Updated July 18, 2013 at 1:10 pm:
Ontario Minister of Transportation Glen Murray announced that Queen’s Park would fund 2/3 of the Scarborough Subway, an amount of $1.4-billion (2010$). This was described a cabinet decision taken in light of Toronto Council’s request for a subway to replace the Scarborough RT.
Murray put the political ball firmly back with Mayor Rob Ford and called on him to fight together with Queen’s Park so that Toronto could get the remaining 1/3 share of funding from Ottawa in line with federal contributions to projects in other cities.
With the press conference still in progress, TTC Chair Karen Stintz was demanding that the province pay $1.8-billion even though the lower amount has clearly been settled on by the government and isn’t likely to change. Yesterday, Rob Ford was widely quoted that if the full funding demanded by Toronto was not forthcoming, then the subway deal is dead.
We will see just how dead the subway is, whether Ottawa can be brought to the table with bags of cash, and just how serious Toronto Council was that their subway approval was “contingent” on better funding than they will receive from Ontario. This will all be back for debate, without question, at the October 8 Council meeting.
The original July 17 article follows the break.
Today, July 17, 2013, Toronto Council voted in favour of a subway line between Kennedy Station and Sheppard & McCowan to open in 2023 if all the stars align. There lies the problem — the motion included conditions that are unlikely to be accepted by various parties, and the decision is conditional on events that are unlikely to occur.
What really happened here? Many Toronto Councillors got to do their bit for Scarborough, to wave the flag, to show that Scarborough is really part of our city because it will finally have its own subway. At least that’s what the Councillors want people to think especially those voting in a coming by-election, or in the general municipal (and likely provincial) ballots in fall 2014.
A long series of motions was proposed, and those interested in the gory details can read them in the record of how the item was handled at Council. Here is a brief overview.
Mayor Ford moved the second of two options proposed in the City Manager’s report (Option B, subways), but proposed adding a recommendation related to the tax levies that would fund the subway. These are described in section B.(2)(d) of the report:
(d) Committing to a property tax increase over three years, dedicated to funding a Scarborough Subway, in an amount between 1.1% and 2.4% (depending upon the amount of funding received through Recommendations B(2)(a) and (c)), on the residential property class, and 1/3 of such a rate increase on the non-residential property classes (in accordance with current City policy), starting with a minimum tax rate increase in 2014 of 0.5% on the residential property class, together with the corresponding 1/3 rate increase on the non-residential property classes, with the balance of the residential and non-residential three year rate increase to be phased-in in the years 2015 and 2016.
Ford’s change added a new clause (3) which reads:
3. Notwithstanding Recommendation 2.d., City Council request the Deputy City Manager and Chief Financial Officer to investigate alternative sources of funding for consideration and report to the Budget Committee, such report to include options to reduce or eliminate the recommended tax increase in 2014 and further reduce the tax increase to .25% for the remaining phase in years.
Much later, during the voting, this amendment was defeated by a vote of 21-23 with the result that the original text, which does not include alternative funding and no/lower tax increases, remains.
In any event, the amount of new tax required will vary depending on how much money the provincial and/or federal governments bring to the table. From Queen’s Park, the City seeks the full $1.8-billion budget amount for the SRT/LRT conversion project including inflation, and moreover the City wants an amount equal to the estimated operating costs of the LRT line that would have been borne by Metrolinx.
Queen’s Park has already hinted that only about $1.4b is on the table net of costs that don’t disappear with the LRT project, and net of sunk costs on design, program management and property acquisition to date.. There is no talk of indexing this amount, nor of any payment for operating costs. Transportation Minister Glen Murray has done much sabre rattling, but has not sent the City a definitive statement of how much Queen’s Park will pay.
As for Ottawa, the debate saw an amount of $333-million move on and off of the table a few times yesterday, and I almost thought I was watching a game of Three-card Monte. One moment, this amount was a federal commitment specifically allocated to the Sheppard LRT project. The next, it was money the City could assign to any transit project it desired. It took a bit for reality — the fact that Sheppard is a Metrolinx project, and the money is tied up there by contract — to sink in. Finally, Council insisted that any federal contribution for the subway be “new money” (see Mihevc motion below).
Right now, the likelihood that either government will ante up is extremely low, especially with a drop-dead date of September 30, 2013.
Attempts to Amend Mayor Ford’s Motion
Councillor Joe Mihevc proposed changing Ford’s motion so that the approval is contingent on:
a. new federal funding equal to 50% of the net capital costs
b. provincial contribution of $1.8 billion (2010 $);
c. no other funding outlined in the Metrolinx and City of Toronto Master Agreement being re-allocated to the extension of the Bloor Danforth line from:
i. Sheppard LRT;
ii. Finch LRT;
iii. Eglinton LRT; and
d. no reallocation of existing City revenues from other services to pay for the subway.
This amendment passed 40-4. Its effect is that the approval of the subway option fails if the senior governments do not come through with the requested shares of funding. The amendment also prevents raiding of other transit projects or budget lines to make up shortfalls.
Councillor Mary Fragedakis moved to restrict the City Manager’s ability to renegotiate the Master Agreement with Metrolinx so that only terms pertaining to the proposed subway conversion are on the table. This prevents terms related to other LRT projects from being adjusted as part of the process. This amendement passed 42-2.
Councillor Adam Vaughan moved that the City Manager be required to bring back to Council any changes in the Master Agreement for ratification. This was ruled to be redundant by the Speaker as the previous motion conferred direct responsibility on the City Manager. A dispute over this ensued, but Council voted to uphold the Speaker’s ruling. I believe that this was a procedural error, and if there had been a possibility of Vaughan’s motion being overridden by Fragedakis’ motion, then Vaughan’s motion should have been voted on first. At this point the issue is moot.
Councillor David Shiner moved that the Land Transfer Tax be investigated as a potential source of general transit expansion funding at $25m/year, and that the provincial and federal governments be asked to contribute an equal share to this fund. The motion lost on a 21-23 vote.
Councillor Paula Fletcher moved that the City request the provincial and federal governments to confirm their share of the funding by September 30, 2013. This motion passed on a 28-16 vote. Its effect, coupled with Mihevc’s motion, is to set a date by which both governments must respond favourably to the City’s request. If this does not occur, then the conditional nature of the approval fails, and we are back to an LRT line.
However, there are two related events. First come the provincial by-elections on August 1. If the Liberals do well in these, especially in Scarborough, then the need to meet Toronto’s demand drops off. Next comes the October 8 Council meeting, the next chance when this issue could surface yet again.
The next vote was on the new part 3 of Ford’s motion as discussed above. This failed leaving the originally proposed range of tax increases in the proposal. The remainder of Mayor Ford’s amendment was adopted 28-16, the same margin as the entire item (as amended).
In an amusing sideshow, Council also voted 27-17 on Councillor Michelle Berardinetti’s motion that:
City Council request the Chief Executive Officer, Toronto Transit Commission to arrange a third party audit of the sunk costs declared by Metrolinx, to ensure that such costs are accurate and valid.
The idea of a municipal agency marching into Metrolinx to perform an audit is laughable, and this probably won’t get far. The purpose is to validate (and with luck to reduce) the Metrolinx clawback of monies related to “sunk costs” on the LRT proposal.
TTC Chair Councillor Karen Stintz tried to jump start the subway process by moving:
1. City Council request the Chief Executive Officer, Toronto Transit Commission to:
a. immediately commence the work to obtain the Scarborough Subway Transit Project Environmental Assessment approvals;
b. establish a dedicated team similar to the Spadina Subway Extension to deliver the Scarborough Subway; and
c. consider the financial merit of transferring the Tunnel Boring Machines (TBMs) at the completion of the tunneling for the Spadina Subway Extension to the Scarborough Subway project (at fair market value credited to the Spadina Subway).
2. City Council increase the Toronto Transit Commission Capital Budget by $10 million for 2013-2014 to commence work on the Scarborough Subway immediately.
This motion was ruled out of order by the Speaker as the Capital Budget was not before Council, and an amendment to it could not be introduced in this manner. I would not be surprised to see Stintz bring something forward at the TTC Board meeting on July 24 to get at least a scope of work discussion going even without funding approval.
The salient point here is that Council’s approval is contingent on funding they do not yet have, and committing money to a detailed assessment is premature.
We now must wait to hear from Queen’s Park and Ottawa, preferably to the sound of sleigh bells, a merry ho-ho-ho and large sacks of cash dropped off at Nathan Phillips Square. Without this largesse, Council’s conditional approval fails.
How Metrolinx will respond given their August 2 deadline is unclear, but this uncertainty is a direct result of Minister Murray and Premier Wynne’s lack of a definitive position and dollar value for the provincial contribution. This should have been settled, in writing, well before the vote so that there was no ambiguity.
Subway advocates have little to cheer about here as their option depends on funding commitments in a very short time period.