TTC Capital Budget 2013 Part IV: Subway Infrastructure

This is the final installment in my review of the TTC 2013-2022 Capital Budget.

Track

The TTC owns a great deal of track and tunnels, although nowhere near as much as larger systems in major cities like New York or London.  Even though our lines are generally more recent than those in places Toronto subway fans list after, ours are getting on and need some major overhauls.  (An interesting statistic: the subway yards account for about 20% of all of the track in the system — 23 single track miles of yards vs 82 single track miles of revenue track.)

The typical lifespan of subway tangent track is 30 years, but only 10-15 years for curves.  Ties last 35 years, and the TTC hopes to raise this number.

The roadbed on open-cut sections of the subway is built like a mainline railway with ties and ballast.  The ties carry the track while the ballast distributes the load and provides drainage.  Some of the ballast now in use is 45 years old or more, and its ability to provide support has been compromised by the growth of weeds.  Ballast should actually be “springy”, not a mass of rock glued together with mud and roots.

The section from St. Clair to Eglinton is scheduled for reconstruction in 2014.  There is no info in the budget papers indicating how extensive this work is or what type of shutdown(s) will be needed.  Regular riders of this section will know that there have been slow orders on the curves north of Davisville for quite some time.

The budget for track rehabilitation was $8-million in 2012, but beginning in 2014 it ramps up and over the ten years 2013-22 it will average about $14m.  A separate budget line covers turnouts (switches and associated track), and starting in 2013 the TTC will replace 6 turnouts per year (the 2013 projects are 2 at Islington centre track and 4 at Victoria Park crossover).  The ten-year budget for turnouts averages about $11.5m per year.

Since the subway opened, visual track inspection with walking crews has looked after the lion’s share of the review.  The TTC proposes to move to inspection from a rail vehicle fitted out for the purpose.  Photos and videos of infrastructure condition will document what is in the field and allow detailed office-based reviews to replace walking patrols.  Conditions that could be missed by a walking visual inspection will be picked up and recorded.  The budget contains $5m in 2013 for this project.

Details of the subway track budget are on page 14 of the pdf.

Signals

The resignalling of the Yonge-University Spadina line will be substantially completed by 2017 at an estimated final cost of $408m.  This is roughly the time when work on the Bloor-Danforth line would begin on a $431m budget running into the mid 2020s.  This date ties in with the presumed availability of TR trains displaced from YUS to BD.

The BD line has capacity problems that might be addressed by upgraded signalling subject to the issues of terminal capacity discussed elsewhere on this site.  A related problem is the capacity of various yards to hold the BD fleet, and the number of trains that can be accommodated and fed into service.

Davisville Yard still has its original signal system including many manually operated switches from the 1950s.  This will be replaced starting in 2016 at a cost of $7m.

Wilson Yard is much newer, but its signals from the 1970s are “obsolete and inferior quality”.  Starting in 2016 they will be replaced at a cost of $41m.

Details of the signalling budget lines begin on page 19 of the pdf.

Postscript: Streetcars and LRT vs Subways

Owning a subway (or, more generically, an underground railway) is expensive.  There are major pieces of infrastructure with no equivalent on a surface system.

Not long ago, in the comment thread for the Downtown Relief Line article, someone challenged the validity of my position regarding the high cost of subways versus surface rail maintenance.  My reply bears repeating.

These are capital, not day-to-day operating, but they are for renewal of existing infrastructure, not new builds. They are as much an “operating cost” as cleaning trains and stations because these capital costs tend to occur in various parts of the system that are at different ages on an ongoing basis.

The figures below are the 10-year totals for 2013 to 2022. I have used the consolidated figures to flatten out the effect of year-to-year variations in project timing.

For track itself, costs will be $249-million for the subway and $322m for the surface network. The streetcar routes total roughly 1.5 times as much as the subway routes (about 90km for streetcars vs about 66km for subway and RT), and this does not include the track retained for diversions and short-turns. If the total cost is expressed per km, the cost for subway track is higher. Moreover, we still have two years left to rebuild the worst of the poorly built tangent track from the period before 1993, and it will be several years to catch up on badly built intersections. This inflates surface track costs above what they would look like for LRT lines built to current standards.

Communications and Signals together amount to about $750m, and much of this cost is chargeable to the subway. Part of this is the cost of upgrading signals on the older part of the system, an activity with no equivalent on the surface system.

Power Distribution is about $66m. Some of this includes projects to update the overhead system for pantographs on the new streetcars.

Under Facilities, the TTC has a line for “Finishes” which applies mainly to subway stations totaling about $170m.

Bridges and Tunnels, most of which are subway facilities, total $452m. Buildings and Structures, again mainly the subway, total $1.49-billion.

These are real numbers, not something I invented.

It is self-evident that underground operation, regardless of the vehicle, has certain advantages including complete exclusion from traffic and weather and faster operation generally as a result of wider station spacing.  Closer headways and shorter waiting times are dictated by policy regardless of demand during off-peak periods.  Where passenger volume warrants (that is to say, reaches a level where vehicle and pedestrian congestion would be intolerable on the surface), then some form of grade-separation makes sense.  However, choosing this option brings future operating and ongoing capital maintenance costs that rarely show up in subway advocacy.

Just on the operating side of the ledger, the TTC expects to be short $14.2-million annually net of new revenue when the Spadina Subway opens to Vaughan (gross costs will be $33.7m; ref: page 1230 of the “Blue Books”).  This does not include costs further down the road as the new infrastructure ages and triggers costs on the capital program.  Will York Region and Queen’s Park chip in, or will they leave such costs entirely to Toronto?

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38 Responses to TTC Capital Budget 2013 Part IV: Subway Infrastructure

  1. Robert Wightman says:

    If York region and the province are unwilling to subsidize the costs of operating the line in York then the TTC should only run every 4th train up there in the rush hour and every 3rd train the rest of the time. Having to wait 10 minutes for a train may make the passengers squawk loud enough to get a subsidy for better service. Turn half the trains at Finch or Downsview and half of the rest at York U. that would help with terminal congestion.

  2. Benny Cheung says:

    The Spadina extension would be built with 2010 technologies, so it should last longer. Steel formulation changes over the years for better performance and so does concrete. Also, when the T35A08 cars are due for replacement, the new cars will certainly be lighter which is easier on the tracks. It is too earlier to speculate at this point.

    The present division between Toronto and York region may not exist in the future. Administrative regions change in the future. Cities and regions merge over time when they get bigger. Even if the status quo remains, we should be confident that the two government can come to agreement over maintenance cost. If York region refuse to pay, trains can always turn back at Steeles West Station.

  3. Jonathan Chen says:

    @ Robert Wightman,

    Waiting 10 minutes for service in York Region is actually good. Average frequency for most bus routes is about 30 minutes (and that’s rush hour).

  4. I’m sure that GO commuters (the only other rail option in York Region) would be happy to wait only 10 minutes between trains.

    Cheers, Moaz

    Steve: But they (and everyone north of Wilson) will get every second train in the AM peak and hence a roughly 4’40″ headway unless the TTC buys more trains.

  5. So what sort of work will be done at VP? Crossover replacment?

    Steve: Four turnouts — the four switches. There was no mention of the diamond in the budget, but I wouldn’t be surprised that this is simply an oversight.

  6. Thanks Steve. No doubt it is an oversight. I cannot see them replacing the turnouts and not the diamond given its age. It’s like installing a crossover but not installing the signals.. More work later ;)

  7. Justin Bernard says:

    ‘This date ties in with the presumed availability of TR trains displaced from YUS to BD.’

    Why would the TR’s be displaced to the B-D? The T-1′s surely will not be ready for replacement then? Is it to add capacity to the B-D?

    Steve: Actually, the first of the T-1′s was delivered in 1995 and it will be 30 years old in 2025. They may have a few more years left in them, but sooner or later, they will go. This is related to the scheme for 7-car trains on YUS which would be the next order of equipment for that line.

  8. Dwight says:

    If the system ran proof-of-payment (vs the current gated fare system), then York Region could perhaps be enticed to subsidise service by allowing a YRT fare to be valid for subway use to, say, as far south as Finch (of which a TTC fare would be required to proceed further).

    (Steve: please remind me – is subway also supposed to move to P.O.P. eventually?)

    Steve: The subway, like all of the TTC, is to move to Presto by 2015 and, hence, to P.O.P.

  9. I have a great idea about the Spadina extension – I take it the TTC can easily figure out its average operating cost per kilometre for track maintance and its average cost per train. Thus if York Region will not pay for the operation of the subway system in York Region, trains will go up to the border and then turn back until they are ready to pay for it.

    Steve: The problem is that the agreement has already been signed, and Toronto is stuck with it. There are now moves to allow York Region riders free access to the subway so that they wouldn’t even pay a TTC fare. This would effectively extend TTC Zone 1 well into York Region, at least for subway connecting trips. So nice of we generous Torontonians to pay for our northern cousins. By the way, $14m is roughly equivalent to a 0.4% property tax increase.

  10. Steve wrote,

    “There are now moves to allow York Region riders free access to the subway so that they wouldn’t even pay a TTC fare.”

    Interesting. The only move I have heard of that vaguely sounds like that is to allow people boarding in York Region to not have to pay a separate TTC fare if their destination is York University. Anywhere else, and the TTC fare would be required.

    Currently, York U commuter students who live in York Region enjoy not having to pay a separate fare to get to campus as several YRT and VIVA routes operate onto campus. When the subway opens, the closest that any of those routes will get will be the Steeles West (Black Creek Pioneer Village) station, and the VIVA routes will likely only connect at VCC. The burden of having students residing in York Region having to pay a separate fare for travel just one stop south of Steeles is supposed to be alleviated by this move.

    How it will be implemented will be interesting. With Presto, it could be implemented with a tap-off operation at York U. The TTC fare would be deducted when they tap-on at whatever York Region station (BCPV, 407, or VCC) and if they tap-off at York U within a certain time limit and/or without any other tap-on operations anywhere else, then the fare would be returned to the ePurse balance.

    Steve: I knew of the York U problem, but recently picked up talk of a generic single fare for any rider originating in York. It would be ironic to see something like this implemented at the same time as there is some support for fare-by-distance within Toronto. I have written of the effects of such a policy, and for those originating at the margin of the 416, the effects are not pretty.

  11. Steve wrote,

    “By the way, $14m is roughly equivalent to a 0.4% property tax increase.”

    I was going to suggest that this increase would be a lower percentage to York Region residents, but I am wondering how 0.4% is calculated. I thought the City of Toronto’s 2012 budget is about $9.4 billion. That would make $14 million only a 0.15% increase.

    Just a note: for residents of York Region, $14m is roughly equivalent to a 0.05% region property tax increase.

    Steve: Only about $3b of Toronto’s revenue stream comes from property tax. There are many other sources of revenue including shared cost programs, and even the $1b of TTC fares is counted in the total. Therefore, a 1% increase in property taxes yields about $30m.

  12. Steve wrote,

    “Only about $3b of Toronto’s revenue stream comes from property tax.”

    Thanks for the clarification. There is likely a similar issue with the York Region taxes that reduces the percentage from the figure I incorrectly stated as 0.05%, as it should have been 0.5%. Furthermore, property tax payers in York Region also pay a municipal component, which varies from one town/city to the next. For Richmond Hill, the town portion is about 56% of the Region amount, so a 0.5% increase on the Region amount makes roughly a 0.34% increase in those combined amounts.

  13. However, choosing this option brings future operating and ongoing capital maintenance costs that rarely show up in subway advocacy.

    And even more rarely in LRT advocacy. As I have noted previously, the best available estimate is that the subway/LRT break-even time is about 21 years (that is, the higher initial costs of a subway are offset by lower operating and capital maintenance costs after about 21 years). This figure is often dismissed, but has not yet been challenged.

    Your note that “the TTC expects to be short $14.2-million annually net of new revenue when the Spadina Subway opens to Vaughan” is interesting; by coincidence, that is only a little less than the increase in annual operating costs caused by Council’s decision to move the Eglinton Crosstown route to LRT above ground east of Laird. I am sure, however, that all will agree that an anecdote does not constitute an argument.

    Thank you for pointing out that at least some of the outside subway track has been in use for over forty-five years without requiring reconstruction of the bed – that detail had previously escaped my notice.

    I look forward to your promised thorough comparison of costs, which I am sure will include a complete through-the-cycle estimate of present value of future maintenance, without any simple straight-line extrapolations of a decade of frenetic activity that includes (at least partially) replacement of outside track that requires such attention only every forty years or so.

    That being said, your work will necessarily involve a great many guesses and approximations to details that have doubtless been thoroughly costed and evaluated by the TTC staff. I suggest that your time and influence would be better spent on advocating an honest debate regarding the cost of transit infrastructure in Toronto; a debate that relies on actual numbers and falsifiable assumptions, rather than the mere repetition of unsupported assertions.

    Steve: It is always amusing to read remarks that go roughly “I have made up my mind that the answer is X, and you should really not bother doing anything other than validating my position.” You assume a level of detailed cost accounting and planning that I have yet to see in the TTC after watching them for four decades. They resort to many assumptions and rules of thumb, and don’t necessarily “get it right” themselves.

    You may have noticed that my articles about the TTC’s budget and projects go into considerably more detail and analysis than we ever see in the covering reports to the Commission and Council. I don’t pretend to be omniscient, but by bringing some of this material out into view, we have a better-informed debate whatever our positions might be.

    As for the $14.2-million, you are of course comparing a net cost for Spadina which is a different route with Eglinton and making assumptions about the transferability of the number, a patently invalid technique.

    I don’t ever remember promising a thorough through-the-cycle analysis of TTC costs because the details necessary to produce one are not publicly available, and I doubt they even exist within the TTC. A major problem with retrospective analysis generally is that the way accounts and activities are aggregated tends to support the organizational structure, not an allocation of costs and resources to each unit of service provided. This changes over time as equipment and facilities age, and one would have to look at historical data to see their evolution and the effect, for example, of a monoculture of vehicles, or of a single subway line aging and their components going through gradual degeneration.

    One odd example of this, sadly for the streetcars, is that when the CLRVs showed up, they were thought to be so much more reliable than the PCCs they replaced, but that fleet was decades old and being maintained at a level that presumed its imminent retirement. The “target” the CLRVs had to meet was nowhere near what the PCCs were designed for and actually achieved when they were younger. Now the elderly CLRVs set the “standard” for the new LFLRVs. Will we get back to a day when a car can run for a full month without a breakdown?

    The TR trains are supposed to be many, many more times reliable than the T-1s, which were supposed to be many more times reliable than the H-series cars (of which the H-6s were notable lemons), and yet the spare factor for cars cycled through the shop for repairs and, as they age, overhauls, remains a target the TTC may not, by their own admission, reach. The TRs are brand new and there are teething problems. At what point do we demand that their stats produce a real reduction in in-service equipment failures? Will they go from being too young to be reliable, to becoming at least middle-aged and starting their inevitable decline without any intervening period of high performance?

    The TTC tends not to ask questions like that, and solves their equipment problems by buying more trains. Bombardier is only too happy to oblige.

    Speaking of operating costs, we have been waiting decades for a return to “high rate” operation on the subway which would save both equipment and crew costs while producing some offsetting increase in rail maintenance and power consumption. All equipment, including the TRs, is capable of higher performance, especially on hills and in areas with widely spaced stations, but the TTC has opposed this option for a long time. With the move to ATC, it will be easy to adjust the signalling and speed controls for higher-performance operation, but I have yet to see any indication that the TTC actually plans to do this.

  14. I don’t ever remember promising a thorough through-the-cycle analysis of TTC costs because the details necessary to produce one are not publicly available, and I doubt they even exist within the TTC.

    I regret having misinterpreted your remarks at http://stevemunro.ca/?p=6835&cpage=2#comment-57165

    You assume a level of detailed cost accounting and planning that I have yet to see in the TTC after watching them for four decades. They resort to many assumptions and rules of thumb, and don’t necessarily “get it right” themselves.

    And that, I suggest, is the real scandal here. I certainly agree with your remark that:

    A major problem with retrospective analysis generally is that the way accounts and activities are aggregated tends to support the organizational structure, not an allocation of costs and resources to each unit of service provided. This changes over time as equipment and facilities age, and one would have to look at historical data to see their evolution and the effect, for example, of a monoculture of vehicles, or of a single subway line aging and their components going through gradual degeneration.

    Sure. Making estimates of future expense is hard. Making forecasts of future anything is hard and subject to error. But consider this fairly routine paragraph from the business press:

    New oil sands mines, for example, require prices of around $80 (U.S.) a barrel to break even, Wood Mackenzie found. Add an upgrader, the “pre-refinery” that transforms heavy oil into a lighter crude that can be further refined into diesel and gasoline, and the needed break-even rises to above $100. So-called “in situ” projects, which use wells and underground steam injection to extract oil sands crude, are less vulnerable, with a break even of about $60.

    I’m using oil sands projects as an example because they’re the first thing that came to mind when considering what private sector project would be comparable in scale to the 8.4 BILLION DOLLARS being spent on the current round of transit expansion without anything that would achieve a passing grade in a second year business school capital project planning exercise.

    Look at this oil sands costing study, for example. Even just a quick glance at the table of contents will suffice to show that they spend a great deal of time specifying and justifying the assumptions that are necessarily part of the decision-making process even when spending a trivial billion-odd when building a Steam-assisted gravity drainage (SAGD) plant. Each of those assumptions can be pulled apart, challenged, discussed and modified. What do we get when spending 8.4 BILLION DOLLARS on a transit system? We get complete crap from a stacked committee and politically motivated cheerleading.

    That is the real scandal. And when I am asked to endorse a plan justified by complete crap and political cheerleading, accompanied by suppression of debate and refusal to address a competing view … I wonder why.

    Steve: Dare I point out that the economics of the oil business also depend on some very generous tax treatments that amount to an indirect subsidy, almost an economic development package. What is the true, all in, cost of those resources including the public contribution?

    As for your complaints about the “stacked panel”, they were responsible only for evaluation of the options for Sheppard, not for the rest of the network including the Eglinton line which is the single biggest piece. The economics of a Sheppard Subway extension (in either direction) are even worse, and the crap from Dr. Chong and his researcher is at least as biased and slipshod as anything done by others on that committee might be. I started writing a critique of Chong’s report, but stopped after it was turning into a major thesis. He flatly wasn’t worth me wasting my time.

  15. Dare I point out that the economics of the oil business also depend on some very generous tax treatments that amount to an indirect subsidy, almost an economic development package. What is the true, all in, cost of those resources including the public contribution?

    Why of course you may add whatever lines you like to the analysis. Just take the framework, add a line, and attach an argument that justifies the line’s existence – that’s how progress gets made.

    That’s the beauty of an actual analysis: individual items may be adjusted, arguments can be made regarding the assumptions and – eventually – an informed decision can be made. It doesn’t matter whether you’re costing an oil sands plant, a Fair Trade Granola factory, or a major expansion to transit infrastructure. The intellectual process is the same. Or should be.

    As for your complaints about the “stacked panel”, they were responsible only for evaluation of the options for Sheppard, not for the rest of the network including the Eglinton line which is the single biggest piece.

    I am aware of that. And the evaluation of the options for Sheppard was crap. There was not nearly enough analysis and argument presented in the report to justify taking a position either way.

    The economics of a Sheppard Subway extension (in either direction) are even worse, and the crap from Dr. Chong and his researcher is at least as biased and slipshod as anything done by others on that committee might be. I started writing a critique of Chong’s report, but stopped after it was turning into a major thesis. He flatly wasn’t worth me wasting my time.

    And thus ends another well reasoned, intellectually satisfying and informative debate on the future of transit in Toronto.

  16. Deborah Brown says:

    We’ve been having this debate for about 5 years. And nothing gets done because political interests trump everything else. And in the process, transit professionals who offer their informed opinions, which happen to collide with the political ‘vision’ of the day are shown the door (remember Gary Webster). What the ‘people’ (or as it fashionable nowadays – the taxpayers) want is immaterial. Most of them are either not well informed (90% apparently do not even know what the The Big Move is), or do not have the technical qualifications and the necessary background to know what is best for the city (and indirectly, for them) in the long run. This is why these decisions have to be taken by transit professionals, not by businessmen (e.g. Ford Brothers) or dentists (Dr. Gordon Chong).

    It is worth mentioning that prior to Ford’s taking office and his newly-found ‘vision’ for underground transit, Metrolinx itself – an agency not unknown for its love of LRT – published a benefits case analysis and based on ridership projections it is quite clear that there is no case for extending the Sheppard subway.

    Steve: I presume you meant to say that Metrolinx is “not known for its love of LRT”, although they do seem to be coming around. I remember a very early presentation by the first chair, Rob MacIsaac, that completely omitted any mention of LRT as an option. He was rather unhappy when I pointed this out.

  17. This is why these decisions have to be taken by transit professionals, not by businessmen (e.g. Ford Brothers) or dentists (Dr. Gordon Chong).

    Atlas Shrugged? Not if I can do anything to stop it. Democracy is untidy, inefficient, frustrating and wasteful, but still better than any technocracy could ever hope to be.

    I am not prepared to give bureaucrats unchecked authority over 8.4 BILLION DOLLARS – that’s about $1,500 for every single man, woman and child in Toronto. That’s a political decision, to be made by my representatives at council. I just wish there was more pressure on them to make the decision in a professional manner.

    It would have been nice to have seen a debate based on the linked Metrolinx paper; a lot of things would have been nice.

    Steve: The irony is that Metrolinx is filled with bureaucrats, and they have been hot on building something under Eglinton more or less since the agency’s inception. That’s the single biggest chunk of that $8.4b. As for Sheppard, I agree that “professional” may not describe the decision-making process at Council, but caution that “professional” should not be used simply to describe an option you happen to agree with.

    The business case analysis Metrolinx uses is deeply flawed in that it rewards expensive versions of a project by counting the economic effects of spending, say, $4b on option “A” versus $2B on option “B”. This is done at a project level, not a network level, with the result that the questions “would a different network configuration costing the same amount be a better choice” and “would the money better be spent on a non-transit project, or not spent at all” are never asked as part of the evaluation.

  18. Robrt Wightman says:

    James I. Hymas says:

    November 12, 2012 at 7:09 pm

    Steve: “However, choosing this option brings future operating and ongoing capital maintenance costs that rarely show up in subway advocacy.”

    JIH: “And even more rarely in LRT advocacy. As I have noted previously, the best available estimate is that the subway/LRT break-even time is about 21 years (that is, the higher initial costs of a subway are offset by lower operating and capital maintenance costs after about 21 years). This figure is often dismissed, but has not yet been challenged.”

    I have a few questions for you:

    1. What is/are the source(s) of this fact? I have never seen it mentioned.

    2. Have you ridden the subway and seen the repairs that are continually being undertaken to fix water damage, age related wear, tunnel liner replacement etc.? Most of these are much lower or non existent on surface lines. Granted the cost of subway maintenance would be a lot less if the TTC could have built more open cut but that is political reaction to NIMBYism.

    3. You have made no mention of demand versus capacity. If there is not enough demand for a subway can building one to improve the travel times of a few be justified by an undefined operating cost reduction? What about the lost ability of the capital cost to provide a better benefit some where else. Is this not a cost that needs to be considered when deciding whether or not an investment is warranted?

    4. What do you define as operating costs and what as capital maintenance? Is mid life refurbishing a capital or operating cost? It depends on the system to some extent. If the TTC were to switch to one person operation, a train at rush hour would have a 1000:1 passenger to operating crew ratio versus about 400:1 for a 3 car LRT train but the subway requires more people to maintain it than the LRT R-O-W does. What is the cross over point?

    The TTC could probably build surface LRT for less money if they would use a ballasted right of way but they have chosen to use multiple layers of concrete to support the track. You are right that the panel was stacked; it was stacked mainly with people who are regarded as being knowledgeable in transit. Since you don’t agree with their report they are mistaken and biased. All opinions are biased, that is their nature; but are they biased by fact or by personal opinion? That is the question.

  19. 1. Toronto Transit Infrastructure Limited Summary of Subway Option, March 12, 2012 Option B: Subway Extension (i.e., Chong; sternly criticized by Steve Munro but, alas, with no numbers either way)

    Holding storage, vehicles and property acquisition costs constant, the higher capital costs of the subway would be recovered from operating savings in less than 21 years, after which there would be significant cost savings to the project (based on most recent capital and operating costs available for subway from Yonge Street to Scarborough Centre).

    I have not seen this number challenged.

    2. Yes, I am aware that subways, like every other construct, require maintenance (you forgot to mention the oval tunnels on University). It’s all a matter of degree, isn’t it? How does the future value of required refurbishing of any of the options considered relate to the up-front cost?

    Steve Munro claims:

    When I talk about the higher cost of track underground, it is not just the rails themself I refer to. There is the tunnel itself, signal systems (not required for on-street operation), ventilation, drainage, and the considerable cost of operating and maintaining the stations. Of course surface track is subject to elements the stuff underground does not see, but this is more than offset by the cost of providing and maintaining that isolated underground realm where tracks can last longer.

    but has no numbers – and doubts that the TTC has any numbers either.

    And that, I suggest, is the root of the problem. Any major corporation has a cost-allocation process and are able to tell – approximately, to be sure, but better than a wild guess – the expenses of each of their major business lines.

    If Toronto is to make informed decisions about transit – it needs information first.

    Steve: You really don’t read what I write do you? I cited figures from the 10-year capital budget listing the cost of various aspects of underground and surface infrastructure capital maintenance.

    3. Demand vs. capacity vs. all-in cost is a political judgement to be made once numbers have been assembled. I certainly don’t want to have a grossly extravagant over-building of transit capacity; on the other hand, some degree of excess capacity in Toronto, which is forecast to increase in population considerably over the next twenty years is no bad thing.

    Remember Miller, lauding his predecessors for making the Bloor Street Viaduct so much stronger than it had to be that sticking a subway on it wasn’t a big deal?

    Steve: That wasn’t a case of advance planning, but of designing a bridge to carry a subway that was to be built in the immediate future. That subway plan was eventually rejected, but the builders of the day were not expecting to wait until the 60s for their bridge to be used. Other examples of this sort of pre-building include the Leaside Bridge where Pape/Donlands turn into Millwood, and the Bathurst bridge north of St. Clair. Both were built with extra steel in anticipation of streetcar extensions that were cancelled thanks to the recession. This was not a case of building for the distant future, but for a much rosier present than actually arrived.

    So let’s see some numbers. Overbuilding will cost a lot; ripping up an LRT in twenty – thirty – forty years to put in a subway will also cost a lot (this is another risk that hasn’t been quantified in any studies I’ve seen).

    Steve: The City, TTC and Metrolinx demand projections out to at least 25 years do not show the LRT lines coming anywhere near maximum capacity. It’s easy for you to say that we will run out of room, but you fail to provide specific numbers here to back up your argument, just a vague sense that we need “more”. Pot / kettle. As for the cost of ripping out the LRT, first off, that presumes we would hit a demand crunch and second that this is a huge cost. Given that the LRT is much cheaper than a subway to begin with, and that a good deal of its infrastructure at 30+ years would be due for major overhaul, the delta to remove rather then replace would likely be small.

    4. I personally would call operating costs the steady and predictable costs (salaries, lighting, cleaning, routine maintenance, etc.) and capital maintenance costs the intermittent charges (fleet replacement, mid life refurbishing, bed reconstruction, etc.). But I have no doubt there are a lot of grey areas. Does it matter? You estimate your future costs and take a present value.

    Steve: When the 10-year capital projections for tunneled capital maintenance are much, much higher (you can go and find my comment yourself, or read the details in the online capital budget), the present value will also be higher unless there is some magic way to make the underground infrastructure last vastly longer than its surface counterpart. When there is no counterpart (e.g. the cost of refurbishing escalators and elevators), then it will be a higher cost regardless of how we do the calculation.

    (5): Expert panel?

    David Crombie Chair, Toronto Lands Corporation
    Professor Eric Miller Director, Cities Centre, University of Toronto
    Dr. Gordon Chong CEO, Toronto Transit Infrastructure Ltd.
    Mitzie Hunter CEO, Greater Toronto CivicAction Alliance
    Prabha Khosla Chair, Toronto Women’s City Alliance
    Israt Ahmed Community Planner – Scarborough, Toronto Social Planning
    Ernie McCullough Executive Director, Sheppard East Village BIA

    Who among these political hacks would you describe as a person regarded as being knowledgeable in transit?

    They didn’t even address operating and capital maintenance costs in their report – that’s the main thing. An argument may be made that addressing such costs was not in their remit; I suggest that building a thing (any thing) without worrying about such matters is a reckless and negligent proceeding that indicates the committee and its mandate were rigged to provide a predetermined answer.

    Steve: I have never argued that this was an “expert” transit panel. That comment came from one of the correspondents here. I return, however, to your first premise, the misallocation of $8b. The Sheppard LRT will consume less than 20% of that with most of the cost going to the Eglinton line and the Scarborough RT/LRT conversion/extension. The “expert panel” did not and was not asked to comment on Eglinton, Scarborough or Finch, only Sheppard. If you want to debate the wisdom of a Sheppard LRT (including the benefit of staying on Sheppard all the way out rather than swinging down to STC as the subway proposal did), that’s another question, but it’s not an $8-billion one.

  20. Deborah Brown says:

    James Hymas, I gather you prefer politicians to have the last word as to what transit is to be built where. Therefore, you prefer the status quo. Because that is precisely why we have been building so little transit infrastructure in the last 35 years or so and why we are far behind so many other cities in terms of public transit. I am tired of politicians who do not have a clue about how transit works debating which kilometre of subway they want to build next year so they can show their constituents how much they ‘support’ public transit.

    And having my tax dollars pay for running half-empty subway trains every 5-6 minutes until 2 AM as a matter of policy in Vaughan or on Sheppard (thank you, Mr. Sorbara and Mr. Lastman), while surface routes in Toronto – on which the very success of TTC’s rapid transit system depends – are being ‘re-allocated’ to meet a arbitrary 10% budget cut.

    A politician’s job is to identify the sources of funding required to build the necessary infrastructure (as deemed by transit professionals, in this case), not to dictate what infrastructure is to be built in the first place. Of course, in practice this never happens because opening a shiny subway line is going to give them more votes than say, adding a few more buses and streetcars on overcrowded routes. Just like I wouldn’t go to Rob Ford to have a tooth extraction or to Dalton McGuinty to treat my hemorrhoids, I wouldn’t want a bunch of councillors – whose primary goal is to be re-elected for another four years – force-feed us a major piece of infrastructure that the city will be stuck with forever and for which all of us will have to pay, regardless of whether it is justified or not.

  21. Steve: You really don’t read what I write do you? I cited figures from the 10-year capital budget listing the cost of various aspects of underground and surface infrastructure capital maintenance.

    In an earlier comment I stated:

    I look forward to your promised thorough comparison of costs, which I am sure will include a complete through-the-cycle estimate of present value of future maintenance, without any simple straight-line extrapolations of a decade of frenetic activity that includes (at least partially) replacement of outside track that requires such attention only every forty years or so.

    In this comment I acknowledged that my expectation that you would provide a through-the-cycle costing was in error, but the essential point remains: you cannot validly extrapolate a ten-year capital maintenance figure on a capital asset as being constant throughout the life of the asset.

    Steve: Actually, I used the 10-year figure to flatten out short-term effects, and noted that the steady state cost of streetcar track maintenance would actually fall in coming years now that the TTC has caught up with the backlog of bad track from the 1980s and early 1990s. On the subway, we have lines at various ages. Yes, nothing that is brand new, but that’s the whole point. Too often, we hear glowing tales of brand new international lines that have all the latest technology and are in the early part of their life cycles for both maintenance costs and reliability. A peer review of TTC subway operations has identified the unreliability of equipment as a major impediment to capacity increase, and this is in part a function of the age of the fleet when the study was done (before the TR deliveries had begun).

    I spent eight grand rewiring my house not too long ago. I don’t budget for that every year! I’m done! I will be highly annoyed if that aspect of the house requires capital maintenance again in my lifetime!

    Steve: A valid statement because that part of your house has a long life cycle. However, you will need to replace the roof at some point, you will paint, you may need to repave your driveway (possibly even rebuild it depending on its construction), and you will almost certainly replace equipment such as your refrigerator, laundry and other appliances. The subsystems in houses are not subject to the same level of wear and tear nor are they expected to serve as many people as subway infrastructure.

    Let’s look at a reasonably simple example:

    The typical lifespan of subway tangent track is 30 years, but only 10-15 years for curves.

    And, just as a first draft of a proper costing, let’s make the assumption that:
    i) tangent track costs the same per unit length as curved track to install, that is $X per unit length
    ii) track replacement costs the same as new installation.
    iii) we’ll be generous and assume that curved track lasts 15 years
    iv) assume a discount rate of 5%
    v) assume the project as a whole has an infinite life

    You wouldn’t compare the total cost of track by examining the expenditures for replacement for the period 25-35 years after installation! You would say that

    Present value of straight track = X + X/(1.05^30) + X/(1.05^30) + …
    = (about) X + X/4 + X/16 + …
    = 4X / 3

    Present value of curved track = X + X/(1.05^15) + X/(1.05^30) + ….
    = (about) X + X/2 + X/4 + …
    = 2X

    So we can say (given the assumptions noted) that curved track is actually 1.5 times as expensive as tangent track, on an all-in basis including capital maintenance.

    If you don’t like any of the assumptions, you can change them and recalculate your numbers. It makes a lot more sense to argue over the expected lifespan of curved track than simply to claim that the other side is a bunch of poopooheads. If there are irreconcilable and material differences … fine. Present me with the arguments, I’ll decide for myself which is more credible and lobby my councillor accordingly.

    These are the kinds of calculations that have to be made before you can take an informed view regarding the choice between the two [to the extent you have a choice, obviously. Using the curved track / tangent track example, it would be related to choice of routes. Is it better to take a long route with few curves, or a short route with lots of curves? An analysis like this - applied to all elements of cost, of course, not just the track - will at least let you get a handle on the pure financial side of the problem].

    Steve: You persist in only talking about the track, not the many other subsystems that make up the infrastructure of a subway.

    As I have stated, I am inclined to give some credence to the Chong estimate of a subway / LRT break-even time of 21 years – because that’s the only source I have in which capital maintenance and operating costs are even considered. These elements are conspicuous by their absence in all other comparisons I have seen. Why? What’s being covered up?

    Steve: As another commenter points out, the difference between the capital cost of the LRT and subway options is so large that the extra capital cost cannot possibly be paid off by lower operating costs. This does not require an extensive calculation, just common sense. It would be like you installing a very expensive solar panel and a windmill in your back yard, all in aid of offsetting annual hydro costs. You are arguing the formulas of business analysis when the basic numbers just don’t add up.

    Steve: The City, TTC and Metrolinx demand projections out to at least 25 years do not show the LRT lines coming anywhere near maximum capacity. It’s easy for you to say that we will run out of room, but you fail to provide specific numbers here to back up your argument, just a vague sense that we need “more”.

    Did I say we will run out of room? I certainly don’t recall saying that. I said it was a possibility. Did I provide numbers? No – my chief complaint is that numbers don’t exist; a debate, as I understand the word, has not taken place.

    I’m also a little suspicious of the 20-25 year planning horizon that seems so popular; I suspect that it’s probably selected in order to favour the LRT option. What’s the biggest cost of a subway? Digging the damn thing, of course. But you only have to do that once … and parts of the London Underground have been operating for 150 years.

    Steve: No, the 25 year horizon is chosen as a maximum reasonable horizon where we have any idea of what may happen.

    I’m not the only who is upset about the appallingly bad planning applied to transit – John Lorinc wrote (and was approvingly cited by some LRT advocates):

    In other words, we haven’t seen any kind of thorough-going side-by-side analysis comparing the original Eglinton to the mayor’s version. No one’s tried to project development activity or estimate incremental tax assessment growth along the corridor where the line will be buried. No one’s attempted to calculate whether the additional capital outlay will generate a commensurate increase in revenue, or how the marginal operating expenditures of the two configurations will compare ten, twenty or thirty years hence.

    No one’s sought to determine what happens to long-term operating costs if rider demand on the buried LRT exceeds capacity sooner than predicted. And no independent entity has tested the mayor’s allegations about chronic traffic congestion on post right-of-way St. Clair West, which he is the cudgel he uses to justify burying the Crosstown along its entire breadth.

    Real fiscal conservatives would demand crisp answers to these questions before proceeding, simply because they’d want solid assurances that scarce taxpayer dollars are being deployed efficiently and effectively.

    Steve: I am imposing closure on this conversation. You may feel that I’m just not willing to engage, but from my point of view you are simply repeating even more complex versions of the same arguments. Your speaking time has expired.

  22. L. Wall says:

    Holding storage, vehicles and property acquisition costs constant, the higher capital costs of the subway would be recovered from operating savings in less than 21 years, after which there would be significant cost savings to the project (based on most recent capital and operating costs available for subway from Yonge Street to Scarborough Centre).

    I have not seen this number challenged.

    The capital cost delta between the LRT to Collins vs subway to STC is $3.5 billion (not including interest) and I’m having a hard time thinking of any scenario where you can pocket $167 million in operating savings per year for the next 21 years on this one line. That’s almost half of the entire TTC operating subsidy every single year.

    If anything I’d expect more holes to open up in the budget if the subway is extended because it’s hard to recover costs when the trains you are running are empty for 90% of the day.

    I personally would call operating costs the steady and predictable costs (salaries, lighting, cleaning, routine maintenance, etc.) and capital maintenance costs the intermittent charges (fleet replacement, mid life refurbishing, bed reconstruction, etc.). But I have no doubt there are a lot of grey areas. Does it matter? You estimate your future costs and take a present value.

    So on the operating side, going underground vs in-street incurs the extra costs of paying for: energy, staffing for cleaning, station attendants, maintenance workers for escalators and elevators, electrical/lighting/signal systems, buildings and facilities, ventilation systems, and tunnel cleaning. An army of workers. Surface lines (compared to the subway) lack the same gold-plated service standards so there would be a huge cost savings there.

    On the capital side, the underground system you will need signal systems, maybe ATO/ATC, and major station repairs. See the walls that have been torn out at Queen, St. Andrew, Osgoode, York Mills. But you might have a set of tracks that might last 5-10 years longer?

    I think you overestimate how much track replacement costs and underestimate how much it costs to operate and maintain the subway.

  23. Steve: You persist in only talking about the track, not the many other subsystems that make up the infrastructure of a subway.

    I used the track only as an example. You have to perform a similar calculation for all subsystems and all costs before you can make statements like Chong’s:

    Holding storage, vehicles and property acquisition costs constant, the higher capital costs of the subway would be recovered from operating savings in less than 21 years, after which there would be significant cost savings to the project (based on most recent capital and operating costs available for subway from Yonge Street to Scarborough Centre).

    or yours:

    Subway cars cost $2.8m each while LRVs cost $5.3m. Subway cars cost less because they are built in trainsets where many subsystems are shared over the train. LRVs are intended for individual operation and have a higher unit cost. The offsetting saving is that one does not have to build dedicated infrastructure to use them.

    or

    Steve: As another commenter points out, the difference between the capital cost of the LRT and subway options is so large that the extra capital cost cannot possibly be paid off by lower operating costs. This does not require an extensive calculation, just common sense.

    I’ve seen many situations in which careful analysis yields in a counter-intuitive result and I’m unwilling to make, approve or support major investments without a careful analysis.

    And, as I’ve said before, the unwillingness of LRT supporters to provide such an analysis makes me rather suspicious.

    Steve: Unlike subway advocates who reject LRT out of hand not because of cost, but because they cannot stomach the thought of giving up road space.

    Steve: No, the 25 year horizon is chosen as a maximum reasonable horizon where we have any idea of what may happen.

    And none of the analysis I’ve seen takes account of the fact that after 25 years, there will still be a subway tunnel, whereas many of the LRT assets will be at the end of their useful lives.

    Steve: I am imposing closure on this conversation.

    Spoken like a true LRT supporter!

    The capital cost delta between the LRT to Collins vs subway to STC is $3.5 billion (not including interest) and I’m having a hard time thinking of any scenario where you can pocket $167 million in operating savings per year for the next 21 years on this one line. That’s almost half of the entire TTC operating subsidy every single year.

    In that case, I suggest you contact Dr. Chong and ask him to justify his numbers. That’s what a debate is all about; having one about transit in Toronto would be a welcome novelty.

    Steve: The point has been made by both sides in this debate. Any further installments will not be published.

  24. Robrt Wightman says:

    James I. Hymas says:

    November 14, 2012 at 5:43 pm

    “1. Toronto Transit Infrastructure Limited Summary of Subway Option, March 12, 2012 Option B: Subway Extension (i.e., Chong; sternly criticized by Steve Munro but, alas, with no numbers either way)”

    “Holding storage, vehicles and property acquisition costs constant, the higher capital costs of the subway would be recovered from operating savings in less than 21 years, after which there would be significant cost savings to the project (based on most recent capital and operating costs available for subway from Yonge Street to Scarborough Centre).

    “I have not seen this number challenged.”

    You are quoting Toronto Transit Infrastructure Limited Summary of Subway Option as reasonable source? It was set up by Mayor Ford with his lackey Dr. Chong in charge; talk about a biased report.

    I realize that you probably will not publish this Steve but I couldn’t resist.

  25. Robrt Wightman says:

    Getting away from the theoretical versus the improbable I went for a ride on the subway to day and notice the following:

    1. Some of the T1 cars have had the end seats removed beside the operator’s cab where (s)he would stand to open the left side doors.

    2. Vincent (Keele?) yard is being torn up with the ballast being reworked and the ties and rail relaid.

    3. The cross over switches at Keele are all covered in orange spray paint so I guess that they are going to be replaced shortly.

    4. A lot of ties in the above ground sections have orange X’s or arrows on them so I assume that there is a lot of rehabilitation work occurring on these tracks.

    5. The cross over switches at Jane are being replaced. I guess that is why the two weekend closures west of Keele.

    6. There are a lot of slow order sections that appear to have active work happening; I am glad to see all this maintenance activity.

  26. Dave Ings says:

    Re your “springy” ballast and weeds comment – this open air section of the roadbed is literally in my backyard. It was interesting for me to observe that when McGuinty banned herbicides the TTC didn’t seem to know what to do, as within a year there were literally trees and bushes happily growing throughout the roadbed. Sometime this year the vegetation disappeared, presumably somebody decided a little herbicide in a transit corridor was actually a reasonable thing.

  27. Mapleson says:

    What’s the biggest cost of a subway? Digging the damn thing, of course. But you only have to do that once … and parts of the London Underground have been operating for 150 years.

    I would just like to point out that in 2007 the 30 year P3 company Metronet, set up to undertake C$35 billion in system moderization and refurbishment in exchange for C$1.2 billion per year in government payments, went bankrupt after only 5 years of operation due to cost overruns generally. That is to say the companies that made up the Metronet group could not make a profit and deliver a renewed system for C$36 billion.

    Chong’s 21 year figure is not debated, because it is conjured fully formed without a detailed basis. One of the easiest attacks on it is the application of valuation of the Yonge extension to the Sheppard line. You cannot take blanket numbers and apply them without looking at the underlying revenues and costs. The Yonge line remains the backbone of the TTC and generates more revenue that it costs to operate. This is not so for the Sheppard line, which requires subsidy from the remainder of the system to operate. Nor can we tell if the additional cost of station attendants was included in the operating costs of a subway line, or only the vehicle operators themselves.

    A 3o year planning window with a 1% margin of error in cost certainties has a 26% margin of error in total costs. At a 5% margin of error (typical of most political polls), the margin of error is 270%. This is why short term (1-2 year), medium term (5-10 year) and long term (25-30 year) plans are developed to adjust to actualities as they occur.

    On another subject, how much might track work and necessary maintenance be affected, if the TTC were to operate 24/7 to reduce the need for additional storage yards? Assuming that trains would be short-turned to allow specific sections of subway tunnel to be serviced?

    Steve: It is unlikely that the TTC would run frequent service (5′ headway) for all night trains, or even cover the entire network. A good example is the overnight service for Nuit Blanche which covers only the central part of the subway, and on a wider headway. We are probably looking at saving 10 trains’ space through this tactic, with the offsetting cost of keeping part of the system open. At one time, the TTC talked of 24/7 service as a possible benefit of automatic train control because they could do one-way operation around worksites, but they have backed away from this idea. Not all sites can be isolated with trains in one tunnel and a work crew in the other. A recent fatality occurred on open track because of a moving work train on the opposite rail from the work site.

  28. Jon Johnson says:

    …based on ridership projections it is quite clear that there is no case for extending the Sheppard subway.

    The question that we must ask ourselves is this, should transit development be focused on meeting the CURRENT needs of transit users, or should transit development be focused on shaping society to meet a FUTURE goal. When we design a system to meet the current trends faced by transit users we assume that the current trends are healthy and ideal, but what if the current trends are not ideal and not conducive to a healthy prosperous society, any reinforcement would simply exacerbate bad behaviour. On the other hand simply building towards some future goal assumes a huge risk that may never materialize.

    My major concern with the logic of the existing LRT plan is that it defines the avenues as major growth zones in the city. Although the avenues growth plan does satisfy parochial growth interests, it does not stand up to scrutiny when it is faced with the reality of significant macroeconomic pressure. In a time of constraint and poor economic returns, transit must focus on getting people to the region with the highest growth potential, downtown Toronto. GO transit and the DRL are categorical priorities. The LRT vs Subway debate is nothing but an exercise in parochialism, and will be defined and settled by severe fiscal restraints at the provincial level.

    Steve: It’s odd to see the LRT network portrayed as an enemy of building more capacity into downtown. Transit City was deliberately designed to provide improved service to many of Toronto’s suburbs, not for downtown travel. It has always been an uphill battle against subways to Vaughan, Richmond Hill and who knows where else, all intended primarily to get people into downtown Toronto and support bedroom community development. Yes, Transit City would be supported by the Avenues, but except on Eglinton where there is a very large capital investment, there was no assumption nor prerequisite of massive redevelopment. We cannot put all of the growth in downtown, and some will happen in the suburbs whether we want it or not. At least the Avenues were intended to focus this development at a moderate (as opposed to high rise, high density) scale along defined transit corridors.

  29. Jon Johnson says:

    “It’s odd to see the LRT network portrayed as an enemy of building more capacity into downtown.”

    The LRT network is not as efficient or cost effective as other alternatives such as GO transit coupled with TTC bus rapid transit. There is also much to be said about higher operational flexibility and lower project risk associated with the alternatives.

    “Transit City was deliberately designed to provide improved service to many of Toronto’s suburbs, not for downtown travel.”

    Although local transit is in fact valuable, it must be weighed against the reality of significant regional socioeconomic polarization. By encouraging local transit and not prioritizing inter-regional movement the proposed system exacerbates the existing problems. The goal of moving people to the region with the greatest economic potential (i.e. downtown Toronto) is to maximize the individuals economic potential and encourage socialization in an optimal setting. Moving people into downtown Toronto eliminates many of the un-priced negative externalities Transit City does not fully account for.

    “It has always been an uphill battle against subways to Vaughan, Richmond Hill and who knows where else, all intended primarily to get people into downtown Toronto and support bedroom community development.”

    At the very heart of all suburban subway proposals is parochialism. These projects depended on an economic model that was very successful over the last 20 years. Success, however, has skewed our assessment of the net present value of many projects. Projects that should never be conceived were brought into reality. When money is free even poor ideas can exist. The problem that we now face is that the economic paradigms that have made Ontario prosperous no longer can deliver the growth that is needed to sustain current economic expectations. If the people of Ontario want to remain prosperous they must direct public funds to those projects that provide the greatest return on investment. When it comes to transit the greatest return on investment comes from an improved GO transit and DRL shuttling a highly skilled labour force into the economic engine that is downtown Toronto.

    The key word that will govern transit development will be productivity. Transit projects that deliver maximum productivity growth must be prioritised, and those that do not should wait for the next era of free money.

    “We cannot put all of the growth in downtown, and some will happen in the suburbs whether we want it or not.”

    This is very true, but it should be done in a responsible cost effective way that is in tune with reality.

    Steve: To save a tit-for-tat debate similar to a recent one with another commenter, I will agree to disagree with you. Your thesis is an economic model of city optimization focused on a core area when, in fact, the region has developed in a different way. We will not undo whatever mistake that might have been simply by beefing up GO and concentrating on downtown subway lines.

  30. Jon Johnson says:

    I will close this comment string by saying the following. Although I believe that we should show a certain degree of respect for the decisions and developments of the past, we must not allow ourselves to be overly constrained by them either. The province of Ontario is facing severe fiscal constraints, structural decline in its traditional industries, poor competitiveness, systemically poor productivity growth, significant socio-economic polarization, and its bond credit rating is flirting with junk status. It is the fiduciary duty of the provincial government to invest public funds in those projects that will maximize the return on investment and maximize the benefit to society. If it does not do so, the province of Ontario will be disciplined by the bond market.

  31. “its bond credit rating is flirting with junk status”

    Yes, a few months ago one credit rating agency shockingly reduced Ontario’s credit rating from AA1 all the way down to AA2. It will take another few decreases and the credit rating will be reduced to the level of a large, stable corporation.

  32. Jon Johnson says:

    I do not share your optimistic appraisal of Ontario’s long term structural risks. Need I remind you that only a few years ago Greece itself had a AAA bond rating. Bond ratings tend to have a great deal of inertia going up or down. There is a great deal of ancillary data and research pointing to significant long term economic and social risk in Ontario. However the point that I was originally trying to make was that despite the risk, good public policy can not only mitigate the risk but build a strong society.

    What troubles me most is not my assertion that there are significant risks in Ontario which theoretically can be fixed, but Steve’s comment,

    “the region has developed in a different way. We will not undo whatever mistake that might have been simply by beefing up GO and concentrating on downtown subway lines.”

    If downtown Toronto can not accommodate the necessary economic activity that will drive the province forward then there are truly significant problems ahead.

    As much as I hate to admit it, Steve through his comment has put forward the best case for the Sheppard subway that I have heard.

    Steve: The province is driven not just by economic activity downtown, but also by manufacturing that is scattered all over the place in areas that are almost impossible to serve with transit. Meanwhile, there are the locations in between — the suburbs — with a considerable and growing population who need to move around. There is a fundamental difference between a network that takes many people to a few places (downtown) and one that connects many origins and destinations. Subways are a very expensive way to deal with the latter, and that’s why the Miller administration opted for LRT.

    There are transport demands that should be met whether you see them as part of the keystone of Ontario’s economy or not.

  33. Jon Johnson says:

    “Steve: The province is driven not just by economic activity downtown, but also by manufacturing that is scattered all over the place in areas that are almost impossible to serve with transit.”

    If the province depends on businesses that have labor costs on average 30-50% higher than their American peers then we can say the province’s fiscal health is exposed to very high risks. Much of the travel demand that you speak of is dependent on the success of the above mentioned businesses, if they fare poorly the travel demand will disappear. The economic paradigms that are currently being used to forecast travel demand for Transit City are rapidly becoming obsolete. Without an economic keystone to drive competitiveness and productivity Ontario will not realize its full economic potential. In a Global economy businesses require a critical mass of economic activity to truly flourish, it should be a public policy prerogative to establish at least one highly competitive economic region to meet the needs of a highly competitive market place. The ideal economic region is downtown Toronto, however if downtown Toronto is not capable of satisfying this need as your previous comment implied, then it is imperative to find another region that can be shaped to meet the economic needs of Ontario.

    It appears that the business district along Progress Ave. in Scarborough is becoming more appealing every day.

    Steve: And the most likely land use there, especially if we built a subway, would be condos, not manufacturing nor commercial office space. The market builds what it thinks it can make money on, not what suits transit plans and economic theories. Indeed it is the major change in suburban land use from the 1970s to today that resulted in the Sheppard Subway plan being rendered obsolete. This was explained in part of the “expert panel” report. The growth in suburban jobs that would have provided foci for the suburban subway riding has not materialized, and what will actually be built (and already is) is high-rise residential with a completely different travel pattern.

  34. Jon Johnson says:

    “And the most likely land use there, especially if we built a subway, would be condos, not manufacturing nor commercial office space.”

    This is a very strong case for good public policy to govern and encourage proper market behavior. All markets that are poorly regulated tend to create bad behavior; the recent financial crisis illustrates my point. Good public policy properly regulates zoning, taxation and couples it with a harmonized transit. The result will be a region that grows properly. The key will be to resist parochial interests, which is easier said than done.

    “Indeed it is the major change in suburban land use from the 1970s to today that resulted in the Sheppard Subway plan being rendered obsolete.”

    Much of the corporate shift to the suburbs was cost related i.e. low tax jurisdictions and cheap land. If Toronto becomes more aggressive in its push to bring down business property taxes, coupled with the green belts restriction on land development there will be a need to recentralize business activity. What is even more important is that in order to remain competitive in a global marketplace a critical mass of business activity is critical to success. The trends favor a strong centralized business district.

    To be frank I don’t really care were exactly business growth will be centered, what I do care about is that the location that is chosen maximize competitiveness and productivity and be very accessible to people across the region. There is no substitute for creating the necessary critical mass of business activity. Any plan that does not deliver on these requirements will underperform or fail entirely.

  35. Mapleson says:

    Critical mass is an antiquated theory. There is only so far you can go in the race to the bottom (if Toronto cut business tax rates from 3.18% to 2.19% to match Mississauga, what do you think Mississauga would do?). Beyond that, decentralized markets are producing more of the success stories in recent years (internet, resource development). It’s a fundamental truth that more people means more expenses.

  36. Jon Johnson says:

    “Critical mass is an antiquated theory.”

    The North American experience with critical mass theory is largely positive if public policy is structured to manage the externalities it creates. I am interested to see why you think the theory is antiquated. A critical mass of development minimizes investment risks, and maximizes returns. What is more it allows government to service the greatest number of people with the least possible investment. Why not build corporate offices downtown, the cost of an improved GO transit system that will serve the entire region will be a fraction of the alternative. What is even more important is that aside form the economic argument, GO transit’s ability to spread equality of opportunity to many communities that are currently disadvantaged can not be underestimated.

    “Beyond that, decentralized markets are producing more of the success stories in recent years (internet, resource development).”

    As much as I do in fact respect these industries I feel that over-reliance on any one industry is dangerous for society. Perhaps I am an idealist, but not everyone in Ontario can be a lumberjack or a miner. I think critical mass theory gives us the opportunity to build work spaces that provide people with more than just a work space, it allows for great culinary experiences, art galleries, theaters and the like. Critical mass theory is more then an economic model, it is a theory that seeks to spread equality of opportunity and a high quality of life to the greatest number of people possible.

  37. Mark Dowling says:

    Jon Johnson:

    “Need I remind you that only a few years ago Greece itself had a AAA bond rating.”

    I have reviewed ratings for Greece between Nov 1995 and now. Greece reached A+ (Fitch’s)/A1 (Moodys) (four grades below AAA/Aaa) – no further and never above Ontario’s AA2/stable.

    Furthermore, as a province Ontario has a greater recourse from Canada (AAA/AAa) than Greece does from the European Union. Were Ontario to receive fair and equal access to equalization, CHST and immigration support funding, the resulting cashflow would likely see restoration to the former AA1 – even more if the Feds were to stimulate the economy further with the institution of US-style federal transportation funding programs.

  38. Jon Johnson says:

    @ Mark Dowling

    Thank you for catching the typographical error. However, to quote the New York Times quoting a Moody’s representative,

    “the market’s perception of the safety of Greek bonds was equivalent to an AAA rating.”

    The general perception of the market was that Greece’s rating was AAA, perception matters more then reality when determining short term behavior. When assessing risk profiles it is worth noting that in 2007 Greece’s debt rating was similar to Ontario’s in 2012. Ontario has the distinction of having very high household debt, systemically poor productivity growth, significant problems retaining talented workers, and significant socio-economic polarization. I have made this statement and the one before to encourage the reader not to be complacent. Although there are challenges, if society is open and honest about the realities that are being faced reasonable solutions can be implemented to correct the problems.

    I do agree with many of your points on how to assist Ontario; I believe we can sum up the situation by saying that public policy must be updated to meet the needs of post-NAFTA social and economic realities. Fundamentally Ontario is being plagued by antiquated policies that have been out of date for more then two decades.

    It is for the reasons mentioned above I do not envy those responsible for transit planning. Their work is constantly torn between the antiquated paradigms of the past, the harsh realities of the present, and the merciless demands of the future. It will be interesting to see how much of the current plan will survive the coming years.

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