Planning for many transit projects in Toronto has been underway for years, but the public face of this work took a long holiday in 2018 thanks to elections at both the provincial and municipal levels.
In coming weeks, Toronto’s Executive Committee and then Council will consider an omnibus report that provides updates on many transit projects and recommends a path forward.
Today, that path is murky given uncertainty about provincial intentions and the degree to which consultation between the city and province is actually in good faith. Premier Ford’s approach on other portfolios, coupled with the breezy confidence of his Transportation Minister (seen recently on TVO’s The Agenda), do not bode well. With the arrival of Doug Ford at Queen’s Park, the provincial goal on transit is more about settling old scores with Toronto Council and proving that Ford’s transit vision is correct than it is about good planning. Recent correspondence between the province’s special advisor on a proposed subway takeover revealed just how much the province does not know, or chooses to ignore. This was not a good start and the province wounded its credibility on basic technical points, never mind the political context.
But for a moment, let us consider Toronto’s future from the point of view of what the city hopes to do, if only they have the control and the money to pull this off.
The report is long, and to break this article into digestible pieces, I will focus on groups of issues. This article covers overall financing of the transit expansion project and specific details for the Scarborough Subway Extension (SSE), now known as the Line 2 East Extension (L2EE). I will turn to other components of the plan in further articles.
Many reports are available on the City’s website (scroll down to the end for all of the links). The principal reports are:
- Main Report: Toronto’s Transit Expansion Program – Update and Next Steps
- Attachment 1: A status update on all projects
- Attachment 2: Line 2 East Extension
- Attachment 3: Waterfront Transit Network – Union Station-Queens Quay Link and East Bayfront Light Rail Transit
- Attachment 4: Eglinton East LRT
- Attachment 5: Eglinton West LRT
Financing Transit Expansion
The most challenging part of any transit project, let alone a complex program, is to obtain funding from governments whose priorities do not necessarily align and which may talk at least as much about the sanctity of “taxpayer dollars” as they do about investment in public infrastructure.
In a media briefing, city staff were quite clear that no project can proceed to the stage of contract tendering and awards unless the contribution agreements underpinning a project are in place.
At the federal level, the primary funding source will be the Public Transit Infrastructure Fund (PTIF) which has two phases. An initial phase was time-limited, and was used in Toronto mainly to fund the purchase of hundreds of new buses. The second, longer-lived phase of PTIF will be used for transit construction projects. There is some urgency to nail down PTIF contributions given the fall 2019 election and uncertainty about this program under a new government.
Note that this entire discussion relates only to projects that would be funded in part through PTIF, not to many others such as the Eglinton LRT extensions or the Waterfront LRT.
Federal funding of $4.897 billion will be allocated by the city, assuming government approval, as below [Main Report, p. 2]:
- $0.660 billion for the Line 2 East Extension project
- $0.585 billion for the SmartTrack Stations Program
- $3.151 billion for the Relief Line South
- $0.500 billion for the Bloor-Yonge Capacity Improvement project
Negotiations with Ontario are ongoing, and the status of projects and associated $4.04 billion in provincial funding is unclear. This could be clarified in the provincial budget to be announced on April 11, 2019. Provincial interest in and plans for the Scarborough extension and the Relief Line will affect both of these projects.
City funding comes from a variety of sources:
- Development charges
- The Scarborough Subway levy
- The City Building Fund levy
- Interest on accumulated reserves from the levies
Financial projections are also affected by factors that have changed since projections made in past years:
- Higher growth rates in development
- Lower interest rates
PTIF2 has an assumed split of 40-33-27% for the federal, provincial and municipal governments respectively. This creates a breakdown of responsibilities as shown below.
The provincial share is supposed to be “new funding” and the amount here does not include prior commitments to Scarborough transit which originally were for the proposed LRT line, later for a subway. Exactly how much Ontario will contribute remains to be seen given discussions about ownership and the scope of the Scarborough subway project. I will return to this in more detail later.
Within the city share, $2.42 billion is unfunded (no revenue sources have been committed to fund/finance the expense), and only $885 million of the SmartTrack Stations Program has city funding. The report recommends that the city’s CFO and Treasurer report prior to the 2020 budget process on strategies for addressing the shortfall.
The project cost estimates for these are broken down below. In the chart, the acronyms are:
- LTD: Life To Date
- PDE: Preliminary Design & Engineering
The possible funding arrangements vary for each project, and these are complicated both by past history and by the uncertainty of early “class 5” estimates. A tentative breakdown is shown below, but this must be taken with a grain (or more) of salt due to technical and political uncertainties. For example, the assumed provincial contribution to the Line 2 Scarborough project is based on inflation of a commitment made in 2010 dollars where the city and province do not agree on the appropriate inflation factor.
Two separate numbers have been used for the Relief Line cost estimate: $6.8 billion in Table 2 above, and $7.2 billion in Table 3 below. In the media briefing, TTC staff explained that the change was due to an alignment revision (Carlaw vs Pape) and changes in construction techniques (mining vs cut-and-cover) at some locations. That may be so, but to have two different numbers for the same project so close together within a report makes one wonder about the care taken in other aspects. On top of that is almost $2 billion as a “provision” for the Relief Line to guard against potential cost increase as the estimate is refined from class 5 to class 3.
This sort of uncertainty is not unusual, but the constant variation in quoted “estimates” makes for no end of problems. The converse is seen with the Scarborough project where the “estimate” for the subway’s cost has remained fixed since 2014 despite major changes in project scope.
The report explains the difference between initial class 5 estimates and the class 3 estimates to be used in setting project budgets:
As a project moves through the three phases, project definition becomes more refined and the information used as the basis for developing a cost estimate is more mature.
- A Class 5 cost estimate is typical when starting the initiation and development phase, where the project is conceptual (0-2% design level). This an order of magnitude estimate to inform the decision of whether or not to continue to study an option.
- A Class 3 cost estimate is based on PDE work (10-40% design level), and is the estimate class recommended when establishing a project budget for procurement and construction. A Class 3 estimate should be used to inform full funding commitment decisions. [p. 16]
Note that the term “order of magnitude” has considerable leeway, and a change from one order to the next is a factor of 10. Saying that costs “A” and “B” are in “the same order of magnitude” gives huge scope which on projects of this nature is measured in billions of dollars. Too much past debate has assumed that minor swings in estimates might occur as designs are refined, but this is more wishful thinking and the political hope that a project will not get out of hand even before shovels hit the ground.
Overall Project Status
The map below shows the location of all projects in the transit network plan.
Projects will advance from stage to stage on their own timetables which are summarized in the chart below.
Line 2 East Extension (aka Scarborough Subway Extension)
This section reviews the status of the Scarborough extension as it is presented in the city reports. Obviously this is subject to major change given provincial announcements of support for taking ownership of the extension and for building a three-stop subway.