TTC 2022 Capital Budget

The TTC’s 2022 Capital Budget report has been published as part of the December 20, 2021 TTC Board meeting agenda. This includes three components:

  • A 15-year capital investment plan giving an outlook on all projects, funded or otherwise, to 2036.
  • A 10-year capital budget for funded projects.
  • A real estate investment plan that ties property needs into capital planning. This is a new component in TTC capital planning.

For political reasons, the capital plans before 2019 were low-balled to stay within available funding, but this hid necessary projects that appeared as a surprise to the TTC Board and Council. One way this was done was to class them as “below the line” (not in the funded list), but more commonly to push their supposed delivery dates beyond the 10-year capital budget window. This made the City’s exposure to future spending appear lower than it was in fact.

A particularly bad case was the collection of projects and contracts for ATC implementation on Line 1. In order to “sell” this badly needed project politically, it was subdivided and some resulting contracts used mutually incompatible technology. The original chunk was simply a plan to replace the existing block signals used from Eglinton to Union and dating from the subway’s opening in 1954. One by one, other pieces were added, but the disorganization was such that ATC was actually an “add-on” to the Spadina extension because it had not been included in the base project.

The situation was further complicated by awards to multiple vendors with incompatible technologies on the premise that each piece could be tendered separately without regard for what was already underway. A major project reorganization during Andy Byford’s tenure as CEO untangled this situation, and provided a “lesson learned” for the Line 2 ATC project.

In 2019, the TTC changed tack and published a full list of its needs and extended the outlook five more years. This came as a huge shock to politicians and city management when the capital needs shot up from $9 billion to well over $30 billion.

Integrated Planning

In the many years I have followed TTC capital plans, the lack of an integrated view showing project dependencies has been a major shortcoming. This makes problems seem easier to “solve” because only a small part of a “solution” is up for approval at one time. Not only was the Line 1 ATC project fragmented (see above), but many follow-on projects were rarely discussed or listed in Capital Budgets.

The full benefits of automatic train control cannot be achieved without an ATC capable fleet, a larger fleet to run more service, power upgrades to handle more trains on a line, carhouse and yard space to store and maintain trains, and station upgrades to handle higher passenger volumes. Installing signals is only a first step.

The report flags the need for integration, and yet the projects continue to be presented in the classic format where only someone familiar with transit operations would know the linkages. Plans could still be vulnerable to misinformed political meddling because the linkages are not well understood. The major projects are listed in groups in Appendix A of the report and discussed at the end of this article.

The resultant clarity in TTC capital investment needs has also brought about a more strategic and integrated approach to capital investment planning. The updated CIP for 2022 begins to bring together critical project interdependencies for larger programs of investment, that if unfunded can jeopardize the larger program. As part of this evolution, the TTC is also introducing its first ever 15-year Real Estate Investment Plan (REIP) as a companion document to the 2022 CIP. The REIP will enable the TTC to strategically plan, manage and optimize its real estate portfolio and, like the CIP, will identify funded and unfunded real estate needs over the same 15-year period necessary to meet TTC’s current capital and future growth needs in support of, the TTC’s CIP.

TTC 15-Year Capital Investment Plan, pp 1-2

Building the 2022 Plan

In preparing the 2022 Budget, spending and timing for projects was reviewed with the effect that $314.5 million was trimmed within the 10-year budget window either through deferral, cancellation or scope changes. That money had been reallocated.

Work undertaken during the 2022 Budget process that recalibrated annual cash flow profiling of base capital needs to align with project timelines, spending capacity and project activities; revisited planning assumptions and timing of key facility requirements; and, confirmed project priorities and dependencies, has enabled the TTC to reallocate $314.5 million to accommodate critical capital needs in the 2022-2031 Capital Budget & Plan. Of this amount, 57% of the funding is being added for Health and Safety, Legislated and State of Good Repair projects which were previously unfunded in the CIP. The balance, of 43%, is funding for Service Improvement and Growth projects.

The recommended 2022 – 2031 Capital Budget and Plan of $12.051 billion funds 52% of the critical capital needs identified and cash flowed in the first 10 years of the Capital Investment Plan, based on available sources of funding.

TTC 15-Year Capital Investment Plan, p 2

Note that this only touches the surface of the funding problem in the coming decade where almost half of the “critical capital needs” (TTC’s words) remain unfunded. This includes basics like new vehicle purchases that cannot realistically be deferred without affecting service and driving up maintenance costs. A related issue here is that “greening” the TTC has extra costs that are net new and could displace other state of good repair spending. Council cannot embark on widespread conversion of a major agency and service to massively reduce emissions without funding the work needed to get “from here to there”.

The overall 15-year plan now totals $37.2 billion of which about two thirds lies in the first decade. Of that amount, $23.3 billion, funding is in place for only $12.1 billion.

The year-by-year spending plans show how this $12.1 billion is front-end loaded because projects in the later years are more likely to be unfunded. This is a perennial problem for the TTC in that they must trust that money will magically appear, usually because someone wants to be re-elected, or there is a need for a special subsidy for policy reasons such as job stimulus or environmental improvements. The TTC does not have a standing allocation of capital sufficient to fund all of the work in its plan.

Broadly, the 15-year plan breaks down into major segments shown in the chart below. Note that this does not include major projects like the Ontario Line which are under Metrolinx and appear in their budget.

The annual breakdown in spending is shown below. Note that this only includes funded projects

There are four key vehicle orders in the pipeline, and more to follow in the “out years” of the budget:

  • 60 new streetcars from Alstom (ordered)
  • 300 new hybrid-electric buses (contract award pending, delivery substantially in 2022)
  • 300 new battery-electric buses (contract award pending, delivery in 2023?/24)
  • 80 new subway trains for Line 2 renewal, extension to Sheppard East and ATC conversion

The money comes from a variety of places, and the table below shows the relative importance of each contribution. “Recoverable Debt” is repaid by the City Building Fund, a still-growing added levy on top of regular property taxes that covers over half of the $12.1 billion. “Debt” is ordinary City debt funded from general revenues. Note that Development Charges contribute a trivial amount to the total.

Recoverable debt of $6.2 billion to be funded by the City Building Fund is TTC’s primary capital funding source and represents 79% of the $7.8 billion of City Funding. This reflects an almost $4.7 billion infusion of funding from City Council with the approval of the incremental tax levy increase during the 2020 Budget process. This will fund approximately $4.2 billion in base capital expenditures over the 10-year capital planning period for TTC’s major subway capital works and vehicle program and $500 million for the City’s one third share of the priority Bloor-Yonge Capacity Improvement project.

Provincial and Federal funding of $1.0 billion is also expected to fund their respective one-third share Bloor-Yonge Capacity Improvements project under the ICIP PTIF2 program. These funding partners will also fund $180 million each as their respective contributions towards the Streetcar Program, as approved in 2021.

Given the funding and commitments above, City funding represents almost 65% of total capital funding for the TTC while provincial funding contributes 13% and federal funding provides 22%, representing 35% of the total capital funding provided by these two funding partners for priority fleet procurements and capacity enhancements.

TTC 15-Year Capital Investment Plan, pp 6-7

This is further broken down in the table below:

Finding an additional $11.3 billion over the next decade will be a challenge, and the need does not stop at year 10.

Changes Since the 2021 Plan

Major changes in the plan for 2022 are listed below. Previous Capital Budgets included summaries of capital budget areas including the previous and current year values so that the changes could be seen clearly. These are not in the 2022 plan and a manual comparison will be needed between the two versions. (I will add this to the article separately.)

The ModernTO program referred to below is a City program to rationalize the use of office space across all of its departments and agencies. According to the Real Estate Plan (covered later in this article), the TTC will consolidate at North York Centre and Metro Hall, and the existing Head Office, the McBrien building, at Davisville Station will be transferred to the City likely for redevelopment.

The Russell Carhouse project includes expansion and configuration of the carhouse to suit the Flexity streetcars. At Leslie Barns, a proposed second exit from the site have been cut from the budget.

Given this is a rolling plan, the 2022-2036 Capital Investment Plan (CIP) is approximately $555 million lower than the $37.77 billion presented in the 2021-2035 CIP. The Capital Investment Plan has been updated to reflect:
• Revised project estimates and/or timing for major capital works such as Bloor-Yonge Capacity Improvements; Line 1 and Line 2 Capacity Enhancements and ATC Line 2 projects based on a stage gate methodology;
• The addition of a new information management capital project to begin preparing TTC for the implementation of the City’s ModernTO program;
• The addition of the Russell Yard & Carhouse Modifications and Extension project to provide maintenance capacity for the additional 60 new streetcars;
• The deletion of costs for the New Streetcar Maintenance & Storage Facility and the Streetcar Facility Upgrade Leslie Second Exit projects; and
• Revised cashflow requirements for years 11 to 15.

TTC 15-Year Capital Investment Plan, p 5

Year-over-year, the capital spending for a 10-year plan have declined slightly because the out years include many unfunded projects that are not included in the later years. This illustrates the shortcomings of only including funded projects. Spending appears to be going down (a “good” thing to some) while the backlog of unmet needs grows “below the line”.

The TTC talks about the breakdown between spending areas, but these figures only include the $12.1 billion of funding in hand.

Approximately $1.14 billion or 9% is allocated to meet health and safety legislative requirements and timelines to complete the Easier Access project ($621 million), including costs associated with the redevelopment plans for Warden and Islington Stations, Subway Station Second Exits ($180 million) and Greenwood Shop End of Life Replacement ($96 million).

The remaining 39% or $4.70 billion of the staff-recommended 2022-2031 Capital Budget & Plan is allocated to service improvement and growth related capital projects, funding such major capital projects as the Bloor-Yonge Capacity Improvement; Line 1 and Line 2 Capacity Enhancement projects.

TTC 15-Year Capital Investment Plan, pp 6-7

One part of the Capital Budget traditionally stands apart from the bulk of the work: the Transit Expansion projects. This list is much shorter now that Ontario has seized control of four major expansions. Three projects remain in this part of the Capital Budget, although others such as the Waterfront West and East LRT projects might find their way into the list late in the decade.

  • The SRT life extension and decommissioning project
  • Design (but not yet construction) of the Dufferin Loop to Exhibition Loop connection
  • Project closeout (years after the line opened) of outstanding claims on the Vaughan subway extension

The unfunded project list is extensive. Each of these projects is part of a larger collection of related works that cannot simply dismissed without hobbling the system’s future.

Unfunded key projects
• Modernizing the Subway and Expanding Capacity
• Purchase 80 subway trains
• Modify Greenwood Yard
• Add auxiliary maintenance and storage capacity in time for the delivery of subway trains
• Supporting a Larger Streetcar Fleet
• Renew Russell Carhouse
• Continue to upgrade overhead power
• Transforming & Electrifying Bus Service
• Purchase electric buses
• Install charging infrastructure
• Implement transit priority measures

Each project belongs to a larger program of investment that is essential for future transit service. Most represent critical interdependencies that, if delayed, would jeopardize the larger program. (p11)

TTC 15-Year Capital Investment Plan, pp 10-11

Below is a table breaking down the $25 billion in unfunded projects by group and year.

Effects on Future Operating Costs

Capital projects have implications for the Operating Budget in future years by reducing or increasing costs and staffing requirements. Spending does not stop with the ribbon cutting on opening day.

  • “Train Door Monitoring” is a system using cameras and a wireless link to train driver cabs to show the status of the platform. This is an integral part of a shift to one person operation, and the savings shown below arise from that.
  • Purchase of buses is expected to reduce ongoing costs because the TTC aims to bring its average fleet age down with the shift from an 18-year to a 12-year life cycle.
  • The Eglinton Crosstown’s effect (shown in the article on the Operating Budget) does not appear here because it is not part of the TTC’s capital plan.

Capital Staffing and Management

The Operating Budget report included a table showing the breakdown of staff who are assigned to (and paid for by) Capital projects. This is a large complement to manage, and does not include staff of contractors working on capital projects. At its December 8 meeting, the Board received a report on Continuous Improvement in Capital Project Management.

Among other issues, this is intended to bring the discipline of “big project” management to the organization overall and avoid situations where smaller projects are launched with incomplete oversight or review. There is also, of course, the need to avoid co-ordination problems between related or potentially conflicting work.

Given the amount of funding, complexity and variation in project and program scope, risk profile and type, the TTC is employing a variety of strategies to ensure that measures are being taken to provide oversight, assurance, proper resourcing and coordination and control appropriate to the nature of the capital project work underway. Building capacity within the TTC to implement these measures will help achieve the commitment to continuous improvement in the planning, management, and delivery of capital projects.

As reported to the Board on December 8, 2021, in the report entitled “Continuous Improvement in Capital Project Management” one of the priority actions identified was the need for a consistent approach to resource planning by taking a programmatic view and ensuring projects are adequately staffed to provide the necessary control and oversight, project delivery, by including corporate services roles as well as roles for City partners needed to support project delivery. As a result, a total of 131 capital positions are being funded in the TTC’s 2022 Capital Budget to build the necessary capacity within the TTC and an additional 15 positions for dedicated resources required by our City partners.

TTC 15-Year Capital Investment Plan, p 21

This is a substantial change in complement to improve the TTC’s ability to manage its own projects, a capability that was ceded to others to extensively in past years.

TTC 2022 Operating Budget, p 49

Real Estate Investment Plan

The real estate plan is intended to pick up on a formerly missing part of TTC capital project planning and budgeting where property, often a long lead-time item, needed for a project was not identified until close to the planned project startup. The plan’s intent is to advance this planning so that delays in real estate acquisition no longer hamper projects.

Many of these projects are unfunded. This can trigger the need to proceed with property acquisition with interim funding, typically from a City reserve.

Many items are listed here in more detail than elsewhere in the capital budget (dates shown are approximate and span the period from property acquisition to planned project completion, if known).

Bus garages• eBus garage effects (retrofits)
• 10th bus garage 2022-2038 (the garage is not required immediately, but other functions might co-locate sooner)
• New Wheel-Trans facility at 388 Evans immediately east of Queensway Garage (property transferred from the City 2022)
Bus loops• Scarborough Shuttle temporary requirements (post SRT shutdown)
• Portlands interim bus loop 2023-2024
• Pape/Carlaw loop (Ontario Line)
Streetcar loops• Broadview Station Loop expansion 2022
• Park Lawn GO Station Loop 2026
• Dufferin Gate Loop Expansion 2025-2029
• Queen Broadview Loop 2025-2030 (this project has been pending for many years and the property was part of a complex land swap involving the old loop site at King & Parliament)
• Broadview Extension Loop (Ontario Line) 2025-2030
• Polson Loop 2024-2029 (part of the Waterfront East LRT project)
Subway yards and carhouses• Wilson and Davisville Yards capacity expansion 2028
• Greenwood carhouse upgrades/modifications 2030
• Western Yard 2022-2034
Subway stations• Easier access property needs for elevators & second exit program
• King station concourse expansion 2024-2028
• St George Station “stacked expansion” 2029-2037 (See note below)
• St Andrew Station second exit 2034-2037
• Reconfigured Eglinton Terminal 2026
• Eglinton expansion via Oxford development 2026-2028
• New connections at Union for Waterfront East LRT 2028
• Dundas West GO connection 2022
• New Warden/Islington bus depots 2022-2025
Subway miscellaneous• New substation in Vaughan + tail track extension
• Warden pocket track 2029-2031
• Line 2 west extension 2041
System• Eliminate use of trailers and storage containers (a widespread need given the TTC’s lack of sufficient office space)
• Hillcrest complex master plan (includes provision of storage for 25 streetcars)
• New Transit Control Centre & Data Centre 2022 to 2028
• Office space consolidation & McBrien Building transfer to City
• Danforth traffic office combined into new development at the former garage
“Value creation opportunities”Repurposing of various TTC sites for other uses by the City.

Note: I do not know what the “stacked expansion” of St. George Station is all about, but will ask for clarification.

Appendix A lists projects by the major area to which they belong. Some are one time (e.g. a new western subway yard for Line 2 BD), some are ongoing (track renewal), and still others are “state of good repair” but occur irregularly rather than each year (fleet renewal, major infrastructure replacement such as ATC).

Note that numbers in the table below do not add due to rounding. The values shown are taken from the TTC’s report.

Line 1 YUS
Total: $8.64B
Funded: $2.79B
Unfunded: $5.84B
Capacity expansion:
• New trains
• ATC (Project in progress)
• Add train storage at yards
• Increase power for more frequent service and replace end-of-life assets
• Station capacity for higher hourly flows
Ongoing maintenance:
• Track rehabilitation and condition monitoring
• Bridges, tunnels, pumps, lighting, communications and signals
• Vehicles
Other enhancements:
• Fire ventillation upgrades and second exits
• Asbestos removal
Line 2 BD
Total: $12.63B
Funded: $3.20B
Unfunded: $9.46B
Capacity expansion:
• New trains (replace end-of-life T1 fleet and expand for growth)
• ATC
• Add train storage at yards
• Western yard
• Increase power for more frequent service and replace end-of-life assets
• Station capacity for higher hourly flows
Ongoing maintenance:
• Track rehabilitation and condition monitoring
• Bridges, tunnels, pumps, lighting, communications and signals
• Vehicles
Other enhancements:
• Fire ventillation upgrades and second exits
• Asbestos removal
Line 4 SheppardOngoing maintenance as listed for Lines 1 and 2.
• No costs are shown specifically for this line in the TTC’s report.
Buses
Total: $5.97B
Funded: $1.05B
Unfunded: $4.92B
Zero-Emission conversion:
• Purchase of eBuses
• 10th bus garage as eBus facility
• Charging capability at existing garages
Ongoing maintenance:
• Replacement of end-of-life vehicles
• Mid-life rebuilds
• Heavy overhaul facility and garage upgrades
Other enhancements:
• Transit signal priority
• Bus stop improvements
Stations
Total: $4.13B
Funded: $2.63B
Unfunded: $1.77B
Capacity expansion:
• Bloor-Yonge Station
Ongoing maintenance:
• Station roofing and finishes
• Maintain, replace and upgrade escalators and elevators
Other enhancements:
• Make all stations accessible by 2025
• Additional elevators
• Platform edge doors
• Station transformation (shift from Collectors to self-service fares)
• Fire alarms and bus platform ventillation
Streetcars
Total: $2.23B
Funded: $1.15B
Unfunded: $1.08B
Capacity expansion:
• 60 new streetcars
• Hillcrest upgrade (storage for 25 cars)
• Russell carhouse expansion and modifications to service Flexitys
Ongoing maintenance:
• Vehicle overhauls
• Traction power infrastructure
• Facility upgrades
Wheel-Trans
Total: $0.33B
Funded: $0.04B
Unfunded: $0.29B
• Replacement of the “Friendly” bus fleet
• Additional facilities to support the “Family of Services” model (e.g. major transfer points)
Other Infrastructure
Total: $3.30B
Funded: $1.50B
Unfunded: $1.80B
• Facilities renewal (office space, shops, etc)
• New Transit Control and Data Centre
• Implementation of major new IT systems (e.g. SAP, Asset Management)
• Non-revenue vehicle purchases
• Storage tank replacement, backflow prevention, standby generators
• Shop equipment, culvert rehabilitation
• Completion of Presto migration
Total
Total: $37.22B
Funded: $12.05B
Unfunded: $25.16B

Comparing 2021 and 2022 Plan Details

This section will be added in a future update.

4 thoughts on “TTC 2022 Capital Budget

  1. “In order to “sell” this badly needed project politically, it was subdivided and some resulting contracts used mutually incompatible technology.”

    Wow! I have been using the words “gross incompetence” to describe the TTC management a lot recently. And here is another example.

    “…the disorganization was such that ATC was actually an “add-on” to the Spadina extension because it had not been included in the base project.”

    Another example of gross incompetence in managing a project that went insanely over budget.

    Steve: Andy Byford inherited and cleaned up a real mess, something Rick Leary tends to ignore when talking about the history of the signalling project as if it was corrected on his watch.

    Like

  2. I can only assume the new electric hybrid buses may be delivered in 2023 instead of 2022 since there is no awarded manufacture , unless they already awarded it & they aren’t telling us. Hard to imagine they can assemble buses in less than a year.

    Steve: The plan is for 2023 probably extending into 2024. No contact has been awarded yet.

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  3. Though the Capital Budget does mention the possible Polson Loop and a link through the rail berm on Cherry, there is no mention (I think) of the QQE LRT, in particular, the expansion of the Union Loop and the Bay tunnel which the TTC are actually working on (or planning for). Is this because the costs are all under Waterfront Toronto or ????

    Steve: It’s not yet an approved project for expansion and therefore is not in the budget beyond design funding. TTC is doing the Bay Street portion and WFT is doing QQ East.

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  4. Let me start by thanking you for your hard work on all this; as usual!

    Steve, questions about 2 projects for clarification:

    1) King Station Concourse Expansion; do we know which one? (ie the one under Commerce Court or the original under the King-Yonge intersection?

    In either case, do we have any notion as to the extent of said expansion and how it would be achieved?

    2) Broadview Station Loop Expansion, does this project have a known scope? What form would this expansion take? Also does the existence, in the future, of a Pape/Carlaw loop mean the routing of 505 away from Broadview, and if so, does that impact this project?

    Thanks for any info!

    Steve: I await info from TTC clarifying the scope of both of these projects. Broadview Station Loop would extend east into the TPA lot, but the track geometry will be tricky.

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