Metrolinx continues to dig into CN Rail’s records for alleged overbilling

By Kenneth Jackson
APTN National News
Back in September allegations that Canadian National Railway improperly billed taxpayers several years ago during the massive expansion of a Toronto commuter railway surfaced prompting the Ontario government to immediately call an audit of its financial records.

APTN National News has obtained a copy of the audit.

But those looking for answers will have to wait.

Because it’s only half of it according to a Metrolinx spokeswoman.

The portion digging into CN Rail’s financial records and comparing them to Metrolinx’s, for alleged financial impropriety, is still on-going said Anne Marie Aikins of Metrolinx, a Crown agency that oversees GO Transit.

“We’re auditing an outside agency and it never goes as fast as if it were only our own records,” said Aikins.

The part of the audit that is complete looked at how management controlled rail corridor projects at GO Transit.

The audit found 22 points where GO could “improve” managing its expansion of the railway corridor. It was completed in December 2013 and the copy APTN obtained says: CONFIDENTIAL – DO NOT DISTRIBUTE.

However, Aikins said Metrolinx would also provide a copy but never did after APTN waited several days.

(Shortly after this story was published Metrolinx posted the audit on their website. It can be viewed here.)

The management audit is nine pages and shows Metrolinx hired firm Ernest & Young who completed audit in December 2013.

The auditors looked into five current projects with one “key supplier” picked by Metrolinx to determine how projects were handled in October and November 2013.

As part of its expansion, GO relied heavily on CN who owned the land and were many times the sole contractor.

At the time of the audit there were 27 active projects with costs at over a $1.4 billion.

The audit found that GO has grown so much, and so quickly, it needs to “upgrade its policies and procedures” to keep up.

“These policies and procedures need to include strong definitions of roles and responsibilities (for increased consistency, efficiency and risk management) and stronger controls,” the auditors suggest.

The audit suggests GO needs to have a better grip on cost estimates with eight areas to improve alone in that area, including defining “tolerance ranges for the estimates at each phase.”

The financial allegations APTN reported on in September alleged that CN overbilled GO, possibly by millions of dollars, is partially based on interviews with former senior supervisor Scott Holmes, who provided documents to the Ontario Provincial Police he said backed up his claims.

CN Rail denied all allegations and said claims made by Holmes were frivolous. CN and Holmes have been in a legal battle after he was fired in 2008.

The OPP had met with Holmes several times last year obtaining documents and taking statements. A detective in the anti-rackets unit also had been emailing him over the course of several months.

When asked in September if the OPP was investigating the force wouldn’t confirm or deny it.

This week, the OPP said they are not investigating CN or Metrolinx.

Metrolinx couldn’t say how long the second part of the audit would take.

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Investigative Reporter

Kenneth Jackson is an investigative reporter in Ottawa, Ont. with more than two decades in the business. He got his start in community newspapers before joining the Ottawa Sun in 2007 where he worked the police beat.

In 2011, Jackson joined APTN to break the Bruce Carson scandal that sparked three federal investigations into the former senior advisor to then Prime Minister Stephen Harper. Carson was later charged with fraud sparking a court battle all the way to the Supreme Court of Canada. The conviction was upheld and was based entirely on APTN’s investigation.

Jackson has focused, almost exclusively, on the child welfare system in Ontario over the last five years. The work has earned multiple awards, including the 2020 Michener Award.