The Ontario Government has pulled the plug on a new light rail project in Hamilton.

Transportation Minister Caroline Mulroney held a quickly-arranged media availability session on December 16 at which she announced that the provincial government would no longer commit to funding the 17-stop, 14-kilometre rail project. Instead, she said, the province would create a task force to study how to improve transit in the city.

The government’s decision to pull out of the project came down to money, said Mulroney. When the project was approved in 2014, the provincial Liberal government committed $1 billion. The Conservatives confirmed their commitment to funding the project during the 2018 election, but Mulroney said at her announcement that the project price tag is now approaching $5.5 billion.

“Although today’s news is certainly disappointing, for Hamiltonians and for our government, we cannot afford to make unaffordable and unsustainable promises,” said the minister. “We cannot afford to continue the Liberals’ approach of making empty promises today and accumulating a massive legacy of debt for our children and grandchildren.”

Hamilton Mayor Fred Eisenberger reacted strongly to the announcement.

“This is a betrayal by the province to the City of Hamilton,” he said in a statement. “This will not only hurt Hamilton’s economy, but Ontario’s economy.”

The Hamilton Chamber of Commerce also called the decision “irresponsible and reckless.”

“It’s hard to hear the province’s ‘Open for Business’ mantra without laughing,” Keanin Loomis, the president and CEO of the Hamilton Chamber of Commerce, said in a statement.

Meanwhile, the question remains of what happens with pre-construction work that is either underway or already completed. Three consortia, for example, were chosen to bid on the project and were due to submit their bids in the spring. They are CityLine Transit Group (which include constructors Dragados, Aecon and Dufferin), Ei8ht Transit (including Fluor Canada, EllisDon Civil and Bombardier), and Mobilinx (with constructors Astaldi, Hitachi-Ansaldo, Amico and Bot).

Additionally, Metrolinx, the Crown agency that manages public transit in the Greater Toronto and Hamilton area, had already acquired two third of the commercial and residential properties it needed to make room for the line. By the end of September, the agency had spent more than $160 million on the project, including $80 million on property acquisition.

Ottawa’s LRT funding still in place

Hamilton’s light rail project may be the only one under threat—for the time being. Mulroney promised that her government remains committed to providing $1.2 billion in funding for Stage 2 of Ottawa’s light rail expansion plan.

“We are certainly committed to Phase Two of the LRT in Ottawa,” she told reporters. “We will commit our funding to Phase Two of the Ottawa LRT. Our officials are working closely with the City as they’re working on their issues, but we expect to partner with them in Phase Two.”

Stage 2 of Ottawa’s light rail line will extent the Confederation Line further into the east and west ends of the city, and the Trillium Line south to the Ottawa Airport. The Trillium Line extension is expected to be complete by 2022, while the extensions to the Confederation Line should be finished by 2025.

The $4.66-billion cost of the Stage 2 expansion will be shared between the City of Ottawa, the province, and the federal government.