UPX Ridership Update

Metrolinx has published ridership stats for the Union Pearson Express to the end of March 2017.

These do not break down trips between various points on the line to show what portion of ridership is end-to-end Union-Airport traffic, and what portion travels to or from stations along the way.

In this chart the blue line traces daily counts and these show a regular weekly cycle. The total ridership grows after the fare reduction of early 2016 and peaked in September 2016. Except for that peak, and a winter dip from Christmas 2016 to mid-February 2017, the average number of daily riders (on a weekly rolling average, orange) has remained slightly below 8,000. This appears to be the new stable level of ridership with the current fares and service pattern. A related issue is that with some trips on busy days reporting standees, growth during certain periods will be constrained by available capacity.

The original projection for UPX was that it would reach 5,000 daily riders after a year’s operation. This it would have abjectly failed to achieve but for the revised tariff. The gray line prorates that projection from the opening week to the first anniversary in June 2016, and then continues on the same rate of increase until March 2017.

In the Metrolinx financial statements (to be discussed in a separate post), it is not possible to separate out information for the UPX division, and for management and accounting purposes, this has now been rolled into GO Transit.

A note to anyone at Metrolinx who is reading this: When you publish data like this, make it available as a spreadsheet (as well as PDF for general consumption) so that the numbers can easily be extracted and analysed without the need to “scrape” the PDF.

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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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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GO Transit Electrification Public Meetings

Metrolinx/GO has announced a series of public meetings through November 2016 dealing with some aspects of the electrification project.

GO Rail Network Electrification Transit Project Assessment Process (TPAP) (Hydro One as co-proponents):

• The focus of this round of public meetings will be to provide an update on the project and conceptual design of the Traction Power Supply and Distribution components.

Barrie Rail Corridor Expansion TPAP:

• The focus of this round of public meetings will be to provide an update on the project and seek feedback on the environmental impacts.

Lakeshore East-Don River to Scarborough Expansion TPAP:

• The focus of this round of public meetings will be on existing conditions.

Further information and a list of meetings is available in the Metrolinx announcement.

Does Toronto Owe Metrolinx Half a Billion? (2)

Two weeks ago, I wrote about the receivable on Metrolinx’ books for supposed “municipal contributions” that have not been paid, but instead have been funded temporarily by Queen’s Park. This has been going on for roughly a decade and the bills are piling up, now over a billion dollars.

I posed a series of questions to the Minister of Transportation’s Press Secretary, and received a friendly, sunny, but utterly uninformative reply.

Firstly thank you for your e-mail and questions – it is nice to e-meet you! I saw your blog piece from earlier this week and the Qs you submitted to Patrick re: the existing framework for municipal contributions to GO Transit growth and expansion capital costs, potential future municipal contributions to major transit initiatives in the region and the Province’s Dedicated Gas Tax Program.

There are two Regulations under the Metrolinx Act, 2006, which are intended to assist the Regions of Durham, Halton, Peel and York, and the Cities of Toronto and Hamilton, to collect development charges (DCs) to help offset their respective contributions to GO Transit growth and expansion capital costs:

1) O. Reg. 528/06, which sets an expiry date for GO Transit DC by-laws; and
2) O. Reg. 446/04, which prescribes the allocation of the expected municipal share of the GO Transit growth and expansion capital costs amongst the municipalities.

The municipal contributions to GO Transit growth framework were put in place to establish a fair and balanced approach to support GO capital expansion in communities across the region. All municipalities in the Greater Toronto and Hamilton Area benefit from an effective GO Transit network, and the Province remains committed to working with all of our partners to expand and deliver this network. Given the transformational $13.5 billion investment that the Province is making to strengthen the GO network through the 10-year GO Regional Express Rail initiative under the Moving Ontario Forward plan, we recognize that this commitment to working together with all of our partners to build and optimize an integrated, regional transit network is even more critical.

As you note in your email, the two Regulations permit GO Transit DC by-laws to help the municipalities offset their expected contributions – per the allocation formula set out in O. Reg. 446/04 – to Metrolinx for their share of GO Transit growth and expansion capital costs. The contributions made by municipalities are not directly linked to any specific expansion projects, but, rather, they are applied against the GO Transit growth and expansion capital program, as a whole.

With respect to your questions related to the Dedicated Gas Tax Program, the funding of two cents per litre of gasoline sold across the province was made permanent through the Dedicated Funding for Public Transportation Act, 2013. The Ministry of Transportation allocates these funds through the Dedicated Gas Tax Program based on a formula of 70% ridership and 30% population for eligible municipalities. All of the factors, including the funding envelope, ridership and population, are updated annually for each program year. The funding envelope for the 2015/16 program was $332.9 million, up from $321.5 million in 2014/15. The Province has provided the City of Toronto with more than $1.75 billion through the Gas Tax program since 2003, including $169.2 million for the 2015/16 program.

Thank you again for your questions.

[Email from Andrea Ernesaks, Press Secretary and Issues Manager, Office of the Hon. Steven Del Duca, Minister of Transportation, September 30, 2016]

Despite the reference to an “expiry date” for GO Transit Development Charge by-laws, this date has been changed every few years and currently sits at the end of 2016. Based on past experience, one might reasonable expect this will be extended again. The municipal allocations have not changed since this charge was introduced despite substantial shifts in population balance around the region and a change in the type of journey that the Metrolinx network serves, especially with planned expansion.

The concurrent mention of the $13.5 billion to be spent on GO RER and “working with all of our partners” suggests that Queen’s Park might include RER in the cost base for calculation of future contributions from the municipalities. If this is so, then the Minister should say so, and all announcements should have a little side bar, an asterisk to a footnote saying, “oh, by the way, your municipal taxes will help pay for this photo op”.

Nothing in the legislation (acts and regulations) explains how “capital requirements” are calculated, which projects would be included, nor how the proportional allocation should be assessed against municipalities. It just appears out of thin air as part of the GO (now Metrolinx) budget. The amount is a not linked to specific projects, but somehow it gets calculated.

The info about the Gas Tax program is not news, but the concern municipalities have legitimately is that an increasing portion of this grant might be clawed back by charges to support Metrolinx rather than their own local programs. This is complicated by the fact that Queen’s Park threatened to withhold the Gas Tax from municipalities that didn’t play ball with the selection of Presto as their fare card. Going forward, we know that back charges for operation of the Metrolinx LRT lines to the municipal level are likely, but the amount has not yet been settled.

The basic point here is that the provincial largesse and support for transit comes at a price, and that will be carved out of money that nominally flows to municipalities for their own use on transit. Toronto’s $169.2 million is now split between the operating and capital budgets. Other monies do flow from Queen’s Park for TTC projects, but they are earmarked to those specific works such as the subway extension to Vaughan.

Moreover, given the state of provincial finances, will this billion dollar “debt” become payable by the municipalities? Toronto’s half-billion share would take a huge bite out of the city’s budget, and an ongoing charge of roughly $90 million could more than halve the value of the gas tax grant.

The Minister might contemplate some of the background information to the Metrolinx Investment Strategy reports which includes a history of GO Transit development charges, a description of the wide gap between the amounts actually collected and the amount anticipated (25% of GO’s capital program). Specifically the Metrolinx Review of Development Charges at pages 6-7. Note that this report dates from January 2014 and therefore does not reflect all of the charges that have accumulated to date. It also speaks of $100 million in revenue from municipal development charges, but the chart below clearly shows that this is far short of the “expected” contribution.


These are not trivial questions, and so I have asked, again, for an explanation. To date, nothing has come to my mailbox. My latest query follows below.

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Does Toronto Owe Metrolinx Half a Billion?

Rummaging in financial reports can lead to interesting discoveries, although we usually read about them when some financial hound exposes dubious accounting practices and drives down the value of a company’s shares. Indeed, the Globe’s David Milstead had a long article on just how pervasive the use of non-standard accounting has become in corporate reports.

In the public sector, various mechanisms are used to reduce apparent debt and exposure to future costs. Some of these involve judgements about just when bills and revenue will roll through the door, or of exactly who will pay these bills as they come due.

In a previous article, I wrote about the TTC’s newfound mechanism called “Capacity to Spend” which reduces future funding requirements by roughly as follows:

  • Project estimates show that the TTC will need about $9 billion to fund its “Base Capital Program” over the next ten years. This does not include special projects such as subway extensions, nor does it include a long list of “below the line” projects that have not yet matured to “approved but unfunded” status.
  • Yearly capital spending by the TTC is typically lower than the budgeted value, but the main reason is that work took longer than expected, or projects were rescheduled into future years. Only a few of the underspent accounts arise from actual savings thanks to lower than expected costs or project cancellations.
  • Nonetheless, the TTC has decided that its real funding requirement for 2017-2026 is now almost a billion lower than has been claimed for many years running.

This is a basic case of revaluing the exposure to future costs to make long term funding (including borrowing) needs appear lower than they really are. This year brings an extra incentive with federal funding that requires matching municipal contributions, money Toronto does not have. But hey, presto!, if we reduce the future spending, at least on paper, we have “found” money with which to pay the local share of the fed’s new program.

Meanwhile up the road at Queen’s Park, a lovely myth for the past near-decade is that there is a “municipal share” to the GO Transit capital program. Most people don’t know about this, and Toronto has refused to actually pay into that pot for several years.

The mechanism was set up back when GO Transit was a separate agency, and it has been passed down through successor organizations to its current home, Metrolinx. The amount of money outstanding is not trivial.


By the end of Metrolinx’ fiscal year March 31, 2016, the accumulated balance of deferred municipal contributions totalled $1.1 billion. The proportions owed by each municipality are set by regulation, and Toronto’s share is just under half a billion. The proportions assessed to each region have not changed since this charge was instituted although one could argue that population shifts and the focus of GO expansion would suggest a different ratio is in order.

Toronto does not carry an account payable for this amount on its books. Meanwhile, in every financial statement, there is a note in this format:

Metrolinx realized a shortfall in municipal funding related to its capital program. The Province has provided funding to bridge the shortfall in the current year in the amount of $141,097 (2015 – $171,111) and the cumulative amount is $1,114,484 (2015 – $973,387). The Province will work with its municipal partners to address the funding shortfalls. [Note 12 to Metrolinx Draft Financial Statements for the year ended March 31, 2016]

What is unclear is whether Queen’s Park will ever call this debt due, or if it will simply be written off as a provincial contribution to GO expansion.

This charge is intended to recover costs for general GO expansion, and it does not include:

  • Chargebacks for works undertaken as part of a provincial project that improve municipal assets such as replacement of water mains or provision of improved streets. This was a major issue for Toronto on the Georgetown South project.
  • Charges for the abandoned Scarborough LRT project engineering.

Missing from all of the annual reports is any indication of just which GO projects these contributions aided. Indeed, the amounts are intended to go into the general subsidy pot at GO without being tied to its work with the assumption that everyone benefits from “more GO” in the end.

An ongoing problem with provincial funding is that there are various ways that the gas tax grants now paid to municipalities are clawed back. There has been almost no change in the level of gas tax provided, and the amount coming to Toronto has been sitting at about $160m for many years. (Toronto apportions this partly to capital and partly to operations.) The effective value of this contribution falls due to inflation. If Toronto had actually paid their Metrolinx assessment in recent years, this would have wiped out half of the gas tax grant.

In 2017, the TTC is making provision in its budget for additional costs related to Carbon Taxes. This will further erode the contribution from Ontario.

The combined effect of all this will be that, at some point, all of the provincial contribution via gas tax will be consumed by paybacks under various levies and fees.

In an attempt to illuminate this issue, I posed a series of questions to the Minister of Transportation:

Which projects now underway or planned will trigger additions to this outstanding balance including, but not limited to, such things as:

  • Ongoing GO improvements (non-RER)
  • GO RER
  • LRT and BRT projects

In other words, although Ontario has not actually collected on the receivable, will it continue to grow and, in effect, will municipalities be expected to eventually contribute to “provincial” projects, and at what level?

Many projects do not fit into the classic GO Transit model of serving downtown Toronto. For example, York VIVA BRT, The Hurontario and Hamilton LRTs, and the Toronto Crosstown and Finch LRTs serve a very different travel demand from GO’s rail network.

Will the formula for allocating these costs be changed to reflect the service territory and areas benefiting from the projects where municipalities are expected to make a contribution?

Although Ontario makes significant investments in transit, its budgetary effect at the local level will be offset by chargebacks including:

  • The deferred Metrolinx receivable above
  • Future costs for Presto which is expected to become self-sufficient and will require increases in service fees to local providers to do so
  • Future costs for LRT operations

Starting in FY 2011-2012, there was a large increase in the annual charge added to the receivable, an average of $183m/year over the last five years, of which Toronto is responsible for $81.6m/year. What projects contributed to this charge and what was their total value (in effect, my question is what proportion of these projects was back-charged to the municipalities)?

When I receive a reply to these questions, I will update this article.

Council Approves Tory Transit Plan, Attempts Pet Project Revivals

Toronto Council has approved the transit plan for Toronto featuring Mayor John Tory’s SmartTrack line and the Scarborough Subway after a long debate on July 14, 2016. Notwithstanding severe problems with financial pressures and the blind faith needed to expect that the entire package can actually be funded, Council added a few pet projects that never quite fade from view thanks to the efforts of individual members.

LRT proposals for Eglinton East and West survived the vote largely because they are part of larger packages – SmartTrack in the west, and the Scarborough Subway Extension in the east. The subway debate has so polarized camps that “LRT” is synonymous with third class transit simply because it was the heart of the “non subway” option. Without the bitterness of the SSE that required subway advocates to paint LRT in the worst possible light, its potential role in Toronto’s future network might not have been so poisoned while other cities embrace this mode.

Staff recommendations in the report were amended in some respects, and a few new clauses were added, notably one asking for City staff to pursue a co-fare arrangement with GO Transit.

The Waterfront Transit Reset report is a separate agenda item and, at the time of writing, Council has not yet dealt with it.

The Finch West and Eglinton Crosstown LRT projects are under Metrolinx, and they are already underway to varying degrees.

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UPX Ridership Update (Updated)

Note: The figures showing revenues and costs for UPX have been corrected as of 12:35 pm, June 30.

A section on future ridership requirements vs operating costs has been added.

Updated 5:30 pm June 30, 2016: Due to conflicting information in the Metrolinx Annual Report, it is possible that the level of subsidy per rider has been overstated in the original article. Pending clarification from Metrolinx, I have added a separate version of the calculation taking into account both sets of figures.

Also, the three days in February 2016 cited originally as “missing” were actually free days and these were not included in Metrolinx counts to avoid skewing the averages. Similarly, reporting “zero” for these days would skew the averages. Therefore, the approach taken below of using the previous week’s data, during a period of little change in ridership, allows the moving average and overall trend to more accurately reflect what would have happened in the absence of the promotional weekend.

Updated 5:45 pm June 30, 2016: Metrolinx has confirmed that there is an error in their Annual Report.

Metrolinx has published the ridership for the Union Pearson Express up to the end of May, 2016. The daily counts rose dramatically once fares were reduced on March 9, 2016, and the values are running well above the original projections after a long period of poor performance.

Exact origin-destination counts are not available, but Metrolinx reports that about 80% of travel is to and from the airport while the remainder are trips between other stations on the line.


Note: In the source data, values are zero for February 13-15, 2016 as this was a free weekend for promotional purposes. The values from February 6-8 have been substituted for continuity.

Total ridership to March 31, 2016 (the end of the fiscal year) was 751,500.

The revenue situation for operations up to March 31, 2016 is revealed in the annual report. Budgeted revenue for UPX was considerably higher than actual.

Source          Actual         Per Rider     Budget
Fares           $15,165,000    $20.18        $43,275,000
Other Revenue   $ 8,762,000    $11.66        $ 7,093,000
Total           $23,927,000    $31.84        $50,368,000

According to the report:

UP Express non-fare revenue of $8.8 million consists of sponsorship and partnership revenues earned in the year. [p 43]

Updated June 30, 2016 at 5:30 pm:

There are two separate sets of figures in the Annual Report related to the subsidy. One claims that the subsidy paid was $63.2m while other shows this value as the total operating cost of UPX. This leads to different calculations of  the per rider subsidy. For completeness, I have left both calculations below pending clarification from Metrolinx.

(As of 5:45 pm Metrolinx has confirmed that their original report was in error.)

Revised version:

Metrolinx has published both the total revenue and the total cost for UPX, and from this we can deduce the operating subsidy.

                               Per Rider
Total Cost     $63,200,000     $ 84.10
Revenue        $23,927,000     $ 31.84
Subsidy        $39,273,000     $ 52.26

With a total cost of $63.2m for 10 months’ operation, an annualized value would be about $76m. If the average fare falls to $10 (half the level with the original tariff), then 7.6m riders would be required to break even.

That is equivalent to about 20,800 riders per day, roughly 2.5 times the current level of demand. This would require an average load of about 144 per train on every trip, both ways, to and from the airport, close to a 2-car train’s capacity. (Calculation based on 4 trips/hour each way, 18 hours/day)

A break-even situation is not in the cards for UPX, and it will continue to drain subsidy dollars from other more widely-used parts of GO operations.

Original version (based on erroneous Metrolinx report):

Metrolinx received approximately $233.8 million in operating subsidies from the Province of Ontario, of which $71.2 million was allocated to the direct costs of PRESTO operations and $63.2 million to the direct costs of UP Express. [p 44]

Yes, just over 1/4 of the subsidy paid to Metrolinx went to support the UPX. This does not include any capital amortization which is provided for separately.

                               Per Rider
Subsidy        $63,200,000     $ 84.10
Revenue        $23,927,000     $ 31.84
Total Cost     $87,127,000     $115.94

With a total cost of $87m for 10 months’ operation, an annualized value would be about $104m. If the average fare falls to $10 (half the level with the original tariff), then 10.4m riders would be required to break even.

That is equivalent to about 28,500 riders per day, roughly 3.5 times the current level of demand. This would require an average load of about 200 per train on every trip, both ways, to and from the airport, greater than the train capacity. (Calculation based on 4 trips/hour each way, 18 hours/day)

A break-even situation is not in the cards for UPX, and it will continue to drain subsidy dollars from other more widely-used parts of GO operations.

Toronto’s Network Plan 2031: Part I, SmartTrack

For the past months, Toronto Planning, the TTC and Metrolinx have hosted a number of public consultation sessions leading up to two critical meetings on the same day: June 28, 2016.

One will be the Toronto Executive Committee’s consideration of a series of reports on various transit proposals.

The other will be the Metrolinx Board’s first meeting in four months with several related items on the agenda.

Reviewing all of this material will require several article that I hope to finish before the meetings where these issues will be discussed actually occur.

Here I will begin with SmartTrack because of all of the proposals, that has been the most threadbare one throughout the public consultation. It is complicated by being a joint project with Metrolinx who own the tracks over which the trains will operate, and who now quite clearly will also own and operate the trains regardless of what the service is called.

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