A brand new multi-million dollar highway that looks ready for GTA drivers may not be open until next year, according to recently filed court documents about the dispute between the province and the consortium hired to build it.
To the naked eye, the $616-million Highway 427 extension appears complete but has remained off limits to the public for months. According to legal filings submitted to the Ontario Superior Court of Justice, the highway was supposed to be ready for use in the fall of 2020, but the province says it may not open this year unless the dispute is settled soon.
Both sides have since agreed to non-binding arbitration, but if that fails the dispute will head back to court, leaving Ontario drivers hoping to use the highway extension stuck in the middle.
“I’m saying be responsible and get this thing settled one way or the other as soon as possible for the benefit of the taxpayers who are paying for it,” said a frustrated Tony Carella, a Vaughan city councillor who represents a ward the extension runs through.
At the heart of the dispute, first reported by CBC News last month, is whether or not the newly built highway needs to undergo extensive repaving work to address safety issues alleged by the province.
LINK427, the consortium that built the extension, says the highway has already passed a road safety audit and the construction was done according to the design the province approved. In its court filings it accuses the government of stalling to avoid paying the consortium tens of millions of dollars
Last month, LINK427 took the province to court, asking a judge to essentially order the highway opened and compel the government to pay the consortium the final $144-million payment it’s owed for the construction.
Highway ready to use, consortium says
About 5,000 pages of court documents, filed with Ontario’s Superior Court of Justice, show the consortium accuses the province of using last-minute delaying tactics to avoid paying the remaining $144 million and another $150 million in cost overruns.
The consortium says it incurred those costs due to construction delays caused by the province’s COVID-19 pandemic restrictions, which slowed work and construction permit applications.
According to an affidavit filed in court, LINK427 project manager Colin McAllister stated the province is intentionally stalling the opening.
The province “began throwing every available obstacle in [the consortium’s] path to Substantial Completion,” McAllister claimed.
“The highway can open now,” he stated in court filings.
Under its contract with the government, the consortium will only be paid when the highway meets what is referred to as the Substantial Completion threshold.
LINK427, which includes ACS Infrastructure Canada Inc, Brennan Infrastructures Inc. and Bot Construction Group, began work on the highway extension in 2018.
The project has two parts: an eight-lane, 6.6-kilometre extension from Highway 7 north to Major MacKenzie Drive; and the widening of the existing four-kilometre stretch of Highway 427 south of Highway 7 down to Finch Avenue.
The widened stretch of highway has opened to the public, albeit with reduced speed limits, because the province says it has concerns over water pooling and drainage issues.
The government of Premier Doug Ford maintains the extension must remain closed due to concerns over what’s known as a crossfall. That’s the slight slope of the road that allows water to drain off to the sides.
The province claims it has to be an exact two per cent crossfall, and the consortium didn’t build it to that specification.
The project is being overseen by Ontario’s Ministry of Transportation [MTO] and Infrastructure Ontario [IO].
Ian McConachie, IO’s media relations and issues manager, says the extension can’t be opened.
“It remains IO and MTO’s position that the road was not built to the specifications in the contract and that safety and related concerns preclude opening the road until repairs have been completed to ensure that the specifications in the contract have been met,” he wrote in an email to CBC News last week.
“IO and MTO are pursuing all potential avenues to safely open the highway as soon as possible.”
The consortium argues few if any highways are built the way the province is demanding.
“It is not possible to construct a highway with a precise two per cent crossfall with no tolerance. All construction involves some sort of tolerance or variability between a design and what is constructed,” McAllister states in his affidavit.
The province is demanding tolerance of no more, or less, than 0.33 per cent.
“The government has not cited any provisions in the [contract] for this proposed tolerance. There is none. This is a new, very expensive requirement, particularly given the constructed state of the highway,” according to the consortium’s court filings.
The province only raised its crossfall concerns in September 2020, when the highway was set to open, with McAllister calling them “phantom deficiencies,” according to his affidavit.
The province’s refusal to open the highway comes as $100 million in loans the consortium took out to build the highway come due at the end of June.
Independent certifier refused to sign off on highway
If the province doesn’t pay the consortium by then, it could potentially cause financial issues, according to the court filings.
LINK427 also says the process to recover $150 million in cost overruns can’t legally begin until the highway opens, further squeezing it financially.
In the province’s court filings, Lou Politano, the senior vice president of roads and special projects at IO, says both parties agreed that it would be up to an independent certifier [IC] to determine if the highway is ready for public use.
“[The consortium] applied for Substantial Completion on two occasions. Both times, the IC did not agree that the requirements of Substantial Completion had been met, and declined to issue a Substantial Completion Certificate,” according to his affidavit.
LINK427 accuses the IC of not acting independently and claims it’s relying on the province’s concerns in its certification process.
Politano stated that repaving the highway extension could take months and if work isn’t started soon, it will likely prevent the roadway from opening this year as paving work can’t be completed in cold weather.
It’s not clear how long the arbitration process will take.