Trams, trains, hospitals – it’s very easy to spend other people’s money

Table of Contents

I’ll let you in on a dirty little secret. Keep it to yourself.

In 2018, the cost of a streetcar in Quebec was first estimated at 3.3 billion and then at 4 billion.

In October 2023, the estimate rose to 10.8 billion, but some whisper about 12 or 13 billion.

The Legault government backs down.

Mayor Marchand proposes to carry it out for 8,400 million. Quebec says no again.

In plain English, no one has the faintest idea of ​​the real cost of this project.

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for what Because it almost always is.

The REM was due to cost 6.3 billion in April 2018, then 6.9 billion in June 2021, then 8 billion in September 2023.

The expansion of the Laval metro was announced at a cost of 378 million. It ended up costing about 700 million.

Initially, it was expected that the CHUM and the MUHC – the two university hospitals – would cost around one billion each.

The final bill of the CHUM is about 3,600 million.

Cost explosion for the MUHC too with, as a bonus, the biggest corruption fraud in Canadian history up to that point.

We will never know the exact costs. The same goes for the Olympic facilities of yesteryear.

Are we absolutely incapable of carrying out large projects without resorting to the open bar?

First, know that, according to available management research, things aren’t much better elsewhere. That’s comforting, isn’t it?

Part of the explanation for the overruns is that projects are getting bigger and more complex.

So there are more risk factors to consider.

If you’ve never built a tram, you also have less experience.

Illustration provided by Alstom

Comparisons with similar projects in other countries are useful, but limited and fragile. The climate, techniques, salaries, etc. they are different

Obviously, the costs explode if there is collusion, corruption, legal disputes, etc.

But I told you about an embarrassing little secret above. In fact, there are three little secrets.

First, costs explode because we announce the cost of the future project BEFORE we have carefully calculated.

for what Because we want to quickly benefit from the political fallout from the announcement.

A nice smoke show wins votes.

Then, too often, we deliberately understate the costs during the first announcement to better sell the pill to the public.

1.1 billion is a lot; 900 million remains below the psychological threshold of a billion.


Finally, elected officials have neither the time nor the skills to assess costs.

They depend on officials, who depend on consultants, who depend on bidders… who understate costs in the hope of winning the contract.

Ideally, an office of neutral assessors, protected from political and financial pressures, would take all the necessary time.

It won’t come. For strictly political reasons.