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Hamilton LRT (Metrolinx/City of Hamilton, Revived)

north-of-anything

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^ Over 30 years, that's not all construction cost, and it has a tunnel component. The GTA West highway is projected to cost $6B I believe, just to build it.
Yeah but the highway is CRITICAL INFRASTRUCTURE. That extra 30 seconds saved per trip will help everyone, unlike the Hamilton elites' little pet project. /s
 

asher__jo

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The 5B is mostly debunked. The true estimated cost is about 3.7B. All these numbers include 30 years or so of maintenance and private sector financing costs. The estimated capital (construction) cost is closer to 2.1B at this moment if I remember correctly. This is still unreasonably high. But for some reason, Toronto construction prices are extremely high. This is a far cry to how much it cost to build the Canada Line, which is a true grade seperated subway/metro line.
A decade has passed since the Canada line was built. Lol
 

WislaHD

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innsertnamehere

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In 2006, the Cost of the Canada Line was $2.054 Billion, that's almost $2.6 Billion in 2020 money. Sure there was inflation, but inflation wasn't THAT bad for the last decade.
construction cost inflation is well above consumer inflation. My understanding over the last 10 years it has been closer to 5% annually.
 

gibsonm

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Glad to hear the LRT has at least verbal support from Ford. Hamilton has quite overbuilt highway infrastructure between the Red Hill, QEW, 403, Linc, and Tesla, not to mention the numerous multi-lane one-way arterials. These serve higher income residents with vehicles quite well, especially on the mountain. It's the inner-city poor who would really benefit from higher-order transit who could really use an LRT. It would give the downtown a well-needed lift.
 

Northern Light

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Cheap money?

Low interest rates.

If in previous years, you could borrow 1Billion at 8% interest; that means 80 Million per year in interest costs alone to service that debt.

If today, you can borrow that same sum at 3% its 50M per year cheaper.

That's the essence of 'cheap money'.

In a direct sense, this can lower the cost of a debt-financed project.

But it also causes many more people to enter the real estate market (and stock market) than otherwise would, using 'the banks' money, rather than their own.

In so doing, the cost of real estate is driven up.

In so far as it fuels high levels of construction; that puts ever greater demand on a relatively fixed labour pool in the skilled trades; which tends to drive up wages at rates faster than inflation.

***

Cheap money is not, by any means a fulsome explanation of why construction costs have risen inordinately in Canada, and in cities like Toronto and Vancouver in particular.

High levels of immigration, creating a real need for additional housing and infrastructure factor in to this as well; amongst other things.

But 'cheap money' is a part of the story for sure.
 

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