Zero Percent Is Not Acceptable

Recent press coverage of the opening salvos in Toronto’s 2013 budget process tell us that the Budget Chief, Mike Del Grande, is trying for another year in which he, the Mayor and the City Manager dictate a zero percent increase in city funding to all agencies.  This is not playing well with some members of Council according to The Star, and with some luck this will extend to boards of agencies like the TTC.

The dynamics of Council have changed since the 2012 budget launch a year ago when the Mayor and City Manager issued a zero-percent edict and drove through cuts to many city services while claiming a massive, if fictional, deficit threatened the city’s integrity.  Trying for a repeat performance may play well as part of the already-in-progress 2014 election campaign, but such an attempt runs counter to the will of many on Council.  This is a delicate time for management at the City and its agencies like the TTC, and the leadership for a different world view must come from Council and the agency Boards.

This will not be as easy as holding a press conference to announce a $30-billion plan for a fairytale network of rapid transit lines that would be paid for through as-yet unknown future taxes and contributions from other governments.  This is the real world where the City and its agencies must raise real money from existing revenue streams today, must make decisions that will affect real service levels today, must be prepared to fight for policies that will deliver results today, not decades in the future.

The Operating Budget in Brief

The Operating Budget covers the day-to-day cost of running and maintaining the transit system.  Major repairs, new vehicles and infrastructure come out of the Capital Budget (about which more later).  Generally speaking, expenses and funding cannot be moved between the two budgets.

2012 Budget (Revised)        Operating     Wheel-Trans
                               ($m)          ($m)
Farebox & Other Revenues      1,069.9           5.3
Expenses                      1,444.0         100.2
Subsidy                         374.1          94.9

2012 Projected

Farebox & Other Revenues      1,076.6           5.3
Expenses                      1,447.4         101.4
Subsidy Required                370.8          96.1
Subsidy Available               374.1          94.9
"Surplus"                         3.3        (  1.2)

Source: CEO's Report for April 2012 (Published June 2012)

The projected figures are always different from the budget for various reasons.  The most common is that expenses never work out exactly as expected due to actual conditions including unexpected changes in major cost centres such as fuel and vehicle repairs.  Some details are in the CEO’s report (see compendium of links at the end of the article).  Revenue is affected by ridership, but can also be hurt or helped by fluctuations in advertising and rent revenues.  While these are small numbers in the larger budget scheme, all of the political debates about transit funding revolve around such small amounts and discuss service cuts or adds in millions of dollars.  A bad year for ad revenue coupled with a Council unwilling to backstop the loss with subsidies translates to worse service for riders.

The 2012 budgets were amended twice.  In June 2012, Council approved increasing the regular expense budget by $2.1m to provide additional service beginning this fall with funding to come from increased revenues.  Earlier, when the Commission was still dominated by Ford-friendly appointees, an attempt by Council to fund $5m in added service was thwarted by the Commission who diverted the funding to Wheel-Trans.

The Problem With Wheel-Trans

The TTC faces a particular problem with Wheel-Trans.  Already it has non-recurring funding of the $5m snatched from the Operating Budget, and it faces cost pressures that are not offset by the revenue stream.  A 5% bump in Wheel-Trans costs might reasonably arise from a combination of the already-awarded labour settlement and provision for added service.  That would push the total Wheel-Trans expenses up by about $5m making the shortfall to be filled in 2013 about $10m.  If fares go up by 3.85% (a 10¢ bump on the adult fare of $2.60), this would bring only about $200k.  Most of the difference must come in subsidies.

However, Wheel-Trans has already been through debates about the extent of its service both in the number and type of customer in will serve.  Flat-lining the City subsidy at the original 2012 level would require a 10% cut in service.  The TTC is hoping to find an alternative funding source for transport of dialysis patients, but this is a band-aid solution that avoids a fundamental debate about what Wheel-Trans should be doing.

Wheel-Trans should not be funded by yearly raids on the regular operating budget, and Council must decide on the rider base and service quality they are prepared to fund.

How Many Riders Should We Plan For?

Meanwhile on the regular Operating Budget, we already know that the TTC is planning for ridership of 512-million in 2012 and 520-million in 2013.  This gets us into to the problems of budget vs actual numbers.  The budgeted ridership for 2012 was 503m, and the 2013 projection is 3.4% over that number in line with actual growth.  However, the starting number should be the probable ridership of 512m which a 3.4% increase would bring to 529m.

In the past two budgets, the TTC has squeezed more capacity out of the system by changing the Service Standards:

  • In 2011, a standard for economic viability was introduced requiring that a route carry at least 10 riders per vehicle hour during a scheduling period to remain in operation.  This triggered cutbacks and service elimination on many routes, particularly on Sunday evenings.
  • In 2012, the standard for vehicle loading was changed to increase the peak period target capacity for bus routes by 5% and the off-peak target capacity for frequent bus routes by 25%.  This rolled back the effects of the Ridership Growth Strategy.

This type of fine-tuning has its limits because it cannot be repeated to gain more notional capacity on the system every year.  At some point, the TTC has to run more trains, streetcars and buses to carry more riders.  Even putting more people on the roof has its limitations.

Moving to larger vehicles can have some benefits, although again this is a one-time change (albeit one that may take several years to fully implement).  However, the benefit from articulated buses and larger streetcars will not be seen on the TTC for several years, and meanwhile the TTC and City must face the financial pressures of the TTC as it is.

An Operating Budget for 2013

Operating Budget Pressures for 2013 ($m)

Probable expenses for 2012           1,447.4
Add 3% for inflation / COLA             43.4
2012 adjusted for inflation          1,490.8
Add 3% for ridership growth             44.7
Expenses for 2013                             1,535.5

Probable revenue for 2012            1,076.6
Less Miscellaneous Revenue              67.0
Farebox revenue                      1,009.6
Add 3% for ridership growth             30.3
Revenue before fare increase         1,039.9
Add 3.85% for fare increase             40.0
Farebox revenue for 2013             1,079.9
Miscellaneous revenue                   67.0
Total revenue for 2013                        1,146.9

Subsidy required                                388.6
2012 budgeted subsidy                           374.1
Additional subsidy for 2013                      14.5

TTC budgets are somewhat more complicated than this summary might indicate, but the basics are here.

  • The increase I have allowed for inflation in labour and materials (3% across the board) is conservative and is lower than the TTC’s own projection.  If actual numbers are higher, then the projected subsidy will also rise.
  • The increase for service is at the sort of level I believe the TTC should be providing, not at a “make do” level that tries to stuff more riders into “spare” capacity on the system.  I have applied the increase against all TTC costs, although in practice some of these do not vary with ridership at this level of change.  For example, central functions such as financial control and human resources are unlikely to be expanded, but these are a comparatively small part of system costs overall.  Physical infrastructure such as subway stations does not grow.  My allowance for higher costs is generous on this count.
  • Ridership growth is at the actual level relative to 2012 probable figures, not the lower budget number.
  • The fare increase (10¢ on a base of $2.60, or 3.85%) is assumed to have no effect on ridership based on recent experience.  I have made no adjustment for higher uptake of pass media by frequent riders.  To the degree that more rides are taken by people with a fixed transit cost, this could reduce fare revenue per trip.  Total revenue is trickier because more new riders may come into the system at higher average fares such as tokens or cash.
  • Miscellaneous revenues are not projected to rise in 2013 according to the TTC’s 2012 budget report.  Therefore, they are excluded from the calculation of revenue growth, and then added back in as a separate item above.

The fundamental problem of TTC budgets and the City’s desire for flatlining is that revenue growth is on a smaller base than expenses.  Even if everything goes up by, say, 3%, this must include the subsidy.  That is before any provision might be made for better service to respond to growth in riding or any initiatives intended to encourage travel by transit.

In the table above, the growth in revenue is $70.3m versus a growth in expenses of $88.1m.  The difference, $17.8m, is partly offset by the 2012 “surplus”, $3.3m, giving a budgeted subsidy increase in 2013 of $14.5m.  (The spread would be greater but for the fare increase that will be at a higher rate than the inflationary number used for the expenses.)

Added to the Wheel-Trans shortfall, we are looking at about $25m additional subsidy to the TTC on the City’s operating budget based on the assumptions and calculations here.

To put this in context, the City’s budgeted revenue from property tax in 2012 is $3.7b, or 39% of the total budget of $9.355b.  (See 2012 budget presentation at page 30).  A 1% increase in these taxes yields $37m.  (The actual percentages vary depending on the class of property with a higher jump going to residential classes, and a lower one to commercial classes.  This is part of the ongoing rebalancing of tax levels that has been underway for several years.)

The Future of Larger Vehicles

The TTC will begin its migration to articulated buses over coming years with the purchase of a small fleet later this year (delivery delays will probably mean service changes will likely occur in 2014), with an option for many more.  This order is roughly the equivalent in vehicle capacity of two years’ worth of normal 40-foot bus purchases.

The operating cost per rider will go down provided that the additional complexity of the artics do not lift vehicle operating and maintenance costs disproportionately.  It will take several years’ experience to determine whether this actually happens, and a related issue will be the integrity of the vehicle frame and major subsystems where costs may not show up in the early years.

Similarly, the new streetcars, twice the size of the standard CLRV, are planned to enter revenue service in late 2014.  There is no experience with these cars to indicate how much of the saving from a higher passenger:crew ratio will be eaten up by higher operating and maintenance costs.

With all new vehicles, high costs in early years can be masked by warranty coverage, in effect transferring maintenance costs for a time to the capital budget (warranties are part of the capital cost of the vehicle).  If the warranty expires, but the vehicle still has an ongoing problem, this represents a net new cost a few years into the vehicle’s life.  It is vital to look at operating costs and potential savings over a timeframe long enough to capture this sort of issue.

In theory, the number of operators required for artic buses should go down by about 1/3 presuming a 2:3 replacement ratio of vehicles.  The streetcar ratio would be even “better” from a budget standpoint.  However, strict replacement of vehicles on the basis of capacity may cause service to get markedly worse because irregularities that are annoying at current service levels will become positively unbearable.  This speaks to the problem of line management — with short headways and more vehicles, line managers don’t have to do much work to maintain vaguely good service — with longer headways things are not quite so simple.

Originally, the TTC claimed that it would not replace CLRVs on a 1:2 basis with the new LFLRVs, and some early projections of vehicle allocations to routes shown with the mockup LFLRV indicated significant improvements in line capacity.  Now they are not so sure, even though latent demand is a big problem on the streetcar lines.  For many years the fleet has not been able to accommodate peak period increases, although there is substantial population growth on some routes that shows no sign of letting up.  Off-peak demand is also rising, but service improvements have been hamstrung by budget constraints and the focus on peak, commuter travel.

If the introduction of artics is used not just as a cost saving measure, but as an opportunity to add capacity, then part of the “saving” of artics will go into better service.  Most businesses would consider that a good policy, but transit in Toronto operates by strange rules.  Remember how, originally, the TTC planned to scoop all of the savings from faster trips on the St. Clair right-of-way by running fewer cars rather than better service?  This is not a new problem.

If larger vehicles are used to add capacity on major routes, and if the TTC really focuses on managing these routes to provide reliable service, the combined effect will be to the riders’ benefit.  The TTC might even save some money although not as much as a straight capacity-based swap might suggest.  However, if the TTC looks only at reducing headcount without the possibility of redeploying some of the savings in better service, then Toronto will remain a land of budget-based rather than service-based transit.

Fleet and Service Level Planning

The TTC fleet plans for buses, streetcars and subway cars have not been published for a few years.  The assumptions on which they are built were imperfect before, and now have many problems.  These will affect both the Capital Budget and the ability of the TTC to actually offer more service to riders even if Council were willing to provide the operating subsidies to do so.

One side-effect of dropping back to the pre-Ridership Growth Strategy loading standard for buses was the elimination of one year’s bus order and the plans for a new garage.  If your standards say you can fit more passengers into a bus, you don’t need as many of them, although 3% annual growth in demand won’t let you maintain that fiction for long.

TTC bus fleet plans also presumed that new LRT lines would start opening in the next few years reducing the requirement for buses on related routes.  Thanks to Queen’s Park’s funding shuffles, the LRT network will open much later than expected, and the bus fleet must continue to serve the LRT corridors at a time riding on the system as a whole is growing.

For the streetcar fleet, the TTC reduced the size of the car order by about 10%, but it is not clear whether this is an absolute reduction, or merely a postponement into a budget beyond the 10-year window shown for purposes of estimating the City’s debt requirements.

The TTC must produce updated fleet plans for its surface vehicles together with their assumptions about future riding and service requirements so that the Commission and Council can debate budgetary projections on a meaningful basis and understand the effect changes might have.

On the subway, at the end of the current TR trainset order, the TTC will still not have enough trains to operate the entire Yonge-University-Spadina line with only TRs, and they will have a surplus of T1 trainsets for the Bloor-Danforth and Sheppard lines.  This situation comes from planning for what was once a unified fleet and the assumption that some T1 trains would remain on the YUS.

Expanding the fleet so that the YUS can be entirely operated with TRs requires not only more trains, but also more storage.  Various schemes may provide this including a proposed online yard in Richmond Hill (or an alternative version between Finch and a future station at Cummer).  The common point in all scenarios is that there are unbudgeted capital funding requirements lurking in the TTC’s subway plans.

Capital planning may seem a long way from next year’s operating budget, but what we will see in time will be projects jostling with each other for funding, and competing with the higher-profile goodies like new subway lines for attention.  If the surface fleets are too small, proposals to improve service may fail simply because we don’t have the vehicles to operate them.  Such is the legacy of the penny-pinching Ford/Stintz years at the TTC.

Where Do We Go From Here?

Zero percent is no solution to anything.  Already, it has brought us two years of makeshift cutbacks in service through processes with diminishing returns.  The assumption is that there is always more to cut, and no thought is given to what happens when those cuts harm the system more than they help it over short-term policy problems.

TTC management and the Commission present budgets cut to the targets asked by the Mayor, and offer no alternatives, no “what if” numbers to inform Council of the cost of taking a different path.  This is not acceptable.  Management work for the whole City, not just the Mayor, and Council should demand a menu of alternative budgets.

Council should also demand a review of the degree to which options are constrained by the combination of ridership growth, cutbacks in fleet plans, and a focus on new rapid transit projects to the detriment of day-to-day operations.

Ideally this initiative should come from the Commission itself.  Now that we have a “new” Commission supposedly free of dictates from Mayor Ford, will we see such independence?  Will the Commission actually talk about how Toronto might once again build its transit network, attract riding and aim for strong growth in the coming decade?

Or will the Commission content itself with self-congratulatory TTC “good news”, with cleaner washrooms, and with press conferences for plans we will never see?

That’s the challenge for the “New” Commission.  The 2013 budget process will show us what they really care about.



26 thoughts on “Zero Percent Is Not Acceptable

  1. To be clear, the increase in operating cost from a fleet change isn’t an inherent cost of operating such a fleet itself, but as a result of the transitioning from one maintenance practice to the other, correct? In other words, if we see a spike in operating costs when the new streetcars and articulated buses arrive, it’s because of the new training and rewriting of maintenance procedures during the transition period, but once the transition is over, activity levels should resume to normal levels as before.

    Steve: In theory, any new fleet should be cheaper to maintain and operate than the one it replaces because the old one is at end of life and is inherently unreliable. However, this is not always true as we saw with the CLRV/ALRV fleets that had severe teething problems, and with the hybrid buses, among others. Warranties paid for as part of the capital cost eventually expire, and the idea is that by this time any one-time fixes should have already happened leaving a happy, low-maintenance fleet. If this is not what actually happens, and costs are still high after a few years, then the problem goes deeper. Particularly bad examples of retrofits were the H6 series of subway cars whose trucks had to be replaced, and the failing batteries on the hybrid buses.

    Problems can also be introduced by design complexity. The PCC car was built to be simple to maintain and to have a typical cycle time through the shops of one month. I don’t think the CLRV/ALRV fleets ever achieved the same level of reliability as the Toronto PCCs managed when they were 20 years old. Over past decades, there seems to have been an evolving acceptance that vehicles won’t be as reliable because of the complexity of new technology. That says something about our priorities in an age when we throw away things rather than expecting them to be repairable at a modest cost.

    Also, I’m still boiling mad at Queen’s Park for screwing around with the construction schedule. In effect, the Liberals gave exactly what Rob Ford and the anti-transit advocates have always wanted: no meaningful transit improvements for as long as possible. When will people call these Liberals the monsters that they really are? Sorry, but this is exactly what it looks like to me, because I don’t care what Queens Park’s excuse is, and neither do transit riders.

    Steve: A related problem is the extended period for deciding how to fund “The Big Move”. Metrolinx holds endless consultations about possible new revenue streams, but has yet to produce a plan (or versions of a plan) showing exactly what they might pay for. People will want to know, give or take five years, when they might see “their” improvement to the transit or road network. Part of the discussion of new taxes must include the tradeoffs between the amount of revenue collected and the pace at which new infrastructure can be added to the system. Of course we have this fiction that the poor construction industry is so stressed out we cannot build at the rate we would really like to see. “We can’t spend money quickly because there’s nobody to build it” is a poor excuse for policy and leadership.


  2. Can you plan your own household budget to have a 0% increase in expenses? What happens to your planned expenses when you find out you plan on having a baby, but turns out to be twins or triplets? 0% increase, but what about fuel costs, they continue to go up. 0% increase, but what about the drought that increases food costs? 0% increase, but the roof is starting to leak, need to replace the shingles?

    Mike “Numbers” Del Grande wants to make a deal that everyone can’t refuse. However, the result will be an decrease in services because the expenses he has no control over will be going up over 0%. The problem remains that his “godfather” does not use city services that most of the rest of us use.


  3. Who really determines whether transit improves in Toronto?

    A: The provincial government.

    Who benefits from no transit improvements?

    A: The auto industry.

    Who is the provincial govt in bed with?

    A: The auto industry.

    We will never get transit improvements. Until maybe the Star exposes the corruption at work — and then maybe 25 years after that, when a new generation who grew up on roads too crowded to want to learn to drive takes over.


  4. And while this is all going on, the 10% cut that the Toronto police were supposed to come up with this year magically vanishes. Frankly Steve, I don’t see anything close to the necessary budget planning outlined here happening in this city until at least after the next municipal election. After all, this is the same administration that can’t help but use an asterisk every time they say “across-the-board”.


  5. Wheel Trans is a major expense due in part to its unreasonably low fare structure. Door-to-door service ought to warrant a higher than normal fare. Not necessarily taxi rates but something extra. Double fare would still be a fair rate.

    Steve: Wheel-Trans would under your proposal still only recover about 10% of its costs, and an extra fare would be regarded as discriminatory for those who cannot use the regular system. We can argue all you like about the level of subsidy, but anything near the cost recovery of “regular” customers would cost Wheel-Trans users a fortune.


  6. Well as the City manager can’t enforce an edict like this without approval from council, that isn’t worth the paper its written on.


  7. Here’s my proposal to fund Wheel-Trans:

    Right now, a car driver with a handicapped placard gets free all-day car parking on Toronto streets. This system is riddled with fraud. Well over 90% of the people I see with my own two eyes using free handicapped parking look perfectly able-bodied to me.

    My proposal is that we derail this particular gravy train and make all car drivers pay equally. Then use the revenue generated to fund Wheel-Trans.

    Steve: You will need to generate close to $100m per year to fund Wheel-Trans from this source. That’s a lot of bum parking permits.


  8. Well over 90% of the people I see with my own two eyes using free handicapped parking look perfectly able-bodied to me.

    You can’t tell if someone is handicapped simply by looking at them. A friend of mine has a prosthetic leg. If he walks too much in one day then he simply cannot walk the next day, as the stump will be too painful to take his weight. If he’s wearing long pants then you can’t see anything different other than a slightly unusual gait.


  9. To Kevin Love –

    As someone with a handicap (not enough to qualify for a Handicapped Permit – the parameters are pretty narrow), I know that not all disabilities are visible. For instance, I walk using a cane, but I can walk a reasonable distance. There are those who might appear to be perfectly normal but have a heart condition or breathing problem that could lead to serious problems if they couldn’t park, or be a passenger in a car that parks, in a handicapped spot. What you see isn’t always the whole story.


  10. Kevin Love said: Here’s my proposal to fund Wheel-Trans:

    Right now, a car driver with a handicapped placard gets free all-day car parking on Toronto streets. This system is riddled with fraud. Well over 90% of the people I see with my own two eyes using free handicapped parking look perfectly able-bodied to me.

    My proposal is that we derail this particular gravy train and make all car drivers pay equally. Then use the revenue generated to fund Wheel-Trans.

    Steve: You will need to generate close to $100m per year to fund Wheel-Trans from this source. That’s a lot of bum parking permits.

    There is certainly room to improve the handicapped parking permit system in Ontario, but as Steve points out, will it raise the funds that Wheel Trans needs? There are also some other issues like the fact that many people who have handicapped parking permits may not be visibly handicapped … or they may be physically able but providing a driving service for a handicapped person you do not see. Just as an example, my father is in his sixties with diabetes, arthritis, and other medical ailments. On a good day he can walk 100-200 meters by himself. On other days he needs a walker or wheelchair. On really bad days he cannot pull himself out of bed. Now, if you saw him walking out of a handicapped space on a good day you might think he was a freeloader. Or, if you saw me parking the car in the handicapped space so I could transport him you might think I’m a freeloader. But that wouldn’t be the case.

    Now, there are some ways to improve the system. Get rid of the 5 year permits, make them renewable along with your license plates (every 2 years maximum). Institute a $5 fee per year etc. The problem here, of course, is that the revenue must be enough to offset the Ontario Government’s cost of collecting the fees and be able to pay the funds Wheel Trans needs.

    Steve: The premise behind all of this is that the existing scheme leads to many “freeloaders”. What are they getting for free? A priority space in a parking lot. Possibly immunity from tagging in an otherwise illegal street parking spot. How many such permits are actually “out there” and what problem do we solve by having them expire more quickly or instituting some sort of regular “means test” that the permit be continued?

    Now, I do have another thought that has been rolling in my head for a while that would lead to better & more stable revenue for public transit in the GTA:

    Convert the Express Lanes of the GTA 400-series highways, as well as the Don Valley Parkway & Gardiner Expressway east of Lakeshore into Express Toll Lane + HOV Routes using the same overhead camera + transponder system that is being used on the 407 ETR.

    Currently there are Express+Collector lane systems on the following routes:

    401 between Brimley & Weston
    401 between Highway 427 & Hurontario
    403 between Highway 401 & Eglinton
    404 between Highway 401 & Sheppard Ave
    427 between Eglinton & Queensway
    Gardiner Expressway between Kipling & Humber Bay

    In addition, the 400 has 6 lanes between the 401 and Major Mackenzie Dr. so it could be divided into 3 lanes express + 3 lanes Collector.

    Bayview & Don Mills can be considered reasonable alternatives to the Don Valley Parkway, and Lakeshore Boulevard a reasonable alternative to the Gardiner Expressway east of the Humber.

    The reason I think this would work is that it provides choice. Rather than all-or-nothing tolls, drivers who wish to pay a reasonable toll would have access to the E]xpress Lane Toll Routes while drivers who would not wish to pay a toll would have 3 options: Carpool (using the HOV lanes), using public transit (using the HOV lanes), or use nearby ‘free’ roads … collector lanes or alternative roads.

    Money from the Gardiner & DVP would go to Toronto for public transit costs, while money from the 400 series highways would be split between Metrolinx and the local municipalities (Mississauga, Toronto, and perhaps Vaughan & Markham)

    In most cases there is already “express-express” and “collector-collector” interchanges between most of these highways, so the majority of the cost would be for the toll collection infrastructure and administration.

    I obviously don’t know how much all of the infrastructure & toll collection & maintenance costs would be, but I do believe that they would be less than the revenue from toll collection. I also believe that using the Express Tolls + “Free/lower-cost” Alternates would be perceived as more “fair” than simply putting tolls on all highways around Toronto without encouraging public transit and giving drivers more choice.

    Your thoughts are welcomed. Of course, since this is Steve’s blog I defer to him if he is interested in having this discussion.

    Cheers, Moaz

    Steve: It does not matter what sort of scheme you impose as a toll for the highway system, it’s still a toll. Dressing it up with a lot of stuff about “choice” presumes that there is enough surplus capacity to allow the sort of shuffling between lanes you propose. That’s not possible on many parts of the highway system. Complexity in any new revenue collection system is simply going to increase the implementation and operating costs while, possibly, alienating users. Also, as I have written before, what is it about motorists that makes them such prime sources of new tax revenue? Tolls maybe (although I would want to see the effect of spillover to local roads), but let’s cast the net wider than just people who drive, many of whom will be the last to benefit from transit improvements they are asked to pay for.


  11. Regarding charging Wheel Trans users higher fare. It is not discrimination to charge more for more service. Door-to-door is more service than the majority of transit users get just as there is a higher fare for certain Express routes since they provide more service in the form of a faster ride. No need to eliminate the entire deficit, just reduce it somewhat. Otherwise what is going to happen is fewer people will be able to use it as funding will be cut one way or another.

    Steve: What is being sold is mobility, and in the case of most of us, that includes a walk to the local bus or streetcar stop. For those where it does not, door-to-door service is provided, but then only for a small subset of the trips users might take. Imagine if you had to prove you were disabled enough to use the subway, and had someone tell you that, sorry, you are fit enough to walk to work, so piss off and let us run fewer trains.


  12. If maximum automobile parking of 0 were imposed, rather than the current situation of minimum automobile parking, the availability of handicapped parking spaces would be reduced, resulting in WheelTrans being not as underutilized as currently (the maximum number of passengers I have observed on the vehicles is two). Active transportation and TTC would also become more competitive than the automobile in certain instances.

    Steve: The idea is not to drive up the usage of Wheel-Trans. Getting rid of handicapped spaces as a way to drive usage is counterproductive. Don’t forget that Wheel-Trans tends to serve repetitive trips, not ad hoc ones for shopping, etc. Also, many people who are entitled to disabled parking permits are not eligible for Wheel Trans.

    Frankly I am finding this entire discussion quite disgusting.


  13. I think the problem is that the Provincial Government no longer pays its fair share of subsidy. Not only because it created a funding gap in the TTC budget, but also because it is the only funding partner that is able to issue debt in order to pay for operating costs (a luxury that neither the Municipal Government nor the TTC have.)


  14. Okay, I’m curious: what does it take for a tax increase to be accepted by practically everyone? What does it take for a failing management system to change, not just to cut whatever qualifies for “waste”, but to grow intelligently, to find real, continuous operational savings, rather than reinventing how many sardines we can fit into a can? Why is it that we study something to the point that if we finally implement it, we’re barely catching up to everyone else?

    No one should be expecting a subway system the size of London or New York, or the commuter rail systems of most of Europe. That said, doing nothing but talk will do one thing: others will pass us by.

    The Big Move isn’t perfect, and as needs change, so will the plan, but seriously, we need to stop pretending that both Toronto and our neighbours aren’t growing. The excuses we’ve all heard just don’t hold up anymore. Not enough construction workers? The condo market is softening. The technology is untested? Plenty of places use all of it already. Expensive? Infrastructure attracts businesses, and we need more of all forms of it.

    Bit of a rant, but I’m not seeing what is stopping us from having +0.1%< growth.


  15. I have to admit that the budget sleight of hands over the last two years has left me a little confused. Sadly, (or happily) this blog is one of the few places that you can get objective analysis of alternatives to the official line.

    My question to you Steve is what happens in 2014 if we have a new administration that is really transit oriented and wants to make improvements not unlike the RGS or the Transit City Bus Plan? How far out of whack are the numbers now? I think the annual cost of the TCBP was 58 million a year by 2014 when announced, but I’m assuming that didn’t take into account the delay in Transit City, so how many garages are we going to need?

    I find it very hard to ever know what the bottom line is in this city!

    Another question revolves around how hard would it be to increase the streetcar order to enable it to keep up with ridership? You have commented about the TTC turning away demand on the streetcar system, what size of fleet would be necessary to handle the demand you speak of? In trying to gauge that question I came up with 329 cars, including spares.

    Steve: In the short term, the TTC can handle the growth by keeping old vehicles on the road rather than retiring them. There will be a long period of overlap for the streetcar fleets anyhow, and the real question is how many CLRV/ALRVs can be kept working until the “out years” of the contract when any additional cars would be delivered. The bus fleet is in a similar situation, but has the added problem of garage space. TTC was looking at some temporary storage for buses, but when the bus plans were cut back in the capital budget, this was no longer an issue.

    I am hoping to get updated fleet plans from the TTC so that this discussion can continue as part of overall budget planning. By the time a new administration comes in, we will be at least two if not more years back from where we might have been.

    On the bright side, there are many service improvements coming in October. I will post info about this once I get a chance to digest it all and format the info.


  16. Steve wrote about handicap parking permits,

    “Possibly immunity from tagging in an otherwise illegal street parking spot.”

    Only in Toronto. The response is amazing when occasionally someone with a permit parks in an illegal spot in Peel, York, or Durham and receives a ticket.


  17. Tolls maybe (although I would want to see the effect of spillover to local roads), but let’s cast the net wider than just people who drive, many of whom will be the last to benefit from transit improvements they are asked to pay for.

    I agree with the principle, but I think tolls, implemented in a manner where local side streets wouldn’t help those who’d try to avoid paying tolls (for which there are a few different approaches), are part of the solution, but so are higher transit fares (while allowing for subsidized passes for those that need it, to which I think Hamilton is on to something).

    Both road and transit systems are subsidized by at least 30% (and that’s the TTC’s approximate subsidy – the road network’s subsidy as a % is higher based on online Gov’t of Canada figures), and both systems have serious challenges for SOGR on the horizon, as the Gardiner is reminding us all in no uncertain terms. If taxes aren’t going to provide the needed funds for whatever reason (to which many choice words may apply), the only reasonable alternative is to get the needed funds from the system users directly.

    If a resource is provided by a method where its cost to use is unrelated to consumption of the resource, people will not think about how they consume that resource, and by extension/as a consequence, will overuse that resource. Tolls deal with that problem on the road network. Whatever method is adopted, though, there generally shouldn’t be any free rides for anybody (besides obvious exceptions like emergency responders etc).

    The gas tax has devolved into an anachronism that has no future with the way vehicle technology is shifting, and should be retired as tolls are rolled out.

    Tolls won’t fund transit (and there’s a strong argument to be made that they shouldn’t fund transit anyway), but they would change behaviour, and probably population patterns, too – both towards something more sustainable. What is currently spent subsidizing both systems, however, can be redirected to capital expansion if tolls and fares look after (nearly?) all operating and maintenance costs.


  18. Jamie said: I have to admit that the budget sleight of hands over the last two years has left me a little confused.

    In fact, budget sleight-of-hand (or hands) has been going on for decades at City Hall. I guess that, since amalgamation more people have been paying attention, and the arrival of a mayor who appears to be a polarizing force has just appeared to up the urgency.

    Sleight of hand will continue long after Mayor Ford’s term is over.

    Calvin Henry-Cotnam wrote: Only in Toronto. The response is amazing when occasionally someone with a permit parks in an illegal spot in Peel, York, or Durham and receives a ticket.

    My mother used to park in the visitor’s parking area (regular or handicapped spaces, as available) of our townhouse complex because she could not climb up the stairs from the underground garage. She would remind me to put the car away for her … and in many cases, there would be a ticket on the car before I could even get to it.

    I think the reason drivers with permits are ‘exempted’ from paying if they park in non-handicapped spaces is the idea that they shouldn’t be blamed if there aren’t enough free spaces available. Not sure how that gets them ‘free’ parking but I guess that’s part of what is happening.

    Cheers, moaz

    Steve: And in any event, the abuse (or not) of handicapped stickers by motorists has nothing at all to do with transit.


  19. This is getting off the topic of the cost of Wheel Trans services, but to clarify…

    Moaz Yusuf Ahmad said,

    “My mother used to park in the visitor’s parking area of our townhouse complex…”

    That would be private property and the rules of who can park where are somewhat up to the complex (with certain exceptions such as properly marked handicapped spaces or fire routes). I was speaking of the parking bylaws in Toronto that allow all sorts of exemptions. In the early 90s, I worked downtown and walked daily down Victoria Street to get to Union Station. Every day, I noticed a car parked on Victoria near Adelaide on a stretch where there was no parking permitted at all. This car never got a ticket because it had a permit. I had wondered how a handicap parking permit allowed someone to park where no parking at all was permitted, and found out that the permit permitted this. In a similar way, Toronto’s street parking permits for overnight parking on a street allows one to leave one’s vehicle there during the day when there is a 3-hour maximum.

    Outside of Toronto, handicap permits only permit the vehicle to use a designated handicap space. Nothing else. Unfortunately for people used to Toronto’s flexible rules, they can get ticketed parking outside of Toronto in a spot that Toronto exempts them from.


  20. The only real solution to the transit funding problem starts first with bringing fiscal federalism in line with post-NAFTA, and what will become post-CETA realities. There exists within the current model of taxation a good deal of inefficiency and misallocation of funds. Second, provincial and municipal governments must realign their taxation system to promote investment and productivity.

    If the reader says to themselves that the system is fine as is. I would like to point out that the Bank of Canada has kept interest rates at unnaturally low levels for a long time, and all they have to show for it is an economy that is barely getting by, a society that displays significant levels of socio-economic polarization, and systemic poor productivity growth. What happens if there is inflation and the interest rates need to go up? Will Toronto still be able to attract skilled labour?

    Transit funding and a healthy productive society both require strong public policy, without it they atrophy and die. Given the current cultural disposition of both the provincial and municipal governments transit funding is contingent on the potential for population growth. If there is no growth the funding will disappear. There is a good chance that within the next 10 years the existing economic system we will face an inflationary period. Sadly, without public policy to promote economic competitiveness the population will likely contract making the need to expand public transit redundant.

    There is one iron law regarding public policy, “the piper ALWAYS gets paid.”

    Steve: There is one flaw in your analysis that even current events show up, let alone the prospect of a future inflationary period. Already we see growth in transit use that is driven not by population (although that’s part of it), but because people are moving to transit when it exists in sufficient quality and quantity to be attractive. Politicians (and by extension society) must be prepared to pay more for transit, even from a fixed pie — one that does not generate new revenues without any effort — or face increased personal travel costs and reduced workforce mobility. This requires us to spend whatever funding we have on transit we need, not on pet projects.


  21. Steve:

    Already we see growth in transit use that is driven not by population (although that’s part of it), but because people are moving to transit when it exists in sufficient quality and quantity to be attractive.

    Although I fully agree with your position on the obvious increase in current transit ridership, the question is why has it increased? As you and a wide body of facts have indicated, much of the ridership increase is associated with the economic downturn; people are accepting a lower quality of life because they can not afford otherwise. The increase in transit ridership is fundamentally derived by an increase in poverty. Sadly, poverty begets poverty. As socio-economic poverty increases so does transit poverty.

    A very important implicit assumption that is imbedded in your reply is that the current economic situation is cyclical and that with increased government outlays the economy will eventually return to its normal growth patterns. I will spare the reader a large catalog of reasons I feel the Ontario economy is uncompetitive, in short only with significant public policy initiatives can the economy regain its competitiveness.

    As for transit, most initiatives were barely able to get support in good times; now in poor times with increasing challenges ahead it is even less likely that there will be an increase in transit funding.


  22. “As you and a wide body of facts have indicated, much of the ridership increase is associated with the economic downturn; people are accepting a lower quality of life because they can not afford otherwise. The increase in transit ridership is fundamentally derived by an increase in poverty”

    Every other economic downturn has been associated with a decrease in ridership. Also, ridership was increasing during the boom years before the downturn.

    That suggest that the ridership increase hadn’t been caused by the downturn, but something else, like higher gas prices and better transit service.


  23. A response to Darwin O’Connor,

    I find your observations interesting and to a degree factual, however I disagree with your analysis and the imbedded implicit assumptions you make about our society, economy and business philosophy of the TTC.

    First let us look at your assumption that the increase in gas prices is causing people to take transit. I can not disagree here, however I raise the question of why has it had such an effect? If we assess the average accountant or lawyer, or the average middle class wage earner who drives a car we find that the increase in fuel costs represent a very small percentage of their yearly income, the increase in fuel price therefore has a negligible affect on their life. When we consider the relationship between car and transit in economic terms as the relationship between a normal and inferior good we will find that the given increase in fuel prices is unlikely to cause the shift in ridership that we have seen. So if those middle class and above are not responsible for the rise in ridership it leaves the bulk of ridership growth to those who are most sensitive to fuel price fluctuations, the poor. Poverty begets poverty. For this reason I do not believe there will be an increase in transit fund related to this source of ridership growth.

    Second, unlike other growth cycles a good portion of the city’s growth this time was condo related in the downtown. A reasonable growth strategy in my opinion, however macro economic factors will put significant pressure on this strategy in the next couple of years. Because of this I do not believe that it is likely that we will see any significant note worthy transit growth related to condo development over the next decade.

    Regarding the business philosophy of the TTC I feel that its services must be delivered in a consistent and reliable way. Services must be delivered in a way that builds trust and confidence between the service provider and the consumer. This is to say that if service is increased, the level of service can not be decreased at the first sign the buses are not running full. But is the TTC willing to make a funding commitment of this nature? Here I must be the pessimist; the problem with the TTC is not so much those that run it but how it is affected by the classic Canadian cultural disposition towards risk aversion. Risk aversion is the single biggest factor limiting an increase in transit funding, trumping all other factors mentioned above. So for this reason it is unlikely that there will be any new funding for transit.

    So my suggestion to the reader is this, if you like transit improvements and other grand projects that will benefit society you must learn to be BOLD and to encourage those around you to be bold as well.


  24. 1 – What are the requirements of the Ontarians with Disabilities Act regarding paratransit (Wheel-Trans)? I know the ADA in the US, but I don’t know the Canadian law.
    2 – if it’s like American law, a big deal is lack of level boarding platforms on trains and streetcars; this creates a lot of “valid” paratransit trips which would not be valid otherwise.
    3 – again, if it’s like American law, ‘travel training’ helps a lot.
    4 – and the result is, in the US, that what’s left are a huge number of dialysis patients, and a lot of people with serious mental disabilities who can’t afford full-time aides. Transport for people in these situations *really* ought to be funded out of health care funding.

    As an aside, if another source is found for dialysis patient transport, that may help a *lot* more than you think.

    Steve: Actually, Wheel-Trans in Toronto likely exceeds ODA requirements and is more extensive than in other cities. This is a side effect of Toronto’s having better transit generally. The political and funding debate is always about the level of service and whether a client is “disabled enough” to qualify.

    Platforms are an issue for the streetcar system, but not for buses and subways, and the streetcar situation is being addressed as part of the move to low floor cars. The larger problem is that many riders are not mobile enough to reach a transit stop, especially in bad weather, or to negotiate transfers between routes on their trip.

    A major issue with dialysis patients is that they may be mobile enough to use the regular system for some trips, and for their “to” trip to dialysis. However, the return trip home happens when they are recovering from the treatment and cannot use the regular system. Yes, this should be covered by health care, but it’s not. This gets us into the usual municipal-provincial funding battles because the city pays for Wheel-Trans while the province pays for health care.


  25. “When we consider the relationship between car and transit in economic terms as the relationship between a normal and inferior good”

    It’s not, though. I think this has to do with the rise of electronic devices. The car is an inferior good to someone who wants to use their cellphone or Kindle or iPad.


  26. While I generally agree with your ideas Steve, I want to point out a few things:

    1) TTC ridership has increased – this is true, but why has it increased? Because TTC has become more efficient? Or providing better service? Or because they increased ridership fares without any justification? The answer here is ‘NO’. In many other cities in the world TTC would have been bankrupt by now or shut down or really replaced by other transit operators. In Toronto, it is like a dictatorship: the law is such not to allow another operator to take a bite, but TTC has to manage all. Instead, it would have been much better to have multiple operators OR some routes to be given on concession, in other words kind of a PPP thing (public private partnership) But Toronto is quote rusty in this matter. People have no choice but to use transit and hence the ridership has grown. The other choice is to use autos, but traffic jams are nightmarish.

    Steve: You are mixing two issues here. You say that the TTC gets more riders because there is no alternative, and by implication that alternative would provide a more attractive service. However, ridership is growing in spite of what the TTC is doing. As for your comment about the TTC being bankrupt or shut down, that’s an odd statement considering the very high rate of farebox operating cost recovery. I personally don’t agree with it being as high as it is, but that’s hardly the mark of a bankrupt system.

    2) The problem lies the way the entire TTC network is developed. It is rather developed, based on coverage, but not on frequency service or rather channelization. Only two (2!) subway lines provide the entire movement of a huge city like Toronto east-west and north-south. Obviously a planning strategy for times when Toronto’s population was 300,000 not 5 million or so. More major transportation channels are needed and some bus routes definitely need to be cancelled or converted to rush hour only; makes no sense to have a bus running with headways every 30-40 minutes during the day like an extra-urban service, while at the same time having another route relatively close running much more frequently.

    Steve: As a percentage of the total system, the number of bus routes running half-hourly headways is very small. The savings from cancelling them would vanish in less than one year’s inflationary increase in costs, and then you would have to find some other target. There is a policy issue here: how far should someone have to walk to get to transit, and how long at most should they have to wait for it. If one takes the attitude that those unlucky enough to work or live in an area that does not generate much riding can fend for themselves, well, yes, we would cancel some marginal services. The problem comes in defining what is “marginal”. My definition would probably be more generous than yours.

    By the way, there are two north-south subway lines the last time I looked, not one. Yes there should be more capacity into the core, but I would argue that part of this should come from commuter rail, not subway expansion. These are two different markets.

    3) Articulated buses and streetcars – YES, Toronto should have purchased them long time ago. Again, I can’t think of another large world city with single buses and streetcars. Even the current design of the single buses and streetcars is terrible: only two doors and all passengers boarding through the first door. Proof-of-payment system is the only feasible solution for Toronto and also for any articulated buses and streetcars: how do you expect for 150-200 people to board an articulated bus or streetcar through the first door only? Articulated buses and streetcars result in reduced costs and more efficient service: less drivers and staff and definitely less air pollution and congestion. But another problem here again: very sharp horizontal curves and confined end loops. Most of Toronto’s current routes are not suitable for articulated buses and streetcars: some buildings will need to be demolished to free up space for larger turns.

    Steve: I should point out that we already have articulated streetcars capable of running anywhere on the streetcar system. As for artic buses, we used to have some, and more are on the way. I don’t remember any case where a route they might serve was physically incapable of handling them beyond basic problems such as bus bays being too short. Your argument is way off of the mark.

    4) Overall, the biggest problem in Toronto is the fear of change. Or in other words, the conservatism regarding public transit that if it has been done so far in the last 50 year or so, why should we change. A very conservative approach. I’ve lived in quite a few countries in 3 different continents, and Toronto is really one of the most conservative cities regarding new ideas and innovations.

    Steve: I will agree with you up to a point, but the bigger problem is that many people (and I suspect you are included here by the tone of your argument) would concentrate on wringing small scale savings from so-called efficiencies, but would object strenuously to paying for a better transit system. “Respect for taxpayers” does not mean “spend less money”, it means “spend wisely” so that what we get is demonstrably worthwhile.


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