Update November 2: The Analyst Notes for many areas of the Capital Budget are available online on the City’s website. Notable by its absence is anything about the TTC, the single largest component of the entire budget.
On Monday, October 29, the City Budget Committee had its first public look at the 2008 Capital Budget. This covers all of the programs funded by the City, of which the single largest part is the TTC Capital Budget.
We won’t know the details of what the TTC is planning for a few weeks until the Commission meeting on November 14, but we can see some outlines in the preliminary material from the City.
Toronto has a huge problem financing the TTC, and as things stand, of the $1.249-billion in new capital debt the City will raise from 2008-2012, about 80% is due to the TTC.
For 2008, the TTC’s capital funding request is in line with the City’s target, but as in past years, this is achieved partly by deferal of spending to the out-years. This is not sustainable, particularly with major capital projects coming down the pipeline. In the current estimates, the TTC’s capital requirement for 2009-2012 is about $420-million greater than the City’s budgetary target.
In addition to this shortfall, the TTC has an accumulated and growing backlog of capital projects that will grow to $363-million by 2012.
The table on page 18 of the Budget Presentation shows the anticipated funding sources from Queen’s Park and Ottawa. An important line in the Provincial section is called “Long Term Funding Requirement” — this doesn’t correspond to any announced program, but it grows especially in 2012. If you omit this line, the level of committed Provincial funding declines substantially. The Federal section contains a similar problem with assumptions about growth in future funding. (The problems and assumptions are restated in text format on page 19.)
The usual problem is that funding schemes at both levels are typically announced for a four or five year window, just long enough to get past the next election, but they are not entrenched. We have to hope that something will replace them, but if nothing comes along, we are left holding the bag for future spending.
A separate Highlights Report shows major transit projects on pages 10-11. Note that the dollar values for these projects only cover the 2008 year, not the full cost to completion. For example, the new streetcar project will only consume an estimated $55-million next year. Those who are following the reconstruction of the streetcar track will note that many of the listed projects are on the “non-revenue” trackage (Dufferin, Church, Richmond, McCaul, Parliament and Wellington). The other major projects, of course, will be completion of the St. Clair line and the remaining work on Bathurst. By late 2009, we will finally be at the end of the heroic project to bring the TTC’s streetcar network back into good condition everywhere.
One troubling aspect of the TTC’s funding needs is “scope creep” and the arrival of previously unbudgeted projects in the five year plan. The 2008-2012 budget exceeds the City’s affordable debt target by $420-million as I mentioned earlier, but this is up considerably from the $197-million shown in last year’s budget.
We don’t yet know which projects contribute to this, and there’s probably even worse lurking in the next five year period from 2013-2017 when many large projects will be in full swing.
One obvious issue is the Yonge subway resignalling project, the move to automatic train control and service increases to build capacity on the line. The subway car order with Bombardier signed earlier this year does not come close to providing enough cars for the entire YUS line, even without the York extension, nor for any improvement in service frequency. If the TTC hopes to reap the benefit of the new fleet, then they will have to add a follow-on order for more “Toronto Rockets”. The additional cars would replace the remaining “H” series fleets used on the Yonge line, and the T-1’s would all move over to Bloor-Danforth.
For the new streetcar fleet, we still do not know the price per car, and each estimate is higher than the last. Moreover, we don’t know whether wishful thinking on specifications will run headlong into technical reality regarding both the track geometry and the overhead power system. Any retrofits will add to the overall cost of rolling out the new cars.
For the bus fleet, current plans call for only modest growth, and even Mayor Miller’s long-promised 100 extra buses will be partly eaten up by added ridership before they actually hit the streets, now likely in fall 2008, a year later than planned.
The TTC has a long history of springing new projects and large-scale changes to existing ones because, somehow, the capital is always found to deal with these problems. Once we see the details in the budget papers, I will likely have more to say on this subject.
The recent federal budget announcement shows quite clearly that Toronto cannot expect relief of its funding problems from Ottawa, and it’s time that both the City and Queen’s Park stopped waiting for that solution. Yes, one or both levels will have to generate new revenue to invest in the transit system, and readers here know that my preference already lies with Queen’s Park.
Toronto’s transit system is a regional resource and it should receive solid, sustained funding from the Province.
Steve Munro 
Kevin’s comment:
I agree wholeheartedly. Then, of course, the question becomes “what funding sources and what rate of taxation?”
I have long been of the opinion that a minimum floor level of automobile taxes should be the true cost of driving. This true cost captures all the externalities, or current costs of driving that drivers are not paying. As I recently posted on another thread, these have been estimated as the equivalent of a gasoline tax of $1.20 per litre.
My own proposals are:
1. A congestion charge tax to enter downtown Toronto of $10, increasing to $50 when the Air Quality Index (AQI) goes over 25.
2. Tolls on all GTA expressways of 10 cents/km, going to 50 cents when the AQI goes over 25.
3. A tax of 40 cents per km placed on 407 use when the AQI goes over 25
4. A province-wide increase in the provincial gasoline tax from 14.7 cents to 35 cents per litre.
This tax system would result in Toronto and the GTA becoming much more livable places to live. Public transit would replace car use, and air pollution (causing 1,700 deaths per year in Toronto) would decline.
Steve: All of this is very nice, but if we don’t build and run better transit, all the taxes in the world won’t solve the problem. Even then, providing attractive transit in the outer 416 and inner 905 is a big challenge given the travel patterns.
I have problems with tolls or taxes based on the AQI for two reasons. First, if we try to create an artificial demand for transit when the AQI goes up, we need to have the service in place to absorb the new riders, assuming they come. We know quite well that service takes priority over cost, and the marginal added cost of driving may not compensate for the perceived quality of transit, especially to someone who feels they have been forced to change modes.
Second, the AQI is affected by factors other than auto emissions in the GTA. Why should motorists in Toronto pay higher tolls when the wind blows all of Ohio’s crap into our weather systems?
We need to encourage motorists to switch to transit all of the time, not just some of the time, and we need to reward them for this choice with both lower overall costs and frequent, easy to use services.
LikeLike
Is this the annual amount of capital spending that’s needed indefinitely to keep the system in a state of good repair, or are we dealing with a bump in SOGR projects due to deferrals and bad luck? I wish somewhere in the budget docs there was a 30-50 year view of anticipated needs (with very rough, constant dollar numbers of course).
The one downside to waves of projects (e.g., rebuilding the streetcar track network in just a few years) is that they’ll probably all need to be replaced around the same time, so we’re already on the hook for another wave of capital spending about 25 years from now. Let’s hope the political climate then is friendly.
Steve: While there are some specific projects that contribute a “bump” like the streetcar track, the amount you are seeing is fairly close to a steady state SOGR budget. The large vehicle replacement contracts are all in the future.
LikeLike
Regarding Kevin’s comment:
The problem with congestion tolls and highway tolls is, as Steve pointed out, that it’s doing nothing but creating an artificial demand for transit.
As a Hamilton resident with friends in Toronto, let me tell you that highway tolls as a means of forcing people on to GO is a bad idea and won’t change anything. Whenever I visit my friends in Scarborough on the weekend, my parents drive me (I’m sixteen and don’t have a license). That is because GO trains only run hourly, though things have improved somewhat with the advent of 7 day service to Aldershot.
If highway tolls were combined with massive GO improvements (I’m talking S-Bahn style service, which seems to be the newest buzzword in the transit-sphere), highway tolls might be feasible. Otherwise it will do nothing other than spread discontent in the masses. The choice will either be pay the highway tolls or wait an hour for a train into downtown.
Congestion charges, on the other hand, I have no problem with. The problem is that congestion charges in downtown would lead to the transit service down there becoming even more jam-packed than it is now. If combined with a DRL (or express tracks on the Yonge Line) and a fixed 501, congestion charges could be feasible I think. Sure, people wouldn’t like it, but that’s not surprising since any move to reduce the use of the ever-precious car is seen as blasphemy by anyone outside of the transit users themselves.
LikeLike
Steve asks: “Why should motorists in Toronto pay higher tolls when the wind blows all of Ohio’s crap into our weather systems?”
Well, I suppose that we could just close the highways completely, as we do for accidents and exceptionally bad weather.
When the air quality gets bad, it’s time to stop making it worse. I agree that the way to get people out of their cars permanently is with excellent transit, but when an acute problem arises a more expedient deterrent is required.
Sure, a stick without a carrot is undesirable. So’s pollution.
LikeLike
I think we need to look at transportation, on a GTA basis, and not transit on a Toronto basis. As long as we treat transit and driving independently, and treat city boarders as geographic boarders as far as transit is concerned, transit will be the poor cousin.
We really need an overall plan, similar to the one Hamburg, Germany drew up in 1965, that covered every planned trip into that city. They knew how many were initiated in areas where transit was not sensible, so those people would need parking (and where), how many needed bus service, how many would be served by train, subway, streetcar.
We need the same for Toronto, and we need it completed before 1989. Yes based on the 2004 redesign of this plan, we would now be building new lines.
LikeLike
What is the actual cost per rider? If someone from Durham gets on the TTC in Scarborough how much is TTC paying on that ride as opposed to the fare of a ride on a metropass?
Steve: It is impossible to calculate the marginal or fully allocated costs on an individual rider basis. Yes, it’s always possible to cook up a formula, but it will produce meaningless results. Costs are not incurred per rider, but per unit of service and infrastructure. Each rider’s “share” of these varies with the trip they take, and with decisions about service quality relative to demand.
905’s hated pooling for social services , should 905 be kicking in for TTC Transit costs especially in the outer areas? Maybe Durham should be in a partnership with Scarborough ?
Very naive I know.
One thing I want to point out in regards to jobs and mobility, the doctor shortage in Ontario will have an effect on commuting I believe. I have a doctor here in Ajax my job is going at the end of month to Miss. Why would I move when I have a doctor here? If Durham steals your employer and you live in Brampton, we have no Doctors taking new patients, why would you move to Ajax ? Unless you did not have a doctor to begin with. Clinics can not replace the Family Practice Doctor.
Just another spin on the line of— Just move closer to your job.
LikeLike
I think when it comes to tolls, there needs to be some creativity as to how we slowly ramp them up.
My initial thought is to set up photo tolling on all established coridors in southern ontario…but to only charge where there is an existing transit alternative (ie. getting on the QEW at Mississauga Rd and getting off at Spadina would be an established transit corridor that warrants a toll, just take port-credit to union+subway). The system should start out with just established corridors being tolled, at a VERY minimal amount relative to the service provided by the transit (1 cent/km, 2 cents during rush-hour) and then as transit service on that corridor is increased, the toll is increased.
As for complexity, I agree that this system would be slightly more complex than a distance based system. But I think a matrix could be provided (perhaps in newspapers, on the web, etc) that would show the prices between two entrance/exits for those who are interested. This added complexity would also encourage people to look into transit systems as an alternative to driving.
We would also get a lot of useful information from tolling data regarding where/when people are driving and how frequently they are driving there. This could provide some insight into future potential transit services, and increases in current services. As well as where to target advertising.
LikeLike
As a “Discretionary Transit User”, I will occasionally take transit when it suits me, that is, I will take it because it is convenient for me to do so, which usually occurs on the occasional trip to the downtown core to catch a sports game, show, or to have a good time in one of the bars/pubs/clubs. Not everyone thinks the same way.
Other “Discretionary Transit Users” that I know will swear up and down on a stack of bibles that they would never take any form of public transportation for any occasional downtown jaunt. Ramming these tolls down their throats without any form of adequate resource (i.e. effective and cheap transit service) will mean that these DTUs will no longer want to go downtown for social calls. Business in the downtown core will plummet, as these DTUs represent a very good portion of their business.
Now you have the BIAs of the downtown cores complaining about the loss of business because of these tolls. They have been consistently campaigning against these tolls for exactly this reason, especially what Kevin is proposing is quite steep, even compared to downtown London from what I hear.
LikeLike
Steve,
What is your opinion with respect to the province taking over and funding the TTC from its own revenue sources? The city struggles every year to properly fund the TTC, yet they oppose any kind of provincial takeover or “uploading”.
If the TTC was uploaded to the province, it could be merged with other transit agencies to create a truly integrated regional transit system.
Steve: The Province is not at all good at delivering services at a local level, and their priorities are province-wide. In Toronto, and increasingly in the GTA, we see transit as an integral part of our transportation options, but this is not the view elsewhere. People in Toronto should be able to demand, through their Council, good transit service and Queen’s Park should give Toronto a fair share of its revenue stream to help pay for it.
We will see how far the GTTA gets with the issue of transit service quality. One big issue, raised by David Miller at the GTTA Board meeting last week, is that GO is still completely focussed on peak period, core-oriented travel. The demand for more roadway capacity arises from the lack of investment in good transit for off peak and non-core trips.
I have no faith in Queen’s Park’s ability to manage fine-grained local services in transit or any other portfolio.
LikeLike
Why do we not bundle a mandatory metropass purchase with property taxes?
For those who use transit anyway, it would not be a hardship — and would actually be cheaper, given volume discounting. For those who do not use transit, it would either encourage them to do so or, in any case, give them something they could sell on a secondary market — for example, to 905ers or to households that require more than one pass.
(Heck, if the city really wanted to get fancy, it could change the price that property owners were charged for them — a percentage, rather than a flat rate, in order to create progressive transit pricing.)
Nor should system undercapacity be an obstacle to a mandatory metropass. If the City went ahead with such a scheme, it could easily be set up to commence only a specified period after the date the bylaw was passed. That would give the TTC time to figure out how much more of a load it would need to carry, secure financing (as against the guaranteed future revenue that the mandatory metropass would raise), and go ahead and build to get ready.
Steve: A huge proportion of total ridership (existing or potention) does not pay property tax directly eihter because they are tenants or because they live in a building owned by someone else (family members, for example). If the intention is to get more revenue for the TTC from taxes, then one way or another we have to raise them.
A Metropass per household, by the way, costs about $1,100 per year based on the discount plan pricing. This is a huge tax increase. If all the property owner does is recover this cost by selling the pass or by giving it to a family member who is now a pass user, the TTC is no further ahead. If the household has a TTC rider who converts from tokens to the pass, the revenue change to the TTC will be a small gain or loss depending on current use by the new passholder.
My preference for transit funding schemes, whatever they are, is that they be as direct as possible without hoped-for secondary effects that may not turn out as expected.
LikeLike
Steve wrote:
“I have problems with tolls or taxes based on the AQI for two reasons.”
There are at least reasons for these taxes that I didn’t mention (trust me, I can write all day 🙂
The first is derived from network theory. First I’ll use jargon, then translate into English. In jargon, my intent is to break the automotive temporal network. The English translation is that it is now possible for someone to use an automobile all the time, no matter what costs (health care, environmental, policing, etc) that imposes on everyone else. By making it very expensive to drive when the AQI is over 25, the ordinary non-rich person suddenly has a strong incentive to not buy a car. Why should someone buy a costly machine that cannot be used for several days of the year?
The second reason is political. It is easier to sell a measure as a death and pollution reduction tool. Toronto’s Medical Officer of Health estimates that air pollution results in 1,700 deaths per year, 12,000 cases of childhood bronchitis, and other serious health problems. It is somewhat difficult to argue in favour of killing people and making children sick.
Steve: The incentive to buy a car is the convenience real or perceived. If you don’t provide an attractive alternative for all of the travel demands cars handle, people will buy them no matter what scheme you concoct. Also, why should only the “non-rich” be penalized?
The impacts you talk about all affect “other people”, and they do so at a level that is not perceived as a personal threat.
LikeLike
The usual problem is that funding schemes at both levels are typically announced for a four or five year window, just long enough to get past the next election, but they are not entrenched. We have to hope that something will replace them, but if nothing comes along, we are left holding the bag for future spending.
(skip to last paragraphs)
The recent federal budget announcement shows quite clearly that Toronto cannot expect relief of its funding problems from Ottawa, and it’s time that both the City and Queen’s Park stopped waiting for that solution. Yes, one or both levels will have to generate new revenue to invest in the transit system, and readers here know that my preference already lies with Queen’s Park.
Toronto’s transit system is a regional resource and it should receive solid, sustained funding from the Province.
Well, we agree on the Federal angle at the very least. Where we always seem to disagree is on what is the called-for countermeasure. My stance is that Queen’s Park has the same inherent problem as Ottawa, because the same electoral system applies to both. The result is a grossly disproportional favourtism being won by rural Ontario. If we don’t switch our electoral system to a proporitonal system, which has just been bumped back by a decade or so, and I suspect a conspiracy on McGuinty’s part (he doesn’t want to lose his majority in 2011), then we can expect Queen’s Park to have low interest in urban needs, especially transit in the age of fiscal responsibility. If you were promoting this strategy in the era of big spending, such as the eras of Peterson and Davis, I’d say your strategy is a good strategy that could work, but since Harris’s common sense execution and the rise in popularity of fiscal prudence, transit cannot count on anything from the government from here on. Both Parliament Hill and Queen’s Park have surpluses, while Toronto is still being cheated out of $9B/year, and there’s nothing (legal) we can do about it. While the NDP would be favourable to transit, as would the Greens, they’re subject to the same problem of 4 or 5 year windows.
Tax changes recently announced are also going to up Canada’s attractiveness, while previous actions by Toronto are also going to up the core CBD’s attractiveness to what it used to be and beyond. Both should be coming into full effect by around 2012-2015. This era is going to see core-bound demand for transit go through the roof. While Miller and McGuinty are silly enough to toddle along and build a couple subway extensions into the 905 region, capacity in the core is going to desperately require a DRL before 2015, meaning construction should start today.
LikeLike
Hi – I was interested in your comment on the order for more rockets. I live in Mississauga – but I am now working on an assignment in Toronto near the airport. I am taking the 191 rocket – and this is working very well.
I’ve worked on assignments in other parts of Toronto – but this is the first time that I have been able to get to work as efficiently – other than when I have used the subway to Yonge & Bloor.
I am wondering where the new rockets will be running. I can’t see much on the TTC wesbite. I think many parts of North York and Etobicoke could use similar routes to the 191.
Steve: The “Rockets” I refer to are the new subway cars, dubbed the “Toronto Rockets”. They are not to be confused with the “Rocket” series of bus routes such as the 190 (which I use from time to time) and the 191. The TTC’s biggest problem is that they don’t have enough buses to run more service.
LikeLike
Sorta “hate” to mention it, but we still have a $255M road folly on our books and they haven’t looked at transit harms, nor transit options. Add the WWLRT atop of this at $500M+ and it becomes nearly a 3/4 billion – which is somewhat unnecessary because of the provincial expansion of the GO trains to 20% more through longer trains doign more for congestion relief.
So in the absence of true leadership to consider a dozen transit options to the FSE and the WWLRT in the very travelled western waterfront corridor, we have to thank the province for some smarts, and be less charitable to the local “progressives” which include Mr. Giambrone. GO does need a transit back-up, but the WWLRT isn’t cost-effective – too many bridges, and it’s too indirect – and like the FSE, we can do better than Metro-era planning.
Steve: One additional wrinkle this year is that, as I understand things, the Federal money for the FSE vanishes if it isn’t committed to something in 2008. The decision was deferred last year, but this year many so-called progressive Councillors and the Mayor have to decide where they stand.
LikeLike
Regarding M. Briganti’s comment to “upload” responsibility of the TTC to the province, I was under the impression that the GTTA would run it, and not the Province. Sure, the province directly funds the GTTA but I don’t think the Ministry of Transportation will attempt to interfere in the matters of local transit issues.
I am in favour of such a takeover if not just because of a relief in the property tax base, but if only because it opens the door to an integration with all GTA transit systems, especially Brampton, Mississauga, and the YRT. In other words, the GTTA would be responsible for transit in the entire GTA. The boon for this is (provided sufficient connections) a person can travel to Markham to Mississauga through Toronto on a single fare. We’ve heard some complaints regarding the “unfair” fare boundary and eliminating this would not only make public transit more attractive, but it allows for more integration between routes rather than ending off at specific points because of jurisdictional boundaries.
The creation of the YRT is one such example, the merger of 5 transit systems have made it easier to get around in York Region (okay, they still deal with 30 minute headways, but it’s an improvement over 60 minute headways, not to mention a larger service area served). Granted, transfers between the 5 transit systems were allowed, but the fact remains that it is a lot easier to get around certain areas without having to resort to confusing transfer arrangements (route splits depending on the boundaries).
I understand the issues regarding how Queens Park is ill-equipped with dealing with local transit issues, but in such a scenario, the former TTC would still look after its areas, the former YRT would look after theirs, and so on. Routes that cross two areas would have to be looked at very carefully between the members of the two areas. The big difference is the potential for further integration between routes and the elimination of the double fare. If that is not an improvement to public transit, then I don’t know what is.
Steve: Until we know how the GTTA is actually going to be funded and to what degree its decisions will be dominated by Queen’s Park, I’m less than thrilled with an idea of their taking over responsibility for the TTC or any other local agency. If the Province pays, they are going to dictate policy right down to how often the Queen car runs.
LikeLike