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O+o Deputy Minister of ‘Sous-ministre de Infrastructure and Communities _infrastructure et des Collectivités Ottawa, Cansda KiP 086 APR 30 2019 Ministry of Infrastructure 8" Floor, Hearst Block 900 Bay Street Toronto, Ontario M7A 2E1 Dear Deputy Giannekos: ‘Thank you for the productive meeting last week at your offices to discuss Ontario's transit priority projects in the Greater Toronto Area. As a follow-up to our meeting, I would like to provide you with a copy of Infrastructure Canada’s Business Case Guide for Major Transit Projects. This Guide outlines Infrastructure Canada’s information requirements for proposed projects should Ontario wish to prioritize any projects that involve approval by the Treasury Board of Canada for federal funding under the Investing in Canada Infrastructure Program (ICIP). As we discussed, there is a near-term timing imperative around Treasury Board consideration of large public transit projects that is dependent on Ontario's ability to meet these information requirements. In the event that approval of federal funding is required before a final business case ‘can be developed, the Government of Canada may use a stage-gate process. Under this approach, an interim business case could be developed following the Guide so that the project can be put forward for consideration by the Treasury Board of Canada. If approved, soft cost funding would flow to allow for the further refinement of a project’s design and costing; however, federal funding for capital ‘costs would be held pending the consideration and approval of an updated final business case to the Treasury Board of Canada. ‘A stage-gate approach may be used in situations where early work is still ongoing in the following areas: ‘© Design and scope definition; ‘© Costing and contingency reserve, typically defined as exceeding 30%; and © Project schedule, key milestones and procurement methodology. Canada In the near-term, in order to have a better understanding of the readiness of each project, a list of questions is provided below whose answers would allow Infrastructure Canada officials to determine an approximate timeline for approval: General ¢ How long will it take to finalize a preliminary design business case that would meet Metrolinx standards? ‘¢ If there isa desire to explore a stage-gate approvals process, when can the federal goverament expect to receive a preliminary design business case? ‘© Will projects requiring Treasury Board consideration be provided individually or as a grouping? ‘© Ontario has signalled an intent to introduce upload legislation for TTC ‘subways in the spring session for all subway extensions and new lines. How will this impact municipal ICIP Phase II public transit allocations? ‘Strategic Information © What are the policy objectives of the project and how the chosen option is the preferred method to meet these objectives, as determined through qualitative and quantitative analysis? © How does the preferred option align with a land-use or transportation plan or strategy, and where possible, how is it consistent with approved plans of regional transportation bodies? ‘+ Has a detailed scope description of the project (kilometres of rail, number of stations, below-grade (tunnels)) been developed? Economic/Costing Information ‘© What cost benefit work has been done to ensure these are the best options for the public policy goals stated in overall communications? ‘* What is the current cost estimate of the project in nominal/year-of- expenditure dollars? What current level of design that the costs were estimated costs based on, and what contingency is included? Aside from the federal share, has all project funding been secured? If not, will the Province backstop any funding shortfall? Are there expectations for any municipalities other than Toronto to contribute funds to the project from their federal Phase Il ICIP public transit allocation? If so, what is the status of negotiations and have those municipalities consented to reallocate their federal funds? To what extent is Ontario seeking permission to use ICIP Phase I Green Funds for the project? If there is an intent to seek Green Funds for the project, has an adequate GHG reduction profile been developed? Your recent budget indicated an intent to use a “market-driven, Transit- Oriented Development Strategy” to leverage third party investment to reduce provincial funding for transit projects. To what extent will this approach be used for funding for the project? Governance and Implementation What is the project's govemnance structure? Given there is a two year transition for the upload of the subway system, ‘what work has been done to refine project governance to date — how do you plan to work with the City of Toronto? Ontario's announcement indicated all four priority projects would use the 3 model, could you share the procurement options analysis documentation for each? Do you have a detailed project timeline and overall implementation timeframe? If not, when will one be finalized? ond