Another Scarborough Subway Boondoggle?

The Star’s Ben Spurr reports that the Glen Andrews Community Association in Scarborough has proposed yet another variant on the Scarborough Subway, and that this is supported by Councillor Glenn De Baeremaeker and provincial Minister (and former Councillor) Brad Duguid. City Planning staff are already engaged in reviewing this proposal without any direction to do so from Council, according to Spurr’s article.


The scheme, nicknamed the “Big Bend” would enter Scarborough Town Centre on an east-west axis rather than the north-south route proposed by the TTC. It would veer east at Ellesmere and then make a wide turn bringing the route under the existing RT through the STC station area and continue to vacant space on the east side of Brimley. This open area would be used as the staging area for the tunnel construction akin to the sites on the Crosstown project at Black Creek and at Brentcliffe.

This would avoid creation of a staging area for the subway tunnel near Ellesmere and McCowan and limit the need to expropriate lands for the subway and a new station, but it would also leave the subway aligned in a way that would allow eventual westward extension to link with the Sheppard line.

Although this has been reported simply as a revised alignment, much more is involved in this proposal. Instead of twin tunnels, the TTC’s typical construction method, a single 12m to 13m bore would be used, one that could accommodate station structures within the tunnel and eliminate (or at least reduce) the need for surface excavation such as we have seen on the TYSSE station projects. The technical side of this scheme was put forward by Michael Schatz, Managing Director of engineering company Hatch (a portion of the former Hatch Mott Macdonald) which shows up from time to time as a consultant to the TTC and GO Transit. Whether this is an official company proposal, or a personal scheme, or some sort of “business development”, is hard to say. There is no reference to this proposal on the company’s website.

As for the politicians, De Baeremaeker in Council and Duguid behind the scenes at Queen’s Park have been meddling in the LRT/subway debate for some time. De Baeremaeker’s initial motivation appeared to be avoiding an election attack by a Ford stand-in challenging his dedication to Scarborough’s manifest subway destiny. Duguid’s role raises questions about who sets transportation policy in Kathleen Wynne’s government and just how much real commitment there is to any of the LRT schemes in Toronto beyond the Crosstown project now under construction.

At yesterday’s TTC Board meeting, De Baeremaeker was noticeably silent on this proposal, but instead focused on the need to get construction underway and end the delays which push up the project’s cost. (For a $3.6 billion project, inflation at 4%, the rate used by the TTC, adds $144m/year, or $12m per month plus the sunk cost of having the project team sit around working on alternative designs until Council makes a decision.)

This is not simply a case of looking at an alternative design for the STC area, but of reviewing the entire line. The larger tunnel would be dug at a different elevation, and the manner in which it would link to the existing structure at Kennedy, not to mention how it will co-exist with the planned eastern extension of the Crosstown LRT, must be worked out. Terminal operations for a pair of stacked platforms at STC also need to be designed if the TTC intends to run all service through to that point.

This represents a considerable delay. It was intriguing that GDB did not mention this proposal at today’s TTC meeting and in fact held to the idea of getting politics out of the way and letting the project proceed.

The Community Association appears to have conflicting goals for their proposal:

And at the end of all this we have a ‘dead end’ subway.

  • A subway that can never be extended to the east if/when demand justified an extension to Centennial College or Malvern or U of T.
  • A subway that City Planners say ‘should not’ be extended north to the Sheppard.
  • A subway that cannot be turned north west toward the huge concentrations of potential TTC riders in the Kennedy-Sheppard area. [p. 2]

And if we are really into city building, true long term thinking, here’s a huge advantage: building The Big Curve means that the subway is not ‘dead ended’ at Scarborough Centre. It turns northwest. The ‘tail track’ points toward the huge concentration of potential TTC riders already in place and with more on the way in the Kennedy-Sheppard area. It points toward the Agincourt GO-Smart Track Station. It is in the approved alignment of the Sheppard Subway to our Centre. It has a future! [pp. 6-7]

It is self evident that if the subway is going to Agincourt and Don Mills, it is most certainly not going to Centennial College, Malvern or UofT. There may be Scarborough Subway Champions now at Queen’s Park (the Liberal’s Mitzie Hunter and the Tory’s Raymond Cho), but the proposed Big Bend line will never come near their ridings in eastern Scarborough.

The Sheppard connection proposal has been around for years, and is a leftover from Rob Ford’s mayoral campaign. De Baeremaeker’s recent comments disparaging the Relief Line take on a new meaning in the context of a politician looking to plunder the capital budget to suit his own ends. It is quite clear that with this outlook, the Sheppard LRT will never be built even though it still appears on official provincial maps. So much for Queen’s Park’s “commitment” to eastern Scarborough.

The single bore tunnel will be quite deep both for structural reasons related to its size and to stay out of the way of utilities. At STC station, the idea is that a deep station would be built within the tunnel under the existing bus loop thereby avoiding the need for a completely new terminal. However, the vertical difference would pose a transfer time penalty, an amusing situation when one considers the scorn heaped on the design of Kennedy Station’s SRT to subway link.

The tunnel option is presented as one that could proceed without the surface disruptions of conventional subway construction as practiced by the TTC. This is not entirely true.

At STC, it will be necessary to build large vertical shafts, at least two, linking from the surface down to the station itself. These must be long and wide enough to house emergency ventillation, stairs, escalators and elevators, and their surface footprint will be considerable. Whether such links can be built while the bus terminal remains in operation is hard to say, and more detailed design of this interface is needed

Similarly, if Lawrence East Station reappears, as the Community Association proposes, it will require access shafts from the surface down to the station. This is a difficult location because Highland Creek crosses McCowan here, but stations below the water table are not unheard of even in Toronto (see York Mills and Queens Quay for examples, although the latter is comparatively shallow). The press release argues that a Lawrence East Station would be cheaper with the single tunnel scheme than with a standard TTC cut-and-cover structure, but the real question is how much this station would add to the cost of a project which does not now include it.

Emergency exit shafts are required roughly between stations. Construction activity for one of these can be seen along Eglinton such as at Petman (east of Mt. Pleasant) where the access is dug down from the surface to tunnels that have already been built below the street. Just because there are no stations from Kennedy to STC does not mean that the space between them will be free of construction effects.

At STC, assuming that the existing bus terminal can remain in operation, there would be a saving on building its replacement. However, this is only one part of a more complex comparison that must be performed between the current TTC proposal’s design and whatever might develop from the Big Bend option. One cannot assume a “saving” until the relative cost and components of the two schemes are worked out.

The Community Association proposes that the tunnel launch site use existing green space on the west side of STC beside Brimley Road. By comparison with the sites on Eglinton at Black Creek and at Brentcliffe, this may not be large enough (especially considering its “long” dimension runs north-south), but that could be dealt with by temporarily closing an adjacent road and expanding into the existing parking lot.

The proposal includes a long list of items that could be avoided by the Big Bend option compared to what the TTC is likely to do, including ”

  • No need for a temporary bus terminal.
  • No need to buy a fleet of buses to carry SRT passengers.

Whether a temporary terminal can be avoided while construction of the links to a new station below it is underway remains to be seen. As for a fleet of buses for SRT passengers, that has nothing to do with the subway plan at all, unless the subway is built in the SRT corridor, an alignment the TTC has already rejected for other reasons.

It is ironic that this scheme only became possible once the City decided it could not afford to take the subway to Sheppard and cut the line back to STC. If there really were a desire to serve the area north of Highway 401 and east of STC, the subway would have gone there. Instead we are back to the Sheppard hookup proposal.

If Council really wants to reopen the entire debate, they need to be honest about what this will cost in time and dollars. Unless there is a change in funding from Ottawa and Queen’s Park, their contributions are fixed and any new costs are entirely on the City’s account. How many more years of the 1.6% Scarborough Subway Tax will be needed to pay for this? How will the return of the Sheppard Subway Extensions to the political field affect priorities for spending elsewhere in the City? How many more Councillors will cry that their wards “deserve” a subway?

Muddled into all of this is the status of SmartTrack which even though the brand name remains in use is really nothing more than a few local stops added to GO’s RER plans. Toronto will have to decide before the end of November (a Metrolinx imposed deadline) just how much it will shell out for additional “SmartTrack” infrastructure.

Councillors are quick to complain that transit project costs rise uncontrollably, but faced with the need to settle on a design so that it can be costed to a reliable level for budgets and construction, continue to pursue alternatives. No doubt the Big Bend proponents will want a cost estimate for their scheme in months so that a formal decision can be made.

If De Baeremaeker, Duguid and Tory have already decided that the Big Bend is the only scheme that will be acceptable, then the whole process of past years has been a sham. It is entirely possible that the Eglinton East LRT, the sweetener added to the Scarborough transit plan to make the subway more palatable, will simply fall off of the map and the money will all go to the subway project. This would be a brutal “bait and switch” for eastern Scarborough, but it would show the true colours of their “subway champions”.

Toronto Transit Plan Punted From Executive Committee

On October 26, 2016, Toronto’s Executive Committee was supposed to receive a report dealing with a wide range of transit issues.

… the City Manager will be providing a report to Executive Committee with recommendations on the Transit Network Plan, including information on cost-sharing discussions with the Province of Ontario on a range of transit projects, as directed by City Council in July 2016 (EX16.1). This report will also include an update on the planning and technical analysis for SmartTrack, Relief Line, and Scarborough Transit. Additional time is required to ensure proper consultation and coordination with relevant stakeholders including the Toronto Transit Commission, Province of Ontario and Metrolinx. [Placeholder item in the agenda]

This report is not yet available as discussions with Queen’s Park are ongoing. A deadline facing Council is that Metrolinx wants a commitment to specifics of SmartTrack work that will be bundled with the RER construction contracts that will go to tender early in 2017.

Given the time constraints, it is possible that the report will go directly to Council at its November 8 meeting. In theory, materials for the Council Meeting should be posted in advance, and for November 8, the usual deadline is only days away. Whether the materials are actually available in advance remains to be seen. This would put a major debate before Council with almost no advance briefing or public debate.

SmartTrack is not the only time constrained project as an updated transit plan and cost estimate for the Scarborough projects, not to mention a financing scheme for the entire package, needs to be dealt with so that work can begin. Any spending commitments will also affect the City’s budget which will be formally unveiled at the start of December.

As material becomes available, I will provide updates and commentary.


GO Transit Electrification Public Meetings

Metrolinx/GO has announced a series of public meetings through November 2016 dealing with some aspects of the electrification project.

GO Rail Network Electrification Transit Project Assessment Process (TPAP) (Hydro One as co-proponents):

• The focus of this round of public meetings will be to provide an update on the project and conceptual design of the Traction Power Supply and Distribution components.

Barrie Rail Corridor Expansion TPAP:

• The focus of this round of public meetings will be to provide an update on the project and seek feedback on the environmental impacts.

Lakeshore East-Don River to Scarborough Expansion TPAP:

• The focus of this round of public meetings will be on existing conditions.

Further information and a list of meetings is available in the Metrolinx announcement.

TTC Service Changes Effective Sunday, November 20, 2016

There are comparatively few service changes pending for the November-December 2016 schedules as it’s late in the year, and the TTC’s main concern is to constrain costs in anticipation of a revenue shortfall for 2016.


Construction Projects

Various diversions will end with this schedule period or shortly thereafter:

  • Construction at St. Clair and St. Clair West Stations will be complete allowing:
    • resumption of streetcar service over the full 512 St. Clair route,
    • operation through the bus loop by 74 Mt. Pleasant and 88 South Leaside, and
    • the interline between 126 Christie and 33 Forest Hill will be broken, and these routes will once again access St. Clair West Station Loop.
  • Construction at Neville Loop will be complete allowing resumption of 501/301 Queen streetcar service to the east end of the line.
  • Water main construction on Queen is expected to end by November 30 at which point the Queen car will return to its normal routing between Spadina and Shaw.

The list of routes affected by the Eglinton Crosstown project continues to grow, and additional running time will be provided on 7 Bathurst, 11 Bayview, 29 Dufferin, 33 Forest Hill, 56 Leaside and 90 Vaughan (the peak period 90B branch to Eglinton West Station will not operate). Generally speaking, these routes will not get added vehicles, but the headways will be stretched to accommodate congestion. The November 2016 changes only affect weekday schedules, but weekend changes will occur in the future.

Streetcar Shortage / Exhibition Loop

The continued shortage of streetcars will trigger the following arrangement for service to Exhibition Loop:

  • 511 Bathurst will be operated with buses, and these will run through to the Exhibition grounds replacing the existing 509 shuttle service. Streetcars will return in early 2017 when vehicles will become available from bus substitutions elsewhere (notably the west end of 501 Queen) and from delivery of additional new cars.
  • 509 Harbourfront cars will turn back at Fleet Loop until construction at Exhibition Loop completes in mid-December.

Trimming Service

Various routes and periods will see small changes to frequency of service to free up resources and reduce costs. The projected changes in loading on the affected routes remain within the Service Standards.

Routes 121 Front-Esplanade and 514 Cherry will be modified so that their hours of service match the standard 6 am to 1 am pattern (8 am on Sundays).

Christmas Period Schedules

The Christmas period for 2016-17 will be three weeks long because the holidays land on a weekend. Reduced service will operate through to the second weekend in January 2017 because schools will be closed for the first week of the year.

The TTC anticipates free transit service on New Year’s Eve, but has not yet announced a sponsor.

City Manager to Council: Put Up or Shut Up

On October 17, Peter Wallace, appeared at the University of Toronto’s Munk School to present the fifth annual City Manager’s Address under the title “What We Do Is What We Fund”. The presentation deck and the webcast are available online.

With the formal Budget Launch for 2017 about a month away, it would be nice to think the City Manager would actually be as blunt as the title of my article rather than the more diplomatic title of his address. I doubt we will see this, however, as Wallace knows who pays his salary. He was quite open in saying that proposing actions that Council will not accept is not a wise move.

As befits the academic setting, these events are very collegial affairs and one could draw an intricate web linking the attendees, their professional backgrounds and employers to each other. Somewhere far away is the brawl of Council with truculent, ill-informed members more intent on self-promotion than city building.

To nobody’s surprise, the basic message is, as it has been for years, that the city has aspirations beyond its means, and that hard decisions are required on the scope of spending plans and the revenues needed to support them. Wallace described the City as someone who reads the news about health effects of tobacco, but figures that “it hasn’t killed me yet” is an excuse to remain a heavy smoker. In another analogy, he likened the City’s forward planning to driving down a dark road using only the parking lights.

Amusing though these lines might be, the real question is whether Wallace will, like his predecessor, collude with the Mayor and the budget hawks to paper over fiscal problems, or put the issues squarely before Council. In his 2015 address, shortly after being appointed as City Manager, Wallace took the strong position that policy decisions are the role of Council, not of the bureaucracy. He would put the options before the politicians, but they had to choose. This sounds good in theory, but it depends on which options are even offered for debate and the degree to which their benefits or shortcomings are actually explained.

In the transit context familiar to readers here, the TTC rarely produces an “aspirational budget”, one that says “here is what we could do, and here are the resources we need” because it is far too embarrassing to its political masters to confront what might have been with their own short-sighted penny-pinching. TTC budgets are all about fitting within a constrained financial envelope of limited subsidy and fare increases.

On the wider level of the City, Council actually manages to pass many motions saying what it would like to do, but far fewer actually paying for these programs. Some Councillors have found to their chagrin that saying “we want” is not the same as “you will provide” as a direction to City management. If the money isn’t there, “we want” simply adds to the wish list that may or may not be addressed.

Wallace began by cataloguing the many great things about Toronto, its high international ranking as a place to live and conduct business, and the many initiatives that combine to support this.


This collection looks almost progressive, but it suffers from a mismatch between expectations and funding. The Poverty Reduction Strategy together with the TCHC improvements are critical parts of keeping Toronto a great place for those who do not share in its flagrant wealth, but both of them are underfunded. SmartTrack still gets a special mention even though it is only part of a much broader requirement for transit growth. This shows that the Mayor’s signature program continues its outsized role in ongoing transit debates. A “conversation about fiscal sustainability” sounds like a cozy tea party but for Council’s rejection of all methods by which this might be achieved.

The stats for Toronto are impressive [p. 2]:

  • The city of Toronto is home to 2.8 million people and nearly 90,000 businesses
  • Canada’s largest city and the fourth largest urban area in North America
  • 8.2% of Canada’s workforce
  • Toronto’s gross domestic product (GDP) accounted for 26% of Ontario’s GDP and 9.5% of Canada’s output in 2014.

But the expectations are also high:

  • Residents and businesses expect and value the services provided by the City
  • Increased demand for public investment to offset congestion, carbon, and threats to poverty

The problem is that neither residents nor businesses actually want to pay for these services or investments, and the commonly heard cry is that taxes are “too high”. In fact, the business community has a good deal thanks to the provincially mandated reduction in the level of taxation relative to residential (owner occupied) properties. For several years, and continuing until 2020 or so, commercial taxes will rise at 1/3 of the rate of residential, and so the cost increases are disproportionately shouldered by residential taxpayers. They, of course, loathe the idea of paying more, let alone at a rate greater than inflation, and so that total tax take for the City actually rises below inflationary rates. This is further complicated by the fact that property tax is only about one third of total revenues, and other streams may be constrained by market conditions or by the penury of funding governments.

Wallace observed that if Toronto’s taxes had actually increased at the inflationary rate since amalgamation (1998), a good deal of the current fiscal problem would not exist. However, three zero-increase years under Mel Lastman and one under Rob Ford, combined with below-inflation increases in other years have left Toronto’s tax base about 20% below where it would have been otherwise.

“Revenue must be part of the solution” is a key point in Wallace’s presentation, and yet it is precisely the revenue issue which challenges Council and runs headlong into the “gravy train” rhetoric which claims that the problems lie with excessive spending. Debates are hostage to this premise.

Austerity has been part of Toronto budgets for years, but there is limit to what can be squeezed out of the budget after many years of retrenchment. Wallace emphasizes that “Savings and efficiencies are critical, but insufficient” and moreover that we “Cannot rely on narrative regarding future revenue sources or operating funding from other governments”. [p. 6]

The City is quite proud of its ability to wrestle down “opening pressures” on annual budgets to a level where the required tax increase can support demands for more operating dollars, and the following chart is intended to demonstrate how effective this has been over the years.


This chart purports to show how well the City has achieved “efficiencies” to rein in year-over-year rises in costs. The amber columns show the “opening” values which represent the projected growth in expenses net of any known changes in revenue, but before any tax increases. The blue columns show the “savings” achieved during the budget process.

This can be misleading in a few ways:

  • There is no distinction between pressures arising from inflation, growth in services provided, and one time effects such as the transfer of a cost between the provincial and municipal level. Therefore, the relative importance of these factors is hidden.
  • Budgets are always compared on a budget-to-budget basis, not budget-to-actual. As I have already written, many “savings” the TTC hopes to achieve in 2017 are actually due to variations between budgeted and actual costs in 2016, some of which have nothing to do with actual “management”. The TTC always “saves” money on diesel fuel, but this occurs because the budgeted price is almost always higher than what they actually pay, and the “saving” is reported year after year as if it were an achievement.
  • A decision to raise fares or fees is not a tax measure, but it reduces the pressure on property taxes. The degree to which such measures contribute to the “savings” is not broken out.
  • Some “savings” are simply accounting tricks to shift costs into other years, notably the City’s approach to provincial termination of social service equalization payments. The City effectively borrowed money from itself pushing the actual need to pay for this transfer into future years, and that bill is now due.

This chart would be much more informative if the major components were broken out so that the contribution of each factor would be evident.

The “opening pressures” for 2017 and 2018 are substantial: $607 million and $438 million respectively. Buried in these numbers is the net additional cost of operating the Spadina subway extension (TYSSE), a new cost which until recently has received little public debate.

The City has many potential sources of revenue, but tapping any of them requires a political acknowledgement that more money is actually needed. Many Councillors, and to a great extent Mayor Tory, simply cannot get past this.


From the list above, many items have not been implemented although Toronto has the legal authority to do so. There is the parking levy (a space-based surcharge on land used for parking) and the specialty taxes allowed by the City of Toronto Act (COTA). The personal vehicle tax was implemented, briefly, but dropped under the Ford regime. A report on the many options will come forward as part of the budget process.

Wallace noted that the increase in user fees has outstripped the growth rate for property taxes, and that TTC riders have contributed more to the City’s revenue growth than the property tax over recent years. A fast growth in fees and rates has also taken place, notably in water rates, and soon to come for solid waste, so that these services are not cross-subsidized by other revenue streams, and so that their capital requirements can be funded directly by those consuming these services.

Four points set a crucial context for the debate, and especially the degree to which decisions on finding new revenue must take place:

  • Ontario has no financial capacity to increase funding, and uploads of City costs to the province are “reaching maturity” (a polite way of saying that little more will happen).
  • Land transfer tax (a substantial portion of City property tax revenue) depends on the continued level of activity and prices in the real estate market.
  • Prior operating budget deferrals must be addressed.
  • Asking for more money from Queen’s Park and Ottawa will not produce more funding.

Mayor Tory has said that he recognizes the need to find new revenues, but is less forthcoming about just how this would be done. There is a planned 0.5% property tax increase dedicated to financing transit projects, but this is a drop in the bucket beside actual needs. Asset sales such as Toronto Hydro bring one-time revenue and forego current income.

At the TTC, there have been some savings from outsourcing and from a move to one person crews on subway trains, but these are small relative to the overall budget, and they are one-time reductions that cannot be reproduced each year to deal with the demand for more service and the basic inflationary increases in costs.

The Capital Budget received less attention from Wallace, although it is key to many of the projects Torontonians have been tempted by as Council and the Mayor pursue new road and transit spending, parks and other social improvements. The problem is that the City’s ability to finance projects is much lower than the cost all of them would entail if they proceeded. This is illustrated by the “iceberg chart” which is now a familiar part of City budget presentations.


This chart does not include some of the recently announced schemes such as the Rail Deck and Don River Parks, and it is unclear whether it includes the required City contribution to Metrolinx expansion, notably the cost of additional SmartTrack-related infrastructure. New and updated costs for many transit projects will come to Executive Committee on October 26 in an as-yet unpublished report.

For all that the City Manager is frank about the need to address Toronto’s fiscal problems, there is no sense that Council and the Mayor will embrace substantial change particularly in the run-up to the 2018 election cycle. Photo ops will continue and (despite global warming) that iceberg will grow. How Mayor Tory and his supporters plan to square great city dreams with their own budgetary rhetoric is a mystery.

Presto’s Problems Multiply

From the Toronto Star:

Presto’s rollout on the TTC is over budget and fraught with problems. This is not new to anyone who has been following the project, or at least following it to the degree that the agencies involved provide reliable information.

As of March 31, however, the agency had spent $276.7 million deploying Presto on the TTC, according to numbers provided by Metrolinx. That’s almost $22 million higher than the agency’s 2012 estimate of $255 million.

The $276.6-million figure doesn’t reflect work that has yet to be completed or was finished after March 31; those jobs include completing Presto deployment at all subway stations, installing additional self-serve reload machines and fare vending devices across the network, and rolling out fare card readers on all 1,900 TTC buses and 500 Wheel-Trans vehicles.

Also unaccounted for are the future cost of upgrading the Presto system — which currently enables riders to pay their fare with a tap of a prepaid card — to allow for direct payment using credit or debit cards, and the cost of migrating TTC passes onto Presto. [From Ben Spurr’s article]

Metrolinx attempts to offload their problems on the TTC. Reliability problems were first blamed on unusual power supply issues on the older streetcars, but then the issue turned out to be far worse on the bus fleet. Presto’s primary implementation to date is on buses, and this is hardly a new environment for the fare card machines.

Now the cost increases are blamed on scope creep in the TTC contract including the fit-out of the old streetcar fleet and the installation of new fare gates in subway stations.

Meanwhile, complications for riders are legion as Ed Keenan describes: difficulty in obtaining and loading money on fare cards, inconsistent rules for their use, overcharges (and undercharges) for transit rides, and a complete lack of benefits compared to the existing system.

Metrolinx loves to deflect criticism to others, but is slow to accept the blame for shorcomings of its own system’s design.

At the outset, Presto as it existed was a more primitive system designed for a simpler environment: GO trains and buses, with riders who mostly took predictable commuting trips to and from Union Station. As its role expanded to other systems, the shortcomings became obvious to the point that the “Next Generation” Presto was developed for Ottawa. Even then, it had major implementation problems.

The GTA fare structure has long been biased against trips to and in Toronto. Unlike the 905 systems, there is no “co-fare” between the TTC and connecting systems notably GO Transit, and GO’s fares within the 416 compound this problem by charging substantially more to travel shorter distances.

Presto has been touted as the basis for “regional fare integration”, but this has different meanings to different people. At its simplest, Presto would be one card that could “talk” to any fare machine and charge the appropriate “local” fare, little more than standardizing the “currency” of fare transactions without any other changes. On a more aggressive level, fares would be “integrated” so that the cross-border penalty would be reduced or eliminated. It is self-evident that getting rid of fare penalties will cost somebody money in the form of higher fares overall, or increased subsidy. However, Queen’s Park wants a “revenue neutral” scheme so that added subsidies are not required.

Metrolinx has wrestled with new fare structure concepts for a few years, and push-back on their original proposals has delayed the production of a final recommendation. Behind the scenes, the always-preferred option was “fare by distance”, a concept familiar to GO, although not actually implemented “fairly” across its network. This brings very substantial operational problems because the fare system must “know” both the origin and destination of each trip requiring “tap on” and “tap off” for each leg of the journey. This evolved into a scheme to make “rapid transit” a distance-based premium fare zone, a scheme that preserves GO’s rail premium, but destroys the “integrated” nature of the subway within Toronto’s system.

The effect might be to lower fares for cross-border trips (a small minority of all GTA travel) and improve the attractiveness of GO+TTC rides, but at a higher cost to TTC users for whom the subway is an integral part of most travel.

Metrolinx also neglected to determine whether LRT and BRT lines would be “rapid transit” because none of them existed in the data used for their study. Such is the quality of forward thinking at our provincial agency.

In this context, a decision by the TTC on the fare structure to be implemented has been almost impossible, although the TTC must be faulted for keeping a real discussion of the options and limitations under wraps for so long. The TTC missed a chance to market the new fare system with more convenient fares and refuses to address a simplified fare structure, notably time-based transfer validity. That decision immensely complicates the fare calculation requirements for Presto in determining where a “new” trip starts and a second fare should be charged.

For its part, the TTC opted to enlarge its fare gate upgrades from a limited scale needed to bring Presto and accessibility to all entrances, to a full-scale replacement across the system. And, oh yes, with the capability to require “tap out” for all passengers (ignoring that a huge volume of passengers transfer to and from surface routes without using a turnstile). In effect, TTC management enabled by stealth a fare structure that has not been debated or approved by the TTC Board (at least publicly) or by City Council.

The TTC also decided to accelerate the Presto implementation by a year so that it would be fully operational at the end of 2016. This would serve two purposes. On one hand, Metrolinx could brag that the Toronto rollout was “complete” and trumpet huge additional usage (along with the service fees) by Presto. On the other, the TTC could move ahead with its redeployment of station staff who would no longer be selling fare media. Things have not quite worked out as planned, and it is likely that we will not see substantial conversion to Presto until the end of 2017.

Presto itself has design limitations, not least the fact that so much of the fare calculation occurs between the card readers at stations and on vehicles and the card itself, rather than in a back-end system. This is responsible for the oddity that updates to Presto accounts do not actually arrive at the card when they are made online, but only later when all devices in the system learn of the changes through periodic updates. “Open payment” support for credit cards is coming, but until the tracking and calculation of fare discounts is done by a central system, credit cards will only support the equivalent of a cash fare, not the discount schemes available to Presto cardholders. That is not a truly “open” system.

We’re not supposed to talk about any of this because everything Metrolinx and its masters at Queen’s Park do is perfect, Ontario is a transit Nirvana for transit policy going back decades. If we were honest, we would be discussing the alternatives, including technical limitations and funding requirements, but instead the only important work is the manufacture of ever more photo ops.

Try harder.

Does Toronto Owe Metrolinx Half a Billion? (2)

Two weeks ago, I wrote about the receivable on Metrolinx’ books for supposed “municipal contributions” that have not been paid, but instead have been funded temporarily by Queen’s Park. This has been going on for roughly a decade and the bills are piling up, now over a billion dollars.

I posed a series of questions to the Minister of Transportation’s Press Secretary, and received a friendly, sunny, but utterly uninformative reply.

Firstly thank you for your e-mail and questions – it is nice to e-meet you! I saw your blog piece from earlier this week and the Qs you submitted to Patrick re: the existing framework for municipal contributions to GO Transit growth and expansion capital costs, potential future municipal contributions to major transit initiatives in the region and the Province’s Dedicated Gas Tax Program.

There are two Regulations under the Metrolinx Act, 2006, which are intended to assist the Regions of Durham, Halton, Peel and York, and the Cities of Toronto and Hamilton, to collect development charges (DCs) to help offset their respective contributions to GO Transit growth and expansion capital costs:

1) O. Reg. 528/06, which sets an expiry date for GO Transit DC by-laws; and
2) O. Reg. 446/04, which prescribes the allocation of the expected municipal share of the GO Transit growth and expansion capital costs amongst the municipalities.

The municipal contributions to GO Transit growth framework were put in place to establish a fair and balanced approach to support GO capital expansion in communities across the region. All municipalities in the Greater Toronto and Hamilton Area benefit from an effective GO Transit network, and the Province remains committed to working with all of our partners to expand and deliver this network. Given the transformational $13.5 billion investment that the Province is making to strengthen the GO network through the 10-year GO Regional Express Rail initiative under the Moving Ontario Forward plan, we recognize that this commitment to working together with all of our partners to build and optimize an integrated, regional transit network is even more critical.

As you note in your email, the two Regulations permit GO Transit DC by-laws to help the municipalities offset their expected contributions – per the allocation formula set out in O. Reg. 446/04 – to Metrolinx for their share of GO Transit growth and expansion capital costs. The contributions made by municipalities are not directly linked to any specific expansion projects, but, rather, they are applied against the GO Transit growth and expansion capital program, as a whole.

With respect to your questions related to the Dedicated Gas Tax Program, the funding of two cents per litre of gasoline sold across the province was made permanent through the Dedicated Funding for Public Transportation Act, 2013. The Ministry of Transportation allocates these funds through the Dedicated Gas Tax Program based on a formula of 70% ridership and 30% population for eligible municipalities. All of the factors, including the funding envelope, ridership and population, are updated annually for each program year. The funding envelope for the 2015/16 program was $332.9 million, up from $321.5 million in 2014/15. The Province has provided the City of Toronto with more than $1.75 billion through the Gas Tax program since 2003, including $169.2 million for the 2015/16 program.

Thank you again for your questions.

[Email from Andrea Ernesaks, Press Secretary and Issues Manager, Office of the Hon. Steven Del Duca, Minister of Transportation, September 30, 2016]

Despite the reference to an “expiry date” for GO Transit Development Charge by-laws, this date has been changed every few years and currently sits at the end of 2016. Based on past experience, one might reasonable expect this will be extended again. The municipal allocations have not changed since this charge was introduced despite substantial shifts in population balance around the region and a change in the type of journey that the Metrolinx network serves, especially with planned expansion.

The concurrent mention of the $13.5 billion to be spent on GO RER and “working with all of our partners” suggests that Queen’s Park might include RER in the cost base for calculation of future contributions from the municipalities. If this is so, then the Minister should say so, and all announcements should have a little side bar, an asterisk to a footnote saying, “oh, by the way, your municipal taxes will help pay for this photo op”.

Nothing in the legislation (acts and regulations) explains how “capital requirements” are calculated, which projects would be included, nor how the proportional allocation should be assessed against municipalities. It just appears out of thin air as part of the GO (now Metrolinx) budget. The amount is a not linked to specific projects, but somehow it gets calculated.

The info about the Gas Tax program is not news, but the concern municipalities have legitimately is that an increasing portion of this grant might be clawed back by charges to support Metrolinx rather than their own local programs. This is complicated by the fact that Queen’s Park threatened to withhold the Gas Tax from municipalities that didn’t play ball with the selection of Presto as their fare card. Going forward, we know that back charges for operation of the Metrolinx LRT lines to the municipal level are likely, but the amount has not yet been settled.

The basic point here is that the provincial largesse and support for transit comes at a price, and that will be carved out of money that nominally flows to municipalities for their own use on transit. Toronto’s $169.2 million is now split between the operating and capital budgets. Other monies do flow from Queen’s Park for TTC projects, but they are earmarked to those specific works such as the subway extension to Vaughan.

Moreover, given the state of provincial finances, will this billion dollar “debt” become payable by the municipalities? Toronto’s half-billion share would take a huge bite out of the city’s budget, and an ongoing charge of roughly $90 million could more than halve the value of the gas tax grant.

The Minister might contemplate some of the background information to the Metrolinx Investment Strategy reports which includes a history of GO Transit development charges, a description of the wide gap between the amounts actually collected and the amount anticipated (25% of GO’s capital program). Specifically the Metrolinx Review of Development Charges at pages 6-7. Note that this report dates from January 2014 and therefore does not reflect all of the charges that have accumulated to date. It also speaks of $100 million in revenue from municipal development charges, but the chart below clearly shows that this is far short of the “expected” contribution.


These are not trivial questions, and so I have asked, again, for an explanation. To date, nothing has come to my mailbox. My latest query follows below.

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TTC Capital Program Review

Back in the early days of John Tory’s mayoralty, the 2015 budget discussions were overshadowed both by the legacy of the Ford administration and by major issues with project control at the TTC. From the Ford years, Tory inherited a mean-spirited attitude to transit spending and service cuts that the new mayor would come to reverse, for a time at least. A bigger issue, however, was the matter of runaway spending by the TTC on two major projects: the Spadina subway extension (aka TYSSE) and the resignalling contracts for the Yonge-University-Spadina subway (aka Line 1).

Even while the TTC’s CEO was coming to grips with these projects, Council passed a motion asking for a review of how the TTC was managing its business.

145. City Council direct the City Manager to issue a Request For Proposal to expedite a review of Toronto Transit Commission Capital program service delivery including:

a. a review of project management of Toronto Transit Commission Major Capital Projects in the past five years to determine actual project costs and completion dates relative to original schedules and estimated costs;

b. a review of staff reporting mechanisms to the Toronto Transit Commission and City Council related to capital project budget and completion date status; and

c. future organizational options for Transit project management and delivery of Major Capital projects related to Transit expansion and major State of Good Repair projects.

146. City Council direct the City Manager to co-ordinate the review in Part 145 above with the Chief Executive Officer, Toronto Transit Commission and to report to the Toronto Transit Commission no later than the November 23, 2015 Board meeting. [Item EX 3.4 Council meeting of March 10, 2015]

In the fullness of time, considerably later than the November 2015 date in the motion, a report from KPMG landed on the TTC Board’s agenda, the TTC Capital Program Review. This was supplemented at the meeting by a presentation from KPMG and a response from CEO Andy Byford.

The terms of reference for KPMG’s work were somewhat different from the Council motion.

KPMG’s scope was as follows:

  • review project management practices at the TTC with respect to the delivery of the Capital Program, and provide recommendations to staff that will assist the organization to improve capabilities for managing capital projects and programs. The TTC Capital Program Review seeks to achieve the following goals:
  • Improve the organization’s project and program management performance by learning from past experience;
  • Support continuous improvement efforts underway at the TTC, including the continued implementation of the TTC Portfolio Management Office (“PfMO”) established in 2014;
  • Assess project governance structure and protocols for reporting of project status, to ensure the appropriate level of transparency and accountability to project sponsors and stakeholders; and
  • Provide guidance on project delivery options and project management requirements for projects of varying size, scope, and complexity. [Presentation, p. 4]

Item “a” of the Council motion asked for a comparison of actual costs and completion dates with original plans. KPMG does not provide this information, and even worse, included a table of selected projects that does not clearly explain their history (see below). There is no “deep dive” into any of the projects and, therefore, no specifics that could be tied to “lessons learned”, to practices that created the problem in the first place.

The table below is the closest the report comes to commenting on Council’s request, but read in isolation it can be misleading. It is ironic that in their presentation to the TTC Board, KPMG did not include this table and made no comment  on it. CEO Andy Byford was not so kind, and emphasized that most of the scope changes were perfectly legitimate.


Other projects included in KPMG’s review but not in the table above were:

  • Fuel Storage Tank Replacements
  • Subway Station Easier Access Phase III
  • Surface Track
  • On Grade Paving

Of these, only the Easier Access program was flagged as “Challenged” with the others as “Successful”, but the reason for the EAP’s status likely has more to do with the complexity of later stages of the work and a lack of funding than with project management and controls. [See Table 1 at pp. 20-21 of KPMG’s report]

Two of these (track and paving) are the only “Ongoing” programs reviewed by KPMG. These are fundamentally different from “Finite” projects such as the construction of a line or the retrofit of elevators to stations. I will return to this distinction later.

This is a dangerous table in that it shows an apparent growth from $5 billion to almost $8 billion in project costs, a 60% increase.  That was the easy headline in media coverage of this report, and the sort of simplistic comparison that some members of Council would seize on as symptomatic of “waste” at the TTC. Scope change appears as a “primary cause” in five of these projects, but not all such changes arise from the same circumstances.

  • TYSSE’s cost grew due to inflation between the original estimate and the eventual approval of the project, and of course because the line was extended from York University to Vaughan Centre.
  • There was a considerable delay between the approval and actual start of work thanks to foot-dragging by senior governments in finalizing their contribution agreements. No adjustment to the completion date nor allowance for inflation was added to the estimate.
  • Politicians along the line wanted showcase stations, not the standard TTC boxes, and much of the contingency in the project’s budget was consumed by unexpectedly high bids for these structures.
  • The TYSSE project suffered from poor organization with many contractors on competing deadlines. This arose in part because the prevailing wisdom at the time was that work should be parceled out in small enough pieces that multiple mid-size contractors could bid. This arrangement was more a political decision than a technical one.
  • The original project did not foresee a conversion to Automatic Train Control (ATC) because that was not part of the TTC’s plans at the time. This item was added after the fact under a separate project budget, but this work added yet another layer of complexity to overlaps between many subsystem installation contracts.
  • The original fleet plan for TYSSE included the continued use of a portion of the older T1 fleet on the YUS with most, but not all, of the trains coming from the new TR order. After the decision to implement ATC, the T1s were no longer suitable because of the high cost of retrofitting ATC to them, and the TR contract grew accordingly. The TTC has a surplus of T1s, but no place to use them, including the proposed Scarborough subway which will also have ATC. The planned opening date for the SSE occurs well before the planned completion of the replacement of the T1s, a project that will have to be accelerated shifting spending into earlier years than planned.
  • The TTC now has a much larger subway car fleet than foreseen a decade ago thanks to the T1 surplus and cars for improved service under ATC that will not actually be used until 2019 and beyond when the ATC project completes. Additional space will be needed for the T1 replacements that will require concurrent storage space and a significantly different carhouse design from Greenwood Shops. These projects are not yet funded, and are not fully included in the cost estimates for the SSE.
  • The TR purchase, like all TTC vehicle contracts, includes a base order plus an option for additional vehicles. This is a standard arrangement for procurement because the TTC never receives full funding for its plans in one go, and circumstances change causing quantities to go up, or occasionally down. The complete order now includes enough trains for the complete replacement of non-ATC capable trains on YUS, conversion of the Sheppard subway from T1 to TR operation, the Spadina extension to Vaughan and additional trains to run more frequent service once ATC is in use on YUS.
  • The ATC contract evolved out of a dog’s breakfast of plans for new signalling on the YUS. Originally, the plan was simply to replace the aging block signal system on the original part of the line. However, funding for this could only be obtained by misrepresenting necessary maintenance work as something that would enable additional capacity. Eventually, the project grew to have at least two overlapping technologies being installed at the same time so that non-ATC operations could co-exist on an ATC line. This proved unworkable, and the contracts were consolidated into a single ATC project. The extra costs are a direct result of, first, underscoping the project for political reasons, and later from a failure to appreciate the technical complexity of what was being attempted.

The above are only the high points of a much more complex history (available in the linked articles), but what should be evident is that major projects interact with each other even though they are almost always discussed as if they are completely separate entities. This is a major problem in TTC budgeting and in the political context where such projects are debated. KPMG hints at this problem in its review, but does not drag any details out into the open.

The following discussion can only touch on the full report of 273 pages, and is intended to place the report more in the political context of the TTC Board and Council (and through them to the ongoing debates about TTC funding) than KPMG which tended to focus on internal issues of process.

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