Court sides with Canada Line over Cambie Corridor construction disruptions to businesses
A B.C. Supreme Court judge has ruled that businesses along the Cambie Street Corridor are not able to claim for damages from the disruption created during the Canada Line’s construction process from 2005 to 2009.
The class action lawsuit represented 250 local businesses and revolves around the disruptive nature of the cut-and-cover method used to build the Canada Line’s tunnel from 2nd Avenue to King Edward Avenue. It pursued compensation from InTransitBC, SNC Lavalin, and TransLink for business losses and hardships experienced.
“There was statutory authority for that interference, thereby absolving the defendants of any liability for economic loss resulting from any nuisance,” Honourable Justice Christopher Grauer wrote in his ruling.
There is one small caveat: Property owners can still try to pursue losses to the value of the property or rental payments.
In the lawsuit, the businesses had argued tunnel boring would have kept disruptions minimal, without disturbing the street surface significantly – similar to the Canada Line’s bored tunnel route under downtown Vancouver.
While Grauer accepted the expert assertion that tunnel boring is feasible under Cambie Village, he placed further emphasis that tunnel boring machines can often become stuck or break down, and when this occurs it can be catastrophic to a project – especially with the tight deadline ahead of the 2010 Olympic Winter Games.
This was the case for the Evergreen Line and particularly Seattle’s Alaskan Way Viaduct replacement project.
“The more important point is that, I find, this risk was not one that TransLink and RAVCO/Canada Line Rapid Transit Co. could feasibly accept in this project given the funding and scheduling constraints,” Grauer.
“The cut and cover tunnelling work as a whole, I am satisfied, was completed as quickly as was practically feasible.”
The plaintiffs assert tunnel boring through the Cambie Village area would have only increased costs by $34 million while the defendants maintain it would have cost upwards of half a billion dollars.
The Canada Line as designed was ultimately completed for $2.054 billion, with $914 million from three levels of government, $334 million from TransLink, $300 million from Vancouver International Airport, and the remaining from SNC-Lavalin’s private joint venture. SNC-Lavalin was originally anticipated to contribute $200 million, but its contribution soared to $750 million due to cost overruns – a factor the company was responsible for.
Precedent was also an important factor in the decision. Justice Grauer gave weight to the decision over Hazel & Co. owner’s Susan Heyes’ lawsuit. She won $600,000 in damages compensation for her Cambie Street business from 2005 to 2008, before she relocated her business, but the decision was reversed by the Court of Appeal in 2011.
Both decisions are expected to set precedent for future infrastructure projects in the province, including the planned underground SkyTrain extension of the Millennium Line under West Broadway.
“It has implications on almost anything,” Gordon Price, the Director of The City Program at Simon Fraser University, told Vancity Buzz.
He adds that having to compensate businesses for perceived grievances and damages would significantly increase construction costs, to the extent that many projects would not financially feasible.
“If there is a prospect that an open ended amount of money had to be allocated in the event that people believe they had been aggrieved or damaged by a public work, then the real impact is not the money but the risk,” said Price. “And if you had to incorporate risk into financial planning, I would expect that a lot of public projects will not go ahead. I think the real problem would be the unknown.”
Price pointed to Seattle’s light rail project as an example when compensation was provided to local businesses directly affected by construction activity along the transit line’s route. However, compensation was limited within an established $50-million fund by the City of Seattle, King County, and Sound Transit.
Businesses were required to include pre-construction tax statements in their application in order to provide evidence of real damages and losses. The fund’s policy provided a maximum of $150,000 to each business, and businesses that relocated were eligible to receive up to an additional $100,000.
“It’s basically up to the government agency as to whether they will set up a fund and distribute it. It’s not an open ended fund to get as much as you can,” said Price.
And if businesses are to be compensated for their losses, on the flip side there’s another consideration to make: “Should government be compensated for the positive results?”