On July 12, the Toronto City Summit Alliance (TCSA) held a round table at Wychwood Barns to discuss their recently published paper on transit funding. Please refer to my first article on this topic for details.
The round table added nothing to what we already know on this subject, but did provide insight into public policy debate here in the GTA. Although this was officially a TCSA event, it was clearly at the service of Metrolinx who had a strong presence. Rob Prichard, Metrolinx CEO, gave opening remarks. As I have already noted, John Brodhead, Metrolinx VP of Strategy & Communications, co-chaired the working group behind the TCSA paper. Other Metrolinx staff were scattered through the crowd, some as facilitators at tables.
Invited participants included activists of varied backgrounds, a few politicians, professionals from government and industry, representatives from various business groups, a few from the media, and others from the collection of “usual suspects” one sees at this type of gathering. The idea, the hope, was that the collected wisdom of this group might inform future debate and recommendations about how to proceed.
Rob Prichard’s Eight Questions
In his opening remarks, Prichard posed a series of questions that showed the difficulties Metrolinx must wrestle with in developing a funding policy. Ooops, no, it’s not a policy, it will be a proposed policy, and it won’t be ready for three years because Queen’s Park doesn’t want to talk about new revenue tools while fallout from the HST, the eco-fee and who knows what other schemes and scandals still glows radioactively.
Here, in a paraphrase from my notes, are Prichard’s questions:
- Should funding just look after capital costs, or also operations? Should only regional costs and systems be included, or also local ones?
- Should we build what we need to make up for decades of inaction, or build to shape future travel behaviour?
- Should new revenues be used to build only transit, or should road projects be included?
- Should a single revenue source pay for everything, and a marketing campaign focus on getting approval for that source, or should a package of revenue tools be used?
- How can we engage the public to support paying for additional spending?
- How can we eliminate the “third rail effect” of any new revenue proposals for politicians?
- How can the debate be framed as a benefit to both drivers and transit riders, rather than as a competition between the two groups?
- Should any new revenue stream be subject to a referendum, and, if so, could we win?
This is a very good set of questions, but sadly, like so much “public participation”, the meeting had already been structured to discuss things a different way, and we never really got to most of the hard issues.
Missing in Action
Discussion of the role of the private sector, of outside investment, of possible ownership roles beyond government agencies, has completely vanished. Our mission was only to debate how to pay for things, not how to finance them.
This is an important distinction. When Metrolinx first talked about an “Investment Strategy”, the very name of that project clearly implied that money would, possibly by magic, appear to fund massive expansion of transit in the GTA. A few things quickly got in the way of this something-for-nothing approach to transit.
- The bottom fell out of the financing market, and the house of cards on which so much planning was based collapsed.
- Public sector accounting rules changed, and the idea that one could hide debt in external agencies or private “partners” no longer was acceptable. If the government has an iron-clad agreement to pay down debt directly or through a leasing arrangement, that’s public debt and must be booked as such.
- The private sector is not quite so awash with cash as it once was, and wants a guaranteed return for anything it might build. The relatively limited exposure of a design-build contract has advantages over the unknowns of a long-term operating and maintenance contract.
- PPP debacles elsewhere, notably the London fiasco, have alerted the public and governments (at least those who are not ideologically blind) to the concept of risk. Private companies can and do make business decisions that may not be in the public interest up to and including walking away from their commitments. The cost and complexity of protecting the public’s need for continuity and quality of service transfers much risk away from the private sector.
- Pay-as-you-play has the attraction of avoiding debt and its long-term costs. We could build up a mountain of debt, but would then be paying interest on that debt rather than building and operating new transit lines. The flip side, however, is that we can only build what we can afford from current revenue. Where is the balance point between how much voters will bear in new fees and taxes versus the frequency of ribbon-cutting ceremonies for politicians?
That we are still talking about an “investment strategy” at this point is almost comic, and only makes sense in a context where politicians recognize that the “investment” is by the public, one way or another. We are going to build and operate billions’ worth of new transit systems and services, and this must be seen as an investment in the health and prosperity of the region, not as an expense to be deeply buried as far away from public view as possible.
Comments and Contemplation
Each of the many tables held about ten participants. We listened dutifully as groups of speakers outlined the issues from their various points of view. The most entertaining of these, and the last, was Peter MacLeod who gave an hilarious talk about how not to conduct public participation. Sadly, those who designed the event had not been exposed to his wisdom.
The speakers were divided in two groups, and after each of these, we turned to questions that had been set in advance. The first pair of questions was:
- What is the best case for investment in transit and transportation infrastructure?
- What is the best way to communicate it to the various audiences concerned?
It didn’t take long for our table (and others, as I heard later) to veer away from the set questions. Both the Toronto Board of Trade and the TCSA, itself composed of many business and government and academic notables, have raised the call for more investment in transportation as an essential tool for regional growth. Transit is no longer something we do for “everyone else”.
Therefore, the “case” for investment and the political message won’t appeal to altruism, to concern for the poor families who have only two cars and are transit dependent for occasional trips, but to fundamental business interests in the future of the GTA.
The implications of accepting that there are limits to car-oriented travel are profound, and yet a critical issue, land use, was not even on the table. In many ways, we have given up on hoping that land use will ever be directly controlled because too many politicians (and their constituents) depend on a never-ending supply of vacant land for new construction. We have built the suburbs, and there is as-of-right zoning for lots more of the same. The challenge now is to provide the means of travelling through this sparsely populated region.
I say “sparse” because, compared to other metropolitan areas with populations over 10-million, the GTA is smeared out over a vast area of southern Ontario. We like to think of ourselves as a “big” city, but that’s an artificial construct compared with places like New York or Paris. Toronto could tout a population of 20-million if only its reach extended from the prairies to the Atlantic, but the hubris of such a claim would be obvious even to those who live here.
The case for investment is actually rather simple: there is no room for more cars in many parts of the GTA, and expansion of road capacity is unlikely. Those cars are getting in the way of commercial traffic, and congestion is no longer just something we hear about in traffic reports. It hurts the bottom line.
Moreover, the cost of private vehicle ownership is prohibitive for a large and growing population who cannot depend on high-paying jobs to sustain a late-2oth century boom lifestyle. We can abandon the city, the region, to its fate, or we can try to improve transportation where this is feasible.
How do we communicate the worth of transit? For starters, we might actually follow the scheme set out in MoveOntario2020. Queen’s Park would bravely invest in new transit lines to show people what could be done, and with that solid base of support, we would turn to the question of revenue generation. Show people that you can build projects they want and need, on time and on budget, and the rest follows easily. That was the plan.
Queen’s Park got cold feet. First they discovered that the cost estimates were a tad low, and their seed money wouldn’t go as far, literally, as they had hoped. Then the bottom dropped out of the financial market, and the idea of new debt as a stimulus, a lure to future spending, was elbowed aside to deal with a recession and widespread concern about Ontario’s ability to pay its bills. Of course, one reason we can’t pay our bills is that we have told voters they don’t have to pay taxes, and this leaves large-scale new levies for transit projects in a difficult place.
We won’t have anything to show for Ontario’s seed money until about 2014 when the Sheppard LRT opens. The Spadina extension, not strictly a new project in the MoveOntario context, opens in 2015. We won’t see Eglinton until 2020. GO will introduce some new services, such as the St. Catharines extension, but these are comparatively small change in a regional context. How, meanwhile, are we supposed to drum up public support for new transit funding streams?
Population and auto growth will continue, traffic congestion will grow much worse, and many of the projects now underway will do nothing to relieve this. Indeed, even if we build transit in the 905, this will at best keep up with growth, and congestion won’t get any better.
The second pair of questions was:
- Which revenue tools have the greatest potential for funding regional transportation plans AND gaining support of decision makers and the public?
- What steps need to be taken to engage decision makers and the public in serious and productive discussion of the potential funding sources?
Positions varied at my table, but there was general agreement that we should not waste our efforts on schemes that would bring in small amounts. We need anywhere from $2- to $4-billion every year more or less forever. One time revenue sources, and those that generate only tens of millions simply are not going to provide the funds we require.
The arguments needed to engage anyone in this discussion turn on the problem, literally, of the road not taken. What happens if we spend the next decades hoping that the Tooth Fairy will fix everything? We certainly know what the past decades of inaction have cost us, and this will only worsen as the surplus capacity, such as it is, of existing networks is consumed while travel demands continue to rise.
The question, then, is which revenue tools are the most suitable and the most acceptable to the task. Now we bump into philosophical problems. Some would use a variety of taxes on motorists, highways, cars and parking lots. This is an odd way to build a transit system — ask your competition to pay for it and expect them to quietly hand over their cash. This approach is justified by some as a way to influence driving behaviour and shift motorists onto transit. Hmmm. What transit? Transit cutbacks are the news of the day, not transit expansion, and what new lines we have don’t address a fraction of the GTA’s auto demand.
We speak of “investment” in transit as a benefit to the region, and this argues for a broadly-based revenue source, either general revenues (as today) or an expansion of sales taxes. Something tells me that the 2011 provincial election will not be fought on a pledge to raise taxes, and this discussion will stay in the realm of hand-wringing activists and non-governmental organizations for some time.
(I was unable to stay to hear what, if any, consensus the meeting reached as the TTC’s regular board meeting began early in the afternoon. I missed the concluding speeches and the sandwiches which, I am told, were rather good.)
Where is the Leadership?
Politicians love programs and schemes that fit neatly into one electoral cycle. Run for election, get a few promises rolling at least to the point of having a ribbon cutting or two, announce a bunch more plans, and repeat the process.
Transit only works like that when you have many projects in the pipeline and you spend at a rate guaranteed to bring something to completion every year or so. That costs a lot of money, unless your political ambition is no higher than an endless series of parking lot dedication ceremonies.
Ontario, going right back to Bill Davis, loves to claim that it has wonderful pro-transit policies for the GTA. From time to time this is even true, but the dedication to transit is uneven and unpredictable. Funding for local operations has been drying up for years, and our cities are expected to provide service to get riders to and from whatever regional lines Queen’s Park deigns to operate.
Many complain of the Spadina extension to Vaughan (and a complementary plan for the Yonge line to Richmond Hill). However, the Spadina proposal has been around for a long time, and dates back to an era when GO Transit had no love for vastly improved service. GO has not exactly rushed to provide frequent, all-day service to Barrie or Richmond Hill, although this is finally part of Metrolinx long-term plans. If GO won’t rise to demands, then it’s no surprise that people north of Steeles demand subway extensions.
Before this sets off a firestorm of subway vs commuter rail debate, yes, I know that there are different markets. The problem with GO is that it preferred to operate a network where losses were few, and passengers were already queued up waiting for the first train to arrive. This skewed political demands to seek alternatives. Imagine how differently the regional network would have evolved had GO been properly funded and pursued an aggressive campaign to build the network we only glimpse now in “The Big Move”. Ontario talked a good line, but starved the very system it built and put its name on for expansion and operating funds. Transit followed development rather than leading and shaping it.
Now the business community awakes to the importance of a transportation network both to move their employees around the region, but even more critically to move their products. If roads are full of commuters, the trucks (and the factories they represent) don’t work productively. This brings us to a basic problem — claims that transit will remove congestion from roads are hard to prove, and the time frames are so long that other factors such as population growth and economic cycles will cloud the statistics.
The GTA is growing quickly, and unlike less robust regions, is unlikely to see an immediate effect whenever a new service begins to operate. The cumulative effect of more transit will be, at best, to keep congestion from getting any worse, and to provide some alternatives for travel within the region. I say “some” because the current modal share for transit is trivial. Getting it up even to the level the TTC now achieves in the outer 416 will require a huge shift in transit quality, let alone pushing to the heights achieved in mid-town Toronto.
Many, no most trips will continue to be made by drivers in cars, many with no passengers. All that transit investment won’t mean much to them, and there’s the difficulty in selling drivers on the concept that they should pay billions to expand the transit riders’ network.
Will Queen’s Park champion spending on transit? Will they work to convince voters that more spending, and, yes, more taxes or fees, are essential to the economic future of the GTA? Or will they spend just enough to limp from election to election, the transit equivalent of filling potholes?
Advocacy and real belief in transit is a hard road. Local transit gets by with whatever funding local councils choose to provide, and only Toronto has expanded service aggressively even as funding dried up. Voters want lower taxes, and too many see transit as a waste, not an essential part of urban life. Some voters know they want something better and, thanks to travel and immigration, many have seen what good transit can look like. A few shiny new trains scattered through the rush hour don’t impress quite the way they did back in 1967.
Ontario must reverse its attitude to transit spending and expansion as something we can only afford when times are good, and then only to the degree needed to polish our pro-transit reputation. Queen’s Park must actually lead, challenging and difficult though this may be, to inspire voters that large-scale transit spending is essential to the GTA.
Workshops by well-meaning business and community groups may be testing grounds, but they are no substitute for commitment and advocacy in the government itself.