After several weeks of behind-the-scenes discussions between the Ontario and Toronto governments, amid various side-shows such as the Greenbelt scandal, the bribes for planning overrides, the potential destruction of both Ontario Place and the Science Centre, there is a deal, sort of.

In the immediate publicity after the announcement on November 27, the level of information varied depending on which document one read all the way from simple, enthusiastic political statements up to terms sheets and draft legislation.

Toronto comes out of this with a better fiscal situation, including some benefits for transit, but some battles are now over, conceded as part of the deal.

• Premier’s Office Press Release
• Terms of the New Deal
• Term Sheet Details
• Bill 154: New Deal for Toronto Act, 2023 which contains:
  • Recovery Through Growth Act (City of Toronto), 2023
  • Rebuilding Ontario Place Act, 2023

The Rebuilding Ontario Place Act has considerable detail on the redevelopment of Ontario Place, and it is clear that this was not pulled together at the last moment. Although the announcement speaks of design changes and makes passing reference to the Science Centre, neither of these is mentioned in the Act which confers substantial power on the Province to do anything it wants, and compels Toronto to stay out of the way.

The Recovery Through Growth Act, by contrast, is threadbare with only the most cursory provisions recognizing the discussions between Toronto and Ontario, and leaving the bulk of any details to Regulations that might be enacted by the Lieutenant Governor in Council (the Provincial Cabinet).

The new financial arrangements for Toronto extend only three years, roughly until after the next provincial and municipal elections, when the context of any renewal might be different. Meanwhile, the Province and City will “undertake a longer-term targeted review of the City’s finances to be completed by 2026”. [Detailed Term Sheet Cover Letter, p. 2]

Both parties expect added support from the federal government, although the dollar amounts and target projects vary between the City and Province.

The “core commitments” in the Detailed Terms begin with a recognition that housing and transportation are intertwined issues:

Toronto needs to expeditiously streamline and optimize planning approvals and accelerate the delivery of affordable, attainable, and rental housing across the continuum. As density is added, Toronto’s transit and city-enabling infrastructure needs to keep up. The upload of the Gardiner Expressway and the Don Valley Parkway will create significant additional capacity for the City to support building more homes faster in Toronto and across the GTHA.

The City commits to using immediate financial benefits as well as all future financial benefits of the upload (pending Provincial due diligence) to support historic investments in housing and the infrastructure that supports and enables growth such as transit, water and wastewater infrastructure, and local road improvements.

What is needed now from the City is an updated pro forma 2024 budget showing the effects of this agreement. This would inform consultation and debate now in progress leading into the budget cycle at Council.

On the transit front, the entire debate about service restoration and quality must be updated with a sense of the monies that will be available in coming years, and the possible targets Toronto can aim at depending on how much additional support is provided to the TTC.

The following sections are arranged by major topic area and are reordered from the Detailed Terms.

Transit & Roads

Existing agreements such as the SmartTrack stations program will continue unless changed or discontinued by mutual consent. This effectively locks Toronto into paying for several GO Transit stations that really should have been Provincial projects.

Negotiations for an Agreement In Principle for operation of new lines, including a revised funding model, will be complete by June 2024.

Toronto will “accelerate and streamline” the approval processes as required by Provincial priority projects. Implied here is that Toronto will not attempt to block Metrolinx designs.

In what might be comic relief, we find:

City commitment to get traffic moving and meaningfully address and reduce automotive gridlock across the City by working with the Province and Metrolinx to manage construction schedules of infrastructure projects.

We will leave aside the problems caused by Metrolinx’ ad hoc changes to construction schedules and high-handed approach to “consultation” that make co-ordination extremely difficult. There is still no sense that the City has the backbone to say “no” to proposals by events and development applications to occupy roadways and snarl traffic, and we are only beginning to see the effects of road closures for Metrolinx works.

A major issue for both parties is that road transportation capacity is constrained before better service on TTC or GO is in place as an attractive alternative.

Whatever negotiations were still underway toward settling issues between the City and Province regarding sunk costs, some of which go back to the Transit City program cancelled by the late Mayor Ford, will end. This will trigger accounting write offs of moneys already spent.

The ledger on historical transit funding reconciliation exercise is settled and cleared.

The City commits to the planned “One Fare” program advanced by the Province (this is already in the works by the TTC with the City soon to follow. However, another key item is:

TTC support for the continued usage of the provincial fare card system beyond expiry of the Metrolinx and TTC Master e-Fare Collection Outsourcing Agreement in 2027.

This will put to rest the TTC’s examination of an alternative to Presto. Such a move by the Province was inevitable given the importance of Toronto’s network in the regional scheme and for Presto’s business model. Pursuit of alternatives by the TTC has long seemed to be little more than pointless rattling of a tin sabre.

On the Eglinton West LRT/Subway project:

Commitment to expeditiously provide Metrolinx and the province with the necessary properties and easements to advance construction of Eglinton Crosstown West Extension (ECWE), tunnels, elevated guideway and stations and to support Transit Oriented Communities along the ECWE corridor.

City and Province to commit to zero-dollar ROW easements for priority subway projects, reflecting shared commitment to efficiencies in the delivery of critical transit projects.

Anyone who harbours the idea that the ECWE plan, as proposed by Metrolinx, will be changed, notably in the controversial section in the Humber River valley, should consider this a dead issue.

In spite of much talk of accelerated housing development on the Waterfront, there is no mention of the Waterfront East LRT line.

A rather woolly statement under the heading “Community Safety and Economic Recovery” speaks of transit improvements:

City to commit to support economic recovery for businesses as well as ridership and farebox recovery, as part of terms and conditions for the Subway and Transit Safety, Recovery and Sustainable Operations Fund to support ridership growth through affordable, convenient, efficient and safe operations.

It is not clear what proportion of spending will go to transit service as an economic support as against “safety” which could be anything from social services addressing homeless people in the subway to security theatre that is an expensive but less productive use of funding.

New Provincial funding and financial relief include:

• A total of $330 million over three years beginning in FY 2024/25 for the operation of Line 5 Eglinton Crosstown and Line 6 Finch West.
• A one-time $300 million in 2023/24 for “Subway and Transit Safety, Recovery and Sustainable Operations”. This is contingent on:
  • “increased presence of police and/or safety officers on transit vehicles and in station areas,
  • “guaranteed expansion and continuity of transit rider cellular and data services across the TTC network, and
  • “enhanced emergency reporting options and response timelines for riders to signal incidents, threats, and concerns to the attention of authorities.”
• $758 million for a one third Provincial share of 55 new subway trains. Metrolinx will add 15 trains to this order to supply trains for the Scarborough and Richmond Hill extensions.
  • There is no mention of funding for other related subway projects including a new signal system for Line 2 BD, or various infrastructure improvements to increase system capacity (e.g. station circulation, power supply).
• The Province will assume responsibility for the Gardiner Expressway and Don Valley Parkway.
  • In 2024, the Province will pay Toronto $197.5 million and $6.4 million for budgeted capital and operating costs for these roads. During that year, there will be a third-party assessment of “all right-of-way, airspace, and underground ownership, legal, and corridor management controls”.
  • In 2025, if the due diligence process has not been completed, Ontario will provide additional funding to Toronto.
  • The Province will not “explore” road tolls as part of this process.

The upload of major roads removes the overhang of future spending from the City’s budget planning. This should not be seen as net new money, but rather a reduction in the deficit in long term spending plans. How much this will release in newly-funded projects remains to be seen.

Housing

Both governments will identify surplus lands over the next six months that can be dedicated to building housing, and within eighteen months key projects should have begun. Actually achieving this will be an early measure of the real commitment each government has to moving this plan forward.

There is specific mention of modular housing, an ironic reference considering that one such development in a Minister’s riding has been stalled by the Province.

As an immediate step, identification of 5 surplus municipal properties appropriate for the development of attainable modular home ownership, and a commitment to work together to develop one of the sites as an initial demonstration site in partnership with the province by Fall 2024.

Additional demonstration sites should enable construction of modular housing to commence in 2025.

Two major Transit Oriented Communities advanced by the Province will be supported by the City at East Harbour and Woodbine GO stations. The City will fund 50% of flood protection at East Harbour at an estimated cost of $200 million, and 100% of the Broadview Extension to the transit hub at an estimated cost of $140 million. The agreement is silent on plans to extend Broadview further south to link up with Commissioners Street in the Port Lands.

Toronto also commits to working with Ontario through Waterfront Toronto (a tripartite agency also including the Federal government) to speed housing development and projects in progress on Waterfront lands.

Toronto will develop a plan within 60 days on how it will achieve housing targets of 20,900 in 2023, 23,750 in 2024, and 28,500 in 2025, including how surplus lands would be used. Toronto will work with the Province “to identify opportunities” for participation by the proposed Ontario Infrastructure Bank.

New Provincial funding includes:

• $200 million annually for three years for operating support of non-refugee shelters and homelessness conditional on Federal support for refugee and asylum seekers.
• If the City exceeds is housing targets by 25%, an additional $342 million would be payable over three years.

Finance and Governance

The Detailed Terms include reference to “efficiency proposals” from an Ernst & Young study which are touchstones for conservative politicians:

… procurement, shared services, more digitized service, review of grants/free programs, reduce overtime costs, and development of revenue generation proposals.

We have been around this particular bush before with the idea that there is loose change in City budgets. Consolidation of procurement and shared services has already occurred in many areas, and there is a point where efficiencies of scale do not produce additional savings. Some of this talk goes back to the days of Mayor Ford and earlier to creation of the megacity.

Spending on “grants/free programs” is a matter of policy, and any so-called waste within that depends on what one values as City-supported programs. “Revenue generation proposals” include new fees and taxes by another name.

Slipped into the list is a provision that will block City attempts to constrain sign pollution:

City agrees for Metrolinx to proceed with the development of all Metrolinx identified signage locations to support non-fare revenue generation.

This has nothing to do with City finances, but is a victory for the billboard industry who can now line Metrolinx corridors with whatever they might want.

Although the Province claimed that it would insulate municipalities from the effects of Bill 23 on Development Charges, they have not yet done so. This is still a matter for “study”.

The agreement takes us only to 2026. What happens next has been punted a few years into the future:

Ontario and Toronto agree to establish a terms of reference by 2025 that will support the undertaking of a targeted review of the sustainability of the City’s finances by 2026.

The review would assess the long-term sustainability of the City’s finances and operations (e.g., use of provincial support, transit ridership recovery, shelter service demands, transit capital, implementation of efficiency measures, revenue generation, public safety and emergency management costs, etc.). The review would inform options to assist City in allocating resources to areas of highest need.

This effectively pushes the debate on long-term sustainability off until new or re-elected governments will be in place at City Hall and Queen’s Park. Until we see the City’s projections for coming years, we will not know whether all of the announced support will be adequate to cover the many needs of operating and capital budgets.

Ontario Place & The Science Centre

Ontario will proceed with the force of legislation to push through redevelopment of Ontario Place and the spa proposal. How much of the park will remain depends on design changes including a proposed shift of the parking structure into the Exhibition lands.

As for the Science Centre, the building may remain, but in a secondary role and dependent on City support:

The Province agree[s] to discuss partnership opportunities with the City for maintaining public, community-oriented science programming at the legacy Ontario Science Centre.

There is no mention of the cost of maintaining and operating the existing structure, and Premier Ford has stated that the Science Centre move to Ontario Place is still in his plans.

Federal Asks

The Federal government came into the discussions for a Toronto-Ontario plan late in the game, and they have not yet made any spending commitments. Some of the Provincial funding is contingent on Federal participation.

The amounts sought are quite substantial:

• East Harbour flood protection: $200 million
• Shelter costs: $853 million over three years
• Shelter infrastructure: $675 million
• Outstanding Federal share of Toronto’s 2022 Covid-19 budget pressure: $235 million
• 55 subway trains: $758 million
• Provision of surplus Federal lands for housing development
• Support through Waterfront Toronto to accelerate housing on their lands
• Policing costs related to emergency response, including public order (events and protests), border control and multi-jurisdictional activities
• 40% of the capital cost of Provincial priority subway projects (amount unspecified)