On January 30, 2014, Toronto Council passed its 2014 operating and capital budgets. In earlier articles, I discussed details of the TTC budgets and won’t repeat that info here. However, a few details from the City budget debate are worth mentioning.
Scarborough Subway
Three Councillors attempted to sideline spending on the Scarborough Subway project by redirecting the planned $14-million in the 2014 budget either to a reserve or to other projects.
All of these motions were ruled out of order by the Speaker based on advice from City Legal staff who argued that since Council had already passes a special tax to fund the Scarborough Subway, they would be open to a lawsuit if the money were not spent for the intended purpose. This ruling by the Chair was challenged, but the Chair was upheld by a vote of 23-22. This is the same margin as in a previous vote on the issue, although a few Councillors switched sides.
I feel that attempts to derail this project are counterproductive at this time for several reasons:
- Like it or not, Council has approved the Scarborough Subway project and its associated tax.
- The issue is very contentious and in the current political environment quickly becomes a “Scarborough against the world” debate.
- The cost estimate for the project is barely beyond the back-of-the-envelope stage, and this cannot be refined without further study that will occur in 2014 as part of the lead-up to the Environmental Assessment. This will include comparative costs and effects for the City’s McCowan alignment and for Minister Murray’s “SRT” alignment.
- If the cost of the subway proves substantially higher, this will certainly trigger a further debate at the 2015 budget sessions under the newly elected Council who must approve the next stage of the subway tax increase. Any increase must be paid for with 100-cent City dollars because the commitments by Queen’s Park and Ottawa are capped.
Other related issues include:
- The projected demand for the Scarborough Subway must be seen in the context of other regional plans that are under discussion. These include substantially better service on the GO Stouffville Corridor. An EA for double-tracking this line is already underway, and the corridor is part of the “Big U” that is under study as part of Yonge subway capacity relief.
- The claimed shutdown period for the SRT for conversion to LRT has been inflated from the 2.5 years anticipated by Metrolinx to 4 years and beyond by subway advocates. Any discussion of the LRT alternative must include a review of how long a shutdown really needs to take, but we are unlikely to see this given that the only authorized work for 2014 will be on the subway options. Any work to make the LRT option more palatable would be viewed as backsliding by subway supporters.
The whole project will be back at Council again in 2015, and that is the time for a well-informed debate on alternatives.
Operating Subsidy
When the TTC Board approved its 2014 operating budget, there was a $6-million unspecified reduction in the expected subsidy based on a recommendation from the City Manager. At the time, both TTC Chair Karen Stintz and CEO Andy Byford said that they would fight for the missing $6m, although we never found out exactly what the effect would be if the TTC didn’t get it.
The original 2014 subsidy proposed by management in the budget (November 2013) was $434m, up from a budget level of $411m for 2013. The Board passed a budget with a $428m subsidy.
The CEO’s report for November also predicted a $411m subsidy requirement for 2013, but probable actuals reported in January show that the system came in $7.3m below this number, at $403.7m. Whether these savings are one time effects or sustainable into future years is a matter of debate (one unexpected source of revenue was the sale of retired subway cars). The TTC does not distinguish between regular and extraordinary revenues, and some savings or costs (such as the actual vs budgeted cost of diesel fuel) vary with market forces.
In any event, for the second year running, the TTC’s actual subsidy requirements have come in below projections. This makes the increase from previous year’s actual to current year’s budget bigger than simply a budget-to-budget comparison would show.
In case anyone is tempted to ask why the TTC cannot do “a better job” of budgeting “accurately”, that $7.3m is less than half of one percent of the total 2013 budget of $1.541-billion. If your own personal finances operate at such a level of accuracy or better, then maybe you have a right to complain. However, given that even a small percentage variation for the TTC turns into what, for Councillors, is a huge amount of money, debates about the TTC budget often turn on the minutia. $6m represents 0.25% on the property tax rate.
Among several budget adjustments proposed by Deputy Mayor Norm Kelly and approved by Council, the TTC received an extra $3m for a new budgeted subsidy of $431m.
Council also passed a motion asking staff:
… to develop an intergovernmental campaign to advocate for a Provincial operating subsidy in line with pre-1995 levels.
$70m of Provincial subsidy now goes to the TTC operating budget as part of the City’s subsidy. This is well below the formula instituted by Premier Davis in the 1970s of a 50% Provincial share. A catch-22 here is that slavishly holding to a percentage allows Queen’s Park to dictate the size of the total budget by specifying an absolute limit to the dollar value of the subsidy. This can artificially constrain the growth in TTC service.
Capital Budget
The Capital Budget was passed including over $2-billion in cuts (shifts of projects and funding to “below the line” over the coming 10 years. Some of this lies in large projects that have yet to be approved, but a substantial amount comes from purchase of new vehicles (buses, streetcars and subway cars), garage/carhouse expansions and facilities maintenance. $10m per year has been cut from streetcar track maintenance in 2014-18, and from subway track maintenance in 2019-2023. In the out years, this is accounting hocus-pocus designed to make the capital spending fit within available target levels, but in the short term, this threatens some necessary TTC work.
The City and TTC will continue to beat their drums for added support at Queen’s Park and Ottawa even though, at least in the short term, this is likely to be more wishful thinking that productive lobbying.
Toronto has a self-imposed debt limit that arises from a desire to keep debt servicing costs at an affordable level relative to tax revenue. Of course, if Council wants to raise taxes, they can also raise the amount of debt as they have done for the Scarborough Subway.
Affordability of Transit Fares
Council passed a motion asking several City departments and agencies, including the TTC:
… to report in advance of the rollout of the Presto Fare Card system and prior to the 2015 budget process, on options related to a fare media policy that addresses affordability issues of transit fares for low and moderate income Torontonians.
This topic comes up regularly at TTC Board discussions, and the common TTC response is that social benefits are not in the TTC’s purview. With the move to smart card fare collection, there is an option to build fare subsidies into a rider’s account and to allow such subsidies to be tracked.
The question, as always, will be whether TTC funding should go to improvements in service and/or fare structure for all riders, or be targeted to those who receive some other form of social assistance.
Steve Munro 
In the worst case scenario, both Ford & Hudak gain power, the EA for the Scarborough subway will mean nothing, as Hudak whatever the cost, will give Ford the money to complete.
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They are supposedly replacing the track on Richmond this year after the current watermain work and in conjunction with repaving. Similarly they have scheduled Wellington for new track in 2017 in conjunction to another watermain project. They had already postponed the replacement of the very old track on Victoria to 2018 (they installed the watermain in 2012). Surely there is a point when making repairs or patching around other construction is more costly than simply replacing all the track? Any idea of where else they intend to postpone work or the operational consequences of further postponements?
Steve: Wellington has been delayed because it cannot be closed until Front Street re-opens. Victoria Street will interfere with the new condo construction beside Massey Hall that was recently approved. Then there is the ridiculous moratorium on construction in 2015 for the Pan Am Games even though they will have come and gone when there are still months left in the construction season.
As for special work, I suspect that only College and Spadina (not Dundas) will be done this year, but I await confirmation from the TTC. Dundas is still in fairly good shape and can hold out for a few years.
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I don’t think it makes sense to reopen these debates again and again unless there is a major increase in funding, i.e. Wynne’s transit taxes pass. If that happens of course, city council will have a big fight about where to build subways, I’m sure the Sheppard subway advocates will come out in full force then. But in the case of the Scarborough subway, both the LRT and subway plans are bad in my view. What happened to simply buying Mark III cars and having a shorter shutdown period for the SRT? The subway costs too much and the LRT ought to have its own yard so the Sheppard LRT is not needed to build it.
Steve: If there is a new yard, it will be over near Bellamy on the extended line. That was the plan in the original SRT extension EA. This would not, however, eliminate the problem of having an orphan transit mode with its own shops.
The new provincial money, assuming that we actually see it, will not contribute much. If there is $2b/year, $500m goes to the municipal sector, of which Toronto would probably get about half based on population. Of the $250m, 3/5 is for transit and the rest for other things like road projects and active transportation. That would give us about $150m in new money, or about double what we get today in gas tax. Then there is the question of how it would be split between operating and capital (the current split is $70m operating, $90m capital).
At the end of the day, that’s not the kind of money we need to build a pile of subways. Don’t forget that the Scarborough financing only “works” because there was already committed provincial money to cover roughly half of the project. That will not be the case for anything new Toronto might come up with that is not already part of The Big Move. Also, the federal money in Scarborough is over half of all of the “stimulus” money Ottawa is thinking of sending our way for the next decade.
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Those days when the subway only cost $500 million more. Those were the days.
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That sounds like good news though it also suggests that plans developed in the background (such as the ‘Big U’) are being quickly moved ahead without much awareness or scrutiny.
If I recall correctly the Uxbridge sub can be double tracked without much trouble except for a narrow point north of Ellesmere?
Cheers, Moaz
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Correct me if I’m wrong but isn’t the south end the main problem here?
What the heck do you do with the ridiculous intersection of Midland and Danforth?
There is not enough auto traffic to warrant the huge cost of under/overpass (which it seems to me to be very difficult to do anyways) and there is too much auto traffic to consider closing it altogether. The railway is still a level crossing, a double crossing just increases the risk of a collision as happened a few hundred yards south in the 70’s.
As it is now cars on Dan heading east are stopped at the Midland light and they straddle the rail line while waiting.
Steve, are there any studies out there on this intersection and what to do with it? (regarding the level crossing)
Steve: No existing studies that I know of, but this will have to be addressed by the EA for the double tracking project and any proposal to run frequent bidirectional service.
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What is the Conservative position on this? On one hand they talk about focusing solely on subways and making the DRL a priority, yet on the other they are criticising the fact that the Liberals are funding transit. If they are elected do they actually intend on funding subways, or are we going to see the provincial funding disappear the moment Hudak takes office?
Steve: Be careful about what Hudak says he will fund. Inevitably, this has a caveat that funding will come when it is affordable, that is to say after they slay the deficit. They could very well steal from transit on one hand, and then fund one pet project on the other. Just look at Harper: more than half of Toronto’s future “stimulus” money dedicated to one politically motivated subway, and no commitment to increasing ongoing funding.
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We need to hope that after the Scarborough subway EA, the costs of it keep ballooning to trigger a debate that may or may not get back to LRT.
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So you thing Metrolinks is having problems with Presto, Chicago is having troubles with their new Ventra Fare card systems. It has given away more than $1.2 million dollars in free rides. See the Huffington Post
Second city also has a take on the “9 Benefits of Ventra”.
And the transit union says, “Put the brakes on Ventra roll out”.
CTA is picking up $245,000 tab for Ventra courtesy calls.
The Chicago Tribune lists the problems the Ventra card is having.
Presto looks positively great by comparison, but then they have not switched the TTC fully to Presto yet.
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Kevin’s comment:
Regretfully, the rhetoric coming from that quarter about tax cuts makes it mathematically impossible to eliminate the deficit.
A good example of this is coming from Ottawa. Right now we would be running a strong budget surplus if it were not for several profoundly irresponsible tax cuts. Including a 29% cut to the GST rate and significant corporate income and other tax cuts.
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I think attempts to derail the B/D extension were necessary in order to keep feeding the slowly burning fire that is the outrage at this expense when a paid for option is relatively ready at hand. There is a reason why many pro-councillors were apoplectic at the mere raising of the issue – they were hoping concerns would go away and the project would become accepted as inevitable.
It has not.
If Hudak does not win, and neither Ford nor Stintz win the mayoralty, that subway will be on the table for 2015 discussion. That’s not as big an if as it looked a couple of years ago. Certainly, this will be a major talking point during the mayoral election.
Interesting times.
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I’m tired of hearing about the Scarborough subway line. As much as I disagree of it being built, I hope this project does not hijack the mayoral race, because transit as a whole should be an election issue, not one line that will directly serve perhaps 5% of the city’s population, if not less.
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The problem is, it’s impossible to talk about city wide transit without bringing up the Scarborough subway extension due to how much transit funding it’s soaking up; both to build it and then operate it. To put it another way, the line may only serve 5% of the city’s population but 100% of the city’s population is paying for it.
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No doubt the Scarborough Subway debate will rear its head a number of times in the next several years. The problem is that the subway is too expensive and the LRT involves the extra transfer and a long SRT shutdown. If someone could find a compromise solution that addresses these, then maybe the plan would have greater than 50% + 1 support and we would make a decision and stick to it.
Steve: The biggest problem is that the “long” shutdown keeps growing because subway proponents inflate it. This started off as a 2.5 year shutdown, but it suits LRT opponents to make it seem as bad as possible. No question it will be a pain in the butt. How much of the next 10 years will the line be shut down simply because it’s broken or snowbound?
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How realistic is a speeded up presto roll out, which Karen Stinz advocates? What are the technical issues? Or is it one of financing?
Steve: It is not feasible, and Stintz is in no position to make it happen. There simply is too much work to do and too little time.
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