Paying the Piper

Now that Metrolinx and, presumably, their masters at Queen’s Park have determined that we will build a network of four LRT lines in Toronto, we can turn to the larger question of paying for “The Big Move” and the “Investment Strategy”.  Some Toronto Councillors are already talking about the need for dialogue with neighbouring municipalities in the 905 for a co-ordinated strategy on transit funding.  This is long overdue.

Once upon a time, the Metrolinx Board actually contained politicians, the very people who would undertake this sort of debate and who, when the going got rough, would have to stand up at public meetings defending the plan and dodging the rotten tomatoes.  Nobody on the current Metrolinx Board has to get elected even as dog catcher, much less as a mayor, and the staff are even further insulated by the fact that almost all of Metrolinx’ business takes place in the refined, quiet space of private meetings.

This is no way to build public support for anything.

The term “Investment Strategy” has a comforting feeling that plays to those who like to wrap public works in the mantle of private enterprise.  We will “invest” in the future of transit and of our region.  That’s fine as far as it goes, but “investment” implies capital, something notoriously absent from government accounts in part due to the economy, but in part to the fact we are loathe to tax ourselves for the services we want.  (Or slightly more accurately, we don’t want to pay taxes for services somebody else wants, but we think we will never use.)

One way or another, somebody has to pay to expand and improve transit service given decades of disinvestment in that field.  Toronto likes to think of itself as a “Transit City”, but in fact stopped investing at a rate needed to keep up with population and travel growth decades ago.

The Investment Strategy is often portrayed as something we have to study, to examine, to fathom the depths of public financial options, but, no, the numbers have been available for everyone to see for years.  Metrolinx produced its first report (one without the word “Draft” stamped on it) in June 2008.  It contained the following table showing the types of revenue stream that Metrolinx might tap.


This was back in the days when we were only looking for $2-billion annually over 25 years for a $50-billion Big Move.  Since then, the actual budget has grown thanks to inflation, the recognition that some project estimates were low, the need to factor in operating costs and the likely demands to fund local transit agencies as part of the grand scheme.  We now hear numbers in the $75-100b range, and that will take a lot of tolls or taxes to pay off.

A more recent version of this table was produced in 2011 for the Civic Action Summit, but the changes lie mainly in the size of the numbers, not in the types of revenue.


The important work Metrolinx must perform is to produce the menu of projects and spending options for which any new revenue streams might be imposed.  To that end, the publication of an updated “Big Move” (not expected until late 2012) and the incorportation of spending options to support local transit are essential.

Moreover, Metrolinx must address jurisdictional issues between GO Transit and the TTC to reconcile demand and capacity problems for the core area.  If we are to collect billions in new taxes, they should not be wasted trying to stuff every available passenger into the Yonge Subway.  Some belong on a Downtown Relief Line (and a real relief line, one that goes north at least to Eglinton, not just to the Danforth subway), and many more belong on the many existing and potential GO rail corridors leading north out of downtown.

The GTA must understand what the real cost of bringing transit up to a competitive level where it will actually make inroads into car traffic in the 905, the sources of funding which might be used, and the limitations (financial and operational) on what can be done.  This type of integrated planning is glaringly absent from Metrolinx work over the past years.

The question of new taxes (by whatever name) is on the table, and the discussion must move into the political arena.  This is not a job for anonymous bureaucrats or a board of unknowns meeting in secret.  Indeed, any decision on the provincial side will be taken at Queen’s Park by the Cabinet and the Premier’s Office with Metrolinx providing a comforting rubber stamp and a patina of independence.

Toronto Council should take this debate not just to its own voters, but to the 905 regions so that we can all have an informed debate and build political support for improving transit.

26 thoughts on “Paying the Piper

  1. I would go with the parking tax, but on ALL GTA non-residential parking spaces. They should also change the gasoline tax rate from the current fixed (last changed in 1992) to a percentage. At least the HST is a percentage, but it goes to general revenue.


  2. What kind of input would the Commissioners on the TTC have in this process?

    Steve: As much or as little as they choose. Their role really should be to provide support to Council and to lead the debate as the premier transit operator in the region. Whether they will actually do this, or spend their time ensuring that all the washrooms are clean, I don’t know. Their role is what they make of it, big, small or non-existent.


  3. I love the term “Investment Strategy”. Who do they think they are, Warren Buffet? They are not making investments to earn money to build a transit system. They are looking for revenue sources, i.e. tax streams to get money to build the system.

    I suppose since Duncan wants Casinos to provide Ontario with revenue they could look at investing in new Slot machines and gambling sources. Maybe they could have a slot tied in with the Presto reader, Double your fare or free.

    Since Dalton has said he doesn’t want any new taxes or road tolls we can kiss any more transit good bye. Until and unless the Liberals are willing to look at new revenue, i.e. tax streams, this process is a total waste of time. Perhaps he will wake up to the fact that there is no such thing as a free lunch or a free transit system from all the work done by Metrolinx but I doubt it. I will not be holding my breath while they make up their mind about how to fund transit.


  4. This is a real manifesto, a call to arms. The way this government manages things such as Metrolinx and ORNG shows that it is completely integrated with the out of touch managerial class, so perfectly typified by Rob Prichard himself. These people are so insulated from the real world and so entitled that they are building the ARL purely to serve their own ilk, the ordinary citizens of Toronto and the residents along the route be damned.

    The next target of the reform movement, which has risen from decidedly unlikely ground, should be to electrify the ARL and make it a proper public transit system ab initio, as moved by Francis Nunziata (of all people) and Mike Layton (who perhaps represents the best hope of a powerful progressive leader some years from now). And finally we may be able to move on the absurdly low property taxes paid by Toronto detached house owners as compared with tenants and businesses, along with raising the many other tolls, taxes and levies needed to run a modern, mobile city. The day of the free lunch is over, and perhaps people finally see that. The delusions of the Fords and their enablers are quickly deflating.

    But really, the managerially unaccountable Metrolinx has to go! The ARL fiasco simply demonstrates who it identifies with.


  5. In an ideal world I’d like to see this all go a lot further – transit funding for the GTHA is already a large umbrella, but I would expand it to transportation policy for all local/regional modes in the GTHA, something akin to Transport For London (TfL) in the United Kingdom. As far as I understand, TfL sets policy or directly runs everything from the Tube to the Bixi bikes to the iconic London taxis. To pretend that we can get away with pigeonholing different modes as if they exist in a vacuum is ludicrous – the prime example here in Toronto would be transit signal priority on Spadina. The TTC has the excuse “oh well that’s not our department”. Then it darn well should be (ie, put them under the same roof at least.)

    One entity would also be able to both take tough decisions and better promote controversial policies. A congestion charge would be a great revenue source – but we have to sell all the benefits: faster for drivers who really need to get where they’re going, better for commercial vehicles (consider the wages lost on paying drivers to sit in traffic), etc. I don’t think it will sell in the GTHA solely under the transit banner. Also, I like Jarrett Walker’s idea of rebranding it a “decongestion price”. It just sounds more palatable.


  6. I think we need plans and ideas, even if its blueskying, in order to be able to sell the idea of revenue generation. Matlow’s discussion has already been framed in terms of taxes, not results and is thus going down like a lead balloon … and feeding the Ford anti-establishment fires. That Matlow came out with this in the same week that the Health Board suggested slowing cars down just does not help.

    Like it or not, money follows vision. Talk about a vision that makes sense, even if it’s uncertain and not fully costed, and people will be willing to pay. Leave it as something nebulous, and there will be little support.

    I’m also coming to the conclusion that a bone will have to be thrown to the car only crowd. Include finishing the 410 or something like that.


  7. Highway/road construction and maintenance are certainly parts of the solution; these, however, are already given considerable funding and priority.

    In any case, regardless of the provincial political situation, I think it will be much more difficult to cancel any of the LRT plans a second time. “Subways, subways, subways” notwithstanding, the Fordites have no plan and no credible ideas and the same goes for their erstwhile opposition allies at Queen’s Park.

    New revenue tools should be proposed along with The Big Move 2.0.


  8. Taxes should not be the only solution to pay for transit. There is only so much disposable income a person has. A dollar spent on taxes is a dollar that does not reach a local merchant, restaurant or even a bank account.

    Government should focus on activities that generate additional wealth or bring wealth to a region. When a tourist visits the MGM Casino in Toronto, this is additional money entering the economy. Taxing John Q Public does not create additional wealth.

    Gaming is very effective in raising revenues in addition to revitalizing the local economy. Why can’t slot machines be placed in stations so that the wait for a bus won’t be as boring? Las Vegas has shown what gaming can do in providing much needed funds. If the public won’t allow casinos on land, we can build riverboat casinos on Lake Ontario. This was how the gaming industry started in Tunica.

    There are other ways of raising money without using revenue tools. Hosting nuclear waste facilities will generate additional income at no cost to the public. Same with hosting US Marines or building a nuclear reactor here. A CANDU reactor can never suffer from a melt down and does not produce air pollution. Compared to having the Blue 22 in my backyard, I will take the CANDU any day if it improves transit.

    If the conversation is framed like if we build a CANDU reactor along with 5 riverboat casinos here in Toronto, we can have x number of metro lines built at no cost to the tax payers. The conversation and response will be different. Torontonians cannot expect the Harper Government to fund everything.

    Steve: Torontonians do not expect the Harper government to fund anything. You have made these proposals before, and I don’t have to repeat my position on casinos as a source of revenue. Moreover, the idea that they are some sort of pot of gold has already been debunked by other writers in the mainstream media. Good luck getting anyone to accept a new nuclear plant — we cannot even get a wind farm or a gas turbine plant approved, never mind nuclear. I look forward to your political campaign in whatever riding you choose to be the recipient of your schemes.


  9. The problem is that everyone wants another level of government to pay for transit. Consider this. If Mr. Harper dropped $1 billion on Mr. Ford’s Sheppard extension, construction would start much sooner than 2014. The EA is done, so if the money is there, the contruction can start. This is fact. Had Mr. Ford secure more funding from the federal government, there wouuld be no debate on the Sheppard LRT. This was something that Mr. Ford was staking his political career on. I am neither endorsing or against the Sheppard extension.

    Gaming by itself will not change the transit much. This fact I do accept. No one expects that table games at Woodbine would build a metro line. However, when tied to other measures that are pro gaming, it will make a difference. For example, if the federal government waives visa requirements for Asian tourists, you can bet that Toronto can support something similar to the Atlantic City Broadwalk. With such stimulus, public private partnerships may become viable.

    This is not a pipe dream. Look at the success of Macau, gaming has made the need for a light rail line there a neccessity. The government of Macau is using in fact using gaming proceeds to pay for it. The Las Vegas Monorail owe its existence to gaming as well. Is it the best way to pay for it, it is debatable.

    Right now, the city probably needs another $10 billion (for argument sake) or so to build the Downtown Relief Line, Sheppard West Extension and the Waterfront LRT. There are 3 million residents in the city of Toronto. Spread it over 10 years, that is about $33.33 of extra revenues that must be collected every year. This is for every man, woman and child. The question becomes would extracting this additional money slow down economic growth.

    Steve: I hate to point out that your math is screwed up, but $1-billion per year paid for by 3-million people is $333.33 each. You are out by an order of magnitude. Moreover, you have not answered the most basic question about Sheppard West: is it a good investment compared with other ways we might spend the same capital?

    Put it another way, the property tax for 2012 will yield about $3.7b (the rest of the budget comes from other sources of revenue), and so $1b of extra revenue would translate to a 27% property tax increase. I look forward to your election campaign.

    I’m not saying we would use property taxes as the source, but simply wanted to put this increase in context of another payment we’re already making. If your math were correct, and the increase were only 2.7%, this might be politically saleable, but you slipped a digit and your analysis falls apart as a result.

    Once again, is this the best way, no one knows. Would allowing TTC to charge an improvement fee on every fare purchased be better? I would agree to pay a $20 improvement fee every time I buy my Metropass. At least John Q Public has a choice not to buy the Metropass and by extension not pay the improvement fee. With a sales tax, everyone pays. Or how about allowing the TTC to charge fares so that it can earn a profit? This way the commission can decide what to build as oppose to politicians. Unfortunately, this conversation cannot happen when government power to tax is the only option discussed. I personally do not know what is the best option. But gaming revenues can make the conversation easier with less sacrifice.

    Steve: At $20 a pop, it would take 50-million Metropass surcharges to generate $1-billion annually, or about 4-million passes a month. The actual number sold is an order of magnitude smaller (there are well under 1m unique riders per day — the typical count the TTC cites is trips, not people — and only about half of the adult riders use passes).

    Yes, you could argue that this would be only one of many possible sources of revenue, but again it’s not the only answer, and you will have to explain to riders why they should pay $240 more per year (thereby making the pass utterly worthless compared to single fares for almost everyone) to ride the TTC.


  10. Taxes should not be the only solution to pay for transit. There is only so much disposable income a person has. A dollar spent on taxes is a dollar that does not reach a local merchant, restaurant or even a bank account.

    Government should focus on activities that generate additional wealth or bring wealth to a region. When a tourist visits the MGM Casino in Toronto, this is additional money entering the economy. Taxing John Q Public does not create additional wealth.

    This argument makes no sense and is just the usual kind of right wing claptrap that betrays ignorance of the most basic economics. A dollar spent on casino gambling is also a dollar not spent at a local merchant or restaurant much less a bank account. In fact, it’s probably one of the least productive ways of spending that money.

    Wealth “creation” occurs from asset appreciation (be it real estate, securities, bond, debt, or futures trading) or from real increases in output due to capital investment and labour force expansion. The first form of “wealth creation” is in some sense “unreal” and subject to speculative bubbles and the sort of risky adventurism responsible for the crisis of 2008. The second form is achieved by forms of spending that give rise to capital investment and the multipliers that go with it.

    Building a casino might attract a small number of additional tourists, but other than the initial construction, all it would provide would be some fairly unremarkable hospitality jobs and a nice big locus for problem gambling and all the concomitant social problems. On the other hand, a regional sales tax devoted to transit infrastructure provides ongoing capital investment for system expansion and maintenance and would contribute to operating costs as well (presumably). Aside from the jobs created directly (and all their related multipliers through increased income and thus consumption), there would be considerable improvement in transit flows and – hopefully – congestion, providing more efficient infrastructure. And, yes, that means wealth creation.

    Anyway, you’re just repeating the same tired argument that tax money becomes some deadweight that has no productive use. This is manifestly false and renders your “economic” arguments completely and irredeemably useless.


  11. Agreed, Steve, it belongs in the political arena. Your recent post about LA County should be instructive here. We can debate the merits of putting every proposed tax to a plebiscite, but the fact remains that the citizens of the County not only agreed to their transportation tax, they ordered their representatives to implement it.

    Of course, that was one county, and more recently it seems that the provincial politicians have taken a divide-and-conquer strategy with the GTHA, a behaviour that doesn’t do much for regional policies of any kind. Still, I think you’re on to something when you talk about Toronto reaching out to the 905.


  12. Steve, sometime ago Cllr Kristyn Wong-Tam floated the idea of the creation of a city bank. Her purposes were to help small business and community groups get favourable loans to startup or fund their activities, which is fine, but I think it should be used for a slightly different purpose.

    Hypothetically speaking, if the City of Toronto launched its own bank and could loan itself interest-free loans for infrastructure projects, would this not solve the problem of funding transit in this city? You wouldn’t need to go into debt to fund projects or collect toll revenue, sales taxes or parking fees to raise the capital. The bank would make its money through service fees and charges, mortgages and such, like the big banks, and provide (I hope) better service for customers but the city could borrow from it to fund a DRL or another series of LRTs (for example).

    The additional benefit is the reliance on other levels of government, or schemes (like the Giorgio Mammolitti Memorial Red Light District or the Rob and Doug Ford Memorial Casino @ Woodbine) would be nullified. Toronto would have its own ability to build as it sees fit without having to beg and go cap-in-hand to Queen’s Park.

    Plus, at least Torontonians could get behind the idea of a community bank that benefits the community and where profits don’t go to the “1%” on Bay Street. It’s a win-win. What do you think?

    Steve: At the end of the day, the money to build transit has to come from somewhere, and I am not sure that the City has any business getting in banking, especially on the scale that would be needed to generate, say, a billion in “spare” revenue that could be used to fund infrastructure. You talk of interest free loans, but that money still has to be paid back someday. If, instead, the City would be using the bank’s profits to offset the loans, then that’s a dividend (much as we get now from Toronto Hydro). As a matter of comparison, the TD Bank’s first quarter profit was $1.5-billion. It would take a “Bank of Toronto” ages to get to the scale where it generated a surplus large enough to fund transit projects.


  13. The problem with making the Province pay for it or the Fed’s pay for it, is that realistically it comes from the same source as if the city pays for it, the lowly and slowly going broke taxpayer. While the Province can spread the cost out over more taxpayers in theory, they have more stuff to pay for, to service those additional tax payers, as well.

    I think the real problem is the study ad nauseum aspect of things, Metrolinx has what 10 studies at several million dollars each to answer the question of should we electrify GO that all seem to say the same thing, but hasn’t spent a penny on actually building anything. The city does this too, every 4 years the city tosses out the politicians and hires a new batch, it takes 5 years to plan a line, whether it’s a subway, LRT, streetcar or SRT. This means the city spends millions of dollars on planning, then elects a new council and the next batch throw out those plans and come up with a new set, which cost millions more. It’s really the only problem I have with Rob Ford, he should have looked at Transit City and stated, we have wasted enough money on planning, lets just build the thing, we can bury it later.

    Steve: A related problem is that GO Transit, in its heart of hearts, just wants to run diesel trains, much as the TTC until comparatively recently did not want to embrace LRT. There’s a lot of inertia in the professional staff, not just the politicians.


  14. Given a choice, we all would prefer the manufacturing of high value goods over hospitality jobs. However, any job is better than no job. If Westjet does not order the Q400 turboprops, the whole survival of the Downsview plant could be in question. There is only 100 backlog right now and at the production rate of 10 a month, within a year, Bombardier will have to close the plant. Orion is closing their plant due to lack of orders and Buy America legislation.

    Steve: Orion is closing its plant in New York too. Daimler is getting out of the bus-building business.

    Casinos do generate additional wealth. After the opening Caesars Palace in Atlantic City, additional expansion took place. This is wealth creation. The Centurion Tower added in 1997 created an additional 600 rooms. There is an on going benefit beyond the initial investment. The Pier Shops at Caesars Palace also created additional job opportunities. Can Downtown Toronto support another mall? The answer is probably yes. If we can draw additional tourists, it will be a winning proposition.

    An ongoing surcharge is much more politically acceptable. Do you see people protesting at Pearson YYZ about the NAVCAN fees? No. Whether one flies out of BUF, JFK, ORD or DTW, improvement fees are tacked on. If we can secure an improvement with future revenue streams, contruction can start right away.

    Steve: There is a difference between NAVCAN fees which are unavoidable (unless one travels to another airport) and a large surcharge on a Metropass which, as I have already pointed out, will not bring in anywhere near the amount of money we require. We should not be making riders pay for the capital cost of projects which have benefits far beyond the riders themself.

    $20 extra on a Metropass, I support. On tokens and cash fares, we can add the equivalent percentage to it (which is about 15%). Along with a fuel surcharge, the TTC base fare can remain relatively stable (perhaps tracking inflation). Transit fares should not be politicized. With this mechanism, if fuel prices decrease, fares also decrease.

    Steve: The total cost of fuel and traction power is a bit under 10% of the TTC’s operating budget. A huge change in fuel costs will be needed to make a significant change in the fares.

    This is better than a sales tax. Sales tax can be avoided. Look at how Amazon ships orders to California without collecting state sales tax. Property tax is not fair since people from other regions use the TTC. Should Toronto taxpayers pay for metro improvements so that tourists from Russia can use it? This is debtable. With a surcharge, the user pays regardless of their origin. Perhaps it is more fair?

    According to the AAA, the cost to operate a motor vehicle (a mid size like a Camry) is about $0.50 USD per km. This includes depreciation, tags, taxes, fuel, insurance and maintenance. On a typical 30 km commute, this is already $15 USD one way. There is room for TTC fares to be raised and transit will still be competitive. We just need to make transit as fast or faster and more comfortable than a motor vehicle.

    Steve: Motorists don’t think of the fully allocated cost of a trip because they are going to own their car whether they use it or not. In fact, leaving it the garage may be seen as counterproductive because they’re not getting full use out of the vehicle. The marginal cost of a trip is considerably lower than the fully allocated cost, and then you have to take into account the convenience factor, real and/or perceived, which has an offsetting value to the motorist.

    Also, you should not use motorists as the basis of comparison for transit fares because many transit riders don’t own cars and should not be forced to pay higher fares simply to put them on a similar footing to motorists.


  15. Casinos do generate additional wealth. After the opening Caesars Palace in Atlantic City, additional expansion took place. This is wealth creation. The Centurion Tower added in 1997 created an additional 600 rooms. There is an on going benefit beyond the initial investment. The Pier Shops at Caesars Palace also created additional job opportunities. Can Downtown Toronto support another mall? The answer is probably yes. If we can draw additional tourists, it will be a winning proposition.

    Having been a tourist elsewhere, I can’t recall ever being especially concerned with finding a downtown mall. It’s not like one goes to New York to visit the Toys ‘R Us at Times Square. For that matter, we have a casino on the waterfront in Halifax, but I don’t even know how much of a draw that is. It’s certainly no reason to come to Nova Scotia and sticking a casino in Ontario Place is no reason to make the trek there either. Frankly I have very fond memories of going there when I was a kid with my dad and enjoying the waterpark and the massive playgrounds (to say nothing of the flume ride and the Megamaze!). The fact that it’s proposed we turn a highly family-oriented attraction into a place that literally profits from “sinful” behaviour is just a bit too much for me to take. Toronto did not become a great city by trying to emulate Atlantic City or Vegas.

    The kind of “wealth creation” you’re talking about is barely a drop in the bucket in a city with hundreds of new condos being built, most of which have street-level retail/businesses. There’s no great compelling need to build a mall downtown.

    And, no, sales tax cannot be avoided, as it is most certainly applied to online orders. It’s not like Amazon and the like are unable to figure out where you live thanks to your billing and shipping addresses. It’s true that years ago they seemed to have a problem applying the relevant VAT, but that has not been the case for a long time. More to the point, VATs are often preferred since they are actually among the most difficult taxes to avoid. Even the wealthy can’t!

    Of course, no one has raised the possibility of reversing the Harris era income tax cuts even a bit. Though considering that might bring in an additional $10 billion per year, it would seem a rather much wiser solution that the harebrained austerity of the Don Drummond.


  16. Benny Cheung says:
    April 28, 2012 at 11:03 am

    “Casinos do generate additional wealth. After the opening Caesars Palace in Atlantic City, additional expansion took place. This is wealth creation. The Centurion Tower added in 1997 created an additional 600 rooms. There is an on going benefit beyond the initial investment. The Pier Shops at Caesars Palace also created additional job opportunities”

    Have you been to Atlantic City recently? I would not use that as an example of anything positive. Outside of the glitz of the Boardwalk and the casinos the town is a dump. Even the Donald sold his casino there.

    Casino jobs are mainly low paying service industry jobs that do not create any real products that generate real wealth. In fact their “all you can eat buffets” and other stores tend to rob clients from surrounding areas and create economic dead zones just outside the casino area. Next time you are in Las Vegas or Atlantic City travel in the area about a mile from the “strip” and see what the real city looks like, crap.

    Listen to one of the left wing radical loony pinko long haired creeps like me or Steve or Josh Gould. Just because we have views that do not follow Reagan or Thatcher does not mean that we are communists.

    Steve: Apparently I was described in the Post recently as a special interest left-winger. Considering that I have no financial interest in what we do with our transit system, and my goal is only to improve the quality of life generally in Toronto, that’s a bit of a stretch. Mind you, those for whom every opponent is automatically a pinko commie have a rather limited ability to appreciate subtleties of policy debate beyond their own self-centred, tax-cutting, business-can-do-no-wrong attitudes.


  17. Internet stores can routinely avoid paying the relevant sales tax. This is why a regional sales tax would not work. I can buy something at an Alberta online store and have it shipped it to Toronto while paying 5% GST. With Mr. Harper increasing the tax free exemptions for cross border shopping, we do not want to decimate retail stores here.

    The Supreme Court made a ruling in 1992 regarding this. The case is Quill Corp. v. North Dakota, 504 U.S. 298 (1992) . This ruling has not been reversed yet. In short, His Honor William Rehnquist ruled that a store must have sufficient physical nexus in order to require it collect sales tax. An online store does not have have sufficient physical nexus since the only connection to the customer is a common carrier (like a courier delivering the product).

    By the way, I am a pragmatic realist. I have never attacked anyone based on their political views. There are no permanent majorities as Alexis de Tocqueville states. My opinion is simply that we must grow the economic pie so that competing interest can be accommodated. I want a Shinkasen network from sea to sea, but I also want to make sure that our economy is large enough to build it without making any hard decision.

    If I frequent a restaurant in the new Toronto casino, there will be no additional wealth created. Unless, the food I ate can make me stronger or think better, but this is not case. Also, if I purchase a shirt from the casino mall, there is no additional wealth created. However, when a store can attract foreign tourist to visit, then it is a wealth generating activity. Those transactions earn much needed foreign reserves for this country. In the case of Casino Nova Scotia Halifax, if the cruise ship patrons visit the casino, it is positive to Canada’s trade account.

    Steve: I think this discussion has gone on long enough. The idea that we would not impose a sales tax because some internet stores might find a way to evade it is poppycock, akin to suggesting that because some people can shelter income in various offshore tax havens we should, therefore, abandon income tax.

    The idea of casinos as a major source of income has already been discussed and debunked in the mainstream press and I don’t have to prove that argument here.

    The total income of the Ontario Lottery and Gaming Corporation for 2010 was $6.3-billion of which $1.7-billion remained after expenses. The Ontario government already takes $1.6b of this income, and that’s for the whole province. The slice that would be left over for new transit projects from a new casino would be trivial.

    Please note that NO further comments on this debate will be posted.


  18. The design of a road tolling scheme needs to be fair to avoid alienating drivers, and needs to minimize the spillover onto non-tolled roads, which by necessity will limit the amount of revenue that a road tolling scheme can generate. Tolls should only apply during times of day when roads are congested (primarily rush hour, and potentially low off peak tolls on 401, DVP, and Gardiner which see significant off peak congestion, and free at night). Any tolling scheme should not charge extremely high off peak rates to maximize revenue like Highway 407 does, which result in the 407 being used far below capacity during off peak periods, and severe off peak congestion on parallel routes like Highway 7. A road tolling scheme ought to be used in combination with a 1% sales tax because of this.

    A package of GTA-wide taxes (rush hour road tolls, sales tax, etc.) should be put on a referendum to be held during the next provincial election, using a mechanism similar to Los Angeles. These could include projects like:

    – Downtown Relief Line/Don Mills subway (phase 1-Union to Eglinton, phase 2-Eglinton to Finch)
    – Upgrading Eglinton and Sheppard to full subway (costly, but in my opinion needed)
    – Yonge line extension to Highway 7
    – Various GO projects (Lakeshore, Milton, Georgetown etc.)
    – Bus improvements
    – Road maintenance and expansion


  19. Many years ago after the amalgamation of Toronto took place, there was something called the Greater Toronto Services Board. GTSB was supposed to sit down and discuss regional and cross-regional issues – planning, transport, waste management, etc. – and coordinate solutions.

    GTSB was apparently so dysfunctional that no one could save it … not mega-Mel or Hurricane Hazel…because it was an overlarge, bloated organization with too many people who were only looking at the interests of their own regions, in an atmosphere of inter-regional and municipal-provincial hostility.

    Nearly 20 years later, can we say that things have changed much? The cities are still “doing their own thing” when it comes to planning, transportation & managing growth. GO & Metrolinx are doing as little as possible to connect the regions, and no one seems ready to have the debate about transit service and fare structures that the GTA desperately needs to have.

    But perhaps there is one piece of good news – transit use in the 905 is changing, with significant increases in demand. I know that demand in the 905 regions is a fraction of what it is in Toronto, and the local agencies+GO offer a fraction of the service that Toronto gets.

    But there are some positive examples, including improvements in services connecting to GO stations, the restructuring of major bus routes to focus on main-line corridors (rather than traveling through subdivisions), and more recently, the provision of express bus services like ZUM & VIVA.

    Perhaps it is time to have that discussion, after all.

    Cheers, Moaz


  20. With all this talk about new pricing schemes to fund megaprojects (some of them needed, others plain vanity), I would warn against politicians prescribing what projects should be prioritised without first consulting City Planners and Engineers who run the system.


  21. Steve and others, have you read the road toll article in Maclean’s of Jan. 2011? I think Andrew Coyne did a consummate job examining the objections to pricing roads. Obviously written from a conservative perspective, it considers the implications for transit — though you have to read right to the end.

    This excerpt gets at the issue of charging to use all streets, not just highways:

    “Indeed, the system works so well, the question arises: why not toll  …  every road? Obviously this couldn’t be done with toll booths, or even gantries. But with satellite tracking technology, familiar to anyone who uses a GPS, it should be possible to apply the Singapore model comprehensively. Tolls would no longer be discreet events, but more like your phone bill: the price you paid to use the road system, much as you pay to use the telephone network. The tolls would vary dynamically, according to the time of day, the distance travelled, the type of vehicle and so on. Satellites, moreover, could be used to update drivers on the prices of different roads as they came up; route-planning software could be used to predict the costs of alternative routes.”


  22. What are your thoughts on general transit improvement taxes/tolls/etc. vs. project-specific ones?

    It seems like US cities often impose taxes dedicated to a project (imagine a “Don Valley Subway Sales Tax” or a “Big Move 2.0 Parking Surcharge”). If the public supports the specific project, this may be a simpler sell than a generic “transit expansion” charge… and maybe would help get around cynicism on a new tax in a region where people (somewhat understandably) complain that nothing ever gets built.

    And while it’d be a shame to lose the revenue as the tax sunsets (when the project is paid for), it can always be replaced with an equally-sized tax for the next big project.

    Steve: The problem with a project-specific charge is that this leads inevitably to project-specific rather than network-based planning. Who living in Durham wants to pay a tax to fund a line in Hamilton? Who in Barrie wants to fund a project in downtown Toronto? If we are going to have a regional tax (or a tax that effects everyone in the region, one way or another), then the revenue stream has to benefit the region.

    Imagine if we asked people to pay hospital-specific taxes to fund health care?

    And so to answer your question, no, I do not support project-specific charges.


  23. Hey Steve,

    When the Eglinton and Scarborough LRT lines were through-routed, the SLRT was supposed to run elevated along the same structure that supports the current ICTS trains. According to the recent maps, the SLRT is now supposed to run at grade. What happened? Will this be directly up Kennedy now?


    Steve: The Scarborough line will use the existing alignment — at grade from Kennedy north to Ellesmere Station, and then on the elevated east to McCowan. The problem is with the maps, not with the plans.


  24. I find your stance that transit planning should move more into the political arena completely foolish. We have witnessed what happens when politics is intertwined with sound urban transit planning; or are you conveniently forgetting the antics of Rob Ford and his allies?

    I never thought you would want more lies, deception and untruths about transit planning in the GTA, because that’s what you’d get if politicians are totally in charge of this.

    Having said that, Metrolinx needs to be less subservient to their political masters. It should have more autonomy and authority to make sound, informed and fact-based decisions on transit. Right now it is woefully lacking a backbone (witness the MOU fiasco and then the recent turnaround to come back to their senses).

    Steve: Your view of Metrolinx (or any comparable agency) is hopelessly naive. The moment we start spending public money, the process is inevitably political either in plain view (like Rob Ford) or hidden behind closed doors (like Metrolinx). That MOU was a product of Queen’s Park and Rob Ford, not Metrolinx who simply went along with the deal. Metrolinx is effectively a department of the Ministry of Transportation and should not be expected to give independent advice — that’s how the provincial government works.

    My call for political involvement is to recognize that it is an essential part of getting any new transit plan and funding plan accepted publicly.


  25. If there is any hope for progress in transit development we will need to avoid miracle cures and talk realistically about funding, planning, building and operating a system. Some of the funding solutions make as much sense as Swan Boats do in discussing vehicle selection.

    Start with discussing the needs and benefits. A good transit network improves the liveability of a city, reduces pollution and wasted time in traffic congestion, and creates choices in travel planning. Property values are enhanced and quality of life is improved. It is true that some benefit more than others, but that is true for all things in life. Remember that even a car driver benefits, as a bus or streetcar full of riders means fewer cars in front of him, and fewer people grabbing parking spots. I appreciate that my teenagers can get around the city without me either buying cars for them or turning myself into a taxi driver.

    So if we can sell the fact that transit is worth having, then we know who pays for it. It is us, the citizens of “Toronto”, however we define that. It will never be a case where “We benefit and someone else pays.” Federal funding is not helpful, due to political complications. If we need (say) $500 per person per year, we are not going to have taxpayers in Edmonton and Montreal pay for our subways. The federal government needs to at least pretend to treat provinces and cities fairly, so they would have to prove they are spending the same amount of money for urban transit across the country. In any event it is just our money being taxed and returned to us.

    Similar arguments apply to provincial funding, but the provincial government at least is in charge of the cities in the province, and can levy a province-wide sales tax. It does have the provincial political complication of a “what about my city” complaint. People love to hate Toronto.

    Currently the role of Metrolinx would be to take the delivery out of the hands of city governments. This is somewhat helpful, because the current city boundaries raises the objection that the City of Toronto should not charge its taxpayers for a service that benefits the entire GTA, and there is no GTA-wide government. If we think politics at City Hall is bad now, try to imagine a long-term funding agreement between Toronto, Peel Region, Brampton, Mississauga, York Region, Durham Region, and the various municippal governments.

    There are complex layers of government, but one level of citizen-taxpayer. So if we calculate $x dollars per taxpayer per year for the next (say) 50 years, and if we agree to the amount, then we discuss collection methods.

    Property taxes hit homeowners and renters in a direct way based on market value of the homes, but there may be a problem with ability to pay. Some are wealthier than others.

    Sales taxes are based on one’s volume of purchases, so if one has financial problems, they can cut back their expenditure level. However unless the sales taxes are levied over a wide area, they just drive buyers to cross-border shopping. Province-wide is best, presuming the provincial government is on side.

    Income taxes can address the ability to pay, but like sales taxes require provincial support.

    Gas tax is just a poor subset of a sales tax. A 1/2 cent tax on all items is better than say 20 cents per liter on gasoline. Plus taxing gasoline has a way of inflaming tempers of drivers against transit riders.

    Road tolls have the same divisive effect politically. They look like punishment for one segment of society to benefit another segment. When I pay a toll to cross a bridge, I can drive across the bridge I am paying for. When I pay a toll so someone else can ride a subway, I will fell ripped. Also the only viable city roads for tolls are the DVP and Gardiner Expressway, and that only impacts a portion of the drivers.

    Casinos, OLG profits, restaurant taxes, and all other such schemes look like “get rich quick” schemes. They just pretend we are getting something for free, when we are not.

    The bottom line is that this will cost us money. We could raise the fares by (say) 50% right now, and generate a surplus from transit riders. Then the TTC could be spending its riders’ money on serving its riders. If that puts the rates into the “kill zone” we could lobby the province for 1% or 1/2% of the HST revenues to be used for funding to municipalities for transit, province-wide.

    Once we establish how much money is available on a permanent basis, we can get down to planning how that money can be spent.

    Until then, all that will happen is lots of talk and no action.


  26. I suppose I should put Benny Cheung’s mind at ease: WestJet today announced an order for up to 45 Q400s, and it is possible that Air Canada will now be obliged to order some to respond to this development. (Back in 2006, WestJet’s Clive Beddoe described Q400s as follows: “Those things spinning around at thousands of revolutions per minute just past your nose just scares the bejesus out of people” which is FUD Rob Ford would have been proud of as he tries to persuade people streetcars are more dangerous than buses).

    I’ve thought for a long time though that the Q400 line closure or relocation would have had a silver lining for the City by opening the way for a massive transit oriented development on the airport lands – perhaps even dense enough to justify a Sheppard Line extension from Yonge to Jane or even the 400/CP Bolton.


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