Day: September 20, 2008

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Is There an Optimal Supply and Demand for Transit?

On September 16, the Canadian Urban Transit Association (CUTA) released a study on the optimal supply and demand for transit in Canada.  Although I may have slept through the local press coverage, I don’t think that there was much if any as other issues crowded out the story.  One might ask why I’m bothering with it now, but I think this is worth talking about even though I don’t agree with the premise of the report.

Only the Executive Summary and Backgrounders are available on the CUTA website, and as a courtesy for copyright, I will not post the full version here.  You will have to get it from CUTA if you really want it.

The principal conclusions as highlighted on the CUTA site are:

  • The economically and socially optimal level of transit supply in 2006 would have required an estimated 1.7 billion vehicle-kilometres of transit service, or 74 percent more service than actually supplied.
  • In 2006, capital investment of $78.1 billion would have been required to bring the supply of transit into line with the optimal conditions of supply in that year.
  • Results of the analysis conclude that Canada is clearly underinvested in urban transit.
  • Bringing transit to the optimal level of supply would produce several positive economic and social benefits – more than two thirds of these benefits constitute the economic value of reduced roadway congestion.

There is no question that higher investment in transit is required across Canada.  However, there is a danger with any calculated “optimal” value that this will be taken as an upper bound.  Moreover, the methodology of the study does not address future needs, only the situation that existed in 2006.  It is based on average relationships between several economic variables taken on a national basis that almost certainly misstate the micro-level effects in urban areas. Continue reading →

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TTC 2009 Operating Budget

This week, the TTC presented a 2009 Operating Budget in a style departing from past practice.  Instead of weeping and wailing about how they would love to run better service, but can’t afford it, the TTC now has a budget posture of “this is what we plan to run, now let’s find the money to do it”.

This is the sort of advocacy long missing from a “transit” agency.

The starting point for the budget assumes:

  • Costs will rise due to inflationary and contract pressures, as well as operation of more service.
  • Revenues will rise due to increased riding (with no allowance for a fare increase).
  • The City of Toronto subsidy will remain unchanged (this is actually a decline taking inflation into account)
  • The outstanding difference is to be funded through whatever revenue streams become available including a carry-over of any surplus from 2008 (at last report, a deficit, not a surplus was forecast).

Riding at current levels was last seen almost two decades ago in 1990, just before a recession triggered job losses, funding and service cutbacks.  During the dark years, service improvements were hard to achieve because almost no changes could meet the high average cost recovery of the existing system.  Policy shifts in this decade have moved the TTC to actively seek new riders even if this means that average will fall from its high of 85% back to a range in line with historic practice of the 80s and before. Continue reading →