Updated June 8, 2010 at 11:00 pm:

The Smitherman campaign has posted a backgrounder to his transportation plan which has been updated to reflect the funding of inflation by Queen’s Park.

In a previous update, I noted that there was a bit over $1-billion still unaccounted for.  This is explained in the backgrounder as follows:

Once the provincial government formally approves their contribution escalation the Smitherman construction cost increment is reduced to $3.87­billion, or $5-billion once financed to 2021. [Page 3]

Although this issue has been addressed, the method of paying for transit investments has not been changed.  Smitherman still depends on revenue from gas tax and dividends from City agencies, money that is already spoken for by existing budgets at the TTC and the City.  He also depends on new tax revenue from developments along the routes to be built.  However, those taxes traditionally have been at least partly spent to serve new residents and businesses these developments would bring.

While I applaud Smitherman for at least producing a detailed plan, I still do not agree with elements of it such as the Bloor-Danforth subway extensions or with his financing scheme.  (For the record, at Council today TTC staff responded to a question from Councillor Thompson about a subway extension and explained that any subway extension could not be built along the existing SRT corridor.)

The original content of this post follows the break.

Updated June 5, 2010 at 6:10 pm:

According to today’s Star, George Smitherman has reduced the estimated cost of his transit plan from $7-billion to $5-billion.

Responding himself to questions about the $17 billion transit plan he announced last week, Smitherman said his plan would require only $5 billion more than the money already promised by senior governments and the city. That’s $2 billion less than he had originally suggested.

The difference, he said, is the cost escalation attached to phasing in the Metrolinx Transit City light rail plans more slowly. The province has agreed to cover that $2 billion cost.

I cannot help wondering, what with Smitherman having assistance from a Metrolinx director on his policy team, he did not know about this funding arrangement before releasing his platform.  Roughly $1-billion is still unaccounted for in Smitherman’s plan comparing the costs for each line (see details in the main article below), and the $5-billion total.

Then there’s the small matter of paying for it all, but with a $2-billion saving before he’s even managed to get elected, what could be easier?

Original Post from May 28, 2010

Toronto Mayoral candidate George Smitherman unveiled his transportation platform at the Toronto Convention Centre today.  It was a big affair, filling a large room with supporters.

Former Premier David Peterson introduced Smitherman, and the irony was probably lost on most in the room.  Back in 1990, I was at Peterson’s announcement in the Macdonald Block at Queen’s Park when he launched an updated Network 2011 plan.  Peterson was defeated months later by Bob Rae, and much of his transit proposal was stillborn.  Only part of the Sheppard subway was actually built, and a short excavation on Eglinton was filled in.  This was an ominous beginning to the announcement of yet another plan.

Smitherman began with the usual thanks to friends, family and supporters, and then turned to transportation issues in Toronto.  Although he decried the lack of leadership and confused nature of some transit planning, he was careful not to single out anyone specifically.  The audience was left to read into his speech a criticism of whoever they wished all the way from David Miller to Mike Harris, possibly by way of Dalton McGuinty and Mel Lastman.  This was a wise tactic both because there is lots of blame to go around, and because the real issue is moving forward from decades of inaction.

“Things need to work” was a theme running through many comments.  At this point, my sense of disappointment started to grow because of Smitherman’s scattershot remarks and his lack of knowledge about why things work, albeit imperfectly, as they do.

One notable example is the question of road repairs.  Smitherman would love to see crews working 7×24 to get in and get out of a neighbourhood with any project.  Sadly, residents tend to complain about noise, and few projects lend themselves to round-the-clock construction.  Without question, there are serious problems of unco-ordination among various agencies and companies, only some of which are under the city’s control.  Indeed, attempts to do “big bang” projects where every utility visits a neighbourhood for one co-ordinated push have tended to fail because there is always something unforseen in one utility’s work that fouls up everyone else.

Certainly, politicians need to take a much more aggressive approach to poor work by civic staff, but this extends all the way through management ranks, not just at the lowly level of a garbage crew.  Bad advice is given to Council.  Site conditions turn out to be different from plans.  Promises made to neighbourhoods are broken because plans and schedules change.

Smitherman recognizes that citizens are frustrated with their city, and he wants “to get things done”.  This requires real leadership backed by good information and policies.  Here, the platform starts to come unglued.

The Smitherman Transit Plan

Smitherman avoids a catchphrase like “Transit City” for his plan, preferring to concentrate on what he will actually deliver.  Well, that’s fine, but names are handy if only so that people know what bundle of proposals a comment, a newspaper article, a political debate might be addressing.  Let’s look at “Transit Delivered”.

Phase 1 runs to 2015 and addresses the Pan Am Games.  Smitherman commits to:

• Expediting the Spadina subway to have it open to York U (a Games venue) by 2015.
• Completing the Sheppard LRT and extending it south to U of T Scarborough Campus and Centennial College by 2015.
• Completing the Queen’s Quay LRT from Union Station to the Portlands including the Athletes’ Village.
• Get the Eglinton LRT underway, but with its tunnel extended west from Black Creek portal to Weston Station where it would include a direct link to the rail corridor and the Air Rail Link.
• “Champion” the Air Rail Link, with “priority” for electrification, whatever that means, but as this is a provincial PPP with SNC-Lavalin, he has no influence in its design, implementation or operation.

If I were Mayor, this would be an astonishingly easy platform to achieve.  I would sit back, put my feet up, and snooze until 2015 when the call came for photo-ops at the ribbon-cuttings.

The Spadina Subway is already planned to be open to York U by late 2015.  Whether this can be accelerated to get trains to the University in time for the Pan Am Games is hard to say, and is substantially dependent on a construction plan that is already set.  Tunnel boring machines cannot be made to move more quickly by Mayoral fiat.  Smitherman decries the length of time needed to get the project going, but confuses delay in reaching the point where this project is approved and funded, and the actual time needed to get it built. 

“1. When will the subway go to York University?

“Service on the new extension is planned to start in late 2015. So you can expect to catch a train to the York University’s Keele campus at that time.”  [Project FAQ]

The Sheppard LRT is already under construction, and Metrolinx plans to have it opened by mid 2014.  The extension to UTSC is part of the Scarborough-Malvern LRT for which there is already a completed and approved EA.  Metrolinx will consider a report on this option at its June 2010 meeting, and it is hardly a new proposal.

Through operation of Sheppard trains to UTSC was foreseen in the original Transit City announcement, and I have advocated building this connection before the SMLRT ever since it became obvious that the entire Transit City network would not be built in one go.  The idea was well received in private discussions with both TTC and Metrolinx folks as an obvious project add-on.  Meanwhile, then Minister of Infrastructure Smitherman stated that Toronto should not be too hasty looking for additional transit money for this type of improvement.

The Waterfront East line has been designed, in part, including the sections from Bay east to Parliament, and from King south via Cherry to the rail corridor.  The connection between these two segments is bound up in the Don Mouth redesign.  Service into the Port Lands is considered a distant plan to coincide with residential development of those lands.  Waterfront Toronto has funding in place for part of the currently-designed segments, but not for the fleet needed to provide service.  There is no announced construction date, but like many other projects, there is a push to get this on the rails in time for 2015.

The tunnel boring machines for Eglinton will be ordered by the TTC next week, and both TTC and Metrolinx are pushing ahead with this project.  The only significant change in Smitherman’s design is the placement of an underground station at Weston to make a good connection with the rail corridor, rather than at the intersection.  Problems with an underground alignment, however, do exist related to houses on Eglinton west of Weston Road that could be affected by the width of the tunnel structure.

In effect, Smitherman promises to build more or less what is already in progress or very close to approval.  He makes no suggestions about how any other projects could be accelerated (or restored to their original timing) if financial situations change at the City or at Queen’s Park.

For Phase 2, Smitherman proposes:

• Finch West LRT from Keele to Highway 27, then south to Humber College, Etobicoke General Hospital and Woodbine Racetrack.
• Extend the Sheppard Subway west from Yonge to Downsview.  This replaces the “Finch Middle” LRT between Keele and Yonge, and by implication the “Finch East” LRT to Don Mills Station.
• Extend the Danforth Subway from Kennedy to Scarborough Town Centre (McCowan Station).
• Extend the Bloor Subway from Kipling to Sherway Gardens.

These plans are substantially different from the Metrolinx schemes, but Smitherman dismisses “The Big Move” as a plan cobbled together by a bunch of politicians, costing far too much and not generally warranting his serious comment.  He may want to talk to Rob Prichard at Metrolinx about this.

Finch West is roughly as proposed by the TTC and Metrolinx in its current form with the only change being confirmation that it would go to major destinations in the Woodbine area as one project, rather than as a phased expansion.

The Sheppard Subway proposal rarely achieves political lift-off because projected demand is low compared to its projected cost.  It looks nice on a map, but when other projects have stronger support, it goes to the back of the queue.

The Danforth Subway extension to STC has two significant issues.  First, the plan calls for the subway to follow the existing RT alignment although this is physically impossible at Kennedy Station where the station points due east and a curve to the north would (a) be very tight and (b) be blocked by an existing high-rise.  Alternative alignments have been proposed with fewer stations, but these would also be completely new construction, not a recycled infrastructure.  The elevated stations at Midland, STC and McCowan would need major reconstruction to accommodate wider and longer 6-car trains from the BD line.  None of this appears to have been considered.

Moreover, the extension of service north to Sheppard and beyond to Malvern, part of the SRT/LRT Transit City proposal, has completely fallen off the map.  Smitherman cavalierly dismisses this problem by saying that people in affected areas will have good service nearby.

The Bloor Subway extension to Sherway was part of Peterson’s 1990 announcement, and it has languished ever since.  It is not part of The Big Move because Metrolinx concentrates on GO improvements in the west, not a subway extension.

Financing Transit Expansion

The marginal cost of Smitherman’s plan versus current commitments (given to the media as part of a background briefing by a senior member of the campaign team) is:

• Sheppard extension to UTSC: $240-million
• Waterfront east:  $225m
• Finch west to Woodbine:  $250m
• Scarborough subway:  $535m (over and above the proposed LRT to Sheppard)
• Eglinton LRT tunnel extension to Mt. Dennis:  $300m
• Bloor subway to Sherway:  $1-billion
• Sheppard subway to Downsview:  $1.3b
• Total:  $3.85b

However, Smitherman’s speech talks about $7-billion, and it is unclear why the difference in the component costs  is so great.  Unit costs were cited as:

• Subway: $300-million/km
• Subway on surface (e.g. SRT replacement): $250m/km
• LRT: $100m/km (surface)

All figures in 2010 dollars.

The subway expansion proposals do not appear to allow for a new yard to store the trains needed to operate the extended lines.  McCowan Yard is far too small for this purpose, and the TTC gave away its interest in land at Kipling years ago.

How would we pay for all this?  Smitherman proposes that the private sector, with which he is intimately familiar from his experience building hospitals for the Ontario government, would finance the lines on a design-build-finance basis.  Toronto would lease them using a Transit Trust whose funding would come from:

• provincial and federal gas tax
• dividends from Toronto Hydro and Toronto Parking Authority
• fees generated through “transit-enabled development”

There is a small problem here.  Most of the funding earmarked by Smitherman is already used for other transit and municipal programs.  Indeed, as Queen’s Park in particular has backed away from capital funding, the gas tax revenues have backfilled for discontinued programs.  This is not “found money” just waiting to be spent on transit expansion.  Indeed, if we actually had this sort of money sitting in City coffers, Toronto would not be crying to Queen’s Park to fund its transit system.

Smitherman is strong on transit staying in public ownership and control, and the financing arrangements would simply obtain the benefit of private sector expertise and risk transfer away from the public partner.

Sadly, Smitherman’s experience with PPP is on a much smaller, well-defined scale.  He cites hospitals like Bridgepoint (formerly Riverdale) and Sunnybrook as examples, apparently ignorant of the fact that much of Sunnybrook was built before he was born (it started out as a Veterans’ hospital) and that Bridgepoint is nothing more than a hole in the ground on Gerrard Street.

A billion dollar subway project is quite a different matter, and involves expertise and risks the private sector may not have or be willing to undertake, at least without a premium on their pricing.

The most striking part of Smitherman’s financing plan is the degree to which it matches Mayor Miller’s scheme to bridge Transit City funding while the Province sorts out its debt woes.  Smitherman observes that interest costs in the early years are low as projects build out, and in any event the debt is held by the private partners and paid off like a mortgage.

This scheme was rejected by the Province right up to the Premier because, under post-Enron public sector accounting rules, a debt is a debt no matter who holds it.  A long-term lease (or “mortgage” to use Smitherman’s term) is a liability for the City which cannot be avoided any more than debt raised by borrowing money.  Smitherman’s days at Infrastructure Ontario may have involved accounting schemes that Queen’s Park now explicitly rejects.

Fares and Operations

Smitherman proposes to allow senior citizens to travel free between 1000 and 1400 on weekdays.  This, he argues, will have no marginal cost in service requirements, and only minimal cost in foregone revenue.  Indeed, Smitherman’s team argues that some seniors would shift their riding out of peak periods to take advantage of free travel, and this would liberate space for other riders.  Trips otherwise taken at evenings and weekends would shift to weekdays.

As someone who will soon qualify as a “senior”, this is a “thanks but no thanks” offer.  Either you value my age and contributions enough to give me free travel at least at all off-peak times, or you’re just throwing me a bone that does not constitute much of a fare cut overall.

Speaking of fares, Smitherman wants to revisit the cost recovery level, now at about 70%, with a view to increasing farebox revenue as a portion of the total budget.  To put this in context, revenue for 2010 is projected to be $958m of which almost all is from the farebox.  To get to an 80% recovery, revenue would have to go up by about 14% to $1.094b.  Alternately, service cuts would be required to achieve the same effect, and this would come at the cost of some ridership.

We have been here before, in 1996 when Harris-era cuts forced the recovery rate over 80% and service was ruthlessly slashed.  We are in an era of growth today and at a minimum need more service on the system as a whole.  Although some complain of half-empty buses roaming the streets, they have a definite purpose — that of “showing the flag” so that riders know there will be service at all hours whenever they wish to travel.  Indeed, the TTC will soon begin the rollout of its Transit City Bus Plan including a core network of 10-minute headways or better on major routes at all times except overnight.  This is an example of leading riding growth with better service, rather than hacking away to hit an arbitrary budget target.

Smitherman did acknowledge, near the end of his media briefing, that Queen’s Park needs to come back into the operating funding arena.  It took some effort to pull this information out of him.

Smitherman wants to see a fare card system in place by 2014, including the ability to use cash, debit or credit cards and the provincial “Presto” card.  How much this would cost and how it would be funded is not yet known.

What’s Missing

There was no mention of any of the following issues:

• Actual target fare and service levels
• Funding of ongoing maintenance and capital programs
• GO Transit and the role of the regional rail network
• Regional service and fare integration with operators such as Mississauga Transit, YRT, etc.
• Remaining Transit City lines (Jane, Don Mills, Scarborough-Malvern) (Smitherman explicitly said he would kill the Waterfront West LRT, another holdover from Peterson’s 1990 announcement)
• The Downtown Relief Line

Most critically, the big missing piece is the financing.  Smitherman plans to make a number of policy announcements over the campaign, and then wrap it all up with a consolidated financial plan.  This would be available in late September.  How the electorate or other candidates are supposed to deal with this is a mystery.

Anyone can promise the earth in their platform, but they need to bring some sense of how they will pay for their schemes and whether they are actually feasible in the larger scheme of municipal operations.  If a Mayor were to introduce a major policy proposal without at least a basic financial overview, he or she would be pilloried by those who demand responsible government. 

Personally, I was very disappointed in this platform.  There are too many vague statements, too much glossing over of major issues, too many examples of bad advice from a policy team that should know better.  Smitherman is a leading candidate for Mayor, and I had hoped to see “Mayoral” quality platform material.  Candidate Smitherman has taken on the most important issue in current political debate, and produced a platform worthy of a junior Councillor with keen, but ill-advised staff.

[For those who might object to this article’s title, “Furious George” is a name the candidate himself embraces as a badge of his commitment to the city.]

Postscript:  Mayor Metrolinx?

Although the Smitherman transit plan distributed to the media has no credit on it, a larger (and different) version was on display at the media briefing.  It bears the name of “Malone Given Parsons Ltd.”.

The “Parsons” in question is Lee Parsons, a director of Metrolinx.  How is it that a company associated with a Metrolinx director can be involved in producing a plan for a Mayoral candidate?  Is there a conflict of interest?  How does he square the Smitherman plan with “The Big Move”?  Will his discussions at Metrolinx reflect his role as a director, or his connection to the would-be Mayor’s transportation plan?