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Waterfront Toronto says it did not make information public because it was afraid of weakening bargaining position with contractors.Fred Lum/The Globe and Mail

Waterfront Toronto is spending close to 40 per cent more than budgeted to make improvements to Queens Quay – a fact the government-funded agency has known for a year, but only now is making public.

The budget for the multiyear project has risen to $129-million from $93-million, Waterfront Toronto said in a press release issued Thursday. The jump in costs was disclosed to the agency's board last December, and it approved a budget increase in February, Waterfront Toronto spokesman Andrew Hilton said. The agency did not make public that it had added millions to the budget, because that would have weakened its hand in negotiating claims with contractors, he said.

The revelations brought a quick response from Mayor John Tory and deputy mayor Denzil Minnan-Wong, a frequent critic of spending by the agency who is set to take a seat on its board next week.

"Obviously I am concerned with the cost overruns with respect to the Queens Quay project and, in particular, the lack of transparency and timeliness in reporting these costs," Mr. Tory said in a statement. "We need to invest in our waterfront, but we need to do so carefully and in a transparent manner that respects the tax dollars we are investing."

Mr. Minnan-Wong said that, despite the negotiations, the agency should have disclosed that there were problems sooner.

"I think they had an obligation as a public body to disclose that information," he said. "They're far too secretive of an organization. Too many things get discussed in private. They just close the doors – they disclose that information to the board, and the public never knew."

He also questioned why the information was not disclosed before the Oct. 27 election. "Why did they wait this long? Did they make a political decision because an election was going on that they didn't want to disclose this during an election?"

Mr. Minnan-Wong asked Waterfront Toronto for details on the Queens Quay project in July, but did not get a response.

Waterfront Toronto, established in 2003 with $500-million in funding from each of the federal, provincial and municipal governments, is expected to run out of money in about three years and has asked the three levels of government to give it the authority to finance its operations and future developments with debt.

In the case of Queens Quay, Waterfront Toronto says the extra $36-million was needed because of unexpected challenges encountered during work on the 1.7 kilometres of waterfront roadway. Higher-than-expected costs and design changes also were to blame. The agency spent an extra $4.4-million – about 12 per cent of the cost overruns – on granite stones and curbs because of rising prices for the material and changes to plans that expanded their use, according to information on its website.

Mr. Hilton said the timing of the release is linked to the conclusion of negotiations with contractors. "We are making it public right now, after we have settled the claims," he said.

Councillor Jaye Robinson, who was on the Waterfront Toronto board during the last term of council, called it "not a very ideal situation," but said the overrun was unavoidable.

"I don't know if this was handled perfectly. It certainly isn't an ideal scenario. They do have a history of delivering things on time, on budget, but in this case, they did not because there were so many unforeseen issues," she said. She echoed the agency's reasoning for confidentiality, but acknowledged that it should have been more transparent.

Pam McConnell, the councillor for the downtown ward, said she wasn't surprised by the cost overruns.

"For me, anyways, I don't question the need for these monies because I could see as they were digging that they were finding things that none of us would have ever known they were there," she said. "We have now built Queens Quay for 50 more years, and I think that's a good investment."

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