If you want to see how big projects go awry, visit midtown Toronto, where the Eglinton Crosstown streetcar line is at long last inching toward completion, five years past its scheduled completion and $8 billion over budget.
The project has become a synonym for spectacular incompetence, but perhaps that is not entirely fair. The Crosstown debacle has actually been remarkably well managed from the standpoint of cutting off information. Despite repeated demands for a public inquiry, those of us on the outside are still largely in the dark about what went wrong with the project and who is to blame for the long delays and massive cost overruns.
This murkiness is a feature, not a bug, for all the politicians, bureaucrats and private-sector contractors who have been involved in the Crosstown debacle over the past 15 years. They may not have been able to build a streetcar line on time or on budget, but they have managed to construct a near-perfect unaccountability machine.
That lovely term, invented by British economist Dan Davies, refers to companies or other organizations that are designed to deflect blame and obscure responsibility. They do so in many ingenious ways: by fragmenting authority, by tying themselves to inflexible policy rules, by offloading some key decisions onto regulators or third parties, and so on.
Sadly for us, Canada’s public sector can compete with anyone on building unaccountability machines.
Once you understand the concept of unaccountability machines, you begin to see them everywhere. The U.S. banks that were at the centre of the 2008 financial crisis but somehow avoided any consequences? They’re unaccountability machines. The companies that build airplanes that crash or the hospitals that administer opioids that turn patients into addicts? They, too, are unaccountability machines.
On a more modest level, so are the call centres that reassure you that “your call is important to us” but keep you waiting for hours. Or the customer-service departments that say they would love to help you but are barred from offering a refund or doing anything else of substance because of “company policy.”
Sadly for us, Canada’s public sector can compete with anyone on building unaccountability machines. Thanks to our multi-level system of government, it’s easy for Ottawa, the provinces and cities to do nothing but point fingers at one another. Add in the recent fascination with public-private partnerships and it’s often difficult to discern who is actually in charge of anything.
The Eglinton Crosstown project is a case in point. It began to go awry in 2011 when the province of Ontario decided to strip the Toronto Transit Commission (TTC) of authority for construction of the new line. The provincial government handed the job to Metrolinx, operator of the province’s GO Transit bus and rail lines. In retrospect, the decision looks like a glaring error, according to a recent probe into the mess by Jeff Gray of The Globe and Mail. The TTC had a decent history of building big subway projects and streetcar lines. In contrast, Metrolinx had built next to nothing.
Its inexperience didn’t stop Metrolinx from venturing into the unknown. It brought in Infrastructure Ontario, another arm of the provincial government. The two provincial agencies then restructured the Crosstown project as Canada’s biggest public-private partnership. Rather than relying on the old system—in which the TTC designed the project in-house, then broke it into chunks and called for bids on each component—the new public-private partnership handed over many of the big decisions to a consortium of private-sector contractors known as Crosslinx.
Is the Crosstown an isolated case? Probably not. Similar don’t-blame-me scenarios are becoming increasingly common.
Critics warned of problems with such sweeping delegation of authority. They were right. Construction hit delays. The project, which had been slated for completion in 2020, blew past deadlines. Frictions grew as problems with mislaid rails, leaky stations and balky scheduling software came to light. Metrolinx slung accusations at Crosslinx, Crosslinx fired back, and the two wound up in court. The pandemic only aggravated things.
The legal battles wound up costing Metrolinx hundreds of millions of dollars to settle. Thankfully, the two sides appear to have struck a truce and an opening of the long-delayed line now seems imminent. Yet however this long, sorry tale winds up, the Crosstown project will stand in Canadian history as a classic unaccountability machine. Responsibility for the project is so fragmented among public and private organizations, as well as different political leaders, that any attempt to locate the root problems vanishes into mist. Everyone acknowledges that a disaster has taken place, but apparently nobody is to blame.
Is the Crosstown an isolated case? Probably not. Similar don’t-blame-me scenarios are becoming increasingly common. Look at Canada’s shambolic housing policy or the continuing struggle to reform the Canada Revenue Agency or the decades-old battle to try and set up a national securities regulator, and you begin to gain an appreciation for how existing bureaucracies protect themselves by fragmenting responsibility and slow-walking reform.
These obstacles to change are looming large as Ottawa attempts to kickstart the Canadian economy with major projects ranging from pipelines to port renovations. The danger is that these bold initiatives will wind up foundering like the Crosstown.
What can we do to prevent that? Three things come to mind.
First, we should acknowledge that simplicity is good. We should be particularly wary of complex projects that involve overlapping organizations and no clear boss. In most cases, a single individual in charge of a single organization should be clearly identified as the person who has the responsibility and the authority to get something done.
Second, we should attempt, where possible, to do things in stages. Sweeping change nearly always means chaos. A better approach is to break big projects into smaller components, then do them sequentially. This gives the project leader a chance to learn by doing and to replace subcontractors that aren’t performing.
Third, sunlight is a good disinfectant. Any project that turns as dysfunctional as the Crosstown should be subject to an automatic public inquiry. At the very least, the threat of being called to testify before a public commission might help to focus minds and galvanize activity. More positively, an inquiry can point out lessons for future builders. Because the one thing we all want to avoid is another Crosstown debacle.
Most of us, anyway.
Ian McGugan writes about markets and economics. His work has appeared in the Globe and Mail, the New York Times and Bloomberg/BusinessWeek. He was founding editor ofMoneySense magazine.
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