So You Want To Own A Subway (2018 Edition)

Among the many promises made by the Progressive Conservative Party in the run-up to the June 7 election is a scheme to upload the Toronto subway system to the province with the intention of relieving Toronto of this ongoing cost. This was also part of their 2014 campaign, and it is born no doubt from the Ford brothers’ assumption that (a) this could be done cheaply and (b) Toronto would save money overall. The pot is sweetened this time around with the guarantee that Toronto would keep the fare revenue and operate the system. The overall tradeoffs in operating and capital costs are not entirely nailed down.

Oliver Moore in the Globe has written about this proposal wondering whether it is actually workable. The quotes below are taken from his article.

The Tories are framing the upload largely as an accounting exercise, making it easier to find funding and thus facilitating transit construction. The province would pay an estimated $160-million annually for major capital maintenance on the subway network, taking an obligation off city books.

Under the proposal, the Toronto Transit Commission would keep operating the subway, with its board setting fares and the city retaining revenues. Expansion planning would be controlled by the province, although Toronto and Ottawa would be asked to help fund construction.

Note that the proposal is silent on the operating cost of the subway. There is something of a myth that the subway “breaks even”, but this is not true, especially for the more-recently opened segments. It is a matter of record that the Sheppard Line loses money, and the TTC estimated that the operating impact, net of new fares, of the Vaughan extension would be $30 million per year.

If the province builds a new subway line, would Toronto, through the TTC, still be on the hook for paying its operating cost?

Any concept of “breaking even” requires that fares be allocated between surface and subway routes and this is an impossible task. One can propose many schemes, but they all have built-in biases because a “trip” and a “fare” are such different things. The situation is even more complex as an increasing number of riders pay through some form of pass all the way from the yearly Metropass (formerly called the “monthly discount program”) down to the two-hour transfer.

How Much Does The Subway Cost?

The estimated value of an upload to Queen’s Park of $160 million/year is woefully inadequate because the TTC’s capital budget for ongoing maintenance is much, much larger. There is much more to owning a subway than collecting billions in construction subsidies. Despite the frequent claim that “subways last 100 years”, they require a lot of ongoing maintenance and replacement of subsystems. With the exception of the physical tunnel and station structures, a large proportion of the older subway lines has been completely replaced or undergone major overhaul at least once since they opened. Line 1 YUS is on its third generation of trains, for example.

I wrote about this four years ago, and this article is an update of my earlier review.

A big problem arises for anyone taking a superficial look at the TTC’s books because so many projects are not funded, or are not even part of the approved “base budget”. They are “below the line” or, even worse, they are merely “proposals” of future works that might find their way into the official list. Looking only at current, approved funded projects ignores a large and growing list of projects that, for political convenience, are out of sight, the iceberg below the water line.

Slogging through the TTC’s Capital Budget is no fun, but somebody has to do it. You, dear readers, get the digested version of hundreds of pages of reports. Thank you in advance.

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