Today, May 17, 2010, Metrolinx CEO Rob Prichard addressed the Toronto Board of Trade with an overview of plans for Transit City projects. The presentation slides are available on the Metrolinx website.
The final transcript version of the accompanying speech is also available online.
Updated May 18 at 6:20pm : An updated version of the Metrolinx plan is now online. This includes more information about the staging and cash flows for each of the five projects, and confirmation that Metrolinx will be ordering 182 LRVs for the four Transit City lines.
Queen’s Park announced the Ontario Budget in March 2010 including a $4-billion cut to the short-term funding for the “Big 5” Metrolinx projects — VIVA BRT, Sheppard East LRT, Eglinton LRT, Finch West LRT, and Scarborough RT to LRT conversion and extension. This triggered a vigorous debate between Provincial and Municipal politicians about the real effect of the cut and the true extent of Provincial commitment to transit funding.
The primary concern at Queen’s Park is constraining the growth of the Provincial debt. In the short term, the Metrolinx projects were seen as easy to shift into future years, beyond the point where debt would be a problem. However, in political circles, deferral can mean outright cancellation especially if the government changes or another portfolio takes precedence for spending.
Only half of Transit City has any funding commitment to date, and now half of that commitment is in question. Where does this leave the plan and, more generally, the growth of a robust transit network in the GTA?
“Move Ontario 2020” and “The Big Move”
In June 2006, Premier McGuinty announced the “Move Ontario 2020” program, a shopping list of over 50 projects to transform public transportation in the GTA. The list included Transit City, but there was no funding for any of the projects. Indeed, Ontario hoped that Ottawa would come in for a 1/3 share as a vital economic development contribution to the heart of the Canadian economy. The total pricetag would be $50-billion.
Ottawa surprised nobody by demurring, and the federal commitments to transit remain on a project-by-project basis. The transit share of the federal gas tax is totally consumed in routine capital costs for systems such as the TTC and nothing is left over for system expansion.
Metrolinx boiled the Move Ontario shopping list down to its own scheme, “The Big Move”, which included a list of “Top 15” projects as candidates for initial funding.
In April 2009, Queen’s Park announced specific funding for the “Big 5” projects totalling $9.5-billion, of which $330-million is the federal contribution for Sheppard East. The VIVA project got $1.35-billion leaving $8.15-billion for Transit City.
However, scope and cost creep pushed the total estimated cost for the four Transit City projects to $10.498-billion, almost 30% above the agreed funding. Metrolinx, TTC and the City of Toronto wrestled the projects back down to fit the budget by splitting six sub-projects off to a “Phase 2”.
- Finch East from Yonge to Don Mills Station ($655-million) (This section was not part of the original Transit City network, but was added by Queen’s Park in the April 2009 announcement.)
- Finch West from Yonge to Finch West Station (Keele Street) ($460m)
- Sheppard East from Conlins (the carhouse location) to Meadowvale ($100m)
- SRT from Sheppard to Malvern ($386m)
- Eglinton from Renforth to Airport ($300m)
- Eglinton from Jane to Renforth ($467m)
Until the Budget announcement, the projects remained on more-or-less their original schedules.
March 2010: The $4-billion Cut
With the Provincial budget came a $4-billion cut in Metrolinx funding. Technically this is a deferral to push the associated borrowing beyond the five-year line in budget projections. A similar scheme has been used by the City of Toronto and the TTC to keep costs everyone knows we must bear off of the short-term capital projections. The problem with this scheme is that the backlog of funding needs grows, and without new revenue it is unclear how we will pay for everything. In a worst-case situation, a future government may take an axe to this backlog for fiscal or political reasons.
To fit the “Phase 1” projects into the new borrowing schedule at Queen’s Park, Metrolinx proposes to stretch out spending primarily by pushing two projects to 2015 and beyond. These are the SRT and Finch West lines. The Eglinton project already extended beyond the five-year window with openings in phases from 2016 to 2020.
In the original plan, $7.7-billion would have been spent in the five-year period where Queen’s Park wants to reduce debt growth. This left $1.8-billion for the out years in that plan. With the revisions, this number has grown to $5.8-billion.
One important point here is that Queen’s Park will index the $8.15-billion Transit City commitment relative to 2008 dollars. This will ensure that the delay in startup will not eat into funding through inflation, provided that project cost estimates do not grow at a faster rate. This provision adds about $2-billion to the funding commitment.
Metrolinx’ May 2010 Proposal
Metrolinx proposes to build the five projects over a longer span.
- The York/VIVA BRT will now be completed in 2020, a four-year delay.
- The Sheppard East line will open to Conlins Road in 2014, one year later than planned.
- The Eglinton line will be completed from Jane to Kennedy by 2020, two years later than planned. Work will begin in June 2010 with the ordering of tunnel boring machines. Tunnel construction starts in 2012 although an access shaft for the tunnel launch will have to be built first. Station construction starts in 2013, and the eastern surface segment begins in 2017.
- The Scarborough RT will continue to operate until after the Pan Am Games, and the rebuilt/extended line will open in 2020. It is unclear why the construction period is so long given that the TTC’s estimate put the shutdown at only 3 years.
- The Finch line from Keele to Humber College will start construction in 2015 and open in 2019.
- Vehicles for all four lines will be ordered in June 2010.
Metrolinx and Queen’s Park have turned down a City of Toronto proposal to provide short-term financing that would allow the Finch and SRT projects to begin sooner. Their reasoning is that debt is debt, no matter who borrows the money, and if Ontario is obligated to repay the City, then it’s Provincial debt simply in another guise.
Metrolinx has suggested that the City of Toronto may choose to fund part of these projects directly by purchase of land for projects in later years, or by construction of extensions such as the proposed Sheppard link south to the Aquatic Centre at UTSC. It is unclear how a City contribution would affect the Provincial desire to have full ownership of the Transit City lines on its books.
These add-ons really belong in a potential “goodie basket” for the 2011 Provincial Budget and the runup to the election. If the Pan Am Games are important, why shouldn’t Queen’s Park find the $150-million needed to extend the Sheppard route south to UTSC? This would have lasting benefit not just for the games, but for the Sheppard line and the campus.
On the subject of subways, the Metrolinx response is simple: both the Eglinton and SRT lines are, effectively, full rapid transit with a long stretch of tunnel on Eglinton and complete grade separation on the SRT. The outer parts of Eglinton will be at grade, as will Sheppard and Finch where demand does not justify the high cost of subway construction.
Prichard ended his presentation with a warning against delay. Mayoral candidates are jockeying for position, trying to replace the David Miller transit vision with their own schemes. Some would tear up Transit City and start over. Readers of this blog will know that I consider such an attitude, charitably, as uninformed and, at worst, crass pandering to those who think we can have a huge transit network, little effect on municipal budgets and no disruption for construction.
What Future Does Transit Have in the GTA?
With all the debate on the Provincial budget and its effect on Transit City, a much more important issue was pushed to the background. Many other projects do not have committed funding, and they are expected to benefit from the “Investment Strategy” whenever it appears.
Today, the Star editorialized on the potential fallout a delay in proceeding with even the “Big 5” projects could have. Although the revised plan takes longer and provides somewhat less than the original Transit City designs, the Star argues that demanding funding for everything may play into the hands of those who would kill Transit City either for alternative schemes in Toronto, or elsewhere in the GTA.
Yesterday, Carol Wilding, president of the Toronto Board of Trade, wrote that the lack of transit investment and expansion now puts the GTA far behind other cities and that further delay will only compound the problem. If the business community really gets behind transit spending, this will be a welcome change from endless calls for lower taxes. Making the GTA competitive on a global scale involves more than having the cheapest possible government.
Some Toronto Mayoral candidates, not to mention factions at Metrolinx and Queen’s Park, hope that the private sector will magically provide funding either through direct investment, or through the tax benefits of development stimulated through transit construction. As we have seen with Highway 407, private ownership of infrastructure doesn’t get rid of the cost even though it may push the debt off of public sector accounts. As for tax benefits, yes, new buildings can bring tax revenue, but this is often decades in the future and that revenue is normally assumed to pay for an array of public services, not just the debt on a transit line.
Creative accounting has no place in this discussion, and politicians must be honest with voters about how we will pay for massive increases in transit infrastructure and service. We need honesty, too, in talk of the “do nothing” alternative, in the cost of simply letting population and traffic grow within the existing system.
Metrolinx had planned to publish an “Investment Strategy” by June 2013 setting out how its long-term plan would be financed. The Phase 2 list above was to be funded through this strategy, not by Provincial borrowing.
Many “investment” options are available, but they all involve extracting large sums on an ongoing basis from taxpayers who are notoriously unwilling to pay. Indeed, the 2013 date was intended to put any discussion of new revenue tools well beyond the 2011 Provincial election. With the economic downturn and the deferral of project funding to an “Investment Strategy” we know nothing about, the delay to 2013 is no longer reasonable or responsible.
When Premier McGuinty announced Move Ontario, he signalled that Queen’s Park would take on the challenge of building transit. When Mayor Miller proposed Transit City, he signalled that Toronto would plan for a network of routes to serve people across the city, not just the favoured few near short subway expansions.
Cold feet. Reconsideration. Indecision. That’s Toronto’s history of support for transit. We wait decades, and still transit has no dedicated funding for construction and operation. Every delay pushes the entrenchment of transit as a vital, permanently funded public service off to the future and the whims of whatever party might control Queen’s Park or City Hall.
Where is the leadership to build a real Transit City?