Updated December 22, 2020 at 1:20 pm: Some illustrations from the Board meeting presentation have been added to this article, or have replaced previous versions with lower resolution from the budget report. Text has been added in some sections notably in comments about the timing of future projects and spending.
This is a companion article to my piece on the Operating Budget for 2021. This year operations will have a big challenge because subsidies are needed to backfill lost fare revenue, and yet politically, spending money on what we already have does not have the allure of announcing yet another subway plan. “Look! Another bus on Dufferin” does not stir the blood in quite the same way although one might argue that the long-suffering riders there are equally “deserving” of attention.
The Capital Budget has its own problems. For many years the true need for transit capital in Toronto was hidden so that the depth of the funding hole would not be obvious. Magically, there always seem to be enough capital to cover current costs, and somehow future years took care of themselves as they became the new present.
That scheme came unglued as TTC capital needs rose and available money went to the flashy new projects: a subway here, an LRT there, and of course an expressway rebuild lest those non-transit riders should be delayed on their vital journeys to and from downtown. A new class of project “below-the-line” was invented to accommodate work that was necessary, but for which money had yet to be found.
However, even getting on that unfunded list required acknowledgement that a project was necessary, and a long list of below-below-the-line work accumulated. In budgetary terms, this tactic was non “sustainable”. One cannot claim to be making a budget while ignoring over half of one’s future needs. Far from being ready to face the future, the TTC had a long queue of projects needed to refresh decades-old infrastructure, but no money to pay for them because they officially didn’t exist in the mind of fiscal planners.
This was not entirely the TTC’s fault. The City of Toronto preferred to have its transit system and appetite for capital look as if everything was in hand. The situation was not helped one bit by the prevailing attitude among some politicians that transit infrastructure, especially subways, is near-immortal while, in fact, lines dating back to the mid-20th century were showing signs of their age.
The situation was simply untenable as what once was “the future” banged loudly on Toronto’s door. In early 2019, a 15 year capital funding outlook was presented to the TTC Board including a $33.5 billion projection of capital needs to 2033.
The capital budget and ten-year plan before the Board on December 21 is not a full update of the 15-year plan, but it shows the transit funding crisis Toronto faces quite starkly. The 15 year plan’s status today is:
… the CIP has been updated and further refined in accordance with Board and Council direction, resulting in a 2021 to 2035 CIP that totals $37.7 billion, of which $10.349 billion is unfunded within the first 10 years and a total of $23.239 billion over the 15-year period. [p. 1]
The total does not in include major expansion projects beyond closeout of the Spadina extension project ($120 million), end-of-life support for the SRT ($47 million), and design work for the Waterfront LRT ($50 million). This is small change on the scale of the 15 year plan’s billions.Continue reading