Toronto’s Omnibus Transit Report: Part I

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:

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.

One of the great mysteries of the Scarborough Subway is that the cost estimate as reflected in TTC budgets never changes. [Click on the illustration to enlarge it.]

Back in 2014, the first year the subway appeared in the Capital Budget, there were three items:

  • Scarborough Subway: $3.305 billion
  • SRT Life Extension: $132 million
  • SRT Decommissioning: $123 million
  • Total: $3.560 billion

Note that the spending, except for the decommission project, ends in 2023 when the extension was planned to open. These numbers are similar to the projected cost of the subway in mid 2013 when the option of switching from the LRT plan was before Council.

In the 2019 Capital Budget, five years later, the Life Extension project is broken into several parts, but the totals for each component remain exactly as they were in 2014. However, the underlying  project is not the same.

  • The extension now ends at Scarborough Town Centre, not at Sheppard.
  • There is only one station at STC. The two proposed for Lawrence East and Sheppard have been dropped.
  • An at-grade bus terminal has been replaced with a large, grade-separated one.

The station now includes a large bus terminal whose cost was, in part, absorbed by cuts elsewhere in the project. At the point it was added in early 2017, the cost breakdown including inflation was:

  • McCowan Alignment with at grade bus station: $3.159 billion
  • Triton Bus Terminal: $0.187 billion
  • Total: $3.346 billion

Another change lies in the signal system which was originally planned to be Automatic Train Control similar to that used on the Yonge-University subway, Line 1, and for which an ATC-compatible fleet was expected to be in place. At the media briefing, TTC staff confirmed that the extension is now planned to use a conventional block signalling system like the existing Bloor-Danforth Line 2. This will be more expensive than installing ATC, and when automatic operation does come to Line 2, ATC will have to be retrofitted to the extension at an added cost. Some preliminary structures needed for ATC will be included in the extension, but no equipment will be installed until the full conversion of Line 2.

Line 2 will continue to use the existing T-1 trainsets rebuilt rather than replaced as originally planned, supplemented by seven new trainsets. This will allow full service to operate through to Scarborough Centre, but only at the same frequency as existing service supported by the old signal system. By the time the TTC gets around to converting line 2 to ATC, the original signals will be 65 years old, an issue for reliability, but more importantly a limitation on any service improvement for Line 2 until ATC conversion in the earl 2030s.

STC station will be designed to permit the addition of Platform Edge Doors (PEDs), but their installation would be part of a separate, future project.

In summary, the scope of the subway project has changed and its opening date is pushed back, but the cost is identical to the originally projected value.

Through all of this, a critical question is to ensure that when council approves “the line 2 extension”, all of its component parts and pre-requisites are also identified and funded at the same time. Otherwise we will face the same situation as on Spadina with unexpected future costs because components were omitted from the approved budget.

In 2016, Council was sold a cock-and-bull story that by trimming two stations and shortening the subway line to an “optimized” configuration, there would be enough money to pay for the Eglinton East LRT extension to University of Toronto Scarborough Campus (UTSC). As recent media reports have shown, this was a fantasy cooked up by city staff to get a combined subway/LRT plan through a reluctant Council. We now know that the subway extension had no hope of being built for only marginally more than the original LRT scheme, but this was the fiction allowing Council to buy in to supporting the subway.

Since that time, the estimated cost of the subway has risen, and is now pushing $4 billion in the revised official numbers which conveniently were not available during the 2018 election campaign.

In the table below, the cost of the subway itself is shown as $3.61 billion in 2017, but that number comes from the original base figure of $3.305 billion, plus risk allowances of $0.305 billion. These are over and above any contingency built into the base project estimate. With the class 3 estimate now available, the projected cost of the extension has fallen by $135 million, and this offsets some scope changes.

The costs related to the existing SRT have changed slightly with the demolition cost dropping about $21 million, offset by $26 million additional for SRT life extension. Other scope changes add a further $61.4 million and enhancements $71.1 million. The scope change includes $55 million to make provision for future construction of the Eglinton East LRT by providing the piling structure within which its exit from Kennedy Station would be built above the subway tunnel. [See Figure 2 on Page 6 of Attachment 2.]

This brings the grand total to $3.87 billion. This does not include the cost of contract administration and interest during construction if the project were procured using a Design-Build-Finance scheme through Infrastructure Ontario (IO).

The recommended budget is shown below. The projected cost was initially over $4 billion, but the TTC now shows a value below that line because the project would be procured using a conventional design-bid-build process, not through IO. Whether Queen’s Park would allow this approach given their love for “alternative financing and procurement” (AFP) remains to be seen.

Although the project cost has gone up by $327 million, there is little effect on the scheme for funding it for various reasons:

  • The extension is now built into the cost base used for Development Charges, and a 10% discount on such charges has been removed by legislation at Queen’s Park.
  • More development is happening than projected adding to DC revenues.
  • The Scarborough Subway Tax is bringing in more revenue because there is a larger tax base.
  • The cost of borrowing is lower than in the original 2013 estimate.
  • Interest on the accumulated tax reserve is now included.

These factors allow an additional $265 million in debt to be carried by existing revenue streams, and the city only has to finance an additional $62 million from other sources.

The actual value of the provincial share is a matter of some debate as Queen’s Park takes a different view of how its originally committed portion should be inflated to current dollars. Their contribution was set at $1.48 billion in 2010 dollars. There is a difference of roughly $200 million in the escalated value between the provincial and city positions, and the table above uses the higher city number. How this will be affected by negotiations regarding the subway “upload” to the province is unknown.

The Line 2 Extension Attachment claims that an updated business case for the extension is available on the TTC’s website. However, the document linked from that page contains only a title and a one page executive summary with few details of the analysis. It does mention that the Economic Case for the subway has a value well below 1 – that costs exceed benefits.

The Economic Case finds that Line 2 East Extension shows significant travel time benefits, which together with all other economic benefits result in total present value of benefits of approximately $3.5 billion over the 60 year appraisal period. Assessed against a total cost, over60 years, of approximately $5.3 billion, the Line 2 East Extension has an overall Benefit Cost Ratio of 0.66.

It also says:

The Financial Case for the Line 2 East Extension can be found in the April 2019 Report.

There is no Financial Case for the extension in the reports before Council.

The project schedule has been revised to take into account various types of risk that could occur. On the TYSSE project (Vaughan Subway), problems arose with target dates because all of the schedule contingency had been used up and any delay pushed out project completion. In this view of the project, there is an estimate of the scale of what could go wrong given the projects scale and complexity.

There are now two “opening dates” with a later one for the full bus terminal in a manner reminiscent of Vaughan Station. With no allowance for risk, the projected opening date for service is late 2026, but with almost a year added for risk factors, this is pushed out to late 2027. The bus terminal would not be completed until mid 2030 making for an extended period when the link from the extended subway to its feeder services would be less than ideal.

If, as the province desires, the stations at Lawrence and Sheppard are restored, then some routes now planned for STC station can feed the subway at other locations. Moreover, it appears that the province wants to shift the STC station site and simplify the bus interchange at this location. What these changes would do to the project schedule is unknown, but almost certain to delay the project for design revisions.

6 thoughts on “Toronto’s Omnibus Transit Report: Part I

  1. Thank you so very much Steve, for such a deep dive, and in public too, which the Cons must dislike, as it does feel like having an Omnibust bill/report means drown them in too much info – and only a five minute chance for truths – so line up the seals, and hey, stamp of approval.

    So with the ongoing persistence of this Suspect Subway Extension, though we have to spend big bucks in Scarborough, yes, is it designed to help ‘bankrupt the system”?? How telling that you managed to find that it’s not good value.

    Steve said: “the Economic Case for the subway has a value well below 1 – that costs exceed benefits.”

    But where’s that report? Aah, dated April 1, right…..same day as the fare hike.

    Steve: I’m simply reporting info that is in the City/TTC report.

    We aren’t getting honest info in a timely way are we? Or we didn’t, and how disgusting that the extra costs didn’t appear ahead of the election, which was tilted by our Dougtator anyways.

    I hope folks have a chance to read Ms. Pagliaro’s excellent digging in to this fudging btw.

    While it’s a wa$te to back away from this SSE now, it’s less of a waste than to build it, and we should be backing away right now, while we still can. Or let those that want it, pay for it. NONE of any of the politicians have even a dime of their own money into it, they should at least cough up a million, right? And have pension payable from the profits, though I think we should be having the Gardiner billions and DVP and 401 have some returns, first.

    There are totally other options that haven’t been well enough explored in Scarborough. Going beyond the LRTs, the Smart Spur option that is outlined on Stephen Wickens blog is freshly updated, and includes sound figures about why another extension is bad news for the existing system and areas further on in.

    And will this transfer?? – Within post figures showing decline in usage of subway by inner-city folks who were crowded out after trains ever-fuller from extension.

    I still remain a fan of using a long wide corridor for some form of transitway as it slices all the way through Scarborough and very close to several major destinations, plus good linkages to most N/S major carterials. We can’t squeeze the cars that much till we have better transit, and while it’s awkward to change a greenway to a transitway, the climate crisis is such and our bad record so horrible, this has to be on the table, and surface is cheaper. No, not necessarily a busway; could be LRTs, and even a subway technology, though we kinda need to have an embargo on all subway scheming in favour of Keep It Simply Surface, at least for this term.

    If this transitway is linked to Thorncliffe Park and to something in the Don Valley, we could have a 3-in-one relief transitway, sooner, and for less, and we do need to have something done in a short time to reach up to Eglinton to ease that Line 1 pressure. While subways obviously take a larger # of people, something is needed, and that something if surface is of smaller relief, but Realief, is now what is needed, and what are short-term/medium/term easings?

    With the re-naming of the SSE to something else – why is this done?? Is/was Suspect Subway Extension too apt? Here are some ideas as to what L2EE really might mean.

    – Losing 2 Extravagant Expenshun
    – Laughably 2 Excessive Expenshun
    – Longing 2 Educated Electeds (Fordwards is backwards)
    – Losing 2 Enormous (an) Elephant
    – Longing 2 End Extension
    – Lyin’ 2 Ease Extension

    And if it weren’t such a cruel joke, great observations about how the cost always seems to be the same, regardless of time/changes, though perhaps it’s just coincidence. But it’s not fair to the Eglinton E folks and the rest of us, right? If it’s BAD value, it’s beyond time to end it, moreso since we seem to need those billions for repairs to transit, housing, roads and Relief.

    If Relief is such a priority for the City, prove this by ending all the subway extension plans that are only making it worse, both north to Richmond Hill (the TTC is enabling this work from PTIP), and also this SSE less-wise work.

    Of note is that the staff seem to be OK with redirecting the federal $600M or $660M towards a relief effort, and that’s good. And we should be involving the federal level in the politics of our transit theft too; don’t they have a batch of money they’ve sent to TO’s subways over the many years, and shouldn’t we have respect for taxpayers? There is the power of disallowance, and a taking of the subways is bad for equity (more women ride transit); bad economics (I’m sure the intent and result will be to get transit users to pay more vs. free riders on excessways); and the environment/carbon problem (transport leads our emissions). And – we could/should ask them to not just intervene with disallowance, but maybe declare TO a ‘Dougsaster’ zone eh?

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  2. Steve,

    As usual you pull the needles out of the haystacks of reports, and refashion to a concise and complete picture. In this political climate of transportation takeover, and posturing it s refreshing to have your clear vision to rely on..
    The SSE (now L2EE) has become a chameleon, changing its spots to suit the situation.

    The change to the extension plan to block signals (BS) is the city’s way to practically make the extension work right now. To use ATC, they would need the new Kipling (Obico) yard, new maintenance facility and a new fleet of rolling stock. Sticking with BS allows the L2EE plan to stay on time and allows Tory to push the ready now – don’t steal our subway position. Clearly the cost benefit is not a favourable one “against a total cost, over 60 years, of approximately $5.3 billion, the Line 2 East Extension has an overall Benefit Cost Ratio of 0.66.” I thought they needed a 1.0 or higher figure to pass the stage gate?

    Steve: You’re not supposed to notice that. It is written to sound positive, but it really isn’t.

    While not in favour of uploading, letting Ford grab the L2EE project for “rejigging” would give the TTC time to get their Line 2 ducks in a row and allow ATC to be an integral part of any expansion. This of course raises the question, can the SRT (Line 3) hang in there?

    Scarborough has waited a long time for better transit. Perhaps the best move towards higher order transit could start with the EELRT and the fully funded, but never talked about, Sheppard LRT. Those two lines and the Smart Track additions to GO lines could transform the transit picture in Scarborough, allowing a considered re-think of the L2EE.

    Unfortunately, too many politicians have spent too much political capital fighting for a “subway” for Scarborough for the SSE (L2EE) to quietly fall by the wayside.

    Why does the Sheppard LRT seem mysteriously absent from all the project timetables?

    Steve: Because the Fords don’t like streetcars, and Jim Karygiannis (among others) has his heart set on a subway extension which makes even less economic sense that the L2EE. I suspect this LRT vs subway situation will be deadlocked for the foreseeable future because, after all, Scarborough “deserves” subways. Even though the Sheppard link was part of the original Rob Ford subway plan, and Doug wants to push the L2EE up to Sheppard, there is no sign of the Sheppard Subway in provincial plans.

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  3. They need to stop these delays and make some fast decisions.

    Line 2 Extension (SSE) – The 1 stop idea was a joke that should have never happened. But we must remember the history of this. There was the Ford-McGuinty compromise (connected ECLRT/SRT) in 2011 that created some peace. Council decided to killed the Ford plan in early 2012, when the proudly took transit planning away from the Mayor. What followed then was a complete disaster. City Council and the Liberals fought with themselves and each other bouncing back and forth between Transit City style LRT and subway, until the Liberals finally ran a by-election as “subway champions” – and there was no going back. Ford, trying to regain some semblance of authority, supported this plan. When the Liberals won that 2014 election – there was no going back from SSE.

    Imagine if in early 2012, Council would have agreed to the connected ECLRT/SRT – but savings would be found by elevating through Golden Mile. Ford, struggling to retain power, would have also agreed to use the saving for DRL (a subway of the type he like), as long as nothing got built on-street on Sheppard (the dream would have live on for him to fight another day). The connected ECLRT/SRT would have also been great impetus for the DRL long to also be a priority. Now, it looks obvious that we are going with the 3 stop option. Again, accept reality, and find savings where possible (i.e. shallow construction, Old Mill or Leslie style station roughly at grade with the subway going over the river).

    East Bayfront – I suspect this is more of an acceptable plan, and not a plan that solves our problems going forward. I see both Bayfront (East) and Harbourfront (West) going up Bay, under Front Street, and all the way to City Hall – eventually all the way to Bloor or Davenport – parts may be on-street. It may be that some type of BRT (along the future streetcar ROW) be used for Bayfront in the interim and using the new GO Bus bay.

    Eglinton East – it is not on anyone’s radar, and was only resurrected a few years ago because of the giant 1 stop SSE boondoggle. Forget about this for at least 5 to 10 years.

    Eglinton West – we know it’s going to be grade-separated, so just agree on Option 4 with stops at major roads only, and find opportunities to reduce costs (portions elevated, cut-and-cover, etc.).

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  4. Walter said: “Imagine if in early 2012, Council would have agreed to the connected ECLRT/SRT – but savings would be found by elevating through Golden Mile. Ford, struggling to retain power, would have also agreed to use the saving for DRL (a subway of the type he like), as long as nothing got built on-street on Sheppard (the dream would have live on for him to fight another day).”

    Considering that it was Ford who said “downtown has enough subways” and he rejected the idea of extending the Sheppard subway to Victoria Park to save face…

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  5. Thanks again Steve and everyone – what an enormous amount of work/thought/production, and is this bunching up of everything designed to limit inputs/opposition? I’m suspicious.

    If I may ‘err’ a possible band-aid to the B/Y overload, and I would be fairly happy to have it shot down. What could happen if we label every third train or second or fourth train on either Bloor or Yonge lines, or maybe both, as a ‘straight-through/no transfer/no stop here’. Would that ease any of the crush load or just make it worse?

    The problem with a no-stops train, aside from the fact that riders won’t expect it (and the TTC still has not got the side destination signs working two years after they were installed) is that the through train will catch up to the local at the next stop beyond Bloor and would sit in the tunnel anyhow. The thing that really clears out the southbound platform at Bloor is a gap train inserted at Davisville, and it is these that allows the TTC to push more trains/hour through Bloor than the schedule calls for.

    And would having free express bus service on Mt Pleasant do much for easing this overload?

    Steve: One subway car represents four buses. And don’t forget that unless the people on those buses originated on or near Mt. Pleasant, they had to pay a fare to reach the bus in the first place. I doubt that there are enough originating passengers in the Mt. Pleasant corridor to make much of a difference, even if we had (a) the buses and (b) room on the street for them. Again I come back to the issue that if there is a frequent service operating into downtown, it needs streets to loop on, and places for boarding passengers (in the pm peak) to wait.

    As another point of reference, the hourly capacity of the King car in the AM peak is roughly 3 train loads. That’s the intensity of service you would need just to make a dent.

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  6. No way I am going along with the “L2EE” rebranding just as things are getting dicey. It’s the Scarborough Subway Extension. All this time we heard how Scarbs HAD to have a subway. Well, look how that’s turning out my dudes. A political football, no ATC, hope the T1 fleet air conditioning holds up.

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