UPX Was Never To Break Even

With all the hoopla surrounding the launch of service on the Union-Pearson Express (aka UPX or UP Express), it was refreshing to learn today from no less than the CEO of Metrolinx, Bruce McCuaig, that the line will never cover its costs.

Cast your mind back to the days of Prime Minister Chr├ętien and his Transport Minister, David Collonette (1997-2003). They had a dream of an express train from Union Station to Pearson Airport, a service that would be built, owned and operated at no cost to the government through the magic of private enterprise. SNC Lavalin was to be the lucky proprietor.

Things didn’t quite work out. SNC Lavalin discovered that the cost recovery for “Blue 22” as it was called in the early days simply didn’t pan out, and they looked for government support. When the Tories came to power, Ottawa’s love for this project waned, and they dumped it … right into the willing lap of Dalton McGuinty who embraced the scheme as a way for Ontario to show the world what we’re made of. Don’t be the last city without an air rail link! The matter was especially crucial as part of the Pan Am Games bid — there would be an express train to the airport.

Alas, the numbers still didn’t work, and SNC Lavalin looked to Queen’s Park for financial support. McGuinty showed them the door, and that might have been the end of things but for the usual Ontario hubris. The project became a public sector job 100%, but there was still the sense that it wouldn’t be a burden on the taxpayer.

On Friday, June 5, 2015, the Star’s Tess Kalinowski had an online Q&A with Bruce McCuaig, and it was quite revealing.

When will the line be electrified?

“The recent provincial budget set aside funding for Regional Express Rail, which includes electrification of the corridors, including UPX. We are folding the UPX electrification into the electrification of the Kitchener corridor as far as Bramalea, and we expect electrification to start being operational on five of the lines in 2023.”

There was a time when electrification was promised for only a few years after UPX began operation. Clearly, this is not going to happen even on a small scale for 8 years, let alone a full buildout. Whether there will even be a government left in office willing to undertake this project remains to be seen.

Back in September 2014, McCuaig claimed that the government’s promised electrification within 10 years was possible. Hmmm. Maybe a few kilometers here and there, but certainly not the full buildout if they’re only going to start in 2023. After a burst of election fever and enthusiasm for electrified GO services, Queen’s Park is getting cool, if not cold feet.

What about additional stations?

“We are building in plans for a new GO station and UPX station into the construction contract for the Eglinton Crosstown LRT. The Crosstown phase 1 ends at Mount Dennis and I think it would be a great place to have an interchange to give people more choice. At Woodbine, we have done what transit planners call “protect” for a potential future station.

“More stations connected in to the subway (like Dundas West/Bloor) and a future location at Mount Dennis means you can access the service at a lower cost. The trip from Dundas West/Bloor to the airport will have a fare of $15.20 if you use your PRESTO card”

It’s nice to know that Metrolinx still implies that the Crosstown will have a “phase 2”, although the almost certainly lower fare on this local transit service would make one wonder why one would choose to transfer off of the Crosstown and onto UPX, especially at a premium fare. As for the fare from Dundas West, it might just be a tolerable alternative to the 192 Airport Rocket from Kipling Station once Metrolinx builds a convenient link from the UPX station to the subway. The current arrangement is not exactly a “first class” link the fare would imply.

How many riders will UPX need to break even, and will it pay off its capital costs?

We plan to have the fare box for UPX cover its operating costs within three to five years. As you would expect, it will take a few years to build the ridership, just like any other system. We are not expecting fares to pay back the capital costs at this time. The province has invested the $456 million in the capital and it would be unusual in a North American context to expect customers to pay back the capital cost through their fares. I don’t know off the top of my head how many riders per day will be needed for cost recovery, but we do expect that level of ridership by year three to five.

So let’s get this straight: what started out as a sure thing for the private sector will take maybe three years just to reach a break-even state on operating costs. This also happens to be the period by which Metrolinx expects ridership to stabilize, and one wonders just how much room for growth in demand and revenue there will be beyond that. As for capital costs, oh we could never expect passengers to pay those. No wonder SNC Lavalin wanted a subsidy.

By the way, remember that phrase the next time someone tries to slip capital-from-current spending into an operating budget as John Tory did this year with the TTC’s bus purchase.

What we don’t know is the amount of subsidy the UPX will divert from other transit needs within GO or other transit systems. There will inevitably be pressure to bring fares on UPX down, especially if service in the corridor is combined with a route like SmartTrack. Then there is the small matter that UPX is a separate division complete with its own president. This is rather like having a President of the Scarborough RT except that Line 3 carries nearly 40,000 riders a day, more than UPX can physically handle if it were packed from 6am to midnight.

I will be magnanimous. Get the line open. Enjoy Balzac’s coffee in the station. Thrill to the glorious view of Toronto’s former industrial might along the rail corridor. Impress the hell out of those Pan Am visitors (although of course the officials and athletes have limos and buses and reserved lanes on expressways for their delicate sensibilities).

Once the games are over, let’s get serious about the money we have invested in the Weston/Georgetown corridor and figure out how to run an actual transit service that caters to more than the well-off who can afford to pay extra for a fast ride downtown.