Trade War Threatens to Hike Costs for Ontario Line Trains
AI-generated image · Bay Street Wire
Canada's retaliatory tariffs on U.S. goods could add substantial costs to a $9 billion contract for driverless subway trains.
A burgeoning trade war between Canada and the United States may significantly increase the cost of the driverless trains intended for Toronto's Ontario Line, according to reporting from Global News Toronto.
On Tuesday, the Canadian government announced retaliatory tariffs on approximately 700 U.S. products, including electric rail locomotives. This development puts a $9 billion contract signed in 2022 by Infrastructure Ontario at risk. The contract, awarded to a consortium including Hitachi Rail, covers the provision of trains, rolling stock, and maintenance. Because Hitachi’s trains are manufactured at a facility in Maryland, they must cross the border to reach Toronto.
While the Ontario Line is not expected to be finished until the early 2030s, the trains could face substantial federal tariffs if the current trade policies remain in place upon delivery. The federal Department of Finance stated that counter-levies are "focused and strategic," noting that the government may grant targeted exemptions to avoid negative impacts on the Canadian economy.
**What it means**
The situation highlights a growing tension between infrastructure procurement and geopolitical stability. Ontario NDP Leader Marit Stiles criticized the province's decision to award the contract to a U.S.-based manufacturer over Canadian options, stating that transformative jobs for Thunder Bay were lost. Global News Toronto reported that Alstom, which maintains facilities in Canada, bid for the project but was not selected.
Metrolinx, the agency overseeing the project, told Global News Toronto that it makes every effort to procure from Canadian and Ontario-based companies. Ontario Premier Doug Ford acknowledged the potential for price increases, describing them as "the cost of war" while suggesting Canada should wait out the current U.S. administration. The total projected cost for the Ontario Line is currently $34 billion.