Think of it as city hall's version of the TV game show Deal or No Deal: Does the Toronto Transit Commission have to buy its new generation of subway cars, at a cost of about $700-million, only from Bombardier?
Mayor David Miller defends the "sole-source" arrangement by pointing to a 1992 deal between Bombardier and the Ontario government that he said obligates the TTC to buy railcars from the Canadian company.
Bombardier spokesman David Slack said the company believes the deal is still valid. The current Ontario government, however, says there is no deal.
The confusion is all the more surprising since it surrounds the largest purchase of subway cars in Canadian history. Former TTC chief general manager Rick Ducharme, who resigned last week, called the subway-car deal a "fiasco."
The TTC is in exclusive talks with Montreal-based Bombardier to build 234 new subway cars at its Thunder Bay plant, without accepting competing bids from other companies. This has raised a political stink among some right-leaning critics of the mayor and TTC chairman Howard Moscoe.
The mayor cited the 1992 deal this week as a reason the city has to give Bombardier preferential treatment.
But Bob Nichols, a spokesman for the Ontario Ministry of Transportation, said the 1992 memorandum of understanding -- signed when Bombardier bought the government-owned Thunder Bay plant where many of the TTC's rail vehicles have been built -- expired in 1997, and only covered "specific vehicle purchases."
"As a result, there is no current obligation on the province or transit authorities to purchase Bombardier vehicles," Mr. Nichols told The Globe and Mail.
That was news to Mr. Miller. "That's not my understanding. I haven't seen the full agreement."
Mr. Miller cited a letter from Premier Dalton McGuinty that he said supported his interpretation. But the Premier's letter, obtained by The Globe, never mentions the deal between the government and Bombardier. It does say that Mr. McGuinty and his government "would have no objections should the TTC decide to use Bombardier as its sole supplier for subway vehicles."
Whether there is a deal or not, the mayor and Mr. Moscoe have a long list of other arguments in favour of the sole-source subway contract. The main competitor for the contract is German-based Siemens, which says it could save taxpayers $100-million by building the TTC's new subway cars in China.
Sole sourcing to Bombardier ensures the creation of hundreds of jobs at the Thunder Bay plant, instead of China, Mr. Moscoe said. Bombardier also uses parts suppliers in the Toronto area, creating jobs here, too, he added, and building the cars in Ontario would generate $142-million in tax revenue for the provincial and federal governments, who are to pay for the bulk of the subway-car costs.
Mr. Moscoe pointed out that sole sourcing is common with large public-transit purchases. Rules exist in the United States that mandate American content in transit vehicles, he said. And the TTC has had sole-sourced subway-car contracts to Bombardier, or to its government-owned predecessor, for decades. Montreal and Chicago have also just entered into similar arrangements with Bombardier for subway car purchases.
Even Siemens, which has hired lobbyists to complain at city hall about the sole-source deal, has benefited from similar arrangements in selling light-rail vehicles to Calgary and Edmonton.
While Mr. Moscoe believes that the 1992 deal between Bombardier and Ontario is still in force, he said he doesn't rely on it alone as an argument in favour of sole sourcing to Bombardier, since it appears to be in dispute: "I don't hang my hat on it."
Jeff Gray