More Metrolinx New Math (Updated)

Updated June 8, 2013 at 12:05pm:

Metrolinx has issued a correction via Twitter (where this discussion started) clarifying that, yes, it is person-years of employment, not jobs, that they are creating, and acknowledging that the graphics and tweets using them were “shortened”.

Anne Marie Aikins ‏@femwriter

… Report explains “person yrs of construction & LT employment” pg 30. Graphs/tweets shortened. Good reminder. Thx

[Anne Marie Aikins is a Media Relations Manager at Metrolinx]

That’s putting it mildly.  Someone did a calculation to figure out how many ACCs would be needed to hold all those people, and so clearly did not understand how the numbers should be used.  Someone put that chart in the Metrolinx report.  The report survived Board scrutiny without anyone, including their members from the banking sector, spotting the problem.

Ooops.

The original post from June 7 follows below.

Metrolinx recently published a graphic purporting to show the employment effect of the Next Wave’s spending over twenty years.

MetrolinxNextWaveJobsWeb

These numbers are a complete fabrication and show how an organization more concerned with puffery than with accuracy can screw up basic arithmetic.

The statement here is that “enough newly employed people” would fill the ACC 48 times.  The official capacity of the ACC is 19,800, and so we’re talking about 950,400 newly employed people.  That’s roughly 1/3 of the entire population of Toronto.

The problem here is the confusion between employees and employee-years.  Metrolinx plans to raise $2b annually for twenty years.  Let’s assume that it will all be spent on job creation, not on getting more work from an existing pool of labour, nor on purchasing offshore technology such as rolling stock, control systems and managerial expertise.  We’re talking about design, engineering and construction, not the cheapest of professions and trades, and a reasonable average fully-burdened (including benefits) cost per job would be at least $80k.  (Governments have paid vastly more per new job on things like auto plants.)

The math is straightforward:  $2b/year divided by $80k gives 25,000.  If the entire amount goes to net new hires, then that’s 25k.  Do this every year for 20 years, and you produce 500k person-years of employment, but not 500k new hires.

There will be some multiplier effects in that an employed person has money to spend and that will find its way into the local economy.  How many new jobs will result is another matter.

We can look at this from the reverse angle: if there is $40b on the table, and it has to be shared among 800k new hires, then each of them will receive $50k.

In this, I have assumed that even the 25% of revenue dedicated to municipal projects creates jobs on the same basis as for the 75% allocated to the Next Wave.

Metrolinx has similar math challenges on commuting times when they routinely confuse avoided future congestion with actual savings.  Moreover, the claimed “saving” only occurs if the entire Big Move is built, something that appears vanishingly likely.  Because Metrolinx only ever discusses their fully-built scheme, we have no idea of how much “saving” will accrue for intermediate stages of the network, nor of the variation in benefits across the region.  This most basic of business analyses is totally missing, at least in any published Metrolinx papers.

Metrolinx really needs some remedial work on economic analysis and basic arithmetic.  Think about it: does it really take 1/3 of Toronto’s population to build a transit network? I have to repeat: the Metrolinx claim is not for job-years, but for newly employed people, nearly one million of them. That’s a basic reasonableness check anyone should be able to spot. How did such a claim even get out the door?

Howling errors like these job creation numbers undermine credibility not just of an incompetent agency but of the government who looks foolish for making claims they cannot possibly deliver.

 

11 thoughts on “More Metrolinx New Math (Updated)

  1. Wouldn’t we save a lot of money by outsourcing those jobs to the Far East? Think about the taxpayers! Ignore the Canadian bread winners, save taxpayers’ money instead!

    Just being sarcastic.

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  2. Since Metrolinx has spectacularly failed to demonstrate even minimally sound mathematical reasoning (and carefully review and vett its announcements for accuracy) before going public with them – as outlined above – how can they be counted upon to properly and responsibly build the big-money projects they are now entrusted with?

    The evidence suggests that incompetence and sheer stupidity are running rampant at Metrolinx – is it any surprise and wonder that it holds its planning meetings in private? Its staff dare not reveal their ineptness in front of an enquiring public and press!

    This latest demonstration of incompetence on Metrolinx’s part should call for a complete halt to and review of all their planning and operations.

    Is the Province of Ontario going to stand helplessly by while billions of its dollars it has already committed to this first phase of “The Next Wave” may well be thrown away on bad planning and engineering, and all behind closed doors?

    Mayor Ford appears to have plenty of anti-transit allies wittingly or unwittingly working on his behalf (with or without his help) to guarantee that nothing of value to the transit file is ever accomplished (with or without Toronto City Council’s blessing). This whole Metrolinx affair may soon disintegrate into meaningless chaos like so many decks of cards.

    Alas, the days appear to be long past when the public could rely on intelligent and honest hard-working civil servants to plan and staff major public infrastructure projects and complete them on time and within budget, while using their brains and resources well.

    Steve, like the proverbial canary in the coal mine, this latest Metrolinx publicity gaffe should serve as a warning of imminent danger. Metrolinx must be forced to open itself up to intense and detailed public scrutiny before it’s too late. You yourself have long since been concerned about and commenting on Metrolinx’s obsession with secrecy – and for good reason.

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  3. On a weekly basis (given an average salary of $30/hour), the Metrolinx Plan can bring 18,000,000 jobs! That will be enough to give a job to every Canadian and even more.

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  4. Roman: 2 billion is 2 followed by 9 zeros. A worker does approximately 2000 hours of work a year so this gives $1 million per hour of work. If you divide that by $30.00 per hour, a figure that does not allow for extras like, taxes, benefits etc, you get just over 33,000 workers. If you add in 50% for overhead this lowers the total to 22,000 person years of employment. If you use the non English speaking meaning of billion which is 1 followed by 12 zeros then you would get 22,000,000 person years of employment. Which billion are you using?

    Regardless of which billion you use nothing is left to buy materials such as concrete, rail, signals, wiring, power distribution equipment etc. Me thinks Metrolinx hired the Ford brothers’ accountants.

    Steve: And since Metrolinx uses the North American meaning of Billion with nine zeroes, I think we know what the numbers should look like.

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  5. The Auditor General thinks Metrolinx is bad at math too. That’s why they won’t release their Market Assessments on the ARL [UPX]. This is the nicest thing the Auditor had to say :

    “We believe that Metrolinx’s initial assumptions about projected annual ridership on the Air Rail Link (ARL) may well be overly optimistic. Although a final decision has not been made on whether the ARL must recover its annual operating costs and any of its capital construction costs, if operating the ARL on a break-even basis is indeed the objective, achieving that objective may not be feasible. Ministry of Transportation documentation indicated that a private-sector group that previously was the successful proponent for designing, building and operating the ARL was unable to secure financing for the venture because prospective lenders felt that despite all reasonable efforts to attract riders, the service might not generate enough revenues to be a viable business. A market assessment conducted by Metrolinx also suggests that ARL ridership may not meet the initial assumptions about ridership growth.”

    Steve: The real shame about the ARL is that it was one of those something-for-nothing private sector schemes cooked up by a previous federal government and inherited by Dalton McGuinty who bought into that premise hook, line and sinker. When SNC-Lavalin walked away from the project, Queen’s Park had a chance to make this part of the basic transit system with integrated fares. However, the mythology was so strong that Metrolinx continued down the premium-service path rather than doing an entirely new analysis of a line serving the northwestern corridor from downtown to Malton.

    Once the Pan Am Games are over and we have impressed whoever it was the ARL/UPX was intended to impress at that event, maybe Queen’s Park will be able to rethink the line’s purpose, pricing and operations.

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  6. Steve,

    The question about the airport connection is this: Should it not be a premium service? I mean people have the option of the 192 Airport Rocket, and frequent private bus services. Or how would you integrate the fare? I take it like with GO and several other agencies.

    But Metrolinx is a government organization, which means that it has to by into the “We’re creating jobs” mantra of the government – not that I believe how are governments are ‘creating jobs’ or else the unemployment rate would be zero.

    Steve: The airport connection could serve the corridor it runs through and provide a lot more “service” in terms of transit capacity (and hence trips diverted from cars) for the capital we are investing in the corridor. That is supposed to be the goal of The Big Move.

    It’s worth noting that the Vancouver line is a “premium fare” only to the extent that there is an airport surcharge (which can be avoided by the knowledgeable traveller) and it is nowhere near the level of the premium proposed for the UPX. The Vancouver line is a local transit route, but nobody seems to complain that it doesn’t provide an express trip. Why is it that Vancouver is cited as an example while the service model it uses is completely ignored?

    As to a fare on the line, it should be based on whatever integrated GTA fare structure GO/TTC/etc put together. If it’s fare by distance, then it should NOT include GO’s usual trick of overcharging the “short haul” passengers so that it can subsidize the long-haul riders.

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  7. I appreciate that you have raised this point and sought clarification from Metrolinx.

    There does seem to be an urgency to share good news and convincing (though mildly exaggerated) numbers are one way to do that.

    CivicAction’s Your 32 campaign also used a skewed number to get a lot of attention & awareness from the public and media. Certainty a “feel alive with 5” (based on the average of 5 minutes saved with a full Big Move build out) campaign wouldn’t be as compelling as the “Your 32” campaign.

    At the same time I am finding myself concerned about Metrolinx’s funding numbers … with the possibility of the revenue tools not collecting the expected revenues, and the possibility of costs rising beyond what Metrolinx has estimated.

    A recent op-ed in Spacing explains some of the issues, and I know you have been raising many of the same concerns as well.

    If The Big Move does fail to achieve transit ‘greatness’, it will be because of those mixed up numbers. We’re already so far behind because of arbitrary decision making (as David Miller recently pointed out, the Sheppard East LRT would have started construction in 2009) … and the mismatch of funding and planning (combined with that lack of local implementation strategies) is going to make things worse.

    Cheers, Moaz

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  8. Steve said:

    Once the Pan Am Games are over and we have impressed whoever it was the ARL/UPX was intended to impress at that event, maybe Queen’s Park will be able to rethink the line’s purpose, pricing and operations.

    How easy would it be to ‘de-premiumise’ the airport line after the Pan-Am Games? Would one not need additional stations to encourage more local use and more capacity to deal with larger numbers who would undoubtedly be attracted to a different kind of service aimed at both passengers and ‘regular folk’?

    Steve: We will be stuck with whatever locations GO already has stations, plus probably a relocated Weston station at Eglinton. However, if we think of the UPX as a supplementary service to frequent operation on the Brampton service, it would put things in a different light. The biggest constraint will be the size of the station at the airport.

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  9. Steve:

    We will be stuck with whatever locations GO already has stations, plus probably a relocated Weston station at Eglinton. However, if we think of the UPX as a supplementary service to frequent operation on the Brampton service, it would put things in a different light. The biggest constraint will be the size of the station at the airport.

    It really does depend on whether there is demand for service along the corridor … and whether Metrolinx is willing to offer that high frequency rail service that would effectively serve as the ‘DRL West.’

    Frankly, I can see residents of the Town of Weston opposing the relocation of ‘their’ GO station just because it is already there. We could therefore assume that Mt. Dennis GO station (GO already has an Eglinton station … which brings up other questions) would be an addition to the line.

    If the City if Toronto had voted for an expansion of gambling at Woodbine, a key component of that expansion would be a GO/DRL West station at Woodbine … connecting to an extension of the Finch West LRT line from Humber College down to Woodbine via Highway 27 and Queen’s Plate, then onwards to the airport via Carlingview & Airport Road.

    One wonders what would happen in 2016 … the line might be a success as it is, there may be a complementary non-express rail service (call it ‘DRL West) added.

    I suppose the strangest possibility would be that the UPEx service is replaced by a Finch West LRT extension (using the UPEx trackage from Woodbine to the Airport) and a separate express train service running from Woodbine to Union.

    Cheers, Moaz

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  10. Mind you, 25K for the next 20 years is a good amount of jobs and should be celebrated.

    Too bad the pols won’t let them compare it to other active fields of employment, like horse racing, or casinos, or avidly following #topoli because you like to see humongous car crashes.

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