North Bay demands answers from province on rail contract – by Ian Ross (Northern Ontario Business – July, 2011)

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business

The City of North Bay wants answers from Ontario Premier Dalton McGuinty on why a GO Transit rail coach contract was awarded to Quebec interests instead of the Crown-owned Ontario Northland Transportation Commission (ONTC).

The decision by Metrolinx to award a five-year, 127-car refurbishment contract to Canadian Allied Diesel Railway Industries (CADRI) of Lachine, Que. has city council demanding the contract be suspended and reviewed by the province.

CADRI’s $120 million bid bested ONTC by $2 million, but North Bay Mayor Al McDonald said there are other factors at play. At a June 7 press conference, North Bay Mayor Al McDonald called the awarding of the contract a “flawed process” that will kill 109 jobs at the North Bay-headquartered Crown corporation, eliminate about $7 million in payroll and cost hundreds more indirect jobs in the region.

“How can the province of Ontario look us in the eye and promote the Northern Ontario Growth Plan, and then be a party to a decision to move a significant number of important jobs out of Northern Ontario?”

Ontario Northland currently is finishing a previous contract to refurbish 121 GO Transit coaches by fall.

McDonald released a statement demanding answers from the province on 10 questions on how the Metrolinx contract was tendered.

Metrolinx is the government agency that manages road and public transit in the Greater Toronto Area.

What’s raising suspicions is the sudden sale of CADRI by its parent company, Global Railways Industries, to an Ontario numbered company controlled by Global’s CEO for $12.9 million, including $550,000 in debt.

The new start-up company has the backing of a Quebec pension fund manager, Caisse de depot et placement du Quebec.

In a July 4 letter to the Premier’s Office, McDonald is urging McGuinty to intervene.

The city is rallying support from politicians, municipal and business groups across northeastern Ontario.

The North Bay Chamber of Commerce asked its members to put up signs to show its support for ONTC.

“This issue is much larger than just the 109 jobs that may be lost – families, tax dollars, community initiatives, suppliers, retail…will all be affected,” said chamber executive director Patti Carr in a statement.

Kapuskasing Mayor Al Spacek, the president of the Federation of Northern Ontario Municipalities, said the tendering process needs to be reviewed, taking into the account the larger regional implications and the impact on ONTC’s other operating divisions. “This should be an urgent and important priority for the Ontario government before it’s too late.”