In the melee that passes for Ontario politics, one major issue is the proposed takeover of Toronto’s subway system by Queen’s Park. Such a change, they claim, would allow a great speed-up of system expansion currently hung up at Toronto Council. A good deal of that hang up can be traced to the Premier and his brother’s actions at Council, but such trivialities get in the way of a good stump speech.
The idea that planning should be based on actual evidence is a buzz-phrase heard most commonly when a politician is trying to appear “businesslike” and claims to be applying some sort of intellectual rigour to back-of-the-envelope planning. The uploading proposal sounds good in theory, but this is due in part to poor understanding of transits needs and cost both at Queen’s Park and at City Hall. The scheme surfaced years ago at Council as a simplistic way to cut the cost of transit support in the City’s budget, and the idea moved to the provincial level along with the Ford regime.
A common thread through every proposal is that the true cost of owning, operating and upgrading the subway system is poorly understood, even by members of Toronto Council and the TTC Board whose job it should be to know these things. It is a convenient myth that the subway “breaks even”, and that if only someone would take the cost of expansion and capital maintenance off of the City’s hands, all would be well.
In the interest of informed debate, this article examines the plan, such as it is, and the many issues that have yet to be addressed by its proponents.
Understanding the TTC Budget
A detailed breakdown of the TTC Budgets can be found in:
The TTC’s budget and long-term plans are poorly understood. The TTC Board scheduled Budget and Strategy meetings, but either cancelled them or spent the available time on narrow-focus rather than system-wide issues. At Council, things are even worse because budget debates, crammed with every department’s issues, get only short review. These are usually in an environment hostile to discussions of change except for a few, small topics. The “big picture” is limited to battles over new transit lines while the health of the overall system goes ignored.
For a decade or more, service growth in Toronto was constrained by the size of the streetcar and bus fleets, the physical limits on train spacing on the subway and the capacity of its stations. Much of the recent service growth is outside of the peak period when spare vehicles are available.
On the capital side, the City has a policy that its debt service costs should not exceed 15% of tax revenues. The province mandates a 25% cap, but the City takes a more conservative approach to provide headroom. Originally the cap applied to each year individually, but it is now considered over a ten-year average so that peaks and valleys in debt costs can smooth out for a 15% average. Already, planned borrowing for future years takes up all available room, and additional debt-financed work is possible only with special levies such as the Scarborough Subway tax (1.6%) and the John Tory City Building Fund (building up to 2.5%). (These are both tax increases above the rate of inflation.) If the cost of borrowing goes up, or City tax revenues fall, the 15% line will be only a fond memory.
The problem is compounded by a chronic understatement of transit needs going back at least eight years. When the marching orders are to keep deficits, and hence taxes, down, any proposals for improvement run counter to political goals. “We can’t afford it” becomes a standard response, and options simply go unstudied especially if they are associated with the wrong political faction.
If we don’t know what options will cost, we don’t know what might be possible or what the trade-offs among options would look like.
Even worse, with the Capital Budget, there is a long list of items that are either:
- approved but not funded (roughly 1/3 of the approved list, about $3 billion worth)
- “below the line” with neither approval nor funding (over $1 billion)
- “future consideration” (over $2 billion)
Many of the big ticket items in these lists are subway items such as new and expanded fleets for the two major routes, and capacity expansion at busy stations. Many items in the budget are actually part of a larger project such subway capacity. However, the budget is presented on a departmental basis, and there is no consolidation of related line items. This has two effects: the TTC Board and Council rightly complain when projects appear to grow because approving the first step triggers the need for all that follows, related items are consigned to “funded” or “unfunded” status without regard for their place in the larger scheme.
The problem with these lists is that they are getting longer, especially the second and third group, even though some items form parts of critical system updates. Other projects simply are not on any budget, or are pushed so far into the future that they have no effect on the current ten-year plans. The 15% rule caused important projects related to Line 2 Bloor-Danforth to be pushed into the late 2020s even though some of them are pre-requisites for the Scarborough Subway Extension. (The components of Bloor-Danforth subway renewal and capacity expansion are discussed in detail in an appendix to this article.)
If Ontario takes over responsibility for the subway, they will inherit that long list of projects. For its part, Toronto Council and the TTC Board do not fully understand the implications if Ontario simply chooses not to invest in the existing system because the estimate of a takeover has been low-balled.
The TTC Board is very simple-minded in its deliberations, and avoids going into details. Their focus is on cost containment, not on service, except when someone needs a photo op to announce some relatively trivial change such as an express bus network that adds few new buses.
If Council and the TTC don’t understand their own system and its real needs, how can they fight for it?
The Tory / Government Proposal
The idea of taking over the subway is set out on the Ontario PC website where they state:
We will:
[…]
Upload responsibility for subway infrastructure, including the building and maintenance of new and existing subway lines, from the City of Toronto to the Province. Add $5 billion in new subway funding to the $9 billion already available to build the Sheppard Loop with Scarborough, the Relief Line, and the Yonge Extension while building future crosstown expansions underground. Keep responsibility for day-to-day operations, including labour relations, with the City of Toronto along with a guarantee that the City will continue to keep all revenue generated by the subway system.
What this will cost:
[…]
Upload Toronto Subway System – Costing to be amortized over life of subway projects once operational, plus $160 million per year for existing assets.
More details are in a May 9, 2018 article on their website including:
[…] the province will upload responsibility for the TTC’s subway infrastructure, including the building and maintenance of new subway lines, from the City of Toronto to the Province. The City will continue to be responsible for the subway’s day-to-day operations, including labour relations with the City of Toronto, along with a guarantee that the City will continue to keep all revenue generated by the subway system. Ford also highlighted that the Sheppard Loop and building the Relief Line and Yonge Extension would be his priority projects.
[…] The Ontario PCs will also commit an additional $5 billion in new subway funding. This will add to the roughly $9 billion already available to build new transit projects in Toronto. Assuming provincial responsibility for the TTC subway system will enable the province to leverage its balance sheet in ways not available to municipalities. Given that the province can amortize subway investments over the life of the asset, we will be able to utilize the province’s balance sheet to get more subway projects completed faster.
[…] “All of these investments will be included as part of our costed, responsible and affordable plan,” Ford concluded.
When Transportation Minister John Yakabuski announced the creation of a panel under Special Advisor Michael Lindsay, he said:
[Lindsay] will work with the province on a plan to efficiently and effectively deliver on this key commitment. Mr. Lindsay, and an advisory panel of up to three experts to be appointed, will support the government in determining the best approach for the upload, including the building and maintenance of new and existing subway lines.
“This is part of our government’s plan to improve public transit and bring relief to commuters across the region,” said Minister Yakabuski. “Travelling around the GTHA can be difficult and cumbersome. Traffic congestion and a lack of transit infrastructure is costing money, jobs and time. Our government is stepping up and treating the subway like the vital service it is. I welcome our new Special Advisor, Michael Lindsay, and I look forward to working with him on this important initiative.”
The Toronto subway system is critical for the economic success of the region. An upload of the subway would help the province to implement a more efficient regional transit system, reduce costs and build transit faster. It could also allow the province to fund and deliver additional transit projects sooner. [From the press release of August 31, 2018]
No specific commitments were made about financial arrangements or funding, as one might expect if this is really to be a “study”, not an exercise in rubber stamping a pre-determined outcome.
All of this sounds good, but there are a huge number of details to be worked out, not the least of which is that the money earmarked to support the subway by the PCs is much below the current level of spending, let alone the level actually needed to attack a backlog of unfunded projects. Premier Ford may have a severe case of sticker shock when he learns just what a subway takeover means, and Toronto could end up with an even worse situation than it now faces.
Who Pays What Today?
For the existing subway system, Toronto pays almost all operating subsidies and capital costs for major renewal and maintenance projects.
On the operating budget, fares cover about 66% of the total, subsidy 30% and miscellaneous revenue (such as leases and advertising) 4% on a base of $1.8 billion. For the provincial fiscal year 2017-18, Toronto received about $182 million in gas tax revenue from the province. Of this, $75 million is allocated to capital and the remainder goes to the operating subsidy. Details of operating subsidies can be found in footnote 13 to the TTC 2017 financial statements (at page 31). The allocation of the provincial contribution between capital and operating is made by the city as part of its budget process.
Capital expansion projects such as the Vaughan extension and the proposed Scarborough Subway are funded separately from the ongoing capital renewal and maintenance budget. The proportions carried by each government vary from one project to another depending on policies of governments at the time. One important aspect to this has been the capping of contributions at a level originally “committed”. A project’s cost may rise, but the provincial or federal spending is set not as a proportion of the total, but as a fixed dollar amount. The purpose of this is to discourage project creep with the city only having to pay “33-cent dollars” in the expectation most of an overrun will be funded by others.
- In the case of the Sheppard Subway, the Harris government capped its contribution and thanks to inflation there was not enough money available to build beyond Don Mills even though Victoria Park might have been a better terminal location.
- On the Vaughan extension, the cost of recovering from problems with both the station construction and signalling contracts was entirely covered at the municipal level (roughly 60/40 for Toronto/York Region based on mileage within each city).
- With the Scarborough Subway, both the federal and provincial contributions are capped in theory, although with the new government at Queen’s Park this will almost certainly change. Moreover, the federal “commitment” which was originally its own item, has now been rolled into a new transit fund, PTIF (see below), and Toronto lost the chance to spend the original bundle by dithering over the LRT vs subway issue.
The federal government gives Toronto about $167 million per year from gas tax and all of this flows to the ongoing capital program. Recently, additional money has come through the Public Transit Infrastructure Fund, and Toronto’s Phase I funding has been substantially used to replace a large portion of the bus fleet. Phase II projects have not yet been announced, but the feds have made clear that their Scarborough Subway contribution will come out of that pot and so PTIF Phase II has less “new money” in it that the announced dollar value implies. PTIF, unlike the gas tax, requires matching contributions at the provincial and city levels. This requires projects on which all three levels of government agree, and in turn that can distort priorities to projects where external subsidies are available.
The ten year “base program” covers ongoing capital renewal and maintenance, and its total value its total value is $9.24 billion of which only $6.5 billion is actually “funded” in the sense that the city knows how it will be paid for. Of this, about half is related to subway projects. Within the list of “unfunded” projects, about 70% are for the subway and the percentage is even higher when “below the line” (and other euphemisms for deferred spending) items are considered. Just for the base budget, the annual cost is about $500 million (funded plus unfunded) without building one metre of system expansion.
This is three times higher than the amount estimated by the government for the ongoing cost of subway maintenance.
Subway Capacity Constraints
There are capacity constraints on the existing system that will not easily be relieved.
Yonge-University-Spadina (Line 1)
Automatic Train Control (ATC) will be fully active in 2020, and it will allow up to 25% more trains to pass a point and carry more riders. The TTC has some provision for more trains in its budget, but the current fleet is not sufficient to reach a 25% increase in service.
Bloor-Danforth (Line 2)
Installation of ATC on Bloor-Danforth is not planned to start until the Yonge project is more-or-less completed, and BD will not see ATC operation until the mid-2020s. The project is currently scheduled to finish after the Scarborough extension opens, but that line will be built with ATC.
The current BD fleet is not ATC equipped, and a retrofit for its short remaining life is not cost effective. Plans for a new fleet are in the budget, but with no funding, and with a completion date after the SSE opens.
A new yard is required to hold and service the new fleet. Property acquisition is in progress, but construction is not fully funded in the budget. Again, this facility must exist before the TTC can begin to take delivery of a new fleet.
Stations
Some stations are already overcrowded during the peak period because they cannot disperse arriving passengers fast enough between trains, or because their platforms do not have enough room for passengers waiting to board, particularly when there is a delay. Much attention has focused on the southbound platform at Bloor in the AM peak. However, there are also issues at St. George during the AM, and at both interchange stations during the PM peak when an enhanced Line 1 will deliver would-be riders to Line 2 25% faster than it does today. There will be no added capacity on Line 2 to absorb them.
The Surface Network
As I have written elsewhere, the surface network is constrained by bus garage capacity. McNicoll Garage will open in 2020, but this will mainly be a “relief value” for overcrowding of existing garages. The next garage after that is not planned until the mid-2020s, and this has severe implications for bus service.
The streetcar network is gaining capacity by the replacement of old cars by new, larger ones, but even this may only just make up for two decades of service freezes and cuts on the streetcar system. The King Street Pilot shows that there is latent demand, but there are no approved plans to deal with this. A potential 60-car add-on streetcar order is mired both in Bombardier’s performance problems with the Flexity contract, and with the inevitable pushback that will come from the Ford government on spending more money on streetcars even though the system badly needs them.
Expansion Proposals and Funding
The government’s plan, repeated from the quotes above is:
Add $5 billion in new subway funding to the $9 billion already available to build the Sheppard Loop with Scarborough, the Relief Line, and the Yonge Extension while building future crosstown expansions underground.
That $5 billion will not go very far. We know that the SSE is going to be around $3.5 billion even before it is restored to three stops which will add to the cost. The Sheppard Loop from STC to Don Mills would be about 8km long, almost 1/3 more than the SSE. This translates to $5 billion and would eat up all of the proposed new money even before the Relief or Yonge extension lines came into play. Although Ontario plans to take ownership of the subway, they cannot possibly build everything they advocate without substantially more funding. Either they must up their own ante, or get into discussions with Ottawa and the municipalities (mainly Toronto) about contributions. This is not a recipe for a fast conclusion of new project approvals and builds.
The question of whether Crosstown extensions will be underground is not clearly answered. The quote above implies this is definite, but in another article is this statement:
While the Eglinton Crosstown expansions must be built, a Doug Ford Government will build the Eglinton West and Eglinton East expansions underground, where feasible.
The “where feasible” qualifier is an important distinction. This also gets into the knotty problem of a “subway upload” also including surface lines.
What is the Subway Worth?
In a recent Toronto Star article, Ben Spurr reported that according to the TTC the subway system has a value of $3.9 billion. I have confirmed this figure with the TTC, but there are very important caveats here.
- The cost base is the original cost of the asset which might have been bought half a century ago, not the replacement cost.
- The value cited is the net value of the assets after amortization.
- The costs include money provided by all contributors although the asset is carried on the TTC’s books. Capital subsidies flow to the TTC through the City of Toronto, and the resulting asset shows up as TTC capital property. However, any debt used to fund these subsidies remains on the books of the government providing them.
However, according to the TTC’s financial statements, the original cost of the system is $17 billion, and of course the replacement cost would be even higher.
The value of the TTC’s tangible capital assets (things you can actually touch like a subway train) is summarized in a note in the 2017 Financial Statements (at page 28) with excerpts below.
- The first table shows these assets at cost.
- The second shows accumulated amortization which writes down the capital cost over its useful lifespan.
- The third shows the book value (original cost less amortization).
Note that the replacement cost of assets is considerably higher than their original cost, let alone their amortized book values. For example, a subway train purchase 30 years ago cannot be replaced for the same cost as the original train. The original Yonge subway opened in 1954 and the structure is in its last year of amortization (on a 65 year basis).
The net book value of the system at the end of 2017 was $10.9 billion, and it is very difficult to believe that only 40% of this is due to the subway which is the most capital-intensive of transit modes. By comparison, the Eglinton Crosstown line alone is valued at $5.3 billion (new, with no amortization yet), and the projected Scarborough subway is well over $3 billion.
The reason for this discrepancy is that many of the “subway” assets have been around long enough to have a much lower original cost than current prices, and they have run through years if not decades of amortization reducing their book value even further. By contrast the surface system assets do not last as long (nor are they designed to) and so the purchase of many of these assets is at a recent cost level with little amortization.
The amortization rates used by the TTC are summarized in the following table. Note that none of them is the infamous “100 year” lifespan claimed for “subways”.
I asked the TTC to break out the major parts of “Construction in Progress”, and they provided the following table. Note that a substantial portion of this (almost $1 billion) is for subway projects. (For clarity “EAIII” is the “Easier Access Phase III” project.) This shows how new assets cost far more than the book value of older assets.
Moreover, a “purchase” at book value would clear the subway off of the TTC’s books as an asset, but would also strip the underlying value as a revenue generator or even for resale (think of Highway 407).
With Toronto remaining responsible for “operation” of the subway, a cost that could include day-to-day maintenance, it is not clear that this is a break even arrangement. It is a common myth that the subway breaks even, but that assumes a specific way of allocating fares that could be biased to overpay for the subway portion of trips. Also we know that both the Sheppard and Vaughan subways operate at a net loss. The Vaughan extension adds about $30 million annually to the TTC’s expenses net of any offsetting new revenue from ridership growth. The further out the subway goes, the more it reaches into territory where it is a money-loser. This is of particular importance if the province takes over planning and building of lines, but expects Toronto to pick up operating costs and losses.
When a Subway is Not a Subway
An outstanding issue between Metrolinx and the TTC is a full operating agreement for the new LRT lines of which the Crosstown will open first. We know that the TTC will dispatch the service and operate the trains, with a Metrolinx contractor doing everything else. However, will Metrolinx expect to be paid by Toronto for provision of this service? How will fares be charged and allocated between the TTC and Metrolinx parts of the network?
We know from past Metrolinx studies that they prefer a fare-by-distance model and this could add considerably to the cost of long trips typical for many suburban riders. Offsetting this is the recent shift in pricing policy both for GO and for 416-905 cross-border travel that was proposed by the Wynne government. It is unclear whether this scheme will survive in the Ford-era budgets.
If Metrolinx charges for service provision, will Toronto be on the hook if the city wants better service than Metrolinx wishes to provide? Subways in Toronto operate every 5 minutes until after 1:00 am, but it is not clear that the same service standard would apply to Metrolinx LRT lines.
Challenges and Questions:
- Ontario now gives Toronto about $180 million in gas tax revenue part of which goes to subway capital maintenance. How much of this will be clawed back by Ontario as part of its “taking over” funding requirements for subway maintenance?
- Canada also gives gas tax money to Toronto. Will Ontario seek to take over part of this subsidy stream for subway maintenance?
- What exactly does Ontario mean by “maintenance”? Do they include only the capital projects, or also the day-to-day running maintenance of the system? If Toronto is expected to “operate” the subway, does this include routine maintenance of the vehicles and infrastructure?
- What will happen to shared infrastructure such as stations, power distribution systems and central support/maintenance locations that now serve both subway and surface modes?
- If Toronto chooses to use provincial assets, that is the trains and stations, at a higher level of service, will Ontario charge for the privilege? In other words, who determines service standards on lines owned by Ontario but operated by Toronto? (There is an analogy here to the as-yet unknown terms of the operating contracts for LRT lines.) If Toronto wants better service than Ontario is willing to provide, how is this to be funded?
- Outlying portions of the subway network operate at a loss, notably outside of Toronto. If the province takes over the subway, why should Toronto pay to operate trains into York Region rather than having the regional government or province shoulder the subsidy?
- Will Ontario review the list of capital projects, including those that are unfunded or not even part of formal lists, and bring funding to a level where needed improvements such as the Bloor-Danforth subway renewal can take place?
- Will Ontario expect capital contributions to system maintenance from Toronto?
- Will Ontario expect capital contributions for subway system expansion from the municipal and federal governments?
- The City of Toronto carries debt that was used to pay for subway assets. Will the province either assume this debt or compensate the city for its investment in subway infrastructure?
- Does Ontario intend to impose fare changes such as fare-by-distance for its routes, or would all routes within Toronto remain as part of a flat fare regime?
- After the subway “upload” to Queen’s Park, what, if any, subsidies will be provided for the conventional surface and Wheel-Trans systems?
This list only begins to delve into the issues involved in a provincial takeover of the subway system, but these are questions that must be answered.
Appendix: Bloor-Danforth Subway Renewal Projects
Over a year ago, TTC management talked of producing a compendium report on renewal and enhancement of Line 2 Bloor-Danforth. This report has never appeared, and my suspicion is that the central problem is that the city and provincial funding plans do not align with the requirements of a consolidated renewal project. The Scarborough Subway creates an additional pressure by setting a date when some components of the plan must be ready even though earlier capital budgets showed dates that were incompatible with the extension’s timing.
Here are the major components of what would be in a renewal plan:
- T1 subway car replacements. The T1s serve the BD line and they will be due for replacement in the late 2020s. There is $1.411 billion in the base budget, but the project has an estimated final cost (EFC) of $1.861 billion because in extends beyond the 10-year capital budget window. This project is not funded, and yet it is closely related to other projects below.
- Subway ridership growth will provide some additional trains for both the YUS and BD lines. This is an unfunded item with an EFC of $287 million.
- Resignalling of the BD subway has an EFC of $431.5 million in the base budget, and it is funded. However, project completion is post-2027. Automatic Train Control (ATC) cannot be used on the BD line and Scarborough extension until there is a fleet capable of using it.
- A new shops and yard will be required because two fleets must exist concurrently, and the yard at Greenwood is (a) full and (b) not suited to maintenance of six-car trainsets now used on the Yonge line. Property acquisition for an old CPR freight yard near Kipling Station is in progress, but a full project to build a yard and carhouse does not yet exist in the capital budget. A cost of $500 million would be at least in the ball park. (Greenwood Yard would eventually be used, in part, for the Relief Line.) This project was originally timed on the basis that the T1 replacement would occur starting in 2025, but if BD trains are to be ATC equipped for a Scarborough extension, both the trains and the carhouse are needed sooner. There is no line item project for this in the capital budget beyond property acquisition.
- Yonge-Bloor capacity improvements are an item for “future consideration” with a pricetag of about $1 billion.
- Capacity improvements at other stations are only an item for study at present, and there is no project to actually implement improvements.
- Platform doors are another “future consideration”. For the YUS there is a line item at $348 million, but there is no provision for anything on the BD line, probably because ATC is a pre-requisite and this would not be in place within the timeframe of the 10-year budget.
These are capital costs related to capacity expansion, and it is unclear who would cover these expenses considering the relatively small distance an “extra” $5 billion will go.
Steve Munro 
I think that the incredible complexity, as you have described, that would surround a provincial takeover will be enough to frighten the Conservatives away; unless they have some bright young members that we haven’t heard from yet. The old Harrisites can barely manage to stay awake, and look as if they have no real comprehension of Doug’s selfish, personal machinations.
I have a question: Given your often mentioned contempt with the present methodology of the TTC Commission and Toronto City Council; do you think Doug’s slimming down of the latter could lead to greater efficiencies? I know that’s not on his mind, but maybe things could work out if council members actually began to listen to each other.
Steve: I worry that there is already a desire by most Councillors (and hence TTC Board members) for oversimplification because they have too much information to digest. With fewer Councillors this problem will be compounded. It permeates down into management as well. When questions are not asked, then simplistic answers and “metrics” of system success are accepted at face value. Although any board or council is expected to be made up of generalists, there is a need for subject matter knowledge, not just a vague desire to “protect taxpayer dollars”. Smaller is not better here.
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Briefly: many thanks for this, especially the detail vs. simplistic soundbite. With language, I’m thinking we should use the term ‘uptake’ vs. upload, because the latter sounds nicer instead of taking without permission which could be – and in Ford’s case – likely seen as theft, and with his abuse of power, we’ll likely be forced to pay more, while the cars keep running for free, since they’re used by the votorist ‘folks’, and we’re not carrupt, unlike the other parties/levels.
And speaking of carruption, we also need to make sure that we’re hard-nosed about how well the mobile furnaces aka cars get a freer ride, though of course they’re costly to run, and in some areas, can be ‘needed’. Old stats from Vancouver indicated 7x more subsidy a year than transit to sum of $2700 each car each year, but these costs are buried – thoroughly buried – in all sorts of different budgets vs. a single BIG target item. vtpi.org
I’ll put more time in to this later; meanwhile, we maybe should be thinking what can be done on the surface for better transit, and in new corridors, and avoid the Subway Industrial Complex thinking as the only form of transit to something done sooner eg. Realief. It’s a dismal prospect with both the likely Clowncil and Cons at Queen’s Park; yes. But maybe – since climate crisis is zero motivator – if the Middle East blows up (which I hope it doesn’t), maybe the $4 a litre oil might wake some up.
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A provincial takeover of the subway system is the only way that subways will be built in the suburban regions of the 416. Consider for example the Scarborough subway approved by every level of government umpteen times but City Council wants to vote on it again and again until it is finally rejected. The latest Scarborough subway report has been artificially withheld until the next Council because the current Council will approve it. As a matter of fact, Downtown resorted to gerrymandering to make sure that the Scarborough subway gets rejected by the next Council for whom the latest Scarborough subway report is being artificially withheld. I know that Downtown’s population has increased and so, they want more Councillors but Scarborough’s population has also increased exponentially and why should Downtown get 3 additional Councillors and Scarborough not get even a single additional one? I support an expanded Council only if Scarborough also gets additional Councillors and if not, then let us reduce the size of Council further down to save even more money. The only way to stop the Scarborough subway now is to get Justice Edward Belobaba to pass another dubious ruling which declares the Scarborough subway unconstitutional which will effectively stop the Scarborough subway but only until a higher court again declares Belobaba’s ruling to be dubious. Vaughan is extremely lucky to not be part of Toronto as there is no way that Downtown would have allowed a subway to Vaughan if Vaughan had been part of Toronto. I know that Steve probably wants to delete my comment but I am truly interested in what Steve has to say about this.
Steve: For starters, I am not sure even a pro-SSE Council will be willing to take on the cost of the Scarborough Subway without significant help from Queen’s Park, and now that DoFo wants a three-stop line plus a loop back to Don Mills, the cost will be astronomical.
The next vote, if it occurs, is to approve the project based on a 30% design estimate which is a lot closer to a realistic cost than the back of the envelope version Council has been working with so far. I fully expect DoFo to scream about TTC incompetence when the price comes in very high, and try to give the whole thing to some cronies in the “private sector” who will be expected to find “efficiencies”. All that will do, along with the design changes, is push back the start date even further, possibly beyond the end of DoFo’s mandate.
The Belobaba ruling has nothing to do with the “constitutionality” of the SSE. You may remember than Rob Ford’s cancellation of Transit City was not actually within his power, but Council bent over and let him do it anyhow because it was at the start of his term before he was seen to be the incompetent, drink and coke fuelled fool he turned out to be.
As for population evolution, wait until the next Federal redistribution. The people for whom the City redistribution was intended will exist in the next census and that will have a big effect on the relative power of “downtown” relative to places like Etobicoke where there is little population growth.
As for Vaughan, I am still waiting for them to pay us the operating cost of their extension. It’s $30 million annually for the whole thing, and based on mileage, that means Vaughan owes us $12m/year. If they want more subways, they should pay for them.
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The advisory panel of Mr. Lindsay will hopefully study this upload scenario for long enough for the PC’s to have to face an election before any action happens.
Steve: They are supposed to report in at most one year. We will see how thorough their study is, and how much bullshit comes out of Metrolinx about how “easy” the whole process will be.
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Steve, with regards to any new yard (i.e. Kipling) for the Bloor-Danforth Line, certainly the yard does not have to be complete in order to handle the new fleet for the line. As the new consists will likely be a) more consists of the Toronto Rocket model or b) be similar to that fleet, I would imagine that to begin with the TTC would only require the new yard to have storage tracks. Any maintenance building(s) can be completed as the TTC receives new trainsets. Any issues should be able to be dealt with either at Greenwood (minor issues anyway) or at Wilson. Or am i missing something here?
Steve: There is no room at the existing carhouses to handle more trains, and Bloor-Danforth is already over-full thanks to the shift of the T1s from Sheppard to BD. Greenwood is totally unsuited to handling six-car trainsets, and that’s what the TTC is looking at for the next fleet. They also need a modern carhouse anyhow. Greenwood also does not have the equipment needed to maintain a fleet with totally new technology including ATC. Wilson is full.
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It will be a disaster. All I can say in response is an old Yiddish curse: “Doug Ford should swallow a bus and s**t transfers the rest of his life.”
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As you mentioned, future capital projects that can be funded by the federal government come with a provision that the total cost be shared 3 ways (federal, provincial and municipal). If the provincial government does upload the capital cost of new projects, would the cost then be shared 2 ways (feds and province) or would there be an expectation on the part of the feds that Toronto should still be contributing because it is a “Toronto-centric” project. I am sure neither government will be happy with a 50% increase in their portion of the cost if there is only a 2 way split and if the feds want some Toronto money in the project, then Toronto would not be happy making a contribution to infrastructure they do not own. Neither is a particularly appetizing solution.
Steve: There have been occasional comments that even after an “upload”, the province will expect a municipal contribution, although that’s amusing if Toronto does not want to build a project. I think that Queen’s Park is making up policy as they go along, and that’s why the whole thing has been sent for a year-long study.
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I have a much simpler solution than the province uploading the subway network: get all of the politicians that want to play with the TTC a train set and they can stop using Toronto as one.
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Now that someone brought up “Transit City”, I will say that I’m partly happy it got cancelled by bumbling Robbie… only because by 2050 (or even 2100) when the Relief Line is built, it will be a subway under Don Mills leaving 3 lanes of traffic per direction (and acts as relief itself to the Don Valley Parkinglot). Express service won’t “bunch” above ground and be erratic or have to stop at a traffic light ever so often, and we won’t have a lane taken away from the car (thereby no “war on the car”) to make way for LRT.
Steve: When Transit City was being designed, I argued very hard that the south end of it should simply be simply a northern extension of the Relief Line because there was no reasonable path from Danforth to Eglinton on the surface. TTC planners refused to go down this path, and the line suffered credibility as a result. North of Eglinton, at the time, might have been LRT or might not. But with the need for major relief on Yonge, subway to Sheppard is the obvious choice now.
When McWynnety and Toronto Circus Council settled on Crosstown being “at-grade” in Scarborough, didn’t they initially promise to expropriate a wee bit of everyone’s property to leave Eglinton as 3 lanes per direction + LRT in the middle or was this a #fakenews rumour I had heard? Because all of the platform designs on the Crosstown website show 2 lanes of traffic per direction. Steve, can you provide any additional details?
Steve: There was talk of this, but for some reason it was not included in the plan. Again, this was a decision that undermined the credibility of the plan and needlessly created opposition. At least the option of widening Eglinton is still available, and I believe it requires very little private property to do this.
Finch West should continue as the planned LRT, and so should Sheppard East. Depending on where the “Relief Line” hits Sheppard, I am indifferent between a line terminus at Fairview Mall or in the Consumers Business area, but then it should convert over to LRT even if it means “another transfer”. Subway is not required and we don’t “need to close a loop”. If there is any part of Sheppard that warrants a “future” subway extension, it is westward to Sheppard West and a possible tunnel into the Downsview Yard, but that is YEARS away.
By the time the Relief Line inevitably opens, maybe Presto will become like Oyster and be used for all GTHA transit agencies as the payment collection vendor and we can have zone-based fares rather than “cross Steeles, pay double”. By then maybe YRT can renumber some existing routes so that they better mimic the TTC number (i.e. 25 Don Mills/Leslie) like they have done with 24 Woodbine, 105 Dufferin, and 165 Weston.
Steve: A much simpler “regional fare” would be two hours travel anywhere, any direction, but that’s a completely separate thread.
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I totally disagree about not needing to close the loop between the University and Yonge lines. There is redundancy downtown with the two lines being about 500 metres apart, and if one line goes down, people can take the other. If there are problems on either line further north, it is harder to get from one line to the other to get to a much further away destination. Expanding the Sheppard subway to reach the University line would mean that some passengers going to the west side of downtown from Sheppard or Finch would happily take the extension to the University line. Right now, coworkers tell me about heading north to Finch in order to get a seat and then heading south to Union and back north again to their destination at U of T.
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The whole uploading idea has always seemed strange to me. Neither the Toronto nor Ontario governments have the spare cash to build new subways, so what does it matter which level of government controls it? It will still be the same taxpayers who end up paying for it in the end anyway. How can anyone consider this with anything other than suspicion about it being some sort of magical “free lunch”?
There must be some ulterior motive. Perhaps they think they can lower costs by privatizing the operation of the subways? I don’t think they are much cost savings there, but the Conservatives are knee-jerk anti-union, so that might be a possible motivation. Perhaps they think they can move to higher GO-level fares, thereby bringing in more revenues? That might be consistent with the idea of the subway becoming a regional asset. It’s possible they want a stealth tax increase like in the Harris years where they shuffle responsibilities around in such a way that the Ontario government ends up giving Toronto less money overall while giving them more costs, and then it will fall on Toronto to raise taxes instead of Ontario?
There might be some theoretical cost savings by forming a permanent provincial subway construction team? I vaguely remember reading that Spain bragged about lowering its tunnel costs by developing in-house tunneling expertise. They didn’t have to pay contractor rates or deal with big contract tenders because they had one in-house team that was always kept busy building new tunnels and which could develop efficient processes since they were always working. Of course, Spain’s economy almost collapsed from building too much infrastructure…
Ultimately, I think it will be all talk. My take on the Ford years were that they were good at cutting things, but they were also completely unable to get anything built or to navigate complex projects. It was Karen Stintz who pushed through the SSE, not the Fords. With all the talk of higher Ontario deficits and grumblings from Ford’s rural supporters that he’s giving too much to Toronto, I doubt that they’ll actually get anything done on the subways. It will be four years of nothing.
Steve: Ford seems to equate owning the subway with being able to plan for it and force construction. Where the money will come from is a mystery.
As for Spain, the amount of building that took place was made possible by EU funds flowing into the country after Spain joined. Once that flow dried up, the story was a bit different. The equivalent here would be to talk about all of the construction we could do if only the Tooth Fairy gave us an unending supply of cash.
They did save money by having a dedicated process and construction team, but also saved a bundle through shallow construction and a much simpler approval process.
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Breaking news: apparently at the Arts debate Mayor Tory talked about leadership being able to change a mind: from a tweet by Matt Elliott –
But in mid-Dedember, Mr. Tory voted to ignore facts with infrastructure decisions in a 23-19 vote in item EX20.2 motion 1b from Mr. Matlow. So What a Hypocrite?!! – and if we heeded facts, we would NOT be contemplating a few billion of further overload of Danforth from the Scarborough area vs. other solutions. And new Premier Fact also has his own Fact-shun to perpetuate the folly of suburban subways into lower densities, and doesn’t the new Spadina Extension cost the system $25 each rider north of York University? Thankfully, there are those – like credit rating agencies – that might respect facts still.
Macleans: What will Premier Doug Ford cost Ontario?
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I’m with Ming here. Province owning the subway seems to be grounded mostly in “spite Toronto council” logic. That’s fine as a “we’re going to take over” announcement to give glee to Ford Nation, but when politicians begin to consider what actually happens after the announcement they might get cold feet. Does the current Ontario government really want to be the high-profile owner of an asset which is in very visible need of rather expensive maintenance? Do the honourable members for Etobicoke want to be the first politicians thought of when there’s smoke at track level or a signal failure? A popular system in good condition might be tempting to upload – as the subway stands, if it was currently owned by the province, PCs would be looking to download it.
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Steve in response to Ming questioned where the money will come from for the Scarborough Subway Extension. Well, where will the money come from for the Downtown Relief Line? The cost of the DRL already nearly tripled once and wait till the real cost of the DRL comes out and it will never get built. The SSE cost is only a small fraction of the DRL cost and I am confident that the SSE will get built by the current PC government as it should be. Regardless, the decision to build or not build subways will not be with Council and I am happy that the province is taking over.
Steve: The cost of the SSE is expected to come in well over $4 billion, and that’s not including the restoration of stations proposed by Doug Ford, nor the Sheppard link west to Don Mills Station. You may recall that when we were sold the idea of an SSE, the extra cost was only going to be $500 million. As for the DRL, it started out in the $4-5 billion range when it only went to Danforth and without inflation in costs to the period when it would likely be built. The extensions north to Eglinton, and then to Sheppard have pushed this higher, but also taken the proposed line into territory where it would have the most benefit for “relief”.
The benefit a DRL will bring to the network and to many riders (including the “relief” effect for the existing Yonge line) is real and substantial, while the SSE proposal exists mainly as a political exercise.
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Not only that, but they were great at cutting piddly little things and making the announcement a big event, while also making cuts that had HUGE cancellation costs. This image demonstrated this.
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From Doug Ford’s May 9 press release:
As a professional Accountant, I always find it amusing when people use accounting terms as magic words. Abracadabra! Amortization! Money magically appears!
In reality, things don’t work like that. So let’s look at the claim in first half of this sentence. “Given that the province can amortize subway investments over the life of the asset…” Amortization and depreciation are not magic words. They describe the process of allocating the cost of an asset over its useful life. So, for example, suppose a piece of subway track cost $20 million to build. And it will last 10 years or one million subway trips before it is worn out. One way of amortizing the cost of this asset is to allocate $2 million per year as the depreciation cost of this asset. In other words, every year our depreciation expense due to this asset will be $2 million.
Another way of amortizing the cost of this asset is to say that the depreciation cost of each subway run over this piece of track is $20. And counting the total number of subway runs of an entire year would give a perfectly acceptable alternative method of determining that year’s depreciation.
Understanding how amortization works allows us to see that the first half of the above sentence from the Doug Ford government is patent nonsense. Not only the province but also the City of Toronto can (and presumably does) amortize investments in subway assets over their useful life.
Steve: Yes, the TTC does amortize its assets including the portion paid for by others. This is in the financial statements. See pp 12-13.
On to the second half of Doug Ford’s nonsense sentence: “…we will be able to utilize the province’s balance sheet to get more subway projects completed faster.” A balance sheet is a list of all the assets and liabilities of an organization. How this speeds up a subway project is a mystery to me.
The province has actual, real ways of speeding up projects. In particular, the province has superior taxing and borrowing powers. And money tends to be very useful in actually getting more projects completed faster.
Steve: What the province regularly does is to hide debt through PPPs. This actually creates a future payable via the DMFOM agreement with the builder (e.g. Crosslinx Solutions for Eglinton), but magically there is no debt. I am baffled by the fact that there does not appear to be a requirement to disclose exposures via future lease payments. For example, the TTC statements show the future costs of leases on office space.
In the case of the City of Toronto, when they float debt, they are required by provincial law to keep the debt service costs at or below 25% of tax revenue, and to be conservative, the City sets a limit of 15% on itself. There is no such discipline at the provincial level, and this is precisely the source of the huge debt that DoFo is so astounded to find that the Wynne government left behind.
DoFo will simply add to the problem with wild borrowing, or alternately will create a future payable account. The question nobody has answered about these (mainly because none of the projects has completed yet) is whether these payments will be counted against the operating cost of the “TTC” subway system. If so, this will require higher fares and/or subsidies to, in effect, pay off the debt.
The portion of the PPP which is true operating cost (the “OM” part of “DBFOM”) would be a legitimate claim based on current TTC accounting, but the cost of the debt is really a deferred capital expense, and these are not charged to TTC operations today.
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I was pleased to see this in the Star today from Royson James.
Though again, the language should be uptake, as uptaking without permission is like taking without permission which is theft. I’m pleased that Mr James has gotten pretty dark about it all, as I see no good coming out from the FOrd involvement in trans*it, and we are likely needing to be litigious, outspoken, pressuring the federal level, and prepared to pay more for less, and have the shytstem squeezed to be stripped of parts to pay for more suburban subway follies.
We should really be preparing for needing to do things by ourselves again – what would that needed relief look like if on surface? Why not think of the Don Valley Parkway? Just because our Dougtator and his carservatives won’t be willing to countenance any dimunition of their free-ride privilege, doesn’t mean we shouldn’t be seeing the DVP as part of a surface transit relief option, and sure, let’s think of bypassing Bloor/Danforth to make it cheaper.
Sadly, the election meddling of Premier Fact is also impacting on how little time we have to get to discussion of these issues, which is urgent, and desperately needs greater expansion of the ideas, though the best starting place is to scrap the SSE, and then, what triage is possible? I hope people don’t get suckered thinking a bit of “Relief” in a decade, maybe, will actually be a reality – and it’ll be very easy to get a stubway in the core, with disbenefits vs. Realief, and we do need that relief function, unquestionably.
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In the private sector, there is indeed such a requirement. But governments have a habit of publishing financial statements using whatever accounting principles they choose to use. Needless to say, they frequently choose to use accounting principles that make themselves look good, even although a private enterprise doing the same would find itself facing serious consequences.
Hence the previous Wynne government’s fight with the Auditor General over pension accounting principles. That simply does not happen in the private sector, where there are consequences to an adverse audit opinion. Big companies whose auditors provide an adverse audit opinion will find themselves rapidly delisted from the Toronto Stock Exchange. Smaller companies will find it hard to get bank loans with an adverse audit opinion. And companies of any size that try to file income tax returns using accounting principles that are disapproved of by Canada Revenue Agency will quickly find themselves In Big Trouble.
But if a government blows off Generally Accepted Accounting Principles and waves a magic wand to disappear debt into a PPP, there are no consequences. In theory, the people should hold them accountable come election time, but try to explain accounting principles to the average voter and watch his eyes glaze over. So as long as there are no consequences to a government arbitrarily choosing dodgy accounting principles to make themselves look good, I predict that this behaviour will continue.
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Lots of hypotheticals surrounding this entire topic, but I am wondering about the hypothetical Relief Line South in particular.
If subway control is transferred entirely to Metrolinx, is it still certain that Relief Line South would utilize typical TTC rolling stock, like the high-floor, third-rail T1s and TRs?
If it isn’t, and for example, Metrolinx wanted some level of technological compatibility with GO RER and chose a high-floor, single-level catenary-powered vehicle for Relief Line South, would the current tunnel and station designs need to be redone?
I am getting a bit too specific here but, on some occasions, I like to see the trees for the forest!
Steve: Changing subway technology would not make sense for Metrolinx as this would drive up costs substantially. Doug Ford’s subway schemes are expensive enough already.
Current plans call for the RL to be linked to the Danforth subway with train storage at Greenwood. Line 2 will get a new yard at Kipling freeing up space at Greenwood. A new technology would require a completely separate new yard, or expansion of an existing GO yard.
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There are two interviews out there of Don Wright, the new Metrolinx chairman, that I’ve seen. In the one the Toronto Star published, he already begins laying out how ‘easy’ it would be for Metrolinx to take over the subway because he says the TTC staff already responsible for it would just move over to Metrolinx and grossly oversimplifies everything.
The Globe and Mail’s interview included this question and answer, which I’ll quote because I can’t paraphrase it succinctly:
This strikes me as cause for grave concern. You can make your case to your MPP but if they’re in opposition, it’ll do no good. If your MPP is in power, your odds improve slightly, but not much if they’re not involved with the transportation portfolio. And, if the ones who are involved represent far flung parts of the province, how involved will they really be? In effect, what he’s saying is if Tim Horton’s screws up your coffee order, it makes more sense to write to Restaurant Brands International’s board chair than to complain right then and there to the shop supervisor, and makes as much sense as that. If the subway gets taken over by the province, good luck. If you have a complaint, you might as well write a letter, put it in a bottle, and toss it into Lake Ontario hoping for the best for all the good it’ll do if this comes to pass.
Steve: Yes, this is extremely dangerous. The province, frankly, doesn’t give a damn about riders think, and Metrolinx is not exactly big on the type of public input we regularly see at the TTC.
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Why don’t we just abandon our democracy and become a dictatorship? The SSE has been repeatedly approved by every level of democratically elected government and the province just voted in a PC government which ran on building the SSE amongst other things and if you are not willing to accept the will of the people, then may be it’s time to abandon democracy.
Steve: I agree that stopping the SSE is not simply a case of saying it should happen, but when the cost goes through the roof for what Doug Ford has proposed, we will see just how much gets built and how fast.
On the subject of dictatorship, there is the small matter of Toronto Council’s size which was NEVER part of the Ford platform. Claiming that this is part of a move to “efficient” government is total BS given that it was directed specifically at Ford’s old enemies in Toronto, not at city governments province-wide. And I won’t say anything about how “efficient” a use of capital and operating dollars a Scarborough Subway would be because the politicians have already decided that money is no object.
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Personally, the unanswered question that bothers me the most about the takeover is whether the province would have the authority to close “inefficient” stations after the upload. After all, the easiest and cheapest way to deal with overcrowding and long subway commuting times is to eliminate stations.
Steve: The problem with this is that a lot of those “inefficient” stations are out in the burbs, including some that have been open less than a year.
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And the Liberals never did anything that was not part of their platform? When one gets elected, are they only allowed to do what they campaigned on?
Do you have any proof of your assertion? Because if what you say is true, then that is abuse of power and you should immediately contact the police. The fact is that Council seats are being merged left, right, and centre and in Downtown and in the suburbs too and so, Ford’s allies in Council are having just as hard a time in getting re-elected as his alleged enemies under the reduced Council size. Compared Ford’s city-wide reforms to Wynne’s agenda of conveniently and silently adding three extra Council seats to Downtown to tip the balance of power in Downtown’s favour even though that Downtown is just a small proportion of Toronto (both population wise and area wise). Please note that it was NEVER part of the Wynne platform to add three extra Council seats to Downtown which she did while the rest of the city and the rest of the province got nothing but nobody complained then.
Steve: I am always amazed by the fantasies that Ford supporters concoct. First off, the extra wards were not Wynne’s doing, they were implemented by the City Council pursuant to their then-powers, and after four years of consultation, and a few legal challenges that failed. “Silently”? What rock have you been sleeping under while all of the review was in progress?
There was no equivalent process for the changes Ford implemented. They just happened. As to Ford’s vendetta against Toronto, if he were serious about downsizing municipal governments, he would have not done this just for Toronto but (at least) for all other major cities in the province. He knows this would be political suicide, but he could play the anti-Toronto card.
Downtown gets more seats because it has more population while there are places in the suburbs where population is actually falling. This isn’t my claim, it Stats Can census data reported by City Planning. We may have to wait for it, but revenge will come when the next census and federal seat redistribution gives downtown the representation its population deserves. By that time, I expect Doug Ford to be fuming, powerless, in opposition if the PCPO hasn’t already dumped him as leader.
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Would there be any merit in interlining the Sheppard line with the Relief Line? In comparison with Premier Ford’s scheme, there at least would be no need to expand the existing Sheppard stations to accommodate six-car trains.
Steve: Given the geometry of the existing Don Mills Station, this would be quite messy to do. The turn would have to be east of Don Mills doubling back to the west under existing buildings. This would also preclude extending the Sheppard line to Victoria Park which would make a better terminus if there is ever an LRT line.
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At some point, the Sheppard-Steeles portion of the Yonge line will need relief. So it’s best to keep the lines separate. Also, extending the relief line north to Finch may happen fairly quickly once the line reaches Sheppard.
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A thought struck me recently regarding a subway take-over by the province: a significant chunk of the property tax I pay for my Toronto home goes to the TTC. However, none of our neighbouring municipalities provide any funding to the TTC, which today I suppose is understandable, since it is a Toronto-owned entity. But if the province proceeds to take over subway ownership, I would have a big problem continuing to subsidize the TTC through my property taxes, at least not at the current rate. I would expect it to go down, or for all neighbouring municipalities and/or regions to start pitching in as well. I wonder how this will all play out? I can’t imagine Ford even suggesting that other municipalities start subsidizing the TTC, because of course taxpayers already pay enough taxes. But the current arrangement would have to change, as it wouldn’t make any sense whatsoever for only those in Toronto to continue funding operations through property taxes, while our neighbours contribute zero.
Steve: In theory, the province would take over some of the maintenance costs (likely the big ticket capital maintenance) while leaving running maintenance to the TTC/City. There will likely be a shell game with QP “uploading” some costs, but cutting back on money the TTC now receives through other mechanisms such as the gas tax share and the provincial chunk of PTIF (the Public Transportation Infrastructure Fund set up by the Feds).
A related issue is whether Ontario will assume all of the debt issued by Toronto (and other governments) to build the subway network and thereby relieve us of the ongoing servicing cost.
It will be interesting to see the balancing act they attempt in “showing” that the upload is actually a good idea for all concerned. So far, the explanations amount to little more than creative accounting.
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