Contractors sue Toronto for $83M, alleging unpaid work on new St. Lawrence Market building

As Toronto prepares for the grand opening of the new St. Lawrence Market North Building, the contractors who built it are suing the city for $83 million, alleging they haven't been paid for all their work and the city is in breach of contract.

The five-storey, glass and metal building will be the permanent home to the St. Lawrence Market's Saturday farmers' market,which spent the last nine years operating under a tent outside. The project has been in the works for years and replaces the old north market building that was demolished in 2016.

Though the work is now officially done, the contractors behind it say there's still unfinished business.

The joint venture of Atlas Corporation and Buttcon Ltd. were awarded a $92-million contract to build it in 2019. But after delivering equipment, labour, materials and other services to complete the project, they're still owed about $83 million, according to a statement of claim filed on March 12 to the Ontario Superior Court of Justice. 

"The Plaintiffs have demanded the payment of the outstanding sum," according to the statement of claim, "however, to date, the Plaintiffs remain unpaid."

The contractors also filed a claim for a lien against the market building property in February, which is included in the statement of claim. It puts the updated contract price at roughly $203 million.

The city of Toronto declined to comment on the matter "as it is a part of an ongoing legal process," a spokesperson said in an email. When asked about the suit Friday, Mayor Olivia Chow said it would all be sorted out in court.

"To all the farmers and all the shoppers, do not worry, it will remain open," she told reporters.

The allegations haven't been tested in court and the city has yet to file a statement of defence.

On top of the $83 million they say they're owed and a declaration from the court that they're entitled to the lien, the contractors are also seeking roughly $9 million minimum for additional costs they say they incurred from delays, disruptions and other impacts caused by the city.

The plaintiffs' lawyers did not respond to CBC Toronto's request for comment. 

Amount being sought is 'astounding,' expert says

Jiwan Thapar, CEO of JTE Claims Consultants, who is often called as an expert witness in construction-related court matters, says he's seen a rise in construction claims since the COVID-19 pandemic, which caused major project disruptions in the industry. But he says the allegations in the statement of claim against the city are eyebrow raising.

"The joint venture signed a lump-sum contract for approximately $90 million. Now the statement of claim is asking for [an] equal amount [or] pretty similar amount from the city of Toronto, which is astounding," said Thapar, who is not involved in the case. 

The advantage of lump sum or fixed-price contracts for contractors, Thapar said, is that they usually come with a high degree of certainty that they will be paid for exactly what the project costs, making it all the more unusual to see allegations that the contract cost could have practically doubled in this case. 

The farmers' market hosted at St. Lawrence Market has been in existence in some form on the downtown site since 1803. 

Toronto city council first asked staff to study options to replace the market's previous building in 2002. The old building was finally demolished in 2016, but delays pushed the start of construction on the new building to 2019, followed by more delays that ultimately raised project costs to $128 million, up from an approved budget of nearly $75 million in 2010.

The farmers' market returned to its former site last weekend. The building will also host court services on its upper floors. The official opening is scheduled for May 10.