Day: December 19, 2023

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TTC 2024 Budget Preview: Part II – Capital

In the first article in this set, I reviewed the TTC’s Operating Budget for 2024. Now, I turn to the Capital Budget and Plan for the year 2024, the 10-year period out to 2033, and the 15-year period to 2038. Reports cited here include:

Capital budgets and plans exist in three formats, each with its own purpose:

  • The annual Capital Budget sets out spending for the coming year. For multi-year projects, only current year spending is included, plus any carry-overs from incomplete work in the previous year.
  • The ten year Capital Plan shows spending planned for the coming decade, and this feeds into a comparable plan at the City of Toronto. Only items for which funding can be reasonably expected are included, and this tends to make the plan lighter on the back end. In past years, some items have been carried “below the line” as unfunded, but desirable, usually major rapid transit projects.
  • The fifteen year Capital Investment Plan shows everything (or almost) that the TTC foresees as capital requirements in coming years. Over the years, it was quite evident that many, many items were not being reported even in the “below the line” portion of the Capital Plan.

The Capital Investment Plan (CIP) gave City politicians and managers a severe case of indigestion when it was first published in 2019 because the total involved, well over $30 billion, was more than three times the size of ten year Capital Plans normally presented by the TTC. This addressed a long-standing problem where capital requests would appear out of thin air because they had never been approved as part of the Capital Plan, and TTC long-range requirements were very different from the numbers usually cited.

Transparency is a double-edged sword because any new scheme will usually show up in the CIP complete with a cost. In the 2024 version, the effect is particularly substantial with a jump to a total of almost $48 billion. Later in the article, I will review the CIP’s evolution over recent years to show the origin of this increase.

A major problem with the various budgets is that they are huge, and the TTC Board has an aversion to long, complex reports. Moreover, there is no Budget Subcommittee of the Board to develop some expertise on the matter, and even when one existed, it met rarely, if ever.

The current Capital Budget was always of most concern because it was usually presented just before it had to be rolled up into the City’s budget, and there was no scope for tinkering. As long as enough money was found somewhere, the immediate financial crisis would pass, and long-range planning would be left for another day. That day rarely came, but it suited the former regime at City Hall not to have the TTC’s or City’s financial peril exposed to much scrutiny. Now that Toronto’s gaping budget hole is out in full view, we can see just how badly the city and transit system have been served by years of pretending our needs were “affordable”.

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