The Toronto City Summit Alliance (TCSA) recently published a discussion paper on transit and transportation infrastructure funding in the GTA. This document will be discussed at an invitational working group meeting on July 14.
There is little new information in this report which follows on the heels of a similar paper by the Board of Trade (see my post from May 2010) and a Metrolinx review of revenue options in 2008. Much more fascinating is the process: a major discussion of provincial infrastructure planning and revenue generation policy is taking place outside of the agency charged with that task. Indeed, Metrolinx VP John Brodhead is listed as a co-chair of the working group along with TCSA’s Julia Deans.
Metrolinx itself may be unwilling to discuss the so-called “Investment Strategy”, but this does not stop well-connected external groups from pursuing a more activist agenda. After years of decrying excessive public sector spending, Toronto’s business community has discovered that failure to spend on infrastructure costs the city dearly in lost productivity and attractiveness for investment. This is not a problem that turns around overnight even assuming we all agreed on what to do.
Queen’s Park may be horrified of proposing new taxes, tolls, “revenue tools”, but with the understanding that spending on transportation in urban regions is essential, even the more conservative elements at the Pink Palace will have to take notice.
Like much of North America’s industrial infrastructure, Toronto’s roads, sewers, schools, electrical grid and transit system were built decades ago, and the scale of building generally exceeded the demand. People took for granted that the services would exist, that capacity would be available, and that business activity could proceed unfettered by the need to reinvest in public infrastructure. Just as steel mills rusted away for lack of modernization, municipal infrastructure decayed, its capital value depleted by tax cuts, the equivalent of asset stripping through dividends, that weakened our ability to reinvest and expand.
Surprise, surprise! Transportation demand is growing faster than system capacity with the predictable result that commute times go up, and congestion is a standard complaint throughout the GTA. Transportation capacity growth focuses on downtown Toronto, essential to the continued expansion of its workday population, but little is done for outlying areas where congestion is worst. Even commuter rail, long viewed as an inexhaustible supply of transit from the 905 to Union Station, is seeing limits on its planning horizon thanks to various physical and technological constraints.
The TCSA report lauds Metrolinx plans, unsurprising considering that agency had a hand in TCSA’s work, but also raises concerns about local systems. Just as expressways depend on local arterials and streets to feed them with traffic, a regional network needs a network of finer-grained services. TCSA hints at a need for better co-operation between local and regional operations, especially on the TTC’s behalf, and hints darkly that if this doesn’t happen, “further restructuring may be necessary”. This is needless sabre-rattling that would have more credibility if Metrolinx and Queen’s Park actually had something to offer toward operating budget funding.
Predictable, sustained funding is the big barrier, not just to individual projects, but to a culture in which transit is seen to grow constantly and actively to show that it can be an alternative to some types of auto travel. Announcements are cheap, but nobody ever gave up their third car thanks to an announcement. “Broader public and private sector support will tend to erode unless significant transit/transportation improvements are delivered on-time and on-budget.”. To this, I would add that these improvements have to be delivered where they are seen to have a benefit to more than a handful of riders and property developers, and address existing and growing shortfalls in the system.
The big four of potential revenue tools are:
- Road tolls on freeways
- Regional fuel tax
- Commercial parking levy
- Regional sales tax
In only a few months since the Board of Trade report, the level of proposed taxes/fees has doubled so that each of these would generate not $1-billion (BOT report) but $1-2b (TCSA report). The magnitude of spending required both for capital investment, future operations and local system funding is dawning on people at many levels. Oddly enough, this is not accompanied by calls to rein in transit spending, at least from the point of view that we have vastly too much service and infrastructure.
TCSA argues that any new funding must pass two tests:
1. New funding instruments must be fair, effective, efficient, transparent and accountable, and seen to be so.
2. New funding instruments, or at least some of them, need to do more than simply provide the quantum of funding required for the Big Move; they need to also help to moderate increasing congestion, and possibly achieve stable or reduced congestion levels in some corridors.
I agree that any new funding schemes must be seen to be fair, but I am less convinced that the second option will be achieved in the short-to-medium term given the backlog of construction needed just to catch up with decades of inactivity. Even as we dig our way from one side of the GTA to the other, population growth will add to network demand, and moderately scaled additions will only keep pace, not produce a tangible improvement.
The goal is to make travel around the region easier. Whether this will also accomplish the task of reducing congestion remains to be seen. Transit’s market share is under 10% in much of the GTA. Even a huge increase in transit capacity and ridership will not replace much of the traffic now on the road network and may only serve to relieve existing congestion enough to accommodate some of the latent demand. This is a big marketing challenge for transit financing advocates — how to convince those who would be taxed to pay for transit expansion that the spending is in their interest.
That problem is central to my view that we must avoid demonization of motorists by taxing only those facility which they use through gas taxes, tolls or parking levies. These may be part of the overall revenue scheme, but transit is a general good just like schools and hospitals, and it should be funded out of a broadly based tax stream such as an earmarked regional sales tax.
When we implement these taxes, whatever they may be, everyone must be quite clear on what they will buy, and what they will not buy. If we settle on $2b per year as a revenue stream, we must understand that this will not fund the scope of transit improvements (and any spinoff benefits claimed for them) needed in the GTA. Indeed, that would barely pay for the Metrolinx capital program, and would leave nothing for Metrolinx operations or the funding of local transit systems.
Metrolinx developed The Big Move through various iterations, and the final version was thought to be aggressive at $50-billion over 25 years. Those were 2008 dollars, and we have only just begun to spend them. Early versions of the Metrolinx network were even more costly at over $80b, but this level of spending failed the political acceptability test before it was even out the door.
Any networks and services we consider for The Big Move 2.0 must not be constrained by considerations of affordability, at least in the planning stage. Put everything on the table, including alternatives, rather than filtering proposals to fit within a pre-determined budget. Only then will voters and politicians in the GTA be able to understand what new funding might, or might not, be able to buy.