An Invitation to Dinner

At the recent meeting of the TTC Board, Vice-Chair Alan Heisey proposed that the TTC and Metrolinx Boards should meet regularly to discuss issues of mutual interest. Such a meeting took place a year ago, but despite the best intentions at the time, nothing further came out of this. As Heisey said “It’s not as if we don’t have things to talk about” citing fare integration, Presto, the Crosstown project and SmartTrack. Using fare integration as an example, with some discussion already afoot about just what this entails, it will be better to have these discussions earlier rather than later, said Heisey. The TTC should be in front of discussions on how an integrated system will be structured in Toronto.

Heisey went on to mention that at a recent meeting of the Toronto Railway Club, of which he is a member, he learned things about the Crosstown contract he did not know such as that the operation of the Mount Dennis yard will not be done by the TTC, and that although the TTC is supposed to be operating the line, the company delivering the project would really like to do this work. This is the sort of information Heisey hopes would come out in a joint meeting, and he proposes that the TTC host the event (as Metrolinx did in 2016).

It is no secret that far more information is available outside of formal Board meetings at both TTC and Metrolinx than one ever hears on the record. Those of us who attend Metrolinx meetings regularly know that “information” is thin on the ground at these events where the primary function appears to be telling the staff how wonderful they are and luxuriating in the ongoing success of everything Metrolinx, and by extension the Government of Ontario, touches. “Seldom is heard a discouraging word” could be the Metrolinx motto.

Indeed the TTC has become infected with a similar problem recently where whatever new award(s) they manage to win take pride of place at meetings while serious discussion about ridership and service quality await reports that never quite seem to appear. Budgets do not offer options conflicting with Mayor Tory’s insistence on modest tax increases. Getting an award for the “We Move You” marketing campaign is cold comfort to people who cannot even get on a bus or train because there is no room.

Oddly enough, when TTC Chair Josh Colle contacted his opposite number at Metrolinx, Rob Prichard, the word back was that such a meeting might have to await the appointment of a new CEO. The position is now held on an acting basis with the departure of Bruce McCuaig to greener pastures in Ottawa. That is a rather odd position to take. Is Metrolinx policy and strategy so beyond discussion that without a CEO, they cannot have a meeting? How is the organization managing to push trains out the door, let along host an almost endless stream of photo ops for their Minister?

Commissioner De Laurentiis agreed that there are many issues, and warmed to the idea, but suggested an information sharing/exchange session as opposed to a formal meeting. She concurred that the type of information Heisey is gathering “accidentally” should come the Board’s way formally.

Vice-Chair Heisey noted that he was told he could not see the Crosstown’s Operating Agreement because it was confidential. For what they’re worth, here are a few handy links:

These do not include the operating agreement for the line because, I believe, it does not yet exist beyond a draft format and the intention is not to formalize it until a few years before the line opens in 2021. However, aspects of the proposed agreement are certainly known to TTC staff. Whether their interpretation matches Metrolinx’ intent is quite another issue.

Other topics for a joint meeting suggested by Commissioner Byers included Accessibility, and the working relationship between Metrolinx and Infrastructure Ontario including the topic of risk transfer.

For those who have trouble sleeping, the Crosstown agreement makes interesting, if tedious, reading. One section deals for pages on end with the contractual arrangements between Metrolinx who will procure and provide the fleet, and the project provider who must test, accept and operate (or at least maintain) the cars. This is a perfect example of the complexity introduced by multi-party agreements with the 3P model. Each party must define at length its roles and responsibilities where a consolidated organization would deal with the whole thing in house. Of course some would argue that this simply shows how keeping parts of the overall procurement within Metrolinx adds layers of complexity that a turnkey solution might avoid. That’s a debate for another day, but an important part of any future project design.

Chair Colle observed that just because you invite someone over to your house, they don’t necessarily accept, and the TTC could find itself without a dance partner. Heisey replied that we should invite Metrolinx to dinner and tell them what the menu will be. Dinner invitations are often accepted. Colle observed that any one or two of the suggested items could “keep us well nourished”.

Mihevc added to the list by suggesting both the Finch and Sheppard LRT projects. That should be an amusing discussion considering that Metrolinx and City Planning have gone out of their way to be agnostic on the subject of Sheppard East’s technology considering that there are Councillors and (Liberal) MPPs who would love to see a subway extension there, not LRT. Both Boards, not to mention their respective management teams, would go to great lengths to avoid implying any sort of commitment beyond the next announcement of another GO parking lot or a long-anticipated subway extension’s opening date.

The biggest problem with the Metrolinx-TTC relationship is the province’s heavy-handed approach whereby any move away from the “official” way of doing things will be met with a cut in subsidy. Indeed, despite increasing outlays from Queen’s Park on transit, they keep finding more ways to charge Toronto for their services. The City gets more money on paper for transit, but spends some of it to buy provincial services in a monopoly market. Even if Metrolinx invites Toronto to dinner, they will expect the City to foot the bill.

As a public service, if only to forestall imminent starvation of the TTC Board, the balance of this article explores some of the issues raised by Commissioners.

The video record of the TTC debate is available online.

[For readers in the 905, please note that this is a Toronto-centric article because it deals with issues between the TTC and Metrolinx. Municipalities outside of Toronto have their own problems with the provincial agency, not least of which is its undue focus on moving people to and from Union Station.]

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Has John Tory Discovered Life After SmartTrack?

With all the flurry of transit funding and construction announcements lately, Mayor John Tory added his own contribution with a media statement at that busiest of stations, Bloor-Yonge. What prompted such a high-profile event? Rumour has it that Queen’s Park plans to fund the Richmond Hill subway extension in its coming budget, and Tory wants to be sure he defends the existing downtown system against overloading from the north.

(See coverage in The Star and The Globe & Mail)

Specifically, Tory wants to ensure that funding will be available for:

Building new transit lines including the Eglinton East LRT, waterfront transit and the downtown relief line

This is brave stuff, our Mayor rallying his city to the barricades [cue inspirational and very-hummable anthem here] were it not that Tory himself is responsible for much of the confusion and misdirection in transit plans today. His election campaign promoted “SmartTrack”, a single city-wide project that would solve every problem and magically be funded through taxes on new development the line would bring. A “surface subway” would speed riders from Markham to Mississauga via downtown with frequent service at TTC fares. Nothing else (except for a politically unavoidable subway in Scarborough) was needed, certainly not better bus and streetcar service to fill all those spaces in between major routes.

Things didn’t quite work out as planned. SmartTrack has dwindled to a handful of new GO stations to be built on the City’s dime, some of which Metrolinx might have built anyhow, and a few in locations of dubious merit beyond their soothing effect on local politicians. With the demise of a scheme to run GO trains along Eglinton from Mount Dennis to the Airport district, the Eglinton West LRT extension is also on the table, but it stops short of its necessary end, the airport, because Toronto lopped off the outside-416 segment to reduce the cost. Whether Mississauga and/or the airport authority itself will contribute to the LRT remains to be seen.

Tory discovered that surface routes suffered under his predecessor, and vowed more money for buses. Toronto bought the buses, but money to actually operate many of them is harder to come by. The only thing that saved the TTC from widespread service cuts in 2017 was a last minute City budget fiddle to bump the expected revenue from Land Transfer Tax.

Meanwhile in Scarborough, SmartTrack and the Scarborough Subway Extension vie for the same pool of riders, and it is only the comparatively infrequent GO service that preserves any credibility for the subway extension. Planners who once argued that an east-west line through the Town Centre precinct would better serve future development now compliantly endorse the supposed benefit of a single new north-south station between McCowan and the shopping mall.

Mayor Tory might now think of both ST and the SSE as “done deals”, although there’s a lot of ground to cover before the final cost projections and approvals by Council. Those extra GO stations and the express subway might still cost more than the preliminary estimates shown to Council, but there’s no more money coming from Queen’s Park. Indeed, the two governments cannot agree on how to calculate inflation in the provincial “commitment”, and Toronto thinks more money is on the table than is likely to be available. After all, Tory is in no position to tell a funding government how much they will pay out. Even those numbers are subject to change if the Liberals lose control of Queen’s Park to the Tories, as seems very likely in 2018.

Then there’s Ottawa and Trudeau’s huge infrastructure program, just the thing a politician who is desperate to make everything seem affordable could wish for. Except, of course, that the infrastructure pot isn’t bottomless. Once it is divvied up across the country, Toronto’s share is well below the level John Tory hoped to spend with his shiny new Liberal red credit card. Holding press conferences about the need for projects won’t change the amount of money available, and the federal program requires that municipalities, even big irresponsible ones, must set priorities. Tory’s plans also require Queen’s Park to come in with funding equal to the Fed’s contribution at a time when provincial budgets are tapped out, and Toronto’s ongoing game of holding down taxes rather than pay for its own services and infrastructure plays poorly beyond the 416.

What does the Mayor do? John Tory, the man who had a one-line plan to solve everything, now looks to a world beyond SmartTrack.

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How Many SmartTrack Stations Will Survive? (III) (Updated)

This is the third and final installment in my review of the Metrolinx Initial Business Cases for new GO Transit (and SmartTrack) stations.

Part I reviewed stations on the Stouffville and Kitchener corridors.

Part II reviewed stations on the Lake Shore and Barrie corridors.

Updated March 24, 2017 at 11:00 am: Additional information including replies to some of the questions I posed to Metrolinx and a report of GO Transit’s current ridership added at the end of this article.

Regular readers here will not be surprised at my skepticism regarding the methodology found in Metrolinx reports to perform comparative evaluations of projects. Much of the information is presented at a summary level, important details are omitted, and the underlying assumptions for some calculations are dubious. That said, these reports are the documents Metrolinx relies on to justify its decisions. Understanding how their methodology works is an important part of any critique of the outcome.

What these calculations do not consider is the political context where the “value” of a station is more strongly linked to its perceived delivery on a campaign promise, or to give the impression that transit service will substantially improve where the station is located. This is quite different from how the new facilities will actually affect the transit network or improve the lot of transit riders.

Most of the proposed stations actually do not fare well in the evaluations, although that could well be due to pessimistic projections of the effect of added stops on other “upstream” users of affected GO Transit routes. The evaluation process is very sensitive to the ridership estimates, and if the underlying assumptions change, then so do all of the outcomes.

The new stations to be funded by the City of Toronto have approved as a package, and the detailed IBC reports were not available to Council at the time. A smaller set of stations might make more sense from a financial or planning perspective, but they were sold as a package that is unlikely to be broken up unless some projects prove to be unexpectedly difficult or costly.

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How Many SmartTrack Stations Will Survive? (II) (Updated)

In the first part of this series, I reviewed the Metrolinx “Initial Business Case” reports for proposed stations within the City of Toronto on the GO Stouffville and Kitchener corridors. This article continues with the Barrie and Lake Shore East corridors. (No new station is planned for the Milton or Richmond Hill corridor.)

In a third article to follow, I will review the overall methodology of these studies and the implications for the viability of the station proposals.

Updated March 21, 2017 at 6:51 pm: The Metrolinx study of stations at the Don River on the Lake Shore corridor does not include the effect of proposed employment at the Great Gulf “East Harbour” site. Therefore the ridership projections and comparative evaluations of stations are based on a situation where this major proposed node does not exist. I have added a relevant quotation from the study to illustrate this.

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How Many SmartTrack Stations Will Survive? (I)

On March 16, 2017, Metrolinx released a series of studies dating from July 2016 containing the “Initial Business Case” reviews of proposed new GO Transit stations. The list came from an earlier process in which Metrolinx began with every conceivable location for new stations on the planned Regional Express Rail (RER) network  and winnowed this down to those that were, broadly speaking, workable. The New Stations Analysis from June 2016 explains this process and the outcome, the choice of whether a station is “in” or “out” of the network, is summarized in the following map:

I asked Metrolinx why the detailed reports on each station were only released now rather than concurrently with the Board report.

Q: … the station analysis reports were only released [March 16, 2017] although they are dated July 2016. Moreover, the Board considered a report on this subject in June 2016 but the detailed reports have not been summarized nor presented to the Board publicly at this or any following meetings. Why has it taken so long for these reports to be published?

A: Upon approval from the Board last June, we engaged with our municipal partners and other stakeholders to finalize the documents. Metrolinx requested formal confirmation of funding from municipalities by November 30, 2016. Once that was received, we worked to get the business cases posted as soon as we could.

If one reads only the summary report presented to the Metrolinx Board, one might have the impression that many of these stations show a positive benefit for the network. However, the detailed reports tell a different story and beg the question of how Metrolinx planning staff got from the business cases to the conclusions in the Board report.

The posted reports are dated over six months ago, and their date does not reflect more recent work, if any, with “municipal partners and other stakeholders”. Whether this is only an editorial oversight, the basic issue is that the case made in the station analyses is not as rosy as the one presented in the summary report to the Board.

A key issue here is that many of the stations form part of Mayor Tory’s SmartTrack plan, and a Metrolinx report throwing cold water on their effectiveness would run contrary to the claims made for SmartTrack’s potential. One might ask whether the Board was misled about the potential harm the SmartTrack stations could bring to GO/RER’s goals.

As reported in both the Globe & Mail and the Star, many of the new stations are projected to have a negative effect on the network. The analyses can be summarized in a few points:

  • Any new station adds travel time to a GO Transit corridor.
  • Demand models are sensitive to travel time, and they predict a loss of ridership if trips are slower.
  • New stations could bring new riders, but these are not necessarily sufficient to offset the loss of longer trips which are the raison d’être of the GO network.
  • New riders from stations close to Union make shorter trips at lower fares leading to a net revenue loss even without considering the SmartTrack proposal to charge “TTC fares” for travel within Toronto.
  • The loss of longer trips drives up the modelled use of autos for commuting compared to what would have happened without these stations. This has a compound effect through the business case analysis because many factors depend on reduced auto mileage.

There are three fundamental issues here. First is the problem of repurposing the regional GO/RER network to provide local service within Toronto. Although SmartTrack as proposed in John Tory’s election campaign included very frequent service, what is actually to be implemented is considerably less ambitious thanks to constraints (both physical and financial) on GO’s investment in additional capacity. Planned peak period services are:

  • Stouffville (Scarborough) corridor: 7 trains/hour with an average headway of 8.6 minutes
  • Kitchener (Weston) corridor: 6 trains/hour with an average headway of 10 minutes
  • Lake Shore East corridor: 11 trains/hour with an average headway of 5.5 minutes

The only corridor to receive service at the level foreseen for SmartTrack is the Lake Shore, and this is applicable only to stations from Danforth (at Main) to Don (at or near the Great Gulf East Harbour development). This higher service level results from the combination of trains on both the Lake Shore East and Stouffville corridors serving these stations. Any new ridership due to SmartTrack has to fit within capacity planned for GO/RER.

Second is a problem of assumptions in the modelling. In all cases, a new station is seen as slowing down GO service, but a major benefit cited for GO/RER electrification is the ability to serve more stations with no increase in trip times over diesel operations. The business case models assume a 1.8 minute delay for each additional stop, and this translates to ridership loses for the long-haul travellers whose trips are affected. However, this analysis does not take into account the possibility that new, electrified service would be implemented concurrently with the new stations thereby eliminating the delays.

Depending on the corridor and the degree of electrification, some trains could remain with diesel power, typically those running to the outer ends of routes beyond electric territory. These long trips would suffer more delay than the shorter electric-propelled ones. However, if the diesel trains run “express” past some or all of the new stations, the resulting service levels will be less attractive to riders, and the wait for a train to Union from an inside-Toronto station would be a substantial portion of the total trip.

I asked whether electrification had been taken into account:

Q: In the studies, there is a reference to the extra time needed to serve a new station on the line, and in the case of Lawrence East this adds 5% to the upstream travel time. Has this number been adjusted to reflect operating characteristics of electric trains? One important point in the electrification study was that these trains could sustain more stations with the same running times as existing diesel trains having fewer stops.

A: Electrified vehicles were assumed in the calculation of delay time.

This does not address the issue that if stations are added concurrently with electrification, there may be no change in travel time and still possibly a net improvement.

Also:

Q: For corridors with multiple proposed new stops, there is the question of the cumulative upstream effects which, I suspect, are not additive.

A: The business cases analysed stations individually and independently. Effects of adding multiple stations to a line would be cumulative, creating trade-offs between end-to-end trip time and the journey time of individuals taking advantage of new stations. This limited the total number of stations that could reasonably be added to a corridor.

That last comment is telling in that it effectively says there is a point where making a route more “local” is counterproductive. This is no surprise, except possibly to SmartTrack advocates.

A related issue acknowledged in the studies, but apparently not in the modelling, is that other factors will influence the choice between driving and taking a GO train – increased road congestion, the difficulty of obtaining parking at one’s destination, and a reduction in car ownership levels over coming decades. A large component of the negative analysis for some stations arises from a ridership loss than may not materialize.

The third problem is the proposed “TTC fare” on SmartTrack services, and the parallel efforts by Metrolinx to change the TTC fare structure for “rapid transit” services to more closely match its own fare-by-distance model. Demand studies for the Scarborough transit network have shown that a TTC fare (defined as the current flat fare with free transfers between routes) combined with very frequent service (12 trains/hour) contribute substantially to potential ridership for SmartTrack. Without these, less demand migrates from the TTC network to GO/RER.

To put these issues another way, there is little point in adding stations to the GO network if the combination of location, service level and fare attracts little ridership inside Toronto, while extra travel time for trips originating outside of Toronto drives riders back to their cars. That said, I believe that the unattractiveness of GO as an alternative to TTC would be a more serious effect than the anticipated ridership loses because other factors would affect a decision by long-trip commuters to move away from GO.

Indeed, if capacity on GO services were compromised with large volumes of short-distance riders, this could be as much of a deterrent to GO ridership as the extra time spent at inside-Toronto stations. The Business Case reports do not address network capacity issues because they review each station proposal in isolation except where station catchment areas overlap.

Almost all recent controversy between Toronto and Queen’s Park centres on capital subsidies for a number of projects, and operating costs are left for another day. However, the position of GO and SmartTrack in the network is intimately linked to operating costs as this will affect the sharing of incremental expenses for new station operation, pressures for additional capacity and service, and fare subsidies by Toronto to bring GO fares down to “TTC” levels.

The current studies do not address the relationship of SmartTrack to existing GO stations and the question of whether “TTC fares” will be available at Milliken, Agincourt, Kennedy, Danforth, Bloor, Weston and Etobicoke North stations, let alone stations on other GO corridors within Toronto. Why should a rider from a SmartTrack station travel downtown for a “TTC fare” while those at Rouge Hill, Cummer, York University, Kipling or Long Branch be forced to pay on the GO Transit tariff?

How much is Toronto, a city that refuses to properly fund its own transit system, prepared to subsidize travel on the GO network within its boundaries?

Station Reviews

The following sections review each of the proposed stations on the GO network as presented by the corresponding Interim Business Case report, grouped by corridor.

Toronto Council has agreed to fund eight stations, six of which lie on the “SmartTrack” corridor from Scarborough (Stouffville line) through Union Station to Weston. Two stations are part of the Barrie corridor.

Several scenarios were used to evaluate the stations, although not all options were considered in each case because local circumstances ruled them out.

Beyond the question of demand models and potential for ridership gains or loses discussed above, other factors appear commonly through these station reviews. Notable among them is the difficulty of attracting new riders to stations on the rail corridors within Toronto. These lines tend to lie in industrial districts well away from major residential or job markets. They are dependent on walk-in trade, to the extent that any exists, as well as connections from TTC routes. Unlike the typical 905-area GO station, the new sites within Toronto will not be surrounded by acres of parking and cannot depend on park-and-ride as their primary source of traffic. This makes the combination of service frequency, speed and fares even more important if GO/RER is to provide a credible alternative to or supplement of the TTC network.

A recurring problem with the reports is that selective data such as daily gains or loses of riders are sprinkled in the text, but the consolidated numbers are given only for a 60-year evaluation period. Where changes are reported, they are not given in context relative to the base numbers of projected riders, nor, as mentioned earlier, with any reference to the available capacity on each corridor. All of the financial effects (hard and soft) flow from these ridership numbers, but it is unclear how they were derived or how alternate assumptions might affect them. To avoid repetition, I will not mention this for each study, but statements regarding ridership, revenues and costs should be treated with caution.

I have asked Metrolinx for additional data on existing and projected demands so that these can be compared with the effects reported from the station modelling exercises. I will add this information when it is available.

Finally, there is an odd viewpoint about what constitutes a “nearby” station in several of the studies where the distance from a potential station to residential density is seen through the eyes of a suburban driver, not as by a city resident who measures trips in blocks, not kilometres. This is especially troubling when access to a station would require going out of one’s way or a difficult walk where where local geography interferes with a “crow fly” access path.

This article deals with stations in the Stouffville and Weston corridors. In a second installment I will turn to the Barrie and Lake Shore corridors.

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Metrolinx Board Meeting Wrapup February 17, 2017 (Updated)

The Metrolinx Board met on February 17 with the following items, among others, on their public agenda.

  • Presto Update
  • Regional Express Rail Update: Level Crossings
  • Fare Integration
  • Bombardier LRV Delivery

Updated: Replies from Metrolinx to questions clarifying their process for grade separation prioritization have been added to this article.

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Creative Writing From the Mayor’s Office

Back in June, an Op Ed from Mayor Tory appeared in the Toronto Star extolling the virtues of the Scarborough Subway. Torontoist, intrigued by how this piece came to be, made an FOI request for correspondence in the Mayor’s office. The result is an article and associated copy of the FOI response.

Tory’s article triggered a response from Michael Warren, a former Chief General Manager of the TTC. I have no brief for Warren himself, but what was intriguing was how the Mayor’s staff reacted with a need to debunk Warren. The following memo from the Mayor’s Chief of Staff is among the FOI materials.

chriseby20160630remichaelwarren

This memo is full of misinformation, but it gives a sense of the mindset in the Mayor’s Office and why so many statements from Tory simply do not align with reality.

… greater use of existing GO rail tracks … six new stations …

The original SmartTrack plan was for a “surface subway” that would carry 200,000 passengers per day using capacity in the GO Transit corridors. However, this plan depends on key factors including good integration with TTC service and much more frequent trains. SmartTrack is now reduced to nothing more than GO’s already planned service stopping at six extra stations. That is not “greater use” of tracks beyond what would have happened with GO’s RER plan. Even the ability to make these stops with little or no penalty in travel time results from GO’s planned electrification, not as part of SmartTrack.

GO Transit has no interest in the work of upgrading signals on their corridors to accommodate the level of passengers implied by that all day count, and hence the network “relief” claimed for SmartTrack cannot possibly materialize without significant new investment.

Tory’s campaign literature talks about a “London-style surface rail subway”. In Toronto, the word “subway” means service that is at worst every 5 minutes, not every 15, and it’s that convenience the campaign expected people to key in on. Some of the timetables for London Overground do feature very frequent service at a level GO’s signal system (let alone Union Station’s platform arrangements and passenger handling) cannot hope to accommodate.

A recent City backgrounder on proposed new stations shows that they will attract some, but not a vast number of new riders. That’s why they were never in GO’s short list of potential stations to begin with.

At these six new stations, trains will come every six to ten minutes in rush hour. That’s better than what candidate Tory promised … every 15 minutes or better. And to be clear, the provincial RER model sees trains coming every 15 minutes.

Actually, the provincial RER model already sees trains coming more often than every 15 minutes during peak periods and the improvements are not confined to the SmartTrack corridors (Stouffville and Kitchener) or to the City of Toronto. Queen’s Park has made no move to bill Toronto for extra service above levels planned for RER, and therefore we must conclude that none is planned.

SmartTrack was always envisioned as a beefed up version of RER; more stations in Toronto, more access for riders, faster frequencies and a TTC fare.

In fact, there is no “beef” in SmartTrack, and its only contribution will be for those who live or work near the six new stations. The service levels are part of GO RER, nothing more. As for a TTC fare, this is far from decided, and the likely cost to Toronto to support such an offer is fraught with problems. There is the obvious question of where the operating dollars will come from, but moreover riders on other GO corridors within the city might reasonably ask why they don’t get the same deal.

Conversely, some of the Metrolinx machinations about “Fare Integration” have suggested that subways might be treated more like GO Transit with a fare by distance model. If that’s what a “TTC fare” for SmartTrack really means, that’s not what Tory was selling in his campaign.

… Warren suggests tax increment financing … has been abandoned. That’s flat out wrong. City staff are preparing to report back … and have already stated it “may be the appropriate revenue tool for funding …”

Warren may have been incorrect that TIF has been abandoned, although it is hard to tell because his original piece “was edited to make clear that John Tory still supports his TIF transit financing scheme” according to a correction notice following the online version of Warren’s article. Whether Tory still supports TIF is of little matter because City staff recently reported that it cannot support the full cost of SmartTrack and additional revenues from other sources will be required.

Warren … talks of the abandoned LRT option, which he says will cost $1.8 billion … The TTC said this week that building the LRT would now cost as much as $3 billion.

The infamous “Briefing Memo” from the TTC about LRT vs Subway costs provides that higher estimate, but this is based on the assumption that the LRT line would be build much later than originally planned. Most of the cost increase is a function of inflation. Also, of course, the LRT option would serve much more of Scarborough than the subway, including the Town Centre planning precinct, a fact Tory’s Chief of Staff conveniently ignores.

As for additional costs, the provincial commitments to various transit plans, including its own, have always included inflation to completion, although undue delay caused by Toronto Council’s inability to make a decision might reasonably considered beyond the level of Queen’s Park’s generosity. All the same, the $3 billion estimate assumed a leisurely LRT project schedule compared to what would have been possible with dedication and leadership.

Under the Mayor’s leadership, Toronto is moving ahead with the most ambitious, and badly needed, transit expansion in its history.

A great deal of the expansion now underway was in the works before John Tory was elected. Indeed, his campaign claimed that SmartTrack was the single project that would solve every problem, and no other transit schemes, notably the Relief Line, need even be considered. Tory has changed his tune on that, but the RL is still treated as something we will need, someday, maybe. There is no leadership on his part in demonstrating how this line would serve suburban riders with additional commuting capacity.

debate … should be guided by fact, not distortions and rhetoric

That comment speaks for itself.

SmartTrack’s Next Steps

After a day-long debate, Toronto Council has approved continuing along the path set by Mayor John Tory to study and possibly to build the transit lines branded as “SmartTrack”. Although this proposal is now much different from the scheme that was Tory’s campaign centrepiece, the idea of SmartTrack continues to receive broad support among Councillors.

The debate covered a lot of ground with two related threads: how would Toronto actually pay for SmartTrack, and how much of the larger transit network many hope to see will actually be built.

Council has yet to consider a long-term financing strategy and possible “revenue tools” (new taxes in plain English) to deal with the combined capital and operating budget demands of the would-be network. Although there was much talk of the lost decades of underinvestment in transit, Council has yet to show that it really is ready to spend Toronto dollars (as opposed to  money from any other source) at the level that will be needed. City staff will present a report on financing options in a few weeks, and the reaction to this will be telling.

What Did Council Approve?

Below is a consolidation of the staff recommendations and amendments adopted by Council arranged to keep related issues together. For full information, please refer to the detailed record of the item.

Note that in all cases where approvals relate to “SmartTrack” this includes both the six new GO stations and the Eglinton West LRT extension unless otherwise noted.

Process:

  • (1) Adopt the “Summary Term Sheet and Stage Gate Process” which includes details of the many parts of the proposed agreements and (2) authorize the City Manager to negotiate and execute agreements with the province to implement this.
  • (3) Request staff to report at Stage Gate 5 for final approval of full funding for SmartTrack. A report on more definitive costing and the financing funding strategy has been requested for an earlier step in this process. See (18) below.
  • (4) Approve the confidential staff recommendation regarding settlement of the Georgetown corridor funding issue. See also recommendation 15.

Technical and Planning:

  • (5) Proceed with planning and design for the six SmartTrack GO stations, report back to Council, and launch the Transit Project Assessment Process (TPAP). This was amended by two further requests that the work include improvement of:
    • the placement and access points of the Liberty Village Smart Track Station to maximize connectivity, and
    • pedestrian connections to the existing Exhibition Place Station for both Liberty Village and Exhibition Place.
  • (6) Confirmation of city support for transit supportive land use plans for areas around the SmartTrack and GO RER stations. Amendments related to this included:
    • Amending the development strategy for public lands at stations, including air rights, to create ongoing operating revenue streams from development resulting from that strategy.
    • Directing the Chief Planner to report in January 2017 with options to develop a comprehensive plan for managing development and growth related to transit expansion.
    • Confirming that the Official Plan as well as other plans, bylaws and policies, are not changed by this decision on this item. The intent of this is to forestall any claim for additional density by would-be developers in advance of the passing of updated plans for area affected by transit projects.
  • (7) Proceed with planning and analysis of the Eglinton West LRT extension up to Stage Gate 3 including finalization of stops and grade separations, provide a scope for this project up to the Renforth Gateway, and provide a class 4/5 estimate of the project’s cost, and conduct the TPAP. Note that this is a more restrictive approval seeking more detail than in the case of the ST/GO stations in (5) above.
  • (8) Request a financial contribution from Mississauga and Pearson Airport to the outside-416 portion of the Eglinton West extension.
  • (9) Ensure that the proposed new station design at St. Clair and Keele includes improved road operations and is co-ordinated with the St. Clair West Transportation Master Plan. A significant part of this would be the widening of the underpass east of Keele Street to remove the existing choke point.
  • (10) Request Metrolinx to consider grade separations at Progress and at Danforth on the Stouffville corridor, with the proviso that any option closing existing roads would not be considered. This was amended at Council to add requests for grade separations at Passmore, McNicoll, Huntingwood and Havendale.

At Council, there was an attempt to have items (7) and (8) deferred until after the Waterfront Transit Reset report is considered by Council in 2Q17, effectively putting both of the proposed Etobicoke LRT proposals on the same approval timeframe. The deferral motions did not pass.

Finance:

  • (13) Approve $71m for preliminary planning and design on SmartTrack (the 6 new stations plus the Eglinton West LRT)
  • (14) Include $2b in net capital requirements for SmartTrack (stations plus LRT) in the city’s 10 year capital projections.
  • (15) Approve $95m for settlement of the Georgetown South issue with the province.
  • (16) Approve $62m for Toronto’s share of 5 grade separation projects.
  • (17) Approve $60m for GO capital expansion (2 stations at Bloor/Lansdowne and at Spadina on the Barrie corridor). This was amended to ask that staff work with Metrolinx on including the study and design of the Railpath along the Barrie line between Bloor and Dundas West.
  • (18) Request staff to develop the financing and funding strategy, and report back when a class 3 cost estimate is available for a definitive Council commitment to the SmartTrack project.

Two additional amendments ask for:

  • strong TTC in developing procurement options, and
  • negotiations with the province for resumption of operating subsidies.

Commitment to the full cost of the new stations and the Eglinton West LRT will not occur until much more detailed cost estimates come back to Council over the next year (or possibly more). In the event that Council opts not to proceed with any component for which Metrolinx has spent money on development prior to the point of final approval, Council will be responsible to reimburse Metrolinx for its costs.

With respect to the additional grade separation studies requested for the Stouffville line, it is unclear how work on this would be funded, although one might expect Metrolinx to respond with a request for some up-front payment and guaranteed participation in funding if any of these goes ahead.

The Status of Other Major Transit Proposals and Projects

Planning and building any part of SmartTrack should be seen in the wider context of other transit needs and schemes, let alone wider demands on the city’s operating and capital budgets.

  • The Spadina Subway extension to Vaughan (TYSSE) is scheduled to open at the end of 2017, although startup costs will affect the TTC’s operating budget before any passengers are carried. For 2018, the current estimate of the annual operating cost to Toronto is $30 million including whatever marginal fare revenue the extension will bring in. This line’s capital was covered roughly one third by each level of government, with about 60% of the municipal share falling to Toronto based on the proportion of the route within its boundaries.
  • The Scarborough Subway from Kennedy Station to Scarborough Town Centre remains the subject of much debate. Although its capital cost is already covered by money from all three levels of government, the proportions are unequal, and any increase to the overall Scarborough transit scheme will be on the city’s tab. The extension will be part of the TTC’s operation along with the net new operating cost, an unknown amount at this time. A critical issue will be whether the cost estimate overall will hold or increase before final project approval, and how this will affect what actually gets built.
  • The Eglinton Crosstown LRT is now under construction by Metrolinx between Kennedy Station and Mount Dennis (at Weston Road) with a planned 2021 opening, subject to issues about vehicle delivery. This project’s capital cost is funded totally by Ontario, but operating costs will be billed back to Toronto at an anticipated annual net amount of about $40 million in then-current dollars.
  • The Eglinton East LRT extension from Kennedy Station to University of Toronto Scarborough College is part of the Scarborough package approved with much fanfare earlier in 2016. The capital cost is part of the same “pot” as the Scarborough Subway extension, but how much will actually be available after that extension’s scope and price are firmed up remains to be seen. This will be an early test for Council. Does it really believe in a “network”, are councillors willing to accept the extra cost as part of building our city, or is the argument still dominated by an outlook claiming that tax restraint must take precedence. An updated Scarborough report is expected in coming months.
  • The Eglinton West LRT extension from Mount Dennis to the Renforth Gateway (at the western city boundary) and then north to Pearson Airport is part of the SmartTrack package. Funding for the line is still uncertain because city plans depend on contributions from Ottawa (likely as part of the Liberal’s infrastructure program), from Mississauga and the airport authority (GTAA) for the portion outside of Toronto. This extension is now the more expensive portion of “SmartTrack”, and ironically appears to survive mainly because of that branding despite opposition from some Etobicoke councillors.
  • Like the central part of the Crosstown, the two extensions would be operated at the city’s expense even though the lines would be owned by Metrolinx.
  • The Metrolinx GO RER program is provincially funded, although the matter of the municipal contribution to GO’s capital remains a sore point between Queen’s Park and the GTHA. Toronto will pay for six new stations as part of SmartTrack and will also contribute to two stations on the Barrie corridor (Bloor/Lansdowne and Spadina). GO RER’s net operating costs will all be a provincial responsibility, and the amount of service that will actually operate depends on future subsidy levels for Metrolinx. Similarly, the full build-out of RER fleets, electrification and service levels will depend on future provincial budget decisions.
  • The Relief Line remains under study thanks to a provincial infusion of $150 million, and both city and TTC staff emphasize that it is a necessary part of Toronto’s future network. While some relief to Yonge line crowding will come from GO RER and the new SmartTrack stations, this will only blunt but not stop the growth in subway demand. A big problem, as readers have discussed here at length, is the project’s scope and the perception that it is intended for a comparatively small part of the system’s ridership, downtowners. The further north the eastern RL branch goes beyond Danforth (to Eglinton or even to Sheppard), the more it performs a service for the city as a whole, but this benefit is routinely underplayed relative to the cost of a new north-south subway. Major capital spending for the Relief Line would not begin until the mid 2020s, but this will still compete with other city priorities.
  • Waterfront LRT to the west is popular with councillors from southern Etobicoke and has begun to overshadow the shorter eastern LRT line in debates. Both parts of a future waterfront network are under review with the “Reset” study now in progress that has only progressed to the point of developing a moderately long list of options. The strategy appears to be to keep this list as open as possible as long as possible so that political fights over the details are held off at least until there is a better understanding of what will work and what the options might cost. Like the RL, waterfront transit has suffered from being perceived as a “downtown” project despite the scale of development it will have to serve.
  • The Finch West LRT is still on the books, and Metrolinx hopes to begin work in this in 2017. There remains some opposition to the line, and it will be a test of the Wynne government’s resolve to see whether actual work is pushed back beyond the 2018 election.
  • The Sheppard East LRT is also still on the books, although it is no secret that many politicians at City Hall and Queen’s Park would love to see this sacrificed for a Sheppard Subway extension. The LRT would be a provincial project with some federal money. There has not yet been any cost sharing commitment to a subway replacement from any government in part because the cost is unknown. It will almost certainly be greater than the LRT line, and like the extension north from Kennedy, will serve a considerably smaller part of Scarborough than the LRT would have. Any decision on this point is likely to fall to the next provincial government, although it will likely be part of the electioneering to reinforce the “subway champion” brand by all parties if this scheme gains traction at Council.
  • The Richmond Hill extension of the Yonge Subway is a project long-sought by York Region, but the idea is tangled up with network relief from GO RER, the Relief Line and other capacity improvements still pending for the existing subway. Some of these, such as added operating cost for more trains on Line 1 YUS, and capital cost for station capacity impeovements, will fall to Toronto. Whether any of the funding pools now thought to be available for transit projects generally will still be available by the time a decision on Richmond Hill faces council, indeed whether this decision will even be in Toronto Council’s hands, are questions for a future beyond any of the existing governments.
  • Not to be forgotten for its demand on city funding is the surface transit system including the bus and streetcar network. While billions in new projects preoccupy debates, a long-standing problem faces Toronto with population growth, much of it “downtown”, that has not been matched by additional transit. Indeed, transit service today is little changed from twenty years ago largely because the TTC streetcar fleet sits roughly at late 1990s levels, and traffic congestion has been responsible for service cuts to stretch the available fleet. Current operating budget plans at the TTC foresee a major shortfall in 2017 that appears unlikely to be addressed by a supposedly pro-transit council and mayor, and this will almost certainly continue into the 2018 election year. On the capital side, the TTC requires an additional batch of streetcars beyond the 204 now on order from Bombardier. Both the financing and supply of this fleet expansion are on shaky ground. As for the bus fleet, TTC management seems more preoccupied with simply replacing its existing fleet of hybrid buses with diesels rather than actually expanding the level of bus service to Toronto.

In this context, the SmartTrack decision is only a small part, and Council has yet to be presented with a comprehensive view of the effect building a real transit network, rather than a few lines, will have on its budget and future financing requirements.

 

The SmartTrack Shell Game With TIF

Ever since Mayor Tory’s election campaign, we have been told that SmartTrack is a something-for-nothing project that would bring vastly improved transit service to Toronto at little or new added cost to taxpayers. This would occur through the hocus-pocus of Tax Increment Financing TIF).

For those new to the subject, the premise here is that building a new transit line causes property values to rise and new development that would not occur in the absence of the transit investment. That generates new tax revenue that could be used to pay off the construction debt. However, the city’s staff, who are bending over backwards to make Tory’s transit plans workable, do not see TIF as coming close to paying for Toronto’s share of SmartTrack.

See also:

The election premise was that SmartTrack would be built at a cost of $8 billion, would provide a total of 22 stations and frequent service over a route from Markham to the Airport Corporate Centre (south of Pearson Airport). This would be shared equally by all three levels of government making Toronto’s share about $2.7 billion, if one believes the premise of the campaign.

The situation has changed over the past two years. The Eglinton branch of SmartTrack as a railway operation was never a good idea, and it has reverted to the original LRT proposal from Transit City. Tory takes advantage of the more closely-spaced stops on the LRT to bolster his SmartTrack station count. In fact there would be more new LRT stations than SmartTrack/GO stations as the plan now stands.

GO Transit’s Regional Express Rail (RER) program will see widespread infrastructure and service improvements beyond which SmartTrack will only add six new stations. The projected cost of “SmartTrack” has gone down, but the City’s share remains above $2 billion. (The values below do not include cost of financing and risk transfer under Ontario’s procurement system that could bump these numbers by 20%.)

smarttrackprelimcosts201611

[Source: Transit Network Plan Update and Financial Strategy, p. 11.]

City staff argue that the benefits available from “value uplift” of existing properties will be low, and they have not included this in their calculations. From new development, the added tax revenue would be $857.1 million over the life of the financing scheme, and to be conservative, staff recommend that only half of this be presumed for SmartTrack financing.

This calculation does not address how the services new commercial or residential development will require would be financed if some or all of their new tax revenues were dedicated to SmartTrack.

The chart below shows the considerable spread between TIF and Development Charges (DCs) revenues and the actual requirements for SmartTrack financing, including the LRT line on Eglinton from Mount Dennis to Renforth.

smarttracktaxrequirement201611

[Source: Transit Network Plan Update and Financial Strategy, p. 12]

The two percent tax increase would be applied to residential property with only a .67% increase for commercial property. This arises from the City’s policy of rebalancing residential and commercial tax rates, a process that will complete in 2020. Given the timing of borrowing for SmartTrack, one must ask whether the balancing policy should apply in this case, and whether it is time for the commercial sector to pay its full share of taxes that will be collected almost entirely beyond the date when the balancing program completes. (Note that “commercial” includes rental apartment buildings.)

The estimates for TIF and DC revenue arise from projections in a report, Commercial & Multi-Residential Forecasts for the Review of SmartTrack, by Strategic Regional Research Alliance (SRRA) that was commissioned by Council to examine the question in detail. (The SRRA report begins at page 8 of the document.)

To put this in context, SRRA was co-founded by Iain Dobson who was an advisor to Tory’s election campaign. In May 2014, just as the SmartTrack campaign started, he was appointed to the Metrolinx Board during Glen Murray’s final days as Minister of Transportation. The consulting contract was awarded by Council on a sole source basis.

When SmartTrack was proposed, the intent was to improve access to areas of potential development. The following map shows these areas and their relationship to the SmartTrack corridor.

smarttracksrraofficenodemap

[Source: SRRA study at p. 21. “Nodes” is misspelled in the map title, and the Downsview node is mistakenly labelled “Lever”. How this might reflect on the care taken on the report I leave to the reader’s judgement.]

Several of the nodes lie outside of Toronto or far from the SmartTrack corridor (blue line and circles). These will either not produce new tax revenue within the 416 or they are too far from ST to benefit from its construction.

A vital question, then, is whether the amount of development contemplated in the January 2016 SRRA report and resulting tax revenues will actually flow to the city. SRRA’s analysis begins with a map of the “TIF Zones”, the areas around stations where tax increases could be expected.

smarttracksrratifzonesmap

Many of the stations are existing or planned GO stops that will see added service without any SmartTrack investment, and ST adds nothing to them (Milliken, Agincourt, Kennedy, Main, Union, Bloor, Mount Dennis). The map also shows a station at Spadina that will not be part of the upgrades planned for the ST corridor.

Although many zones are shown, most of them will not be affected by SmartTrack as it is now proposed, merely the addition of six stations to the GO Transit map: Finch East, Lawrence East, Gerrard, East Harbour (Lever), Liberty Village and St. Clair.

Although the SRRA report discusses the methodology for analysis of the effect of SmartTrack in the TIF zones, it does not provide a dollar value for the actual tax increments this would produce, nor a description of how this might be calculated. Numbers cited in the City report imply that a more detailed breakdown exists for the SRRA data, but that it has not been published.

An important component of the stimulus attributed to SmartTrack is the construction of additional residential units because ST would make jobs in the outlying centres (notably Markham and the airport) easier to reach and thereby allow reverse commuting. However, there is no “ST service” per se, only the provision of stops where riders might board GO RER trains running less frequently than original claims for ST itself.

Projections for employment and residential growth are shown in charts.

smarttrackofficeemployment201601

The core area remains the primary location for employment growth, although the projection with SmartTrack diverts some of this to other areas, notably the Queen/Carlaw area (i.e. the Lever site) and Liberty Village. The latter is a bit of a stretch because the station would be located at the northeast end of the district while commercial development, such as there may be, will be toward the southwest.

An important distinction here is that in the “secondary zones” (those along transit corridors other than ST) and in the non-TIF part of the city, the projected employment with ST is generally lower than if ST exists. In other words, potential development that might hold these employees shifts into areas where it contributes to projected TIF revenue.

A similar situation applies with residential units.

smarttrackresidentialunits201601

The city adjusts for this numerically in their backgrounder on City Funding and Financing Strategy.

smarttrackofficespacegrowth201611

smarttrackresidentialcondogrowth201611

What is not clear, however, is which of the TIF zones are included for this analysis, in particular those which are at existing GO stops, nor whether the effect of ST’s having no marginal service beyond that provided by GO RER has been take into account. If all zones were included, has the potential revenue due only to SmartTrack been overstated?

A similar problem exists for the calculation of Development Charges because the formula for these, set by provincial law, makes them applicable only to the benefits provided by the expenses undertaken by the City, not to improvements others such as GO might provide nor to improvements existing transit riders might obtain from the new stations/services. This considerably limits the scope for recapture of costs through DCs. (In Scarborough there was was a successful appeal by developers that reduced DCs attributable to the Scarborough Subway. This was based on a higher estimate used for new riders in the DC calculation, and hence the proportion of riders from new development, than in a later estimate.)

There is a more general problem with DCs in that they affect every new building in the city, not just those along the transit corridors. Developers who do not benefit from the projects these charges help to finance are not enthusiastic about building yet more costs into the base borne by would-be purchasers.

Questions for the City

All of this raises many questions about the validity of the calculated TIF revenues available to finance the SmartTrack scheme. I have sent queries about this to City staff, and await a reply. This article will be updated when more information is available.

Council will debate the SmartTrack reports at its meeting beginning on November 8, 2016. Here, in brief, are my questions.

  • The staff presentation to Council expresses commercial growth in thousands of square feet while SRRA uses employment. These can be converted to each other with a ratio, but what number has been used? How do the City numbers relate to the SRRA values?
  • The bar graphs in SRRA’s report do not include actual values making direct calculations such as selective inclusion or exclusion of TIF zones difficult. What are the numbers?
  • Which TIF zones were used for the calculations in the City presentation? Only the six the City is paying for, or zones at all “SmartTrack” stations even though many of these are GO RER locations to which ST will not add any service?
  • What adjustments in projections have occurred between the original SRRA estimates and those used in current City estimates?
  • As with TIF, have DCs been calculated only based on the six added “City” stations, or for all of the ST/RER locations?
  • TIF revenue is projected to grow uniformly and across all included zones. Is this a realistic assumption, how much growth is projected in each zone, and when is this expected to occur?
  • If the SmartTrack tax were implemented at the same rate across all property classes, at what level would the tax be set?