VZCZCXRO7422
RR RUEHQU
DE RUEHON #0296/01 3281817
ZNR UUUUU ZZH
R 241816Z NOV 09
FM AMCONSUL TORONTO
TO RUEHC/SECSTATE WASHDC 0014
INFO ALL CANADIAN POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 TORONTO 000296 
 
SENSITIVE 
SIPDIS 
DEPARTMENT PASS TO USTR/EISSENSTAT, SULLIVAN 
 
E.O. 12958: N/A 
TAGS: ETRD EINT ELTN CA
SUBJECT: Toronto's Transit Expansion, Opportunities for U.S. Firms 
 
REF: TORONTO 63 
 
¶1.      (SBU) Summary: The Toronto Transit Commission's (TTC) C$2.6 
billion Toronto-York Spadina Subway Extension Project presents 
potential opportunities for U.S. businesses as there is no domestic 
content requirement for the design and construction phases.  The 
project, part of the biggest expansion in the TTC's history -- 
North America's third busiest mass transit system -- is in the 
design phase of a design-bid-build format.  Design work will be 
available for contractors to bid on by mid-2010.  More information 
will be available to potential contractors by mid-December.  End 
Summary. 
 
 
 
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Project Funding 
 
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¶2. (U) As part of its economic stimulus package and infrastructure 
renewal in its 2009 budget, Ontario pledged C$9 billion to address 
transportation issues.  The province's total infrastructure budget 
was topped up with C$4 billion from the GOC's 2009 federal budget. 
In March 2009, the GOC and Ontario announced they would allocate 
C$1 billion for a C$2.6 billion TTC expansion project, with 
two-thirds coming from the Province.  The balance of the project 
will be funded by the City of Toronto and the Regional Municipality 
of York.  The Toronto-York Spadina Subway Extension Project is the 
start of the biggest expansion in the TTC's history, North 
America's third busiest mass transit system, after New York and 
Mexico City.  The planned extension, which will include six subway 
stations, intermodal bus terminals, commuter facilities and 
parking, among other infrastructure upgrades, is expected to open 
in 2015. 
 
 
 
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Budget Shortfall Won't Stop Project 
 
----------------------------------- 
 
 
 
¶3. (SBU) The expansion plans are moving ahead despite a C$106 
million shortfall in the TTC's 2010 operating budget.  However, in 
an effort to offset its operating budget shortfall, TTC 
Commissioners (made up of nine city councilors) voted November 17 
to hike the adult TTC cash fair by 25 cents to C$3.00.  Other fares 
(students, seniors) will also increase.  Even with the fare hike, 
the TTC will be short C$56 million in next year's operating budget. 
There is wide speculation that similar fare hikes are likely for 
the next several years just to cover operating costs.  To date, 
city politicians responsible for TTC have refused to discuss cuts 
to service. 
 
 
 
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Contracts Awarded 
 
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¶4. (U) The TTC expansion project follows a design-bid-build format. 
The project is currently in the design phase, with three lead 
design consultants working on station design.  U.K.-based Arup 
Designs, California-based AECOM, and The Spadina Group Associates 
(a joint venture between U.K.-based Alsop Architects and 
Toronto-based Stevens Group Architects) have been awarded contracts 
worth C$70 million for the six stations in October 2008. 
 
 
 
¶5. (SBU) Design work will be available for contractors to bid on by 
mid-2010.  A TTC representative told us that the organization plans 
to give a presentation to prospective contractors in early December 
that will provide prescriptive details on the available contracts. 
We were told that U.S. contractors have attended presentation 
 
TORONTO 00000296  002 OF 002 
 
 
sessions in the past, and are expected in December as well.  TTC 
officials claim their tender requests do not have domestic content 
requirements -- other than for vehicle tenders. 
 
 
 
-------------------------------- 
 
Domestic Content Rule for Trains 
 
-------------------------------- 
 
 
 
¶6. (U) As part of a larger regional transportation concept a 
request for proposal for new vehicles was issued by the TTC.  That 
RFP specified a minimum of 25% Canadian content.  Quebec-based 
Bombardier and Germany-based Siemens submitted bids.  Bombardier 
was awarded a C$1.2 billion contract to supply the TTC with 204 new 
low-floor light rail vehicles (LRV) -- streetcars -- beginning in 
¶2011.  A TTC representative told us on October 30 that the TTC has 
exercised an option to buy an additional 56 subway cars for the 
Toronto-York Spadina Subway Extension as part of the same order. 
 
 
 
¶9. (SBU) Comment: The TTC and Ontario have selectively established 
domestic content requirements in an effort to protect Ontario's 
skilled manufacturing jobs.  The streetcar contract represents 
4,500 direct jobs in Thunder Bay, Ontario, where Bombardier builds 
the vehicles.  While nearly half of the total project's value did 
specify domestic content requirements, the TTC is actively seeking 
U.S. participation for other aspects of the expansion, including 
large-scale construction contracts.  TTC's chairman, an ambitious 
city councilor with a Toronto mayoral campaign likely in his 
future, personally urged us to promote the expansion project as an 
opportunity for U.S. businesses. 
JOHNSON