The City of Toronto launched its 2020 budget process on January 10, 2020 with a presentation by senior management and a short question-and-answer session with some members of Toronto Council. At this point, the material was quite high level, including some management puffery, but the real meat of the budget lies in the departmental and agency Budget Notes to be discussed at meetings on January 15-17. The TTC budget will be discussed on January 17.
- Presentation by the City Manager
- City of Toronto Budget Reports & Presentations for departments and agencies
- Budget Note for the Toronto Transit Commission
- TTC 2020 Operating Budget Report
- TTC 2019 Making Headway Report on Capital spending requirements
Much has been made of the City Building Fund and its rising property tax levy to finance substantial growth in the TTC and Housing capital budgets. The changes to the TTC’s ten year capital plan between its original launch in December 2019 and the version presented in the January 2020 Budget Note are detailed later in this article. Within those changes are two major categories:
- It was only one year ago, that TTC management proposed, and the Board approved, a significant change in the timing of Line 2 Bloor-Danforth renewal pushing out the installation of Automatic Train Control, construction of a new yard and purchase of a new fleet by a decade. The new Capital Plan shifts this work back into the 2020s and better aligns with the timing of the Scarborough Subway Extension. It also removes a reliance on older technology whose longevity was uncertain, notably the signal system.
- The original Capital Plan included no money for new vehicles beyond purchases now in progress. There is a new item for “Vehicles”, but this is not subdivided by mode. Significant spending is budgeted for 2022 and beyond. Expanding any of the fleets also triggers a need for garage/carhouse facilities and there is a substantial increase in the planned spending on facilities.
On the Operating budget, the changes are much more modest because the additional revenue mainly keeps up with inflationary pressures, but does not go beyond for an aggressive expansion of service.
The TTC plans to hire 88 more operators and has budgeted more service hours, but the purpose of this is described differently depending on which part of the budget report and presentation one reads/hears. In December 2019, the Operating Budget and its presentation talked of relieving overcrowding that placed some routes beyond the Service Standards. However, the same addition to the Service Budget is used to handle other factors and the list makes no mention of reduced crowding.
I await clarification from the TTC on this important issue – does the TTC plan to reduce crowding or not? Will they burn up new service hours mainly to pad schedules for better service “resiliency”, or will they actually add service on overcrowded routes?
How City Revenues Work
The City and its agencies collect revenue from various sources including property taxes and TTC fares. Some revenue streams go into a general pot, while others are dedicated to specific functions (e.g. TTC fares go to transit service).
The total collected from property taxes in 2019 was about $4.4 billion out of the total City operating budget of $11.6 billion. The difference comes from many sources including transit fares which will be $1.3 billion in 2020.
Toronto Council has maintained a policy of inflation-only tax increases for the past decade. However, in fact, the dollar increase in property tax revenue is less than inflation because different types of property are subject to increases at different rates. For every 1% rise in residential taxes, commercial taxes go up only 0.5%, and multi-residential (apartment buildings) do not go up at all. Industrial property taxes go up only 0.33% for every 1% on the residential rate. The purpose of these differences is, over time, to drive the ratio between business and residential taxes in Toronto down to a level comparable to the rest of the GTA, and for multi-residential properties to freeze taxes altogether.
This process has been ongoing for several years (dating back to the David Miller era, but it was imposed by the Province), and will not complete until the rates achieve the target levels. However, until the city gets there, when there is talk of a 2% tax increase, this does not translate to a 2% rise in tax revenue because non-residential properties do not see the same level of increase in their taxes. The projected increase in the basic property tax levy for 2020 is $63.4 million, or about 1.43% over 2019.
What this means for transit (and every other city operation) is that although the political talk is of “inflationary” tax increases, the actual increase available for distribution among programs is below inflation, and there is strong competition for any available money especially where new services or programs are involved.
The tax increases above do not include the recently approved “City Building Fund” [CBF] proposed by Mayor Tory and endorsed by Council. This additional tax will build in on top of the basic tax increase over several years.
A smaller CBF was already building into the tax stream in past years at 0.5% annually, but the intent is to raise the annual increase to 1.5% as shown below. This will fund about $6.6 billion in borrowing for transit and housing capital projects. None of this money is available to support additional service nor to limit fare increases.
The numbers here can be confusing because they refer both to the original CBF-supported borrowing as well as new borrowing from the increased CBF. The $6.6 billion in the chart above refers to new borrowing, but the total supported by the entire CBF is around $7.6 billion. Of this, transit will get about $5 billion and the rest will go to housing programs.
Note that the same ratios for the application of this tax apply among property classes, and so the CBF will be funded disproportionately by various classes of property tax payers.
Trimming Expenses to Fit Available Revenues
Each year, the City faces the need to trim spending to fit available funding, and this exercise gives management a chance to say “look how much we found in the sofa cushions, again”. There are higher revenues in several categories, but there are also “savings and efficiencies”. Although this can give the impression that management can always find ways to trim costs, these savings are not necessarily changes that can be repeated in future years. For example, the Solid Waste Rebate was a scheme to subsidize, for a time, the cost of garbage service, but this is being phased out. In the 2021 budget, there is only $10 million more to be recovered (compared to $25m in 2020), and nothing in years beyond.
Similarly, efficiencies in how the City budgets and does business cannot necessarily be replicated each year. For example, the “Budget to Actuals” line below represents the “saving” achieved by basing 2020 budget increases on actual, not budgeted, spending in 2019. Increases are not granted on money that was never spent. (This can also be thought of as “use it or lose it” budgeting, but that’s another discussion.) This is a one-time accounting change that will not be available to help with the 2021 budget.
The City Manager, speaking at a media briefing, stated that the “opening pressure” (the amount by which projected expenses in 2021 exceed projected revenues) is about $440 million, and this will be whittled down over the coming year leading to the 2021 budget.
City management have not produced a breakdown of savings in the 2020 budget with an indication of which these are one-time changes, as opposed to changes that could be replicated in future years.
The TTC fare increase is expected to yield about $31 million, and this is commonly cited as being equivalent to a 1% property tax hike. Although total tax revenue is about $4.4 billion, as explained earlier a 1% residential tax increase translates into a smaller overall value, and so it yields only about $30 million.
The “Value Based Outcomes Review” led to many savings, but by far the majority of this lies in how the City does its purchasing and procurement. There will be a total of $51 million in savings, but only $31 million of this will be achieved in 2020 with the remainder expected in 2021. After that, the City will have to look under other rocks for big savings.
This gives an example of the degree to which the City and its agencies must “trim fat” or cut services year over year. Some changes are real efficiencies and improvements, but others can represent loss of services. One of the hardest things to find out about any part of the budget, including the TTC, is what was left out. By the time any proposals are public, most of the trade-offs have already happened in private, and there is little or no debate.
Overall Revenue and Expenses
The chart below shows the breakdown of revenues and expenses among major categories within the Operating Budget.
The TTC fare revenue includes the 10-cent fare increase planned for March 1.
Part of the Provincial gas tax allocated to Toronto (included in Fed/Prov Revenue below) is used to fund the TTC, but it does not show up in the budget papers as a “TTC” item. However, it is explicitly included in the TTC’s annual financial statements. For 2018, the Provincial gas tax allocation was divided $91.6 million to operating and $70 million to Capital. There is often confusion about Provincial Operating subsidies because they don’t show up as a distinct line item in budgets.
There is no Federal Operating subsidy and all of the $167.4 million in Federal gas tax allocation went to Capital in 2018. Later in the article, I will discuss the other Capital subsidies from both governments.
TTC Operating Budgets for 2020
The TTC Operating Budget includes two components. The larger of these is for the “conventional system” while a much smaller one is for Wheel Trans. The proportion of cost recovery is much higher for the conventional system, but the two lines are combined as one in the overall City budget. The tables below show the breakdown of the gross budget (total expenses), the revenues and the net budget. When Council debates increases to departments and agencies, it is the net budget they fret over because this represents the subsidy.
The TTC is unusual as an agency in that it is a significant source of revenue in its own right. Note that “revenue” includes advertising and one-time draws from reserves, not just fare revenue. Although the conventional system’s cost will rise by 5.3% in 2020, this is partly offset by a 6.1% increase in revenue to keep the net value down to 3.6%. This is not the sort of accounting sleight-of-hand that can be repeated every year.
The projected 2020 revenue include a $9.3 million draw from reserves, $7.0 million (net) from better enforcement of fare payments, and $19.4 million in costs recovered from Metrolinx for additional service due to construction projects. Reserves are not boundless, and there is only so much added revenue available from reduced fare evasion. The Metrolinx payments are in dispute between the agencies, and the City may never see this money. These are all one-time sources of revenue, not ongoing savings.
What does TTC plan to do with more operating dollars?
Key service deliverables
• Ensure delivery of 100% of scheduled capacity, to provide 9.6 million hours of revenue service and 533.5 million revenue rides.
• Implement Year 1 of the 5 Year Service Plan to improve on-time performance on key routes, beginning with 29/929 Dufferin, 35/935 Jane, 39/939 Finch East, 37/937 Islington and the 86/986 Scarborough Routes.
• Implement Anti-Racism Strategy and establish an independent office to address TEO Complaints.
• Examine current non-core work practices and identify areas for improvement through Business Transformation.
• Develop a 5 Year Fare Policy & 10 Year Fare Collection Strategy.
• Enhance system accessibility and spontaneity of travel through continued implementation of the Wheel-Trans Family of Services Model.
• Commence operation of the McNicoll Bus Garage.
• 255 Hybrid Buses, 60 E-Buses, 204 LRV’s in revenue service, plus one half of the Wheel-Trans Fleet modernized.
[TTC 2020 Budget Notes, p 3]
On a positive note, the TTC plans to restore service to a level meeting its crowding standard, something that slipped in 2019 thanks to budget pressures:
A further $4.8 million and 88 TTC operators are required to deliver an increase in service hours, which is required to adhere to the TTC’s service standards so that no more than 51 passengers are accommodated per bus in peak periods and 36 in off peak periods. To adhere to these standards, an additional 89,211 scheduled operating service hours are proposed for 2020 … [TTC Operating Budget at p 17]
The goal of restoring service levels to match standards was underscored in the budget presentation at the TTC Board on December 12, 2019.
A further 39,000 hours of service are planned for improvements to surface transit schedules for better reliability. This usually involves extra running times on the assumption that vehicles are “late” because they cannot make existing schedules. This does not address the lack of management to maintain regular vehicle spacing when “on time performance” is measured only at terminals, not along the routes where most riders actually board.
To put these additions into context, the total service budget for the TTC is 9.45 million operator hours, of which 8.32 million are on the surface system. If past experience is any indication, the improvements will not appear on the street until later in 2020, and there is always the chance that they will be clawed back for savings if TTC revenue projections prove too optimistic.
The numbers in the table below [TTC Operating Budget, p 18] do not match the values in the text cited above. The 89,211 hours cited for crowding reduction above are shown below as the combined effect of four changes, none of which addresses crowding. I await clarification from the TTC on this discrepancy.
The point about “non core work practices” is code for contracting out, and this is sure to provoke pushback from the TTC’s unions, especially in a contract bargaining year.
There is no mention in the budget of fare changes beyond the planned across-the-board increase. The Fair Pass program, a discounted fare for people on some forms of social assistance, is funded through the Social Development, Finance and Administration Budget, not the TTC. Although it is planned to expand substantially in 2021, this will be subject to the overall budget pressures for that year. The projected additional cost to the City will be $22.7 million in 2021 and a further $7.7 million in 2022.
Phase 3 will expand eligibility for the program to all adults residing in Toronto with incomes below LIM+15%, an additional 370,000 residents.
Service Level Impact: Through Phase 1 and 2 of the program, which offers discounted fares to adults receiving social assistance (Ontario Works and Ontario Disability Support Program), and adult recipients of child care subsidies with households incomes under LIM+15% (15% above the national low-income measure), approximately 110,000 residents are eligible. Phase 3 will expand eligibility for the program to all adults residing in Toronto with incomes below LIM+15%, expanding eligibility to an additional 370,000 residents.
[Budget Note, p 19. “LIM” refers to the “Low Income Measure”, a value defined by Statistics Canada]
There is a more general issue about fares and discounts in that many are granted to a wide variety of people based on their age (children, youth, seniors) or some general status (e.g. post-secondary students), not based on the ability to pay. Any change of this nature should be part of a regional policy change, and that would involve the 905 municipalities and Metrolinx. The TTC will be reviewing this as part of its five-year fare policy, and the issue is certain to be a political hot potato for anyone who tries to reduce or eliminate existing subsidies.
The ten cent fare hike for 2020 is likely to be repeated in future years, especially if money is going to other programs such as the Fair Pass and/or service expansion.
The Capital Budget exists in multiple versions that can be confusing to readers. These include:
- The current year budget and ten year plan: It shows the planned spending for “funded” projects, those that are approved and are linked to known future revenues. In some cases projects will have higher total costs than in the plan because spending continues beyond the ten year window. This budget exists in two versions: the original announced in December 2019, and a revised version with additional funding from the Capital Building Fund.
- The fifteen year capital needs: These were published in the TTC’s Making Headway report in January 2019 which revealed the extend of the unfunded transit needs and forced a political discussion of the transit backlog.
- Budgets for special projects, typically new rapid transit lines, that have dedicated funding separate from the base budget. In the original 2020 budget, these were shown separately from the base budget, but they are combined with it in the City’s Budget Notes.
- Budgets for projects taken over by Ontario no longer appear in the TTC budget except for the cost of related works. For example, the cost of keeping the SRT running is in the 2020 TTC budget, but the cost of the proposed subway is not.
|($ million)||2019-2028 Plan||2020-2029 Original||2020-2029 With CBF|
|Rapid Transit Expansion||3,831.8||287.1|
The revised 2020-2029 plan includes changes to many project areas. A comparison of the full budget is in the spreadsheet linked below.
- Some lines were renamed between the two versions of the 2020-2029 plan, and some lines were consolidated.
- The original 2020-2029 plan shows rounded values. This produces small changes between the two versions that only reflect the degree of rounding, not an actual change in spending.
The first two pages of this file show the ten year plan as it appears in the City Budget Note. This includes the new money from the CBF. Also shown are the original 2020-2029 budget numbers from the TTC’s report in December 2019 and the change between the two. The remaining two pages compare the planned spending on items where the change is more than $20 million
A major change affects projects to renew Line 2 Bloor-Danforth. This work was pushed out many years in the TTC’s 2019 Making Headway report, but the timing has been advanced in the most recent budget. The line item project details are not yet announced.
The affected items are:
- ATC Signalling: Up from $248.1 to $871.0 million. The Line 1 project winds down in 2023, and this was the only major signalling work in the original budget. New planned spending moves the Line 2 ATC project into the second half of the current decade.
- Bridges and Tunnels: Up from $426.4 to $459.9 million. This item include many subprojects with increases coming mainly in the latter part of the decade.
- Corporate Initiatives: Up from $40.0 to $107.8 million. There is no description of what this item covers, let alone the large increase. The increase is spread evenly over the decade.
- Environmental Programs: Up from $54.9 to $78.9 million. Additional spending is planned for the second half of the decade.
- Equipment: Up from $231.6 to $337.8 million. The change in this line is mainly in the first half of the decade.
- Paving: Down from $142.9 to $121.1 million. This line covers items such as renewal of paving in bus loops.
- Other Buildings and Structures: Up from $610.0 to $2,872.6 million. This line is the largest in the overall budget and it covers a wide range of projects. The large change here will include projects such as the new subway yard at Kipling (Obico property) and the reconstruction of Harvey Shops as a carhouse for an expanding Flexity streetcar fleet.
- Purchase of Vehicles: Up from $113.0 to $1,542.1 million. The original plan only covered the wind-up of vehicle supply projects in progress, but the new plan includes substantial spending starting in 2022. The breakdown between modes is not yet known.
- Subway Car Overhaul: Down from $659.4 to $259.4 million. This change reflects a reversal of the 2019 plan to rebuild the T1 fleet for service through the 2030s on Line 2.
- Traction Power: Up from $236.6 to $262.7 million with the change falling in the latter half of the decade.
There is a small increase ($34.8 million) in 2021, but from 2022 onward the annual increases range from $386.5 to $700.7 million. This is a very substantial growth in capital spending, and it is long overdue. The backlog of unfunded projects remains large, but provides ample opportunity for other governments (present and future) to come to the table with money for these works.
The Capital Budget and Plan are funded from many sources with the City picking up about two thirds of the total as shown in the table below.
[Budget Note, p 17]
- “Recoverable Debt” is primarily the proceeds of the City Building Fund. It is described as “recoverable” because it has an explicit revenue stream, as opposed to general debt that forms part of the annual charge on the base Property Tax.
- PGT and FGT refer to gas tax contributions from the Provincial and Federal governments respectively. Note that for the Provincial tax, this is only the portion that is directed to Capital. The remainder goes to the Operating subsidy through the City as discussed earlier in the article.
- PTIF is the Public Transit Infrastructure Fund. The $1 billion in PTIF 2 money will go toward the $1.5 billion Bloor-Yonge Station expansion project.
- “204 LRV” refers to the small remaining Provincial commitment to the Flexity streetcar program.
One point that has yet to be clarified by the City is the status of the “Scarborough Subway” funding that has been raised through a 1.6% levy on the Property Tax. This is in addition to the City Building Fund levy.
The City’s Budget Committee will discuss the TTC budgets on Friday, January 17, and the TTC Board will receive details of the revised Capital Plan and spending priorities at its meeting on January 27. Whether some of the details on capital projects will come out at the Budget Committee remains to be seen.
88 new operators…to drive more buses to abate overcrowding. Would it not make more sense to add more supervision to route management, remove some of the extra run time and use the existing vehicles (spaced out properly) to alleviate overcrowding?
With modern technology it should be possible to use GPS to use lights on the dash to signal “spacing” similar to subway trains. If you get a yellow, slow down till the light goes green, or if it turns red just delay a bit at the next bus stop with a out of traffic bay.
Better line management should mean better, or at least efficient use of existing resources, perhaps allowing some of these new operators to grow service rather than just maintain existing levels.
The increase in vehicle spending is interesting. Like to see the split on that once known. If some of the facilities spending is for a revamp of the Harvey Shops, there almost has to be streetcars tuck into the allocation. The question is how many? With a revamp of Harvey, and even with extra night runs there is an upper limit before a new yard would have to be found.
Steve: The idea of showing vehicle spacing on the dash is already in the new Vision system, but it’s oriented to “on time” not to headway management. As for streetcar capacity, the TTC can handle 60 more cars with existing capacity plus Harvey Shops, but another 40 (as shown in their 15 year plan) would need another yard. One alternative would be to relocate Duncan Shops (the bus maintenance facility) and make Hillcrest all-streetcar. Any decision along those lines would be related to the shift to all-electric vehicles because any new bus shops would be designed around the technology that would be in place for decades to come.
There are a truly huge number of issues with our city and its budget, and our future in a world of changed climate, sigh. (Snowdrops are out in bloom in my core ‘hood).
Car subsidies are buried in multiple budgets; but the transit costs are quite separate. While we do give a lot to transit, the costs from cars are substantial, and definitely not borne to the same extent as transit users, though they are costly. So a Vehicle Registration Tax of maybe $400 or $600 each would be a major redress, and a shock, of course. But if Vancouver found annual avoided cost of $2700 per car each year a couple of decades ago…..
Perhaps the clearest example of this cost is the rehab of the Gardiner for a relative few.
The limited view of ‘inflation’ – the cost of housing has been inflating for most of us well beyond a 2% a year – and indeed, in this Guardian article it says “In less than two decades, housing prices in Toronto doubled, then trebled, then quadrupled: the average price of a single-family home went from $251,267 in January 2000 to $1,044,527 in late 2018”. So….. where’s the doubling in property tax?
Steve: Under MVA, taxes do not rise proportionate to property value. If all values double, then the tax rate is halved to keep the revenue the same. Only properties that go up by more than the average, or which fall behind the average rise see a change.
And there are multiple deteriorating situations like the housing crisis; the conditions of our roads; non-enforcement by police of traffic rules that seems to be partially funding, though I believe there’s evidence that routine traffic law enforcement catches a lot of bad guys, and what happened to that book I gave to the Metro level decades back ‘Men are not Cost-Effective’? Did it end up in the library, or recycling?
But thanks for the detailed context and analysis Steve – hopefully we’ll see a VRT put in to place, though the leadership – including at the province which may step in to nix a VRT as it’s a ‘carservative’ bunch of ‘carmunists’ – is desultory. Or should that be ‘desulTory’?
I have to post this comment anonymously as I am close to a city councillor who also sits on the TTC Board. He said that there is a strong push from the mayor’s office to cancel additional streetcar purchases in favour of electric articulated buses. There is also a strong push from the provincial government for the same and the federal government is keen to meet Canada’s greenhouse gas reductions targets under the Paris Agreement. Swedish manufacturer Volvo makes articulated electric buses although I have no information on which manufacturers are being considered.
Steve: The irony of this is that replacing electric streetcars with electric buses does not address greenhouse gas reductions. It only would “count” if we replaced the diesel buses now on streetcar routes, and there are not enough of them to counterbalance the equivalent of 60 new streetcars.
The real way that transit reduces greenhouse gases is to get people out of their cars, but that means actually adding transit service, not swapping one vehicle type for another. But adding service means upping the operating subsidy, and I don’t see anyone bellying up to the bar with money for that.
This sounds like a classic case of spending capital from another government because it’s available. We did this to buy hybrid buses that didn’t work. We did this to buy replacements for the hybrid buses. Did we expand the fleet? No.
Remember how we lost our last fleet of electric buses to CNG vehicles which were the big thing thirty years ago because they were “green”, at least compared to diesels of their day.
Flextime works very well as a solution to any transit problems.
Steve: For employees who can work flexible hours, they can shift commuting times, but this only shoves some of the peak to the shoulders, not address problems with service quality. Expecting that we will fix the problems of traffic and transit congestion by hoping people will move to flexible hours is a really good way of burying your head in the sand. Anyone who can avoid the peak of the peak does this now.
I am wary of derailing the conversation away from transit and towards vehicle registration taxes, but –
A VRT ignores all the non-416 cars in the city and presumes that everyone with a car is generally using it to the same extent. Owning a car is not the same as using the road and benefiting from hidden subsidies.
Why not implement more road tolls or a camera-enforced price for driving around with in a zone (i.e., if a camera detects you driving downtown, that’s $10 or whatever) instead of a VRT? Make the people who actually use the roads etc pay instead of presuming that everyone who owns a car is using it in lieu of transit and/or regularly contributing to congestion, road wear and tear, etc etc.
Disclaimer – I live downtown. I walk, I bike, I ride transit, and I own a car that I rarely use The cost of insurance, gas, etc. is less than the cost of plane tickets to fly my family home a few times a year. Our car is used less than 1x a month other than for the long drives home.
Steve: What you are talking about is a congestion charge for entry into the core area. I have a problem with this because some of the worst traffic problems and needs for better transit are not in the core, but a central area charge doesn’t catch them. Of course we could raise the gas tax everywhere (it has been static since the 1990s), but that would be a “war on the car”.
From the Volvo electric articulated bus website link above:
In other words, these electric articulated buses from Swedish corportation Volvo are available for rent which will make it very easy for the TTC to rent a few for a trial. No long-term commitment is needed and there are no minimums (the TTC can rent a single bus for as little as a single day if the TTC so chooses). The website also says that these buses can climb high gradients and Volvo provides the charging infrastructure as well. This might be a good opportunity for the TTC. Why did the TTC not include Volvo as part of the TTC’s electric bus trial?
Steve: An excellent question. However, remember that the TTC trial procurement got underway almost two years before Volvo announced this vehicle. I should also mention that the capacity per vehicle on the Volvo page, at 150 per bus, is the typical overstatement of crush capacity used by vendors, not the day-to-day capacity a vehicle would reasonably have for service.
An important factor for a trial is that these are artics and their design assumes all door loading. This would be a major change for TTC bus operations affecting stop layout and fare collection.
They also offer regular sized electric buses which would have fitted into the trial now underway. However, at the point the procurement was started, Volvo was not listed as a manufacturer of battery buses.
I see that the January agenda for the Executive Committee is now online but it does not show an update Report on Waterfront transportation – in particular QQE. I thought that a Report was supposed to return to Executive in early 2020 about this so I assume this means that we will not be seeing any significant action on QQE and the expansion of Union loop in the year ahead (or maybe ever).
Steve: The recommendation adopted by Council (in item EX4.1) reads:
Also, the Waterfront Toronto Board at its December 2019 meeting approved that work proceed on the Queens Quay East design. This had been held down at the WFT FARM committee, but was released by the Board on receipt of further information from staff. [Source: Waterfront Toronto. Minutes of the Board meeting have not yet been published.]
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Why does the City want to freeze the TTC cash fare while raising the fare for regular users (i.e. Presto card holders)? And why are there concession cash fares, when concessions are available on a Presto card? It seems that one should raise cash fares more for occasional riders rather than for regular riders. Also, the small difference between cash and Presto card fares reduces the incentive to switch to Presto. Or is the cost of handling cash fares insignificant compared to Presto?
Steve: There is always pressure to leave the cash fare at a multiple of 25 cents and so it does not change as often as the ticket/token/Presto rate. As for the concession fare, the TTC mad a 10 cents across the board increase in all fares, and so the concession fare actually went up more, proportionately, than the full fare.
The residual fare handling done by the TTC should be getting cheaper but as long as they have to dump fareboxes from every bus every night, even if they’re not as full as they used to be, there will be an overhead. If anything, the cost of collecting cash fares will rise because they will be the only surviving non-Presto fare and the fare processing machinery will remain in place, albeit scaled down, just for them.
I think that the whole process is fairly ad hoc these days, although there is supposed to be a study of future fare structures beginning this year.
Isn’t Volvo the parent company of Nova Bus? There is nothing to suggest that Nova bus will have anything particularly revolutionary when compared to Newflyer and others. All the major electric bus companies already offer articulated electric buses except for Nova Bus, which will presumably get the technology when Volvo finishes developing it. Electric bus technology is getting good, but it still needs a few more years to work out the kinks. Also, renting is a terrible idea. The more financial “magic” you do, the more things get messy. The government can borrow money at much lower rates than any company can, so it always makes more sense for governments to get a loan and to buy rather than have a private company get a loan to buy and then rent from that company.