Council-Approved Transit Facility Now Projected to Cost $185M Moves Ahead

Site preparation has begun for Guelph’s planned transit and fleet facility on Dunlop Drive, even as the project’s price continues to climb during a period of steep property tax increases.

Work on the city-owned site, located beside the Waste Resource Innovation Centre near Stone Road East and Watson Parkway South, started in early November. According to the city’s general manager of facilities and energy management, the current phase involves vegetation removal, invasive species management, tree protection, and installation of construction fencing. These activities must take place before winter due to environmental rules and are expected to continue until the end of the year.

The upcoming facility is intended to house and maintain city buses and fleet vehicles and support the charging needs of electric vehicles. Full construction is scheduled to begin in spring or summer 2026, with completion projected for 2029.

City council approved the project during the 2024 budget cycle. It originally appeared in the capital forecast at an estimated $323 million. Council later downsized the plan significantly, reducing the building from roughly 40,000 square metres to 26,277 square metres. Staff explained that the redesign uses a smaller footprint and modular construction so it can be expanded in future years. While this approach lowers immediate costs, staff noted it sacrifices economies of scale, meaning future expansion could be more expensive.

The revised budget was initially set at $172.4 million. However, new figures in the 2026 budget documents now place the cost at approximately $185 million, an increase of more than $10 million despite the reduction in size. The rise comes at the same time residents are facing compounded property tax increases well above inflation.

Funding is expected to come from three sources: taxpayers (45 percent), government grants (38 percent), and development charges (17 percent) according to the city’s project summary. With nearly half the funding drawn from the tax base, the cost escalation raises concerns about affordability for ratepayers already absorbing multiple years of large tax hikes.

This is not the first time the project has been re-scaled. The city’s early concept in 2019 envisioned a facility serving transit and other municipal departments, with transit-related components alone estimated at $200 million. After environmental and archaeological reviews, staff confirmed in January 2023 that public works and building maintenance operations would no longer be included, narrowing the project’s scope.

Despite those adjustments, the price continues to trend upward as pre-construction work proceeds. Whether the city can keep future increases under control remains a key question as Guelph moves toward building one of the largest capital projects in its history.