must meet obligations that depend on the actions of another party who has no reciprocal contractual obligations.”

More than a year after the lawsuit, the Eglinton Crosstown LRT remains without an opening date, years behind schedule and a political bat to beat for opposition parties to beat the government with.

Already a year behind schedule, officials hope to resolve the Finch West dispute quickly and avoid it adding to the line’s delays.