Toronto Takes A Financial Hit From Lost Transit Riding (Part II)

This article continues from Part I with additional information presented at the TTC Board meeting of March 13.

A widely reported number is the half-billion dollar shortfall in TTC revenues in the period up to Labour Day. Even with an offset of about $200 million in savings for a net deficit of $300 million, this is still not small change.

The TTC faces several challenges for service in the immediate future and then through any “recovery” period as restrictions are lifted on various types of activity and the need for travel grows.

The first problem is shown dramatically by this chart:

The TTC’s current service level accommodates the 20 per cent of normal demand they now have (although there exceptions, about which more below), but as long as riders must keep two metres apart, the system at full service could only handle about 30 percent of normal. That’s an average, and the situation varies by route and time-of-day.

With distancing in effect, the practical capacity of vehicles is much lower than the usual level. In the charts below, three capacity levels are shown: normal service standards, 50 per cent load, and the load with a two metre rule in place.

The ratio of normal to current (two metre) capacities shown are 3.4 for buses, 3.9 for streetcars and 4.5 for subways. One might reasonably quibble that the spacing shown for some cases, notably at the rear of buses, does not meet the rule, but in any event, this shows the extent of lost capacity. The replacement factor for all modes lies somewhere between three and four vehicles in the fully distanced, two metre environment.

The 50 per cent example was included in the presentation as an indication of what the situation would be with relaxes rules, but this version has riders sitting in closer quarters than anyone other than close friends and family would reasonably accept today. Even at this level, twice as much service is needed to handle whatever demand shows up.

The problem is further complicated by the unevenness of demand (leaving aside irregularity in service actually provided). The charts below show the 96 Wilson and 35 Jane bus route maximum loads pre-and post covid. Note that the vertical scales are not all the same making visual comparisons between the charts difficult.

Although demand is down from pre-covid levels, it still regularly crests the target of 15 passengers per bus with the “average” line sitting above that level in all cases. Although the TTC talks of additional “demand-responsive” service at 7 percent, this would not pull the averages down to 15. At least the TTC is monitoring loading at a detailed level, but they need to demonstrate that the service they actually operate achieves the target level. Leaving riders at a stop because a bus is “full” has more serious consequences now than the usual griping about overloaded buses in pre-covid days.

Demand is not uniformly distributed across the network. Although there is a cluster of hospitals downtown that is well-served by the subway, many health care and employment areas are scattered around the suburbs where bus service is essential for access. TTC reports that the bus network is the least affected by riding loss even though 4 in 5 bus riders have vanished.

Busy stops on the network are concentrated along the bus corridors. This shows two important factors in considering service levels:

  • Heavy demand is not concentrated downtown but is spread throughout the city.
  • Busy stops are not located just where there are health care or work locations, but along routes where riders travelling to those locations live. This is a variation of the “last mile problem” where so much planning and hand-wringing looks at station locations, but not at how riders get to and from transit.

These factors make any move to further trim transit service to fit available budgets extremely dangerous over the entire city.

(Note that the map below shows only bus routes and so demand on the streetcar routes is not charted below. The reason for this is that the streetcar fleet does not yet have the same technology that is installed on bus routes to track demand and crowding.)

The TTC claims that overcrowded trips have been reduced to about six per cent by focusing service where it is needed. That is laudable, but the statistic shares with so many others published by the TTC that it is a system-wide, all-day average. A rider on a packed Dufferin bus takes little comfort from having their conditions averaged with lightly loaded times of day and routes elsewhere.

Crowding levels, plotted as a heat map, show where the problems are concentrated.

At this point I cannot help making an observation about how the TTC reports on its service quality. Clearly, they have the ability to review demand/capacity levels at a fine grained basis, but getting real data out of the TTC is almost impossible. And yet here it is. This sort of chart should not vanish after the emergency, but should be a fundamental and regular report on service quality. There is no longer an excuse that “we don’t have the data”, or “it’s coming soon”.

An obvious question about crowding levels is the metric used to count riders. The TTC has been using two of them, at least on buses;

  • Presto taps. This measures the number of people who “tap on” when they board and hence reflects “boarding” or “unlinked trips” (where each transfer counts as a new trip). This does not measure:
    • Boardings at paid areas in subway stations.
    • Trips where a rider does not pay.
    • Passengers leaving vehicles.
  • Automatic passenger counters. This technology counts people getting on and off of buses and is independent of fare collection.

The Presto data are useful for comparison with historical data, but it is the passenger counters that tell the full story. They have not yet been installed on the streetcar fleet. The subway network has no mechanism for counting all passengers and this depends on visual counts by TTC staff that are conducted periodically at various locations.

The financial implications for the TTC and the City of Toronto in coming months are considerable. In Part I, I included a table showing the financial effects and savings for the TTC up to Labour Day. Here it is again.

The table does not tell the full story because it does not show the gross operating costs. For 2020, the total budget (including Wheel-Trans) is about $2 billion, or about $160 million per month. The TTC shows savings of $10.9 million/month from the reduced level of service. Note that this is not proportional to a 15 per cent cut in service because some costs do not vary with the amount of service. This is not just administrative overhead, but much ongoing infrastructure and fleet maintenance is required even if less service operates.

If the TTC returns to full service, that saving will disappear.

Moreover, the capital deferrals are booked here as $19.3 million/month. However, the $116 million over five months will not exist from September onward because it is a fixed amount, the capital portion of the provincial gas tax allocation to Toronto.

Between the two factors, the monthly deficit will go up by $30 million in September if the TTC resumes full service offset only to the degree that fare revenue returns.

The big challenge comes in that mid-range where ridership is building, but service has to run flat out to provide enough space even with only half of the demand. Whether the system can handle this will depend greatly on how concentrated this demand is by location and time of day.

The map of current hot spots shows how important the suburban bus routes are. We may have lots of room on the subway, but that won’t get people to work on the bus lines. If a return to 50 per cent demand is unevenly distributed, the pressure for even more service in parts of the network will be severe, and it is not clear how much extra service the TTC can field due to both fleet and staff constraints.

Looking down the road, the TTC is planning for three separate time periods:

  • The remainder of 2020
  • January to September 2021
  • September 2021 and beyond

Different options will be needed depending on the expected demand patterns and financial support available. Without a return to near-normal demand and crowding, the fare revenue that represents and the better fleet utilization, transit cannot return to its former role.

Better transit funding cannot be a quick, one time payment to tide over for the short term. If the tooth fairy comes up with $300 million today, that only gets the system and the city to labour day this year, but the problem will persist and grow well into 2021. That year’s budget cycle will be brutal at every level as the need to actually pay the bills rather than shipping money out the door will hang over every government.

7 thoughts on “Toronto Takes A Financial Hit From Lost Transit Riding (Part II)

  1. I’ve heard TTC management makes well over 30% more than it’s labour counterparts. Some more or less across the system with Janitorial Supervisors being the most outrageous at $103k a year, and it’s labour counterparts making $50k-$60k a year. The pandemic is hurting everyone, but a supervisor making $100k+ a year definitely raises eyebrows. Who’s actually on the frontlines? labourers cleaning/sanitizing high contact points, or their supervisory counterparts, pointing and ordering. Maybe the TTC needs to review staff/management pay, and not lay off 1200 drivers that will most definitely cause a decrease in service and an increase in customer demand. The TTC is walking a very fine line as to being a catalyst for spreading Covid-19.

    Steve: If you want to see out of control spending, just look at the sunshine list and the number of very well-paid folks (not including consultants) working at Metrolinx. The system is a fraction of the TTC’s size, but people at Metrolinx make more than those at the TTC.

    There is nobody with the job description of “Janitor” in the TTC’s portion of the list. A big issue for ATU local 113 is that the TTC has been outsourcing low end jobs such as bus cleaners.


  2. Thank you for the overview, Steve. About passenger counters: what are the actual components of this tech and how do they operate? Are there plans to install APCs on the subway?

    Steve: There are UV beams across the doorways that sense people entering and leaving the vehicles. On the subway, given that the doorways are often full of people this is not practical. There are no plans for APCs in the subway. Streetcars eventually. A problem there was that this was not included in the original spec for the vehicles, and there are already detectors at the doors to tell whether they should stay open. Adding another to sense direction would require piggybacking on something that is part of another system in the cars.


  3. Of course current rideship levels do not necessarily correspond with ‘regular’ levels (whatever those would be in the future).

    It still is interesting to note that the busy routes are in the west end: Dufferin, Keele, Jane, Wilson, Finch West, Weston….

    This suggests a couple of things:
    1. We need a subway in the NW part of the city, all the ridership is there!
    2. Oops, we already do have a subway there

    What this says about the Scarborough Subway Extension I will leave to the east end fan club.


  4. Time to redirect the Suspect Subway Extension tax, and what’s collected, as well as raising the property tax by 8 to 18%, and a Vehicle Registration Tax, and scrapping the Gardiner rehab as well, for starters. Unpopular; but that’s the real direction needed, and civic leadership here may well assist to enable more funding to flow from other governments as some of the payin’ is felt by TO residents/rich.

    Steve: I am with you right up to the end of your pitch. Do not assume that all who pay property tax are “rich”, and remember that even tenants pay tax through their rent. Also note that because of the way Toronto has been rebalancing residential and commercial taxes, the lion’s share of the Ford and Tory transit taxes fell on residential property while the lines this money will build will be a big benefit to commercial property owners.


  5. With much respect and appreciation Steve, with a good stiff 8 or 18% hike in the property tax, while yes, it would create real additional $tress, especially amongst newer homeowners and more than a few retirees, the realities are that most city property has inflated a LOT over the last decade or two, well, well beyond the rate of ‘inflation’ that property tax is based on, or tries to reflect. As there also are a lot of empty bedrooms/space in all of the City, if there’s more $queeze on the owners, maybe that’s motivation to bring in a tenant, sell, or renovate to an apartment, thus helping the housing crisis and we do tend to house our cars a bit better than some people sometimes eh?

    Here’s a link that has an indication of housing inflation through the decades.

    And if there’s too much pushback on an 18% hike, well, a Vehicle Registration Tax of $500 almost looks reasonable, especially if dedicated to transit, right? As Caronto is still a rich city, I think many outside of it wouldn’t be minding some support if the ‘payin’ was also seen to be occurring in Hogtown as well. And then, maybe look at corporations, and stop the snow-washing etc. as a further step, including going after those in the Panama Papers, which I don’t think has yet been done.

    Steve: Property taxes are not linked to market values except in the sense that if a property goes up more than the average across a municipality, so do its taxes. The problem is that MVA treats the value of a property as if the owner actually paid that much for it, and taxes on a presumed wealth that is not necessarily there. This is particularly a problem in a now-falling market. Toronto is not implementing the current round of MVA updates because they represent prices in a market that no longer exists.

    If property values were stable, then, yes, taxes would go up by “inflation” (or whatever value the city used for that number), except for the commercial vs residential rebalancing still underway that saw commercial rates go up by only 1/3 of residential increases, more recently by 1/2. The irony of this is that residential taxpayers are carrying the lion’s share of the Scarborough Subway Tax and the City Building Fund because these were applied on the same pro-rata basis to the tax classes.

    When you talk about an 8 or 18 percent increase, remember that unless there is a change in the allocation scheme, this really means a 12 to 27 percent increase for residential, and only 4 to 9 percent increase for commercial. The only silver lining is that this only applies to the city portion of the tax which is about 60 percent of the total. The rest is the provincial school tax.


  6. Once again, I’m indebted to your grasp of the intricacies – and inequities – in the tax ‘system’, thank you for sharing gently. And it seems that the Province again, is calling shots or tilting the table, and $crewing many of us, such as is still occurring with the Wa$te of the SSE, and the other extension proposed, plus Eglinton. I think commercial landlords are also able to pass on tax bills directly to their tenants; not so fair, given all the other costs of smaller storefronts. But that said, at times, it’s really ridiculous that some houses sell for millions, but the taxes are a few thousand, and maybe the fairest thing is actually a Vehicle Registration Tax of $500-ish, with bulk going to transit, though it’s not about logic and fairness, but a continuation of the ‘$hift and $haft’ policies of a few governments.


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