Presto’s Problems Multiply

From the Toronto Star:

Presto’s rollout on the TTC is over budget and fraught with problems. This is not new to anyone who has been following the project, or at least following it to the degree that the agencies involved provide reliable information.

As of March 31, however, the agency had spent $276.7 million deploying Presto on the TTC, according to numbers provided by Metrolinx. That’s almost $22 million higher than the agency’s 2012 estimate of $255 million.

The $276.6-million figure doesn’t reflect work that has yet to be completed or was finished after March 31; those jobs include completing Presto deployment at all subway stations, installing additional self-serve reload machines and fare vending devices across the network, and rolling out fare card readers on all 1,900 TTC buses and 500 Wheel-Trans vehicles.

Also unaccounted for are the future cost of upgrading the Presto system — which currently enables riders to pay their fare with a tap of a prepaid card — to allow for direct payment using credit or debit cards, and the cost of migrating TTC passes onto Presto. [From Ben Spurr’s article]

Metrolinx attempts to offload their problems on the TTC. Reliability problems were first blamed on unusual power supply issues on the older streetcars, but then the issue turned out to be far worse on the bus fleet. Presto’s primary implementation to date is on buses, and this is hardly a new environment for the fare card machines.

Now the cost increases are blamed on scope creep in the TTC contract including the fit-out of the old streetcar fleet and the installation of new fare gates in subway stations.

Meanwhile, complications for riders are legion as Ed Keenan describes: difficulty in obtaining and loading money on fare cards, inconsistent rules for their use, overcharges (and undercharges) for transit rides, and a complete lack of benefits compared to the existing system.

Metrolinx loves to deflect criticism to others, but is slow to accept the blame for shorcomings of its own system’s design.

At the outset, Presto as it existed was a more primitive system designed for a simpler environment: GO trains and buses, with riders who mostly took predictable commuting trips to and from Union Station. As its role expanded to other systems, the shortcomings became obvious to the point that the “Next Generation” Presto was developed for Ottawa. Even then, it had major implementation problems.

The GTA fare structure has long been biased against trips to and in Toronto. Unlike the 905 systems, there is no “co-fare” between the TTC and connecting systems notably GO Transit, and GO’s fares within the 416 compound this problem by charging substantially more to travel shorter distances.

Presto has been touted as the basis for “regional fare integration”, but this has different meanings to different people. At its simplest, Presto would be one card that could “talk” to any fare machine and charge the appropriate “local” fare, little more than standardizing the “currency” of fare transactions without any other changes. On a more aggressive level, fares would be “integrated” so that the cross-border penalty would be reduced or eliminated. It is self-evident that getting rid of fare penalties will cost somebody money in the form of higher fares overall, or increased subsidy. However, Queen’s Park wants a “revenue neutral” scheme so that added subsidies are not required.

Metrolinx has wrestled with new fare structure concepts for a few years, and push-back on their original proposals has delayed the production of a final recommendation. Behind the scenes, the always-preferred option was “fare by distance”, a concept familiar to GO, although not actually implemented “fairly” across its network. This brings very substantial operational problems because the fare system must “know” both the origin and destination of each trip requiring “tap on” and “tap off” for each leg of the journey. This evolved into a scheme to make “rapid transit” a distance-based premium fare zone, a scheme that preserves GO’s rail premium, but destroys the “integrated” nature of the subway within Toronto’s system.

The effect might be to lower fares for cross-border trips (a small minority of all GTA travel) and improve the attractiveness of GO+TTC rides, but at a higher cost to TTC users for whom the subway is an integral part of most travel.

Metrolinx also neglected to determine whether LRT and BRT lines would be “rapid transit” because none of them existed in the data used for their study. Such is the quality of forward thinking at our provincial agency.

In this context, a decision by the TTC on the fare structure to be implemented has been almost impossible, although the TTC must be faulted for keeping a real discussion of the options and limitations under wraps for so long. The TTC missed a chance to market the new fare system with more convenient fares and refuses to address a simplified fare structure, notably time-based transfer validity. That decision immensely complicates the fare calculation requirements for Presto in determining where a “new” trip starts and a second fare should be charged.

For its part, the TTC opted to enlarge its fare gate upgrades from a limited scale needed to bring Presto and accessibility to all entrances, to a full-scale replacement across the system. And, oh yes, with the capability to require “tap out” for all passengers (ignoring that a huge volume of passengers transfer to and from surface routes without using a turnstile). In effect, TTC management enabled by stealth a fare structure that has not been debated or approved by the TTC Board (at least publicly) or by City Council.

The TTC also decided to accelerate the Presto implementation by a year so that it would be fully operational at the end of 2016. This would serve two purposes. On one hand, Metrolinx could brag that the Toronto rollout was “complete” and trumpet huge additional usage (along with the service fees) by Presto. On the other, the TTC could move ahead with its redeployment of station staff who would no longer be selling fare media. Things have not quite worked out as planned, and it is likely that we will not see substantial conversion to Presto until the end of 2017.

Presto itself has design limitations, not least the fact that so much of the fare calculation occurs between the card readers at stations and on vehicles and the card itself, rather than in a back-end system. This is responsible for the oddity that updates to Presto accounts do not actually arrive at the card when they are made online, but only later when all devices in the system learn of the changes through periodic updates. “Open payment” support for credit cards is coming, but until the tracking and calculation of fare discounts is done by a central system, credit cards will only support the equivalent of a cash fare, not the discount schemes available to Presto cardholders. That is not a truly “open” system.

We’re not supposed to talk about any of this because everything Metrolinx and its masters at Queen’s Park do is perfect, Ontario is a transit Nirvana for transit policy going back decades. If we were honest, we would be discussing the alternatives, including technical limitations and funding requirements, but instead the only important work is the manufacture of ever more photo ops.

Try harder.

Does Toronto Owe Metrolinx Half a Billion? (2)

Two weeks ago, I wrote about the receivable on Metrolinx’ books for supposed “municipal contributions” that have not been paid, but instead have been funded temporarily by Queen’s Park. This has been going on for roughly a decade and the bills are piling up, now over a billion dollars.

I posed a series of questions to the Minister of Transportation’s Press Secretary, and received a friendly, sunny, but utterly uninformative reply.

Firstly thank you for your e-mail and questions – it is nice to e-meet you! I saw your blog piece from earlier this week and the Qs you submitted to Patrick re: the existing framework for municipal contributions to GO Transit growth and expansion capital costs, potential future municipal contributions to major transit initiatives in the region and the Province’s Dedicated Gas Tax Program.

There are two Regulations under the Metrolinx Act, 2006, which are intended to assist the Regions of Durham, Halton, Peel and York, and the Cities of Toronto and Hamilton, to collect development charges (DCs) to help offset their respective contributions to GO Transit growth and expansion capital costs:

1) O. Reg. 528/06, which sets an expiry date for GO Transit DC by-laws; and
2) O. Reg. 446/04, which prescribes the allocation of the expected municipal share of the GO Transit growth and expansion capital costs amongst the municipalities.

The municipal contributions to GO Transit growth framework were put in place to establish a fair and balanced approach to support GO capital expansion in communities across the region. All municipalities in the Greater Toronto and Hamilton Area benefit from an effective GO Transit network, and the Province remains committed to working with all of our partners to expand and deliver this network. Given the transformational $13.5 billion investment that the Province is making to strengthen the GO network through the 10-year GO Regional Express Rail initiative under the Moving Ontario Forward plan, we recognize that this commitment to working together with all of our partners to build and optimize an integrated, regional transit network is even more critical.

As you note in your email, the two Regulations permit GO Transit DC by-laws to help the municipalities offset their expected contributions – per the allocation formula set out in O. Reg. 446/04 – to Metrolinx for their share of GO Transit growth and expansion capital costs. The contributions made by municipalities are not directly linked to any specific expansion projects, but, rather, they are applied against the GO Transit growth and expansion capital program, as a whole.

With respect to your questions related to the Dedicated Gas Tax Program, the funding of two cents per litre of gasoline sold across the province was made permanent through the Dedicated Funding for Public Transportation Act, 2013. The Ministry of Transportation allocates these funds through the Dedicated Gas Tax Program based on a formula of 70% ridership and 30% population for eligible municipalities. All of the factors, including the funding envelope, ridership and population, are updated annually for each program year. The funding envelope for the 2015/16 program was $332.9 million, up from $321.5 million in 2014/15. The Province has provided the City of Toronto with more than $1.75 billion through the Gas Tax program since 2003, including $169.2 million for the 2015/16 program.

Thank you again for your questions.

[Email from Andrea Ernesaks, Press Secretary and Issues Manager, Office of the Hon. Steven Del Duca, Minister of Transportation, September 30, 2016]

Despite the reference to an “expiry date” for GO Transit Development Charge by-laws, this date has been changed every few years and currently sits at the end of 2016. Based on past experience, one might reasonable expect this will be extended again. The municipal allocations have not changed since this charge was introduced despite substantial shifts in population balance around the region and a change in the type of journey that the Metrolinx network serves, especially with planned expansion.

The concurrent mention of the $13.5 billion to be spent on GO RER and “working with all of our partners” suggests that Queen’s Park might include RER in the cost base for calculation of future contributions from the municipalities. If this is so, then the Minister should say so, and all announcements should have a little side bar, an asterisk to a footnote saying, “oh, by the way, your municipal taxes will help pay for this photo op”.

Nothing in the legislation (acts and regulations) explains how “capital requirements” are calculated, which projects would be included, nor how the proportional allocation should be assessed against municipalities. It just appears out of thin air as part of the GO (now Metrolinx) budget. The amount is a not linked to specific projects, but somehow it gets calculated.

The info about the Gas Tax program is not news, but the concern municipalities have legitimately is that an increasing portion of this grant might be clawed back by charges to support Metrolinx rather than their own local programs. This is complicated by the fact that Queen’s Park threatened to withhold the Gas Tax from municipalities that didn’t play ball with the selection of Presto as their fare card. Going forward, we know that back charges for operation of the Metrolinx LRT lines to the municipal level are likely, but the amount has not yet been settled.

The basic point here is that the provincial largesse and support for transit comes at a price, and that will be carved out of money that nominally flows to municipalities for their own use on transit. Toronto’s $169.2 million is now split between the operating and capital budgets. Other monies do flow from Queen’s Park for TTC projects, but they are earmarked to those specific works such as the subway extension to Vaughan.

Moreover, given the state of provincial finances, will this billion dollar “debt” become payable by the municipalities? Toronto’s half-billion share would take a huge bite out of the city’s budget, and an ongoing charge of roughly $90 million could more than halve the value of the gas tax grant.

The Minister might contemplate some of the background information to the Metrolinx Investment Strategy reports which includes a history of GO Transit development charges, a description of the wide gap between the amounts actually collected and the amount anticipated (25% of GO’s capital program). Specifically the Metrolinx Review of Development Charges at pages 6-7. Note that this report dates from January 2014 and therefore does not reflect all of the charges that have accumulated to date. It also speaks of $100 million in revenue from municipal development charges, but the chart below clearly shows that this is far short of the “expected” contribution.


These are not trivial questions, and so I have asked, again, for an explanation. To date, nothing has come to my mailbox. My latest query follows below.

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TTC Capital Program Review

Back in the early days of John Tory’s mayoralty, the 2015 budget discussions were overshadowed both by the legacy of the Ford administration and by major issues with project control at the TTC. From the Ford years, Tory inherited a mean-spirited attitude to transit spending and service cuts that the new mayor would come to reverse, for a time at least. A bigger issue, however, was the matter of runaway spending by the TTC on two major projects: the Spadina subway extension (aka TYSSE) and the resignalling contracts for the Yonge-University-Spadina subway (aka Line 1).

Even while the TTC’s CEO was coming to grips with these projects, Council passed a motion asking for a review of how the TTC was managing its business.

145. City Council direct the City Manager to issue a Request For Proposal to expedite a review of Toronto Transit Commission Capital program service delivery including:

a. a review of project management of Toronto Transit Commission Major Capital Projects in the past five years to determine actual project costs and completion dates relative to original schedules and estimated costs;

b. a review of staff reporting mechanisms to the Toronto Transit Commission and City Council related to capital project budget and completion date status; and

c. future organizational options for Transit project management and delivery of Major Capital projects related to Transit expansion and major State of Good Repair projects.

146. City Council direct the City Manager to co-ordinate the review in Part 145 above with the Chief Executive Officer, Toronto Transit Commission and to report to the Toronto Transit Commission no later than the November 23, 2015 Board meeting. [Item EX 3.4 Council meeting of March 10, 2015]

In the fullness of time, considerably later than the November 2015 date in the motion, a report from KPMG landed on the TTC Board’s agenda, the TTC Capital Program Review. This was supplemented at the meeting by a presentation from KPMG and a response from CEO Andy Byford.

The terms of reference for KPMG’s work were somewhat different from the Council motion.

KPMG’s scope was as follows:

  • review project management practices at the TTC with respect to the delivery of the Capital Program, and provide recommendations to staff that will assist the organization to improve capabilities for managing capital projects and programs. The TTC Capital Program Review seeks to achieve the following goals:
  • Improve the organization’s project and program management performance by learning from past experience;
  • Support continuous improvement efforts underway at the TTC, including the continued implementation of the TTC Portfolio Management Office (“PfMO”) established in 2014;
  • Assess project governance structure and protocols for reporting of project status, to ensure the appropriate level of transparency and accountability to project sponsors and stakeholders; and
  • Provide guidance on project delivery options and project management requirements for projects of varying size, scope, and complexity. [Presentation, p. 4]

Item “a” of the Council motion asked for a comparison of actual costs and completion dates with original plans. KPMG does not provide this information, and even worse, included a table of selected projects that does not clearly explain their history (see below). There is no “deep dive” into any of the projects and, therefore, no specifics that could be tied to “lessons learned”, to practices that created the problem in the first place.

The table below is the closest the report comes to commenting on Council’s request, but read in isolation it can be misleading. It is ironic that in their presentation to the TTC Board, KPMG did not include this table and made no comment  on it. CEO Andy Byford was not so kind, and emphasized that most of the scope changes were perfectly legitimate.


Other projects included in KPMG’s review but not in the table above were:

  • Fuel Storage Tank Replacements
  • Subway Station Easier Access Phase III
  • Surface Track
  • On Grade Paving

Of these, only the Easier Access program was flagged as “Challenged” with the others as “Successful”, but the reason for the EAP’s status likely has more to do with the complexity of later stages of the work and a lack of funding than with project management and controls. [See Table 1 at pp. 20-21 of KPMG’s report]

Two of these (track and paving) are the only “Ongoing” programs reviewed by KPMG. These are fundamentally different from “Finite” projects such as the construction of a line or the retrofit of elevators to stations. I will return to this distinction later.

This is a dangerous table in that it shows an apparent growth from $5 billion to almost $8 billion in project costs, a 60% increase.  That was the easy headline in media coverage of this report, and the sort of simplistic comparison that some members of Council would seize on as symptomatic of “waste” at the TTC. Scope change appears as a “primary cause” in five of these projects, but not all such changes arise from the same circumstances.

  • TYSSE’s cost grew due to inflation between the original estimate and the eventual approval of the project, and of course because the line was extended from York University to Vaughan Centre.
  • There was a considerable delay between the approval and actual start of work thanks to foot-dragging by senior governments in finalizing their contribution agreements. No adjustment to the completion date nor allowance for inflation was added to the estimate.
  • Politicians along the line wanted showcase stations, not the standard TTC boxes, and much of the contingency in the project’s budget was consumed by unexpectedly high bids for these structures.
  • The TYSSE project suffered from poor organization with many contractors on competing deadlines. This arose in part because the prevailing wisdom at the time was that work should be parceled out in small enough pieces that multiple mid-size contractors could bid. This arrangement was more a political decision than a technical one.
  • The original project did not foresee a conversion to Automatic Train Control (ATC) because that was not part of the TTC’s plans at the time. This item was added after the fact under a separate project budget, but this work added yet another layer of complexity to overlaps between many subsystem installation contracts.
  • The original fleet plan for TYSSE included the continued use of a portion of the older T1 fleet on the YUS with most, but not all, of the trains coming from the new TR order. After the decision to implement ATC, the T1s were no longer suitable because of the high cost of retrofitting ATC to them, and the TR contract grew accordingly. The TTC has a surplus of T1s, but no place to use them, including the proposed Scarborough subway which will also have ATC. The planned opening date for the SSE occurs well before the planned completion of the replacement of the T1s, a project that will have to be accelerated shifting spending into earlier years than planned.
  • The TTC now has a much larger subway car fleet than foreseen a decade ago thanks to the T1 surplus and cars for improved service under ATC that will not actually be used until 2019 and beyond when the ATC project completes. Additional space will be needed for the T1 replacements that will require concurrent storage space and a significantly different carhouse design from Greenwood Shops. These projects are not yet funded, and are not fully included in the cost estimates for the SSE.
  • The TR purchase, like all TTC vehicle contracts, includes a base order plus an option for additional vehicles. This is a standard arrangement for procurement because the TTC never receives full funding for its plans in one go, and circumstances change causing quantities to go up, or occasionally down. The complete order now includes enough trains for the complete replacement of non-ATC capable trains on YUS, conversion of the Sheppard subway from T1 to TR operation, the Spadina extension to Vaughan and additional trains to run more frequent service once ATC is in use on YUS.
  • The ATC contract evolved out of a dog’s breakfast of plans for new signalling on the YUS. Originally, the plan was simply to replace the aging block signal system on the original part of the line. However, funding for this could only be obtained by misrepresenting necessary maintenance work as something that would enable additional capacity. Eventually, the project grew to have at least two overlapping technologies being installed at the same time so that non-ATC operations could co-exist on an ATC line. This proved unworkable, and the contracts were consolidated into a single ATC project. The extra costs are a direct result of, first, underscoping the project for political reasons, and later from a failure to appreciate the technical complexity of what was being attempted.

The above are only the high points of a much more complex history (available in the linked articles), but what should be evident is that major projects interact with each other even though they are almost always discussed as if they are completely separate entities. This is a major problem in TTC budgeting and in the political context where such projects are debated. KPMG hints at this problem in its review, but does not drag any details out into the open.

The following discussion can only touch on the full report of 273 pages, and is intended to place the report more in the political context of the TTC Board and Council (and through them to the ongoing debates about TTC funding) than KPMG which tended to focus on internal issues of process.

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Does Toronto Owe Metrolinx Half a Billion?

Rummaging in financial reports can lead to interesting discoveries, although we usually read about them when some financial hound exposes dubious accounting practices and drives down the value of a company’s shares. Indeed, the Globe’s David Milstead had a long article on just how pervasive the use of non-standard accounting has become in corporate reports.

In the public sector, various mechanisms are used to reduce apparent debt and exposure to future costs. Some of these involve judgements about just when bills and revenue will roll through the door, or of exactly who will pay these bills as they come due.

In a previous article, I wrote about the TTC’s newfound mechanism called “Capacity to Spend” which reduces future funding requirements by roughly as follows:

  • Project estimates show that the TTC will need about $9 billion to fund its “Base Capital Program” over the next ten years. This does not include special projects such as subway extensions, nor does it include a long list of “below the line” projects that have not yet matured to “approved but unfunded” status.
  • Yearly capital spending by the TTC is typically lower than the budgeted value, but the main reason is that work took longer than expected, or projects were rescheduled into future years. Only a few of the underspent accounts arise from actual savings thanks to lower than expected costs or project cancellations.
  • Nonetheless, the TTC has decided that its real funding requirement for 2017-2026 is now almost a billion lower than has been claimed for many years running.

This is a basic case of revaluing the exposure to future costs to make long term funding (including borrowing) needs appear lower than they really are. This year brings an extra incentive with federal funding that requires matching municipal contributions, money Toronto does not have. But hey, presto!, if we reduce the future spending, at least on paper, we have “found” money with which to pay the local share of the fed’s new program.

Meanwhile up the road at Queen’s Park, a lovely myth for the past near-decade is that there is a “municipal share” to the GO Transit capital program. Most people don’t know about this, and Toronto has refused to actually pay into that pot for several years.

The mechanism was set up back when GO Transit was a separate agency, and it has been passed down through successor organizations to its current home, Metrolinx. The amount of money outstanding is not trivial.


By the end of Metrolinx’ fiscal year March 31, 2016, the accumulated balance of deferred municipal contributions totalled $1.1 billion. The proportions owed by each municipality are set by regulation, and Toronto’s share is just under half a billion. The proportions assessed to each region have not changed since this charge was instituted although one could argue that population shifts and the focus of GO expansion would suggest a different ratio is in order.

Toronto does not carry an account payable for this amount on its books. Meanwhile, in every financial statement, there is a note in this format:

Metrolinx realized a shortfall in municipal funding related to its capital program. The Province has provided funding to bridge the shortfall in the current year in the amount of $141,097 (2015 – $171,111) and the cumulative amount is $1,114,484 (2015 – $973,387). The Province will work with its municipal partners to address the funding shortfalls. [Note 12 to Metrolinx Draft Financial Statements for the year ended March 31, 2016]

What is unclear is whether Queen’s Park will ever call this debt due, or if it will simply be written off as a provincial contribution to GO expansion.

This charge is intended to recover costs for general GO expansion, and it does not include:

  • Chargebacks for works undertaken as part of a provincial project that improve municipal assets such as replacement of water mains or provision of improved streets. This was a major issue for Toronto on the Georgetown South project.
  • Charges for the abandoned Scarborough LRT project engineering.

Missing from all of the annual reports is any indication of just which GO projects these contributions aided. Indeed, the amounts are intended to go into the general subsidy pot at GO without being tied to its work with the assumption that everyone benefits from “more GO” in the end.

An ongoing problem with provincial funding is that there are various ways that the gas tax grants now paid to municipalities are clawed back. There has been almost no change in the level of gas tax provided, and the amount coming to Toronto has been sitting at about $160m for many years. (Toronto apportions this partly to capital and partly to operations.) The effective value of this contribution falls due to inflation. If Toronto had actually paid their Metrolinx assessment in recent years, this would have wiped out half of the gas tax grant.

In 2017, the TTC is making provision in its budget for additional costs related to Carbon Taxes. This will further erode the contribution from Ontario.

The combined effect of all this will be that, at some point, all of the provincial contribution via gas tax will be consumed by paybacks under various levies and fees.

In an attempt to illuminate this issue, I posed a series of questions to the Minister of Transportation:

Which projects now underway or planned will trigger additions to this outstanding balance including, but not limited to, such things as:

  • Ongoing GO improvements (non-RER)
  • GO RER
  • LRT and BRT projects

In other words, although Ontario has not actually collected on the receivable, will it continue to grow and, in effect, will municipalities be expected to eventually contribute to “provincial” projects, and at what level?

Many projects do not fit into the classic GO Transit model of serving downtown Toronto. For example, York VIVA BRT, The Hurontario and Hamilton LRTs, and the Toronto Crosstown and Finch LRTs serve a very different travel demand from GO’s rail network.

Will the formula for allocating these costs be changed to reflect the service territory and areas benefiting from the projects where municipalities are expected to make a contribution?

Although Ontario makes significant investments in transit, its budgetary effect at the local level will be offset by chargebacks including:

  • The deferred Metrolinx receivable above
  • Future costs for Presto which is expected to become self-sufficient and will require increases in service fees to local providers to do so
  • Future costs for LRT operations

Starting in FY 2011-2012, there was a large increase in the annual charge added to the receivable, an average of $183m/year over the last five years, of which Toronto is responsible for $81.6m/year. What projects contributed to this charge and what was their total value (in effect, my question is what proportion of these projects was back-charged to the municipalities)?

When I receive a reply to these questions, I will update this article.

TTC Board Meeting September 28, 2016

The TTC Board will meet on September 28. Various items of interest are on the agenda, but there is nothing regarding the 2017 budget or fares which will be dealt with at one or more future meetings (to be announced).

Also in the agenda is a long (273 pages) report from KPMG reviewing the TTC’s Capital Program, project management and procurement. There is a lot to digest in this document, and I will leave it for another day.

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TTC 2017 Operations: A Budget Meeting With No Budget (Updated)

Updated September 22, 2016 at 11:30 am: Information from the Budget Committee meeting has been added. It is organized by topic so that readers do not have to wade through the meandering nature of a discussion that lasted a few hours.

Fare Evasion:

This topic came up early in response to a deputation from TTC Riders. Commissioner Byers asked whether money could be saved by reducing evasion. TTC management claims that the numbers remain low, but later came to acknowledge that increasing the fare inspection from 80 to 100 would be beneficial. The committee requested that this be addressed in the overall budget.

For reference, a fare inspector costs the TTC at least $100k/year including benefits, and so 20 more would represent an increased operating cost of at least $2 million. Fare revenue stands at about $1.1 billion, and a 1% change in fare recoveries (either way) is worth about $11m annually. The TTC would like to get the fare evasion rate down to 2% or less.

CEO Andy Byford noted that the intent of inspection is to make the chance of being caught and the penalty for this both high enough that few attempt to evade fares. Inspection will actually become more labour intensive with the shift to Presto because the cards must be scanned to determine whether a fare has been paid, while transfers and Metropasses can be quickly checked visually.

Service on Lightly Used Routes

Commissioner Byers also asked whether there were savings to be had by cutting service where buses were running “empty”. This is a complex issue for several reasons.

Before the TTC returned to guaranteed full service on all routes (a John Tory initiative to reverse one of Rob Ford’s cuts), a standard was developed to screen out the worst performers. The metric used was riders per vehicle hour, and the value was set at 10. In other words, if there are two buses on a route, they must carry at least 20 riders per hour between them. Note that these riders are not on the buses all at the same time, but the loads will often be concentrated in location and direction. This leaves the bus running “empty” some of the time.

Many routes have outer edges and branches that do not achieve the same level of demand as the core part of the system. If one were to look only at these sections, one could prune the “poor performing” bits around the edges. However, this would leave major routes operating on a shorter extent than during “normal” hours, and the degree of cutback would vary from place to place. This is a recipe for riders abandoning routes because they are unsure of when service will be available, or that they might miss the “last bus” for a trip home.

Without question, riders on these segments are carried at a higher cost, but that is part of the cost of doing business on a network. One might also add that there is a double standard where it is acceptable to subsidize riders on a subway line at a very high rate, while decrying the “waste” of such an expense on a bus route.

This issue comes up regularly, and there is an underlying implication that vast amounts of public money are wasted where service is not required. The actual numbers tell a very different story.

When the full service to all routes was restored, the cost to do so was pegged at $1.7m for the partial year implementation in 2015, and at $5.5m for the projected full year cost in 2016. This shows that the amount of money available if the policy were reversed is marginal unless the standard for “poor performance” is set much higher and correspondingly more service disappears.

Provincial Subsidy

Commissioner Mihevc raised the perennial question of getting more money from Queen’s Park as an alternative to higher fares, taxes or service cuts. In doing so, he is longing for an era over two decades ago when Ontario paid 50% of the TTC’s operating subsidy, an amount that would roughly have been $305m in 2016. The actual subsidy from Queen’s Park is about $90m which comes from the Provincial Gas Tax allocated to the City of Toronto (a further $70m from this source goes to the Capital Budget).

Queen’s Park might be forgiven for wondering whether any new transit cash would actually improve the TTC’s lot, or simply be used to reduce City expenses and preserve lower property taxes and/or fares. Recent sleight-of-hand in the Capital Budget where nearly $1 billion of proposed expenditures simply vanished from the books, thereby neatly providing the City’s “contribution” to a shared federal-municipal funding scheme at no cost suggest that senior governments are right to distrust municipal intentions.

Mihevc claimed that the subsidy per rider was higher under Mayor Miller. The actual numbers appear in the chart below. Miller’s last budget year was 2010. Note that except for 2008, the provincial gas tax contribution has remained constant, but on a per rider basis is declining due to growth.


Where Is The Additional Service?

TTC Riders observed that people at a Jane-Finch community meeting laughed when told that the TTC had increased service. The problem here is that the service adds vary by time of day and location, and not all riders benefit equally. There is also the discrepancy between advertised and actual service as I have discussed in other articles.

The following are changes in the Jane-Finch area between September 2014 (pre-election) schedules and those in use today:

                2014       2016

35 Jane
AM Peak         5'00"      4'45"
M-F Midday      8'00"      6'15"
M-F Evening     11'00"     10'00"
Sun Morning     11'00"     10'00"
Sun Afternoon   10'30"     10'00"

195 Jane Rocket
AM Peak         10'30"     10'00"

36 Finch West
AM Peak         3'00"      3'37" * 
M-F Midday      5'00"      5'20" *
PM Peak         3'34"      4'37" *
M-F Early Eve   7'15"      7'45" *
M-F Late Eve    7'30"      9'20" *
Sat Early AM    9'00"      9'30"
Sat Morning     6'30"      6'00"
Sat Afternoon   5'30"      4'30"
Sat Early Eve   9'00"      8'00"
Sun Early AM    10'30"     10'00"
Sun Morning     6'45"      6'30"
Sun Afternoon   5'30"      5'00"
Sun Early Eve   9'00"      7'15"
Sun Late Eve    11'15"     10'00"
* Changed from regular to articulated buses on 36A Humberwood service.

Saving 2.6 Percent

Roughly two thirds of the $15.8m savings cited by TTC management came from reduced Health Care costs. The reason cited for this is that the ongoing investigations into Benefits Fraud have resulted in lower claims. This effect will bottom out at some point, and so further savings in 2018 cannot be counted on.

In a “normal” year, the $15.8m would have been part of the overall budgetary review, but because of the Council request for an across the board 2.6% cut, these have been separately identified. What has not yet been addressed is the remaining $172m shortfall between the City subsidy and the TTC’s projected needs.

Saving $172 Million

TTC management has a long list of requirements totalling $172m, although they continue review of their budget to see if added savings can be found that do not affect service quality. Andy Byford strongly made the point that he does not plan to cut service. We will have to see what Council and the TTC Board actually direct him to achieve.

The 2016 budget provided for service improvements in September 2016, but these are not required according to the TTC because ridership is lower than anticipated. There has been no public review of actual loading conditions and whether there are routes requiring more service. A common problem is that for peak service the TTC has no spare vehicles, and so budgeted improvements could not be implemented even if the loading standards showed they were required. In years past, the TTC would list the improvements that could not be made due to various constraints (typically fleet, budget and availability of operators), but this list has not been published recently.

Much of the “savings” against the originally foreseen $215m budget pressure does not arise from management actions. The delay in Presto rollout is laid at the feet of that agency (see below), and the saving is simply a case of delaying the onset of the more expensive period where TTC and Presto fare collection systems and staff co-exist. The draw from the “stabilization reserve” (surplus subsidy from past years that was not required) will exhaust this reserve in 2017 even though 2018 is expected to be a difficult budget year too.

TTC management often cites “savings” in diesel fuel costs through hedging, and claims an $11m saving for 2017. The total fuel budget for 2016 was $84m, itself down almost $10m from 2015. How much of this reduction is simply a question of market pricing and how much comes from hedging is not broken out. One is a management tactic while the other is simply good fortune that would be reversed if fuel costs go up again. Indeed, this saving will be offset in 2017 by carbon taxes.

The problems with Presto arise from two issues:

  • Presto’s IT provider (Accenture) has not yet provisioned sufficient back-office computing power to handle the volume of transactions that Metropass sales will generate. This is being remedied, but will delay the rollout.
  • The delivery of fare media vending machines from Presto is running late, and station collector staff cannot be reduced/redeployed because they will continue to sell legacy media.

Commissioner Myers described Presto as a “mini Bombardier” in their inability to deliver a product on time. It would appear that Presto faces a similar problem – the lack of investment in sufficient capacity.

Long Term Savings

The TTC is midway through many changes in how it does business such as the replacement of its archaic vehicle monitoring system and the implementation of computer systems using modern, integrated software. These are expected to produce savings once completed, but there is a short-term hump while changes are developed and implemented.

The Committee asked management to produce a report listing all of the projects together with their projected costs and savings so that short-term funding increases can be justified as “investments” in future savings. The Catch-22 here, of course, is that those savings will have to actually materialize. A more common situation is that new systems and procedures allow improved or expanded functionality and service, part of the justification for undertaking them, but do not necessarily reduce costs.

Collective Bargaining Agreements

The current agreements run into 2018 and bind the TTC to cost increases. In preparation for the next round of negotiations, they will continue to examine ways to reduce costs, but this issue is not debated publicly unless it explodes into the media from specific proposals.

How The Budget Works

Commissioner Campbell is frustrated by the way in which the budget is presented, notably that it shows previous year budget figures, not actual results, as the basis for comparison. One problem here is that work on “next year’s” budget often starts before “last year’s” numbers are finalized, but more generally this is an issue with municipal budgets generally. The use of previous budgets as a starting point is not a problem if budget and actual numbers do not vary by much, but this can be thrown off by unexpected revenue or cost changes.

Moreover, Council is always wrestling with amounts at the margins. For example, the TTC subsidy is almost $500m, but a 1% change in the gross costs (the full budget, not the net after fares and other revenue) amounts to about $17m, equivalent to roughly a 0.6% property tax hike. Moreover, if that $17m were to be entirely recovered through subsidy, it would represent a 3.4% increase on that $500m base sending the budget hawks screaming about “out of control” costs.


Ridership changes occur at different rates both by time of day and by location. The overall numbers appear in the monthly CEO’s Report, and a current issue is whether the downturn will be sustained or if it is a short-term effect. Ridership for 2016 is up slightly over 2015, but not by the amount originally forecast.

This is an underlying problem with TTC budgets. At times, simply to produce more revenue on paper and thereby reduce the “required” subsidy, the TTC has aimed high for ridership. Many times, they got away with this, but the tactic failed in 2016. The shortfall (as the numbers above show) represent large percentage hits relative to the subsidy and this creates a funding crisis thanks to overly optimistic projections. Conversely if the TTC aims low, but does better than expected, it is criticized for demanding too much.

Commissioner Mihevc observed that an 8 million drop in projected ridership came with a projected revenue loss of $32m, or $4 per ride. Management explained that there was actually an offsetting additional 4m free rides by children meaning that for paying customers, the shortfall was actually 12m rides at a cost of about $2.65 each. This value is still higher than the average fare paid, and the discrepancy has not been fully explained.

The modal share is growing downtown, according to Deputy CEO Chris Upfold, but falling elsewhere. The boundaries of this effect were not discussed, and we will not have a detailed look at the issue until the 2016 Transportation Tomorrow Survey reports out sometime next year. (This is a quinquennial survey conducted by the University of Toronto for the Ministry of Transportation and many other agencies/cities.)

Problems with capacity arise from a lack of sufficient fleet to carry riders coupled with the ongoing effects of service delays and interruptions. For example, service capacity on 504 King is planned to be substantially improved, but this will require a fleet of new low floor streetcars.

TTC management routinely cites employment stats as the closest indicator of ridership. However, this number is affected by many factors including:

  • Core area jobs tend to have conventional hours and produce the well known peak travel effects on transit.
  • Off peak workers and those located outside of the core face the double challenge of lower service levels and a network that is not oriented to their travel requirements.
  • Many jobs are now part time, and more trips are required for a worker to get between them.

Off-peak service levels and reliability can work against making transit attractive for many outside of the core because of long travel times and transfer connections at inhospitable locations.

The Budget Committee appeared to be interested in more details about the times, locations and causes of demand changes, but did not actually pass a motion to this effect. Chris Upfold remarked that the drop has not been concentrated in specific times and locations (although this contradicts an earlier comment about modal share), and that the TTC does not have the technology to track riding in detail. This begs the question of how they track riding at all, and what data they do have on route behaviour.


Wheel-Trans is a large growth area in the TTC’s budget thanks to several factors:

  • 12-13% increase in basic demand.
  • 5% increase in demand due to new eligibility criteria.
  • Improved call centre performance means fewer calls are abandoned and more rides are booked.
  • The unaccommodated rate (requests that got through, but could not be booked) has dropped from 2% to under .5%.

Chair Josh Colle would like to see Queen’s Park contribute to the cost of Wheel-Trans given that it is provincial legislation driving some of the growth. Given that transportation is considered as a human right, this is a cost that must be widely absorbed just as businesses deal with the cost of accessibility and accommodation. For several years, the TTC held its elevator program hostage to demands for more provincial funding, but that charade ended in 2016 when the Easier Access program moved back into the “funded” part of the Capital Budget.

Toronto faces additional costs, and it’s time for Council to accept the responsibility.

Commissioner Campbell moved that staff report on the option of letting registered WT users ride for free on the conventional system so that at least some trips might be diverted. This gets into a difficult territory of the general problem of groups who ask for reduced TTC fares, a population substantially larger than the WT community. This really should be dealt with as part of the City’s overall review of subsidy programs, not as a one-off scheme to avoid WT costs at the TTC.

The original post follows below.

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About That Metrolinx Generator in Mount Dennis (Update 2)

Over some time there have been conflicting stories about the purpose of a backup power generation unit at the Mount Dennis maintenance facility on the Crosstown project. I have heard some rather wild statements from folks at Metrolinx that suggests they might be making things up based overheard water cooler chatter (not that offices tend to have water coolers these days, but it’s the idea that counts).

After the media scrum at last week’s board meeting produced more confusion, I sent in a set of questions for clarification. The boffins at Metrolinx are supposedly working on it. Yes, you. I know you read this site, so in case the memo hasn’t reached your desk, you might want to answer the following:

Regarding the backup generator at Mount Dennis:

I have heard stories both that its purpose is for on site emergency power and for traction power to the main line.

Another variant is that less than full power would be provided in an emergency at least to clear trains from tunnels.

It does not make sense to have one huge generator capable of providing traction power to the entire route. At a minimum, a parallel distribution system would be needed to connect to the standard substation-based feeds along the line.

Also, emergency power requirements are different for traction (750 VDC) and station power (110/220 VAC). Do you really expect me to believe you plan a totally independent power distribution network from Hydro?

Another cockeyed variant is to use the generator to offset peak power demands.

Please provide a detailed technical description of what this generator is expected to power and under what circumstances so that there is a single explanation of this project from Metrolinx.

I await a reply from Metrolinx that is coherent and credible.

Updated September 20, 2016 at 10:40 pm:

Metrolinx has provided the following information about their power generation proposal for Mount Dennis:

Metrolinx is working with Toronto Hydro to explore an alternative to the proposed natural gas powered back up facility near Mount Dennis Station.   An alternative would have to provide the same basic functional requirements as the proposed natural gas powered facility.  It would also be subject to any necessary approvals from the Province of Ontario and the City of Toronto. More info is coming in the near future I understand.

The gas-powered facility was proposed in order to provide the ability to maintain service when the power goes out and improve transit resilience, lower the cost of power by eliminating any contribution to peak power demand from the new system, and ensuring it does not contribute to the need for more transmission or generation infrastructure.

The proposal included:

  • a traditional Toronto Hydro electrical grid connection at two locations; and,
  • building an 18 Megawatt backup power facility – six generators – (with capacity to heat the MSF office spaces) in the northwest corner of the MSF site, known as the backup power facility.

CTS [the consortium building the Crosstown line] developed this proposal based on our RFP requirements whereby proponents were asked to design a system to achieve the power needs of the project, which included redundancy. The Energy Matters regime of the Project Agreement drove proponents to make the system as energy efficient as possible and to the extent possible limit peaks during the key hours of peak that challenge the grid. CTS is asked to forecast the following power supply needs for the system and commit to them for the 30-year Maintenance Period,

  • a) Discrete Power Use: the total amount of power needed;
  • b) Transmission Peak Use: the peak amount of power needed at any point in time (i.e. during rush hour); and
  • c) Global Adjustment Peak Use: the peak amount of power needed during the time when Toronto Hydro’s network is a peak capacity.

Each of the above peaks were assigned a $/MW or $/MW-h to determine the overall power costs of the project (that was unique to that proponent’s proposal). This cost was part of the proponents’ bid for the purposes of the financial evaluation. This regime exists to make bidders responsible for energy efficiency of their LRT system because Metrolinx will pay the energy bills for the 30 year Maintenance Period.

The proposal from CTS to responded with a fully capable 18MW power facility with the ability to completely eliminate contribution to peak period on the grid. As a result of the proposal, CTS was able to reduce their evaluation costs for the Global Adjustment Peak Use and their Transmission Peak Use.

The final power supply scenario provided for both a traditional connection to the Toronto Hydro network as well as the self-generating power facility. CTS’ obligations were to provide the power supply and HMQE’s obligations were to determine which power supply to use, i.e., either the backup power facility or the connection to the Toronto Hydro network. There are rules associated with changing of the power supply. CTS also committed to making one of the power generation units a co-generating unit (produces power and captures heat by-product). [Email from Anne Marie Aikins, Senior Manager, Media Relations, Communications & Public Affairs, Metrolinx]

This description begs a few questions:

  • If Toronto Hydro’s capacity is strained, how are we powering new facilities such as the TYSSE and proposed SSE? Does the TTC have to design for an alternative, power self-generation and transmission capability?
  • How does this claim square with statements made during the GO Transit electrification study that at the provincial level, spare power for RER was not an issue at all?
  • What additional capacity will be required to power the extensions to Pearson Airport and UTSC, and can this reasonably be sited at one location, Mount Dennis?

Updated September 22, 2016 at 8:20 am:

The acronym used above “HMQE” refers to “Her Majesty the Queen’s Entity”, a short form for the combined Metrolinx and Infrastructure Ontario Entity.

The primary purpose of the generator is supposedly for “Bulk Power Disruptions”, that is to say an outage from the provincial supplier, Hydro One. There have only been three such outages since (and including) the major blackout of August 2003. However, other explanations for the generation capacity emerge from time to time.

Crosslinx Transit Solutions (Crosslinks), the winning proponent, proposed an 18MW (six 3 MW engines) natural gas fired power plant to achieve 40% reduction in life-cycle electricity costs, as well as, provide backup power to protect against Hydro One electricity transmission failure (e.g. June 2013 flood at Hydro One Manby Station left 300,000 people without power for days in west Toronto and east Mississauga). Back-up power is required to ensure that LRT trains can be removed from tunnels, and provide emergency ventilation in the event of a power failure. [From the city’s report Update on Metrolinx Proposed Power Plant for Eglinton LRT, p. 3]

In other words the primary function is to reduce electricity costs rather than simply having backup power. There is no business case to show how generating their own electricity would be cheaper for this line than direct purchase from a utility.

Toronto Hydro requires additional distribution capacity for the Crosstown line and will have implemented this by the time it opens. However, this will not, according to Metrolinx, be in place soon enough to allow early testing. That statement does not explain just how much power testing would require as opposed to full operation of the line, nor whether Toronto Hydro is already capable of providing power for the testing phase.

The City’s report also speaks of heat recovery for use on site and by nearby developments. This would only make sense if the generators were operating fairly regularly, not as occasional backup units.

GO Transit’s RER power feeds will come directly from Hydro One and they will not be constrained by local transmission capacity.

Metrolinx has yet to comment on power for the Crosstown extensions, but they have confirmed that the Finch LRT will not include a comparable power facility in its design.

This entire scheme is looking more and more like a noble idea gone wrong. The specifications for this facility are in a section of the Crosslink project contract (“Output Specifications”, Schedule 15) that is completely redacted from the public version. It is intriguing that the contract contemplates the possibility that the cogeneration facility might be dropped from the project (section 20.18).

TTC Service Changes Effective Sunday, October 9, 2016

October 2016 brings relatively few changes in TTC service. The details are listed in the spreadsheet linked below.


  • One person train operation begins on 4 Sheppard Subway.
  • 506/306 Carlton reverts to its standard routing with streetcar operation following completion of track, water main and streetscaping on the west end of the route.
  • 502/503 services on Kingston Road revert to bus operation due to full streetcar operation on 506.
  • 501 Queen will be cut back to Woodbine Loop with a bus shuttle to Neville during reconstruction of Neville Loop. Normal streetcar service via Queen between Spadina and Shaw will resume.
  • One car will be removed from 505 Dundas during peak and early evening periods, and running times will be shortened accordingly, to reduce queuing of cars at terminals.
  • 510 Spadina schedules reorganized to match actual street conditions. Although on paper this shows as a service cut, the actual service operated has not been as good as advertised.
  • Service on Main Street will be reorganized with 64 Main operating only south from Danforth to Queen. Service north of Main Station will be provided by 62 Mortimer and 87 Cosburn (which is part of the 10 minute network).
  • Schedules on 36 Finch West, 60 Steeles West and 196 York University Rocket will be adjusted to reflect the end of subway construction activities.
  • Service on 91 Woodbine will be reorganized so that the Parview Hills branch is now operated by a separate route 93. All service on the 91 will now operate to York Mills, and the 91B peak service to Lawrence will be dropped.
  • Schedules on 165 Weston Road North reorganized for reliability with additional running time.


Presto: A Botched Opportunity to Market Transit in Toronto?

The TTC is well into its rollout of the provincially-mandated fare card, Presto, across the transit system. Like any new piece of technology there are teething problems, but both the TTC and Metrolinx seem bent on making the implementation as difficult and unfriendly as possible.

As the implementation now stands:

  • All streetcars have Presto readers at all entrances, although their reliability leaves much to be desired.
  • About half of the bus fleet has readers, and this work is expected to complete by year end.
  • Many subway stations have at least a few turnstiles with Presto readers. This too will complete by year end, but installation of new fare gates will continue well into 2017.
  • Some stations have machines to allow riders to reload their Presto cards, but these are scattered around town, and their placement (inside or outside of the fare control area) is inconsistent.
  • Riders can pay the equivalent of token or ticket fares with Presto at adult and senior rates, but the ability use Presto for all trips is hampered by whether readers are available throughout a journey.
  • Metropass users cannot use Presto because the monthly pass function has not yet been implemented, and in any event would be worthless unless all of one’s travel were confined to Presto-enabled vehicles and stations.

The implementation of a new fare collection system, bringing the TTC into at least the latter part of the 20th century, presents a chance to “get it right”, to promote a more attractive fare structure and transit in general. This opportunity has been lost through a combination of factors at the TTC, city and provincial levels. What should be a “good news” story is one of uncertainty and complaints, with more to come.

The Technology

Without question, any transit system that has converted its fare collection from a manual system to an automated one did not achieve this overnight, and perfection in a rollout is a lot to ask. That said, Presto is supposed to be mature enough that we should not be worrying about the basics. Card readers should work well enough that encountering one that’s out of service should be rare, not a common occurrence. Fare calculations should be accurate, theoretically an easy task in such a simple system of Toronto that is bereft of zones and transfer charges. Support systems such as reloading fare value onto the card should have a close to 100% up time, not be down for entire weekends for back-end software upgrades.

Retrofitting the technology to vehicles requires wiring for power and control systems, as well as providing an interface to the on-board GPS units. That is comparatively simple beside the work needed in a subway station where running wiring for power and control circuits to fare gates requires new conduits in concrete floors and, in some cases, upgraded power distribution within the station. The TTC has chosen to use this opportunity to install new fare gates, and this makes the work more complex than simply fitting a Presto reader onto existing turnstiles. More about those gates later.

The central point here is that this is basically a construction project that may take time, but once done should allow the new technology’s installation and operation. That last step, actually “turning on” the new machines, depends on technology working “out of the box”. This has not been the case either with Presto readers or with the new gates. Responsibility for maintaining this equipment is supposed to lie with both Presto (part of Metrolinx) and with the gate vendor, but the TTC is doing this work for the time being. It is unclear how many workmen will have to appear on site when a Presto-enable gate becomes cantankerous and vendors point at each other in the classic “not my problem” standoff.

This is a huge scale-up for the Presto organization both in terms of the number of devices it must support, and the volume of transactions it will have to process. Because Presto has limited attractiveness to TTC riders, it accounts for a very small proportion of fares collected. In May 2016, of the 41.3 million trips taken on the TTC, Presto was used for 1.72 million, or 4.2%. Whether Presto is capable of scaling up to the demand represented by even half of all TTC trips remains to be seen.

Opportunities for a New Fare Structure

When a new fare card was first proposed for the TTC, a big selling point was supposed to be that new and improved fare options could be provided. These include:

  • Shifting to timed fares where an initial “tap” buys two hours of travel with no restrictions on stopovers and transfers.
  • Use of time-of-day based fares with lower charges (or longer travel per tap) at off peak hours.
  • Implementation of equivalent to Day Pass pricing with the total charges in one 24 hour period capped at the value of a pass no matter how many trips were taken, with similar options on a weekly and monthly basis. Riders would not have to decide in advance whether buying a pass was worthwhile.
  • Interagency fares so that the boundaries between the TTC and neighbouring GTA systems could be simplified or eliminated.

Changing the fare structure will almost certainly have a cost because anything that makes travel cheaper for some riders is unlikely to be made up for with increased revenue through greater use. Bumping other riders’ fares to pay for this would be unpopular, and there would inevitably be cries about favouritism and hardship unless the overall change could be seen to be beneficial to most riders.

The TTC has considered a move to timed fares, a function Presto already supports in other parts of the GTA and which has always been available to the TTC, but the penny-pinching politicians who would have to fund this change are more worried about precious tax dollars than improving transit’s attractiveness and usability. The estimated cost for this option is about $20m/year, although there is good reason to suspect that this number has been padded. TTC Chair Josh Colle, and by implication Mayor Tory, did not want to spend this amount as part of the 2016 budget package, and in the constrained environment of the 2017 budget, this is even less likely.

Timed fares have two important benefits. First, they completely eliminate the complex rules about transfers and the need for the Presto software to figure out what is a “legal” transfer. This process is fraught with potential errors and overcharging through a combination of GPS errors (did you actually transfer where Presto thinks you did), and from ad hoc routings for short turns and diversions. One cannot have a transit system where the rule is “always tap on” followed by a list of exceptions most riders cannot be expected to know. The TTC will provide a refund for riders who are overcharged (assuming that they even notice and go to the exercise of retrieving their trip logs online), but even a 1% error rate translates to a huge number of complaints.

The second benefit is linked to the convenience of using the TTC as a service without worry about marginal cost for short hops, something passholders already know about. A common complaint among poverty advocates is that “trip chaining” is very expensive for riders who must do several errands in one set of trips that by TTC rules cost a separate fare for each leg of the journey. Too  much of the underlying philosophy of fares on the TTC (and on GO) is based on the “commuter” trip, not on the frequent user who travels the TTC the same way motorists or cyclists might journey from one stop to another.

Fare capping is already used on GO Transit where beyond a certain number of trips per month, travel is free. The ability to do this for the TTC and to implement it for Day Passes already exists in Presto, and the Day Pass conversion was originally expected to occur midway through 2016. It might be held up because of the limited availability of Presto on bus routes, but the reason might also be that any extension of a “pass” is opposed by some on the TTC Board and in management who regard any pass as “lost revenue” rather than as an inducement for greater system use. The idea that transit systems exist to encourage more riding is utterly lost on those who look only at the “bottom line”, not at the wider benefits transit confers.

If automatic capping is implemented for monthly passes, the number of riders gaining a reduced fare may actually go up because there will no longer be an up-front decision about whether a pass will pay its way. This would increase the proportion of equivalent-to-pass riders to an even higher level (now well over 50% of all trips) than it is today. This phenomenon and the effect of other fare options has not even been discussed in any public TTC report.

Interagency fares are, at least for Queen’s Park and Metrolinx, the holy grail of a new fare system. Riders (and voters) in the 905 will get a simpler and maybe even a cheaper ride into Toronto. However, nobody wants to pay for this, least of all the provincial government where the focus is more on how to get municipalities to pay more for transit. Among the outstanding issues are:

  • Will Presto confer a unified, cheaper fare for travel on multiple agencies, including GO Transit, or will it simply be a way to automate the collection of existing fares on all systems?
  • If some type of “co-fare” is extended to 905-416 trips on local carriers (e.g. York Region Transit/VIVA to TTC), who pays the extra subsidy?
  • Will a “co-fare” be provided between GO and the TTC as it is for GO and the 905-based carriers?
  • How will “Smart Track” and a “TTC” level fare within the 416 be implemented on GO Transit’s rail corridors? By extension, exactly what is meant by a “TTC fare”?

The Dark Side of “Opportunities”

A new fare structure may bring not just “better” fares for riders, but could also include lurking fare increases that have not been discussed as publicly as they should be.

On the TTC, some or all of the discount metropass schemes could disappear under the rationale that the savings through subscription and automatic bank withdrawals would apply to all buyers of “passes” on Presto, and there is no longer a reason to give subscribers one month free out of twelve. Never mind that this is a great loyalty and marketing tool. There are more than a few at the TTC who see this as a chance to get more revenue from this group of customers. (Full disclosure: I have been a Monthly Discount Plan user since this was introduced.) Of course a “twelfth month free” could also be implemented as an automatic loyalty reward just like daily or monthly fare capping. All that is needed is the policy decision, plus the software change needed to implement it.

A major problem for TTC Presto riders today is that there are limited locations where riders entitled to discount fares (seniors, students) can have their Presto accounts set up to charge concession rates. This is supposed to expand with the full TTC rollout, but details are scarce. If you can’t get your card set up for a discount, you pay full fare needlessly, or you stay with “legacy” fares as long as they are available.

The stealthiest of the possible fare change proposals is a move to some form of distance-based fares. Metrolinx has been pushing the idea as part of its “Regional Fare Integration Strategy” for a few years, and shows little sign of relenting on this for the TTC. “Rapid transit” fares would be based on distance travelled, and a fare from, say, Scarborough Town Centre to downtown would cost considerably more than it does today with likely a decrease in short distance fares. Metrolinx is quite selective in its description of “rapid transit” and initially this was only the GO rail and TTC subway networks. However, the description has more recently appeared for future LRT lines, although there is no mention of whether BRT services such as VIVA would fall into this category.

The TTC has assisted with making fare by distance possible because its new fare gates can have readers on both sides so that a “tap out” is needed to leave a station. This has very severe implications for the operation of a system that is designed around a free transfer and full integration between surface and subway routes. The Metrolinx study is still underway thanks to a growing realization at the political level that fare by distance is a land mine just waiting to go off under an already unpopular provincial government.

Presto implementation is expected to add $30 million to the TTC’s costs for 2017 because the savings of the new system will not be fully realized while old and new co-exist. That’s roughly the equivalent of a 1% property tax increase if paid through subsidy, or about a dime on the basic adult fare. In the medium term, Presto fees to the TTC are limited by contract, but we know from other cities that a big jump faces the TTC down the road because Presto simply is not self-sustaining on its current revenue stream. Queen’s Park does not want to indirectly subsidize local transit through its mandatory fare technology, and will claw back gas tax transfers from any municipality that does not comply.

A Marketing Failure: Bad News is Bad for Business

In my role as a “transit advocate”, I get questions both on this site and in person about how Presto will work. People ask me what is happening to the fare structure, and thanks to indecisiveness at TTC, I have to answer “I don’t know”. For a system that is supposed to be widely available in a few months, the absence of details is very troubling.

Even worse is the sense that both the TTC and Metrolinx are setting up for an environment where the transit rider (existing and potential) is a distant secondary consideration to avoidance of new costs and gerrymandering the fare system for political benefit.

The absence of public debate about fare structures and related funding challenges shows that none of the players wants to see these issues brought out in the open.

“Good news” is not made by Ministerial and Mayoral pontification, self-congratulatory statements devoid of actual benefit to transit users. “Lower taxes” is a meaningless term if the cost of using a service those taxes should pay for goes up.

Presto could have been a chance for major improvements in how riders view transit. The convenience of passes could be extended to a wider range of customers. Transfer rules that deter use of transit for short hops could be eliminated. The transit network could be seen as one unit (“seamless” is the favourite term) where fares would not create artificial barriers. New technology could be an improvement over tokens and paper, not as a move to a less reliable and inconvenient payment system.

That’s what a city, a region, a province committed to really selling transit as “the better way” would do. Instead, we get unreliable technology, and a refusal to address the need for extra subsidy to pay for restructuring.

A chance to promote transit with some truly “good news” has been wasted because governments are too cheap to pay for it.

Digging Into Delay Reports

The National Post’s Victor Ferreira has a long article today about TTC subway delays. His post consolidates information from the months of September through November 2015 breaking down the causes of delays and gives a better background of why subway service might be erratic than anything published by the TTC.

Over those three months, there were 1,190 delays lasting more than two minutes, and the total delay time was 7,301 minutes or roughly 6 minutes per delay. This raw statistic does not tell the full story, however, because some delays are trivially short, an annoyance to people on a few trains, while others last longer, shut down sections of lines and affect thousands of riders. That is a level of detail missing in the Post’s article, but likely also in the underlying TTC data. For a “customer focused” organization, some measure of the breadth of a delay’s effect is an obvious metric.

The overwhelming major categories for delay causes are “Customer”, “Mechanical/Infrastructure” and “Crew/Operator” which between them account for about two thirds of all incidents with “customers” contributing just over 300 out of the total. In other words, of the major categories, over half of the delays are due to TTC-side, not customer-side issues. The remaining one third of the total are a mixed bag of problems.

Some of these relate to train speed and operation, although pending changes to the signal system will reduce, then eliminate this problem through a move to new speed control software and, eventually to automatic train control.  This is an important operational issue, but the question remains of just how much time each such delay represents and how many trains (i.e. passengers) were affected. There were only 36 delays cause by an “oversensitive” speed control system in the study period, and so the magnitude of improvement riders might see will be small.

Friday has slightly more delays than other weekdays, but without a breakdown by delay type, we don’t know whether this is primarily due to more operators calling in sick, or because doors prefer to stick just before the weekend. There are also peaks in numbers of delays coinciding with the two daily rush hours, no surprise considering that there are more trains in service to fail, and more riders putting more stress on the system.

A key comment by Mike Palmer, Acting Deputy Chief Operating Officer:

For delays caused by mechanical and infrastructure issues, “money is the quick fix,” Palmer said.

This is the same sort of issue as the broken air conditioning units on Line 2 BD trains this summer. If you don’t spend the money on maintenance, things don’t work. Anyone who owns a car or a house knows this, but for some members of City Council, there is a mythology that boils down to “buy and forget” when it comes to expensive capital assets such as subway infrastructure and rolling stock. The trains on BD are roughly at the midlife period on a 30-year design span, and things that worked perfectly ten years ago don’t today.

Having large fleets of a cars all of a similar vintage can lead an organization like the TTC to forget that maintenance is necessary. For a time, many cars may be in their golden, maintenance-free period. When the time comes to undertake major overhauls, the staff and budget are not in place and budget hawks claim that rising costs are “out of control”.

In recent budget debates, some at the TTC have brought up a long-dormant scheme to install platform edge doors (PEDs) at stations. The total cost of this project is about $1 billion, and neither the TTC nor the City has that kind of spare change available. One factor often mentioned is the ability of such doors to keep garbage, notably newspapers, off of the tracks and thereby to reduce the number of fire delays. However, many fire-related calls (smell of smoke, etc) are the result of electrical issues including overheating of equipment and wiring. A recent major delay at Yonge Station was caused by deteriorated cables, not by newspapers.

The TTC should subdivide its statistics to show which type of delays would actually be addressed by specific types investment and/or procedural changes, and how much better service could be as a result.

Service quality is the TTC’s primary problem because riders do not trust the system to get them to their destination reliably. This requires a high level of consistency in TTC performance where a 90% target may sound good, until one acknowledges that this means one trip in ten (that is to say once a week for a regular commuter) will be affected by a delay of some type. Frequent riders see even more delays, and unreliable service leads people avoid transit as a first choice and use it only when the alternative is even less palatable.