Toronto Council Approves Ford/Tory Transit Deal With Minor Amendments

On October 29, 2019, Toronto Council approved the proposed deal between the City and the Province of Ontario whereby the Province takes full responsibility for construction of four new rapid transit projects while the City retains control of the existing subway. The details of that agreement were examined in previous articles and I will not repeat their content here.

The debate ran all day, and it is no surprise that in the end the vote went in favour of the deal. Queen’s Park is in a position to impose its will on the City, and the offer of “free” new lines and retention of control of the TTC’s existing network was too much to turn down. Moreover, this becomes the Mayor’s signature transit “accomplishment” while his previous fantasy, SmartTrack, is a shadow of its original promise, for practical purposes a dead issue.

Several amendments were adopted in an attempt to put conditions or restraints mainly on the Ontario Line project. These are really more suggestions that the Province might, if it’s not too much trouble, modify aspects of their plans. However, Council is in no position to impose any conditions on Provincial actions as they have ceded control and pledged co-operation for whatever the Province eventually builds.

The following motions were adopted (quoted text is from the Council agenda item EX9.1 Toronto-Ontario Transit Update).

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The Toronto Board of Trade Shills for the Ontario Line

Over on Facebook, I was challenged for simply slagging the opinion piece The Ontario Line: Give the future a chance. Originally, I wasn’t going to comment, but there are enough half-truths in the article that it’s worth writing about them. This is a consolidation of the Twitter version of my reply with slight modifications.

This article is credited to Jan De Silva as a “Contributor”. She is identified as the President and CEO of the Toronto Board of Trade at the very end of the article. I would be very surprised if this article were not the product of Metrolinx itself. Too many of the arguments are stock Metrolinx boilerplate, including assumptions about the nature of criticism of their project.

Associations matter, especially when they aren’t acknowledged in the byline. If an article was by a policy wonk from the Manning Institute, for example, you would read it with a different media filter. If you read something from me, you put on the SwanBoatSteve filter. Identification of the author, of the voice, up front is important.

“billions of city dollars can be freed up for maintenance”

These are billions the city has yet to allocate in any budget. They are net new spending which will crowd other works. The only money we actually have is the accumulated revenue from the Scarborough Subway Tax and that’s less than $200 million in the bank. Moreover, everybody seems to be earmarking these $$$ for new projects like the Eglinton East extension.

Why is TO paying for an extension to a Metrolinx line? Ditto for the four surviving SmartTrack stations.

“some critics still fear using new technology for the Ontario Line”

This is a red herring used to cast aspersions against critics. We don’t know which technology might be used because in all probability the P3 proponent will come with their own technology partner just like the Canada Line in Vancouver. Other SkyTrain lines must use the Bombardier technology because they are part of a network, but the Canada Line was deliberately made separate to break Bombardier’s stranglehold as a vendor.

Unfortunately, the spec for that line was cocked up and the builder was able to cheap out on station size and train length. These are contract design/management issues, not technology issues.

“Some critics”, yes, but many critics have much more substantial objections.

“critics who claim that the Ontario Line is “drawn on the back of an envelope.” Even if that was true – and it never was – the Metrolinx and Infrastructure Ontario teams behind the initial proposal have been working with the TTC to refine their plans.”

Either it was a plan that needed TTC’s refinement, or it was a rough sketch enough to work for Doug Ford’s announcement. It was not a finished plan. The City’s own report states that it is at a very low level of engineering detail with wide potential variation in the cost estimate.

“Planning for this line incorporates greater use of above-ground rights-of-way”

There is a reason we put lines underground, sometimes needlessly, and it has a lot to do with neighbourhood effects and the political will to get transit out of the way of cars. These are separate effects depending on the location. Eglinton’s central section is underground because it won’t fit on the street.

Some people claim that surface operation elsewhere (including the extensions) shows socioeconomic bias against the affected areas. Cue the “poor Scarborough” theme. That story doesn’t work so well in Etobicoke.

“changes to how tunnels are bored”

The TTC was already looking at single bore tunnels for some projects. These work in some areas, not so well in others especially if the larger diameter triggers problems with the available space, utilities, groundwater and bedrock.

“lighter trains to facilitate easier river and overpass crossings”

True, assuming that the lighter trains are capable of providing the capacity required. More importantly, lighter and smaller trains affect the structure size be it elevated or underground.

“more standardization of stations above and below ground to build quickly and affordably”

Tell this to the politicians who want architectural grandeur as a mark of their importance. Some variation in stations is inevitable because of location, demand, etc.

We probably would not have to look very hard to find the TRBOT gushing over the designs for the TYSSE stations when they were proposed.

“Metrolinx and Infrastructure Ontario are merely proposing to use the same tools cities like Madrid, Barcelona and Paris use to build dozens of kilometers of new subways at speeds we’ve only dreamed of before.”

The important thing those cities have is (or was) money and commitment. They had senior governments (including the EU) willing to pay, and a political climate where plans were not rejigged every few years to suit someone’s ego. And they had plans that ensured a continuous program of construction rather than the stop-start situation we have in Toronto thanks to political meddling and competition to “build MY subway now”.

“Subway systems in all three of these world class city transit cities have multiple car sets on their tracks, and even used different gauges as technologies developed.”

This is another red herring. Toronto has had multiple car sets on its streetcar and subway tracks since the 19th century. Old heavy red “G” trains, larger lighter “H” and “T” trains, 2 car sets and 6 car sets, wooden streetcars, steel, PCCs, CLRVs and now Flexitys.

Gauge is a question mainly of history and system age. Suburban lines in Toronto were standard gauge until they were incorporated into the “city” system e.g. Long Branch.

“critics insist Metrolinx may not hit its 2027 target date for the Relief Line … And even if this solution took until 2029 – the target date for the earlier Relief Line – this route should be more effective at providing relief than originally planned, too.”

The fundamental problem with the analysis of the Ontario Line vs the Relief Line is that the RL South is the basis of comparison, and so of course a longer RL has a greater benefit. The fact that the RL North study was being run by the Province and was stalled is not mentioned at all.

“The Ontario Line also creates a true subway network, with connections to the Yonge University Line, the Eglinton Crosstown LRT and the GO system at Exhibition Station,  so riders on the shoulders of our inner suburbs can shift commutes to avoid other chokepoints from several directions.”

The reference to offloading GO is key and it applies also at East Harbour (although that station does not exist yet). The OL is as much a relief line for GO at Union as it is for the TTC subway. This is a valid goal, but it should be acknowledged so that everyone is aware how much future capacity will be dedicated to GO relief rather than subway relief.

The article is completely silent on neighbourhood effects along the way which are not trivial. This is not just two tracks for an updated version of the SRT, but a six-track corridor for GO and the OL. Yes, SRT trains are not as noisy as GO trains, and the latter might even be toned down when, if ever, they electrify. I am not holding my breath on that as it costs a lot of capital that Metrolinx does not have and does not want to spend.

The Ford/Tory Subway Plan: Part II – Technical Appendices

In the first of two articles, A Big Announcement, or a Transit Three Card Monte?, I reviewed the proposed agreement between Ontario and Toronto whereby the Province would build four lines or extensions at no capital cost to the City, and ownership of the existing system would remain in City hands. This has been hailed as something of a “peace in our time” solution to the contentious relationship between Premier Ford and the City, but there are many outstanding issues that will not be resolved before the City signs on to the new deal.

In this article, I turn to three appendices to the City report, specifically:

Citations in this article are in the format [A3, p5] where “A3” is the attachment number and “p5” is the page number.

Reading through these documents, I was struck by how an essential section is buried right at the end of Attachment 4: the City/TTC evaluation of the Metrolinx Initial Business Case for the Ontario Line.

The main report is enthusiastic about the viability of the proposals and the contributions they will make to the City of Toronto. However, the attachments reveal the degree to which the scheme is far from complete or settled. There is a caveat that if the proposals change significantly, then the gushing support for the new plans could become only a trickle. But the political pressure is for the City to commit to the scheme, whatever it may become, in the rush to “get shovels in the ground”.

This is a long article intended to pull key points out of the technical discussion of proposed new lines in an attempt to highlight the major chunks without requiring readers to wade through every page (although the keen ones among you certainly will, I’m sure).

Timing of Market Calls for Procurement / Public Participation

The City/TTC have not received a detailed schedule from Metrolinx, however the Infrastructure Ontario Fall update includes the following timelines:

  • Ontario Line: RFQ Spring 2020, RFP Summer/Fall 2020
  • L2EE: RFQ Winter/Spring 2021, RFP Summer/Fall 2021
  • YSE: RFQ Fall 2021, RFP Spring 2022
  • EWLRT: To be determined [A3, p12]

This is aggressive for the OL and gives very little chance for substantive change before the RFP goes out. “Public participation” will be minimal in the best Metrolinx tradition.

The opportunity for feedback and input throughout a project’s development may differ given the anticipated P3 delivery model. Details regarding the Province’s proposed approach are provided as Attachment 11 to this report. City and TTC will continue to advocate for meaningful public consultation on provincial transit projects. [A3 p11]

There are conflicting priorities in completing work regarding the new design and changes to the Assessment with the desire for an expedited delivery process.

Q22: Has an assessment of construction-related impacts been undertaken as part of the preliminary planning and design? What about impacts on community, businesses, traffic congestion, noise, etc.? If not, when will this occur and be factored into decisions on build methodology, procurement, and a program for business and community supports?

A: The City/TTC expect that this will be undertaken as part of the updated environmental work for the TPAP(s).

Q23 Will the Province adhere to City permits and approvals, per the practice under the LRT Master Agreement?

A: The applicable Master agreement(s) for these projects are to be developed, and it will be the expectation that agreed upon service standards and timelines for applications, permits and approvals will be adhered to. The Province is seeking city commitment to explore opportunities to accelerate and expedite delivery including review of processes, and leveraging powers and authorities. [A3 p13]

Q29: Are you building the [Ontario] line to a budget of $10.9 B or are you building a line with a defined scope of work?

A: The project cost estimate is preliminary based on the current state of development. The scope in so far as length and areas served have been consistently stated. Future adjustments to scope, budget and schedule will be identified as part of subsequent phases of work. [A3 p15]

“Future adjustment” is a term that implies potential change, but how would this be handled with a P3 contract already in place? When do the requirements to deliver on time, on budget, supersede whatever objections or improvements might emerge from a review process?

Transit Oriented Development

One of the Province’s favourite terms now is “Transit Oriented Development” and the supposed ability to pay for transit with development charges and fares from new riders. There is a question, however, of whether the Province will seek higher density around stations to pay for its rapid transit plan even if this requires development at a scale beyond what the City has planned or the neighbourhood is expecting. What other costs will TOD bring for infrastructure, services, schools? The overdevelopment of Yonge & Eglinton, where the Province wants to see even more density, is a prime example.

Q13: With respect to “transit-oriented development” and seeking private sector investment, what assumptions are being made with respect to compliance with the City’s Official Plan policies and guidelines?

A: The Province has committed to work with the City to ensure that transit oriented developments advance a shared understanding for effective growth and high quality development of Toronto. The City and the Province are working through the details of an agreement on how they will work together to advance TOD opportunities. [A3, p10]

That is not the most reassuring of comments given the bull-headed nature of Provincial policy development. Doug Ford (and his brother before him) believes in the magic of the private sector somehow covering the cost of his dreams. This could have severe consequences for both the City and for the transit system if that dream is exploited to remove controls on high density development.

Getting There From Here

There is a problem throughout much rapid transit planning in Toronto that agencies only consider the end state after many projects have been built, new jobs and residences have been created, and magically we are transported to a future date and city where the models run.

Unfortunately, we have to get from 2019 to 2041, the year for all of the modelling cited in these reports, and there is no guarantee that the system can handle either the intermediate stages nor the “end state” if things do not occur as quickly as we hope.

Although GO expansion is part of the next decade’s work, there is nothing published to show how it will affect the TTC network for good or ill. Indeed, a major role for the Ontario Line now appears to be “relief” for congestion at Union Station almost to the point that relief of subway congestion is a secondary matter.

SmartTrack is a mythical “service” whose final configuration is still not known. Metrolinx has been quite evasive on this point, and the best we can hope for is a train every 15 minutes at “SmartTrack” stations along the Weston and Stouffville corridors. Two of the six ST stations may never be built because they physically conflict with, or lose projected ridership to, other services.

It may suit planners and politicians to talk of demand models for 2041, but what will the 2020s and 2030s look like on Toronto’s and the wider region’s transit system as we await the arrival of new services? This is a major shortfall in the City reports because they do not address the “how do we get from here to there” problem complete with associated operational and financial headaches. A scheme for the province to pay the entire cost of four new lines is wonderful, but there is much more to the transit system’s future than Premier Doug Ford’s map.

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A Big Announcement, or a Transit Three Card Monte?

On October 16, the governments at Queen’s Park and Toronto City Hall announced a deal to sort out competing transit plans for the city. The current provincial priority projects are the Ontario Line (Don Mills/Eglinton to Exhibition), Scarborough Subway extension from Kennedy Station to Sheppard, Yonge Subway extension from Finch to Richmond Hill, and the Eglinton West LRT extension from Mount Dennis to Renforth.

The main City of Toronto report will be discussed at Executive Committee on October 23, and then at Council on October 29-30.

This article reviews that report with reference to a few parts of its many attachments. I will turn to the technical attachments in a second article. To focus material on each subject for readers, I have grouped related items together or re-sequenced things for emphasis. There are extensive quotations of key material so that readers hear not just my “voice” but that of the report’s authors.

Despite the importance politicians at both levels place on the proposals, the fundamental problem remains that many of the details are cloudy, to be kind. Specifically:

  • The City of Toronto retains ownership of the existing transit system avoiding a complex realignment of responsibilities and governance, but with this comes total responsibility for funding the ongoing state of good repair.
  • A large gap remains between the amount of funding needed to maintain and expand Toronto’s transit system relative to the amounts actually available and committed in budgets at various levels of government.
  • Ontario will build four key projects substantially with its own money, but continued support for transit beyond this is uncertain.
  • Toronto will redirect funding originally earmarked for its share of the key projects to other priorities, notably the TTC’s repair backlog. However, much of that “funding” does not exist as allocations in existing budgets and new money is required from Toronto to pay its share.
  • Cost estimates for the key projects are based on preliminary estimates that could change substantially as the design process unfolds. These estimates are in 2019 dollars and make no provision for inflation. The reports are silent on how the proportion of total spending by each contributor might change over the decade or more of construction.
  • A substantial total of project costs will be born by private sector partners through a “P3” financing mechanism. These arrangement will require future payments for what will be, in effect, a capital lease, but the mechanism for funding this from three levels of government is unclear. The reports are silent on the split between short term borrowing to pay for construction as opposed to long term payments to the P3 financier.
  • Project details as they are known today will change in response to design work and the need to keep costs within the projected level. This will affect alignments and stations, and what we think we are buying could be quite different from what we actually get.

The challenge in all of this is, as always, the question of money. We can watch the hands of politicians and managers at all levels as they shuffle cards on the table. We hope to “find the Queen”, to win in the subway sweeps rather than being taken for suckers who will cheer any plan, but lose every game. It is far from clear whether the proposal is a “good deal” for Toronto, and there are huge future transit costs that are barely addressed.

The whole exercise is a political deal to bring peace, comparatively speaking, to the transit file which was needlessly fouled by Doug Ford’s insistence that he knows more about transit in Toronto than anyone else. Does Toronto take this as its last best chance to preserve some semblance of control over its transit future, or do we keep fighting for a better deal?

There are a lot of holes in this plan and severe implications both for the City’s finances and the future of Toronto’s transit system. Many questions need to be asked and answered, even if the result will be a whole new plan after provincial and municipal elections in 2022.

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To Upload Or Not To Upload, That Is Not The Question

In his continuing assault on the City of Toronto, one of Premier Doug Ford’s early promises was to take the TTC subway system completely off of the City’s hands. That scheme was cut back to handing Metrolinx the responsibility for planning and building new lines, with the existing TTC system left for future consideration.

Now, the Star’s Ben Spurr reports that the upload has fallen off of the table and a new “deal” will be proposed:

In exchange for Toronto supporting Ford’s pet project, the “Ontario Line” between the Science Centre (Don Mills & Eglinton) and Ontario Place (south of Exhibition Place), Ford would leave the existing subway system in Toronto’s hands. This is a huge retreat for a man once bent on eviscerating City Council’s control over transit, and it raises the question of “what next” for Toronto transit politics.

I have written before about the high cost of subway ownership:

In brief, there is a myth that the subway network “breaks even” because its high ridership, and hence revenue, more than pay for the cost of operations and maintenance. This has two fundamental flaws:

  • Much depends on the allocation of fare revenue, and the amount of the fare carrying a rider on a bus+subway trip, for example, belongs to each leg of the journey. There are various ways to do this, but they all produce distortions in a flat fare system with extensive free transfers between routes and modes. This process is even more difficult in the era of monthly passes and two-hour fares.
  • There is a huge ongoing capital cost for subway renewal, for systems, vehicles, stations and much more that do not last the mythical “100 years” subway boosters claim, but which must be refreshed on a regular cycle. Even the physical structure, the tunnel, needs major repairs to achieve its intended lifespan.

Cuts to provincial funding started years ago, and the Ford government has reversed plans to increase Toronto’s share of provincial gas tax revenue. The provincial contribution to ongoing capital maintenance is small. As for operations, the City pays the lion’s share of the subsidy and the riders pay most of the rest.

If Queen’s Park takes over the subway, it would hardly be fitting for Toronto to continue paying much of the cost of maintaining this asset, and it would become a new drain on provincial resources. Premier Ford never tires of telling us that these are stretched to the point where major cutbacks, not additional costs, are the focus of all government planning. True, the province would give up its share of surface system costs, but that is a small contribution compared to what the City already pays in operating and capital subsidies.

Doug Ford’s dream of being the Tsar of Toronto Transit Planning comes with a big price tag, and there is a good chance that the government is having second thoughts about whether the proposed changes are worth the bother and expense.

The challenge for Council is, however, more complex that one of embracing the Ontario Line, popping the sparkling wine, and celebrating the Premier’s retreat.

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Metrolinx Board Meeting September 12, 2019

The Metrolinx Board met on September 12, 2019, but there was not much of substance on the public agenda. Presentations consisted as much of rehashing old news (including he oft-announced service improvements on GO Transit), but almost no substantive policy discussions.

Links here to the Agenda and Video for the meeting.

Ontario Line Initial Business Case (Video at 23:35)

This report was presented by a team of four from Metrolinx:

  • Mathieu Goetzke, Chief Planning Officer (Acting)
  • Malcolm Mackay, Project Sponsor for the Ontario Line, and until 13 days ago an engineer at TTC with 13 years experience, now transferred to Metrolinx. His previous major TTC projects included the Relief Line and the Union Station second platform.
  • Duncan Law, Head Sponsor for the subway program
  • Becca Nagorsky, Director for Project Planning

As I have already reviewed the Initial Business Case (IBC) in some detail, I will not dwell on that here, but will flag comments during the presentation and discussion of particular interest.

There were two threads on which nobody remarked, but which were significant given the way that the Ontario Line was announced:

  • The project details are far less advanced than the bluster of the original announcement might have indicated, and Metrolinx acknowledges that significant technical challenges remain for the design.
  • Language implying the general incompetence of the TTC to build a “modern” rapid transit line is much reduced if not eliminated from the discussion.

These are welcome changes, but we now face the need to build something because the Premier announced it.

Mathieu Goetzke introduced the presentation saying that although the Initial Business Case (IBC) was published in July, they are now going into more details. The Preliminary Business Case (PBC), the next step in the process, must resolve some issues and Metrolinx needs to “activate all possible levels” to address project costs. (See video at 27:00.)

Duncan Law continued in this vein saying that it was important to recognize that the IBC is an early stage of the project. Both the Relief and Ontario Lines are underpinned by the recognition that more capacity is needed. With roughly 50 per cent of the Ontario Line being at or above grade, there would be cost savings. Moreover, with the line separate from the existing subway system, there is an opportunity for technology change that would not otherwise be possible. There is a big difference in this outlook from saying that the TTC uses out of date technology.

Becca Nagorsky echoed the remark that the IBC is a first phase saying that its purpose is to define the project’s goals that must be preserved through the life cycle of more detailed design. She continued what has become a standard Metrolinx comparison of the original Relief Line project to the Ontario Line considering only the Relief Line South. This works from the assumption that the Ontario Line’s technology change will save so much money that the Relief Line North, as a conventional subway, does not even come into the discussion. This precludes the possibility that future design work might discover that the Ontario Line could be more expensive than originally thought, but by then the idea of going back to a subway project will be difficult, if only for political reasons. (There are parallels with the now-entrenched concept of a Scarborough Subway.)

The capital cost projections include anticipated savings due to “risk transfer” to a private sector partner in a Design-Build-Finance-Maintain (DBFM) P3 arrangement, but as with so many P3 schemes, there is little explanation of how exactly this is achieved. In particular, there is always the possibility that circumstances and designs will change, and the private sector “partner” will not assume this risk.

Note that none of the Benefit-Cost ratios exceeds “1” indicating that any version of the project does not produce a “profit” within the Metrolinx benefit-cost methodology. This came up in discussion a bit later (see below). The important issue here is that a large project such as the Ontario or Relief Line has benefits (and possibly costs) that the methodology does not capture notably the value of increasing resiliency in the rapid transit network by provision of alternate routes, and the enabling of projects such as the Richmond Hill extension that would otherwise overload the system.

A new addition to the discussion is a map showing the supposed benefit of the Ontario Line to residents of low income areas. It is no surprise that the OL (and the full RL to Eglinton that preceded it) benefit low income areas such as Thorncliffe Park and Moss Park, but there is a bizarre problem with the map which shows a reduced access to low-income jobs for residents between the Spadina Subway and the Barrie GO corridor south of Eglinton, far from the Ontario Line, not to mention Flemingdon Park north of Eglinton. There is something wrong here with the underlying model, but nobody at the meeting picked up on this.

Duncan Law bravely observed that “we are trained to challenge how things have been done” and this will lead to cost avoidance in the design (video at 38:00). He noted that early works on the route would be accelerated, although this is a tactic already in place (after much political fighting with Mayor Tory who eventually embraced it) for the Relief Line. At this point, Metrolinx is considering what their options for the OL design are before they take them to the public for comment, and they are still at an early stage.

In other words, they have a line on a map, but even that may change, and they fear alarming the locals with designs that are not yet definitive.

Malcolm Mackay spoke about the early works and the importance of co-ordination with large programs in the corridor to “leverage” contracts and consultants for other projects such as delivery of the (now) six track structure from East Harbour to Gerrard (four GO tracks plus two for the OL). There is also the potential role of Transit Oriented Development (TOD) works where some OL work could be combined with private development. However, it is not clear whether the likely construction timeframes of East Harbour and other projects would mesh with the schedule for construction of the OL.

In a marvellous piece of bafflegab, the presentation notes:

To demonstrate visible progress and to de-risk the schedule, a progressive works program is being contemplated with a ground breaking target of 2020 – 2021. [p 20 of the PDF]

What this means is that if Metrolinx actually undertakes some work soon, there will be political benefits of “progress” (shovels in the ground) and would-be bidders for the larger project will see that it has progressed beyond a political slogan and a line on a map. It is unclear just how much will actually be achieved by 2020 when the requests for qualifications and proposals (see chart below) occur.

Among the potential early works is design work the Don Valley crossing and possible launch sites for tunnel boring machines (TBMs). The decision to place some of the OL at or above grade means that there are more transitions in and out of tunnels than would be the case with an all-underground line, and launch sites at the transitions are required. These have significant effects on their locations as recent experience on the Eglinton Crosstown shows.

Mathieu Goetzke observed that the Queen Street corridor has challenges, but of course that would also have applied to the RL at least as far west as Osgoode Station. There is the larger question of the choice by the RL project of Queen versus a route further south, and again that is both a technical and political decision that is now set in stone.

The Next Steps slide below contains the troubling observation that Metrolinx will work to “understand community engagement” as if somehow Metrolinx has been operating in the dark while the Relief Line project went through its assessment and consultation stages. In a telling, but common, misuse, Metrolinx describes what they will undertake as “fulsome” intending to imply “copious” or “substantial”, but the word can also mean “excessive and insincere”, the fawning behaviour of one who insults by being overly complimentary. Metrolinx and GO before them have a long history of insincere public participation.

Discussion by the Board raised various questions starting with one from Michael Kraljevic who asked how much of the work already done on the Relief Line can be used for the Ontario Line? Mathieu Goetzke replied that work on the Queen Street corridor “feeds in” to the OL project, and Queen is “incredibly complicated”. The northern branch of the OL was built in part on the Relief Line North study. Malcolm Mackay stated that all of the work done so far will still be used giving the example of an underground station where geological information would inform design for a nearby structure. Some strategies that were “not successful” will not be pursued for the OL.

Regarding the construction challenges listed in the IBC, Vice-Chair Bryan Davies asked about “showstoppers” in the project. Duncan Law stated that there are none in the project “at this stage”, and he claimed that the benefit is that we see the risks now. Undoubtedly there will be several challenges, but the team will work through them, he said. The objective is to get people to jobs and home. Integration with GO for local and regional travel is important, Low continued. Environmental Assessment amendments will be required including a review of technical options for the OL. There is a “significant mountain to climb”.

Consultants have been engaged for the EA process, but subways tend to be environmentally positive, said Mackay, Metrolinx claims, and challenges with the elevated sections will be overcome.

These comments really are a dodge of the main question about the ability to reuse work already completed. The basic fact is that the OL alignment diverges considerably from the RL in places, and the detailed RL work, including public consultation, does not reflect the OL plan as it now stands. Again, we hear that this is a complex, challenging project, a rather different characterization than the self-confidence of the line’s announcement.

Director Paul Tsparis asked how the OL project helps to alleviate pressure on Line 1, and how is the TTC helping on that front.

Malcolm Mackay trotted out the usual list of TTC efforts including:

  • Larger trains
  • Painted tiles on the platforms at St. George and Bloor-Yonge to channel waiting passengers
  • Automatic Train Control
  • Bloor-Yonge Station expansion

The reference to larger trains is getting tiresome whoever cites it because the “new” Toronto Rocket (TR) equipment has been operating for some time now, and their extra capacity was long-ago consumed by latent demand. The painted floor directions may have some effect, but the big problem at busy stations is that platforms become totally filled even with a slight delay and this prevents easy exchange of passengers with trains. As for ATC, Mackay despite his years working at TTC, was unsure of the dates when it will be implemented. He also neglected to mention that more service requires more trains and, eventually, more train storage when the TTC exhausts what it now has. If the province takes ownership of the subway, this problem will land in their lap.

This was capped off with an observation that going north to meet the Eglinton Crosstown is a “beautiful addition to relief” to Line 1. Well, yes, many advocates have been saying this for a very long time while others downplayed the importance of continuing north of Danforth. Even Metrolinx flagged the added relief of the northern extension, and this informed support for work on it by the previous provincial government.

Michael Kraljevic asked about the benefit cost ratio where the value is less than one, although the P3 arrangement is alleged to improve that factor. How does this line up against other subway projects?

Mathieu Goetzke replied that it is hard to get a ratio beyond 1 with brand new infrastructure. GO improvements have good numbers because they build on legacy infrastructure. Moreover other modelling techniques would pick up economic development issues that are not included in the Metrolinx model. Phil Verster explained that Metrolinx does not consider benefits outside of purely transit ones, and the wider economic benefits would make every transit business case a good one. A case will always be touch-and-go for tunnels to get to a ratio of 1. Goetzke added that the OL can enable other works [e.g. the Richmond Hill extension].

This is quite an admission for Metrolinx who have wrestled with their business case analysis for some time. In a political climate where projects must at least break even, the benefits that are balanced against costs have a huge influence on the results. This can include both the scope of benefits (how wide a net is cast to capture benefits) and what payback period is used in the calculation. If the scope is too wide, there is a risk that presumed benefits are not entirely due to the project itself. If the timeframe is too long (Metrolinx uses 60 years), there is a financial problem of substantial expenditure in the short term for savings that might or might not accrue over the very long haul. Moreover, a large proportion of the “benefits” do not capture revenue that can be used to pay off project debt, but rather accrue to transit riders in reduced travel time and increased mobility.

These approaches can be defended on the grounds of “city building” and the long term, cumulative effect of having more transit infrastructure. However, the attempt to make any one project “pay its way” can distort how it is evaluated for political reasons.

Footnote: The Metrolinx Blog includes an article which emphasizes that the Ontario Line will not be built on unproven technology. The ghost of the UTDC and the Scarborough RT still haunts provincial decisions.

Ridership Initiatives (Video at 1:13:19)

Metrolinx ridership for the second quarter of 2019 is up 4.1% over the same period in 2018. However, children did not ride free a year ago, and when they are removed from the “before” numbers, the remaining ridership rose by 5.2%. It is worth noting that the TTC attempts to count children even though they ride free on the system, and so ridership numbers for the two systems are not directly comparable, at least on that basis. There is also the challenge of defining a “ride” when trips can involve a series of transfers and the benefit of the two-hour fare on Presto. The whole question of reporting demand on the GTA network needs work, including granularity about when and where people actually travel.

Statistics reported by APTA show commuter rail up 2.1% among reporting agencies, and bus ridership down 1.0%. GO bus ridership is up 4.5%.

A detailed map (PDF) shows the ridership by station across the rail network. There is no data for the bus network where there has been some controversy about which services should be maintained and which should be cut. Moreover the rail network counts do not distinguish by time of day to break out growth, if any, in off-peak travel as GO moves beyond peak period, peak direction commuting service to downtown Toronto.

Ridership growth varies by corridor and station. The high roller is Barrie with a 10.6% growth in the corridor. Kitchener us up 5.6% and Lakeshore East is up 4.8%.

GO is doing a lot of online marketing which they report as being quite successful, and there is an uptake of e-Tickets as a way of purchasing fares. Many of the promotions are for attractions in the off-peak period and for casual users who would be new to the system.

GO regards riders in Toronto as “transit natives”, people familiar with what transit can offer, and markets to them differently than to potential riders in the 905. Whether this is valid all the way out to the 416/905 boundary is hard to say.

The lower base GO fares are driving ridership within Toronto, but there was no discussion of the effect that will occur if the GO-TTC co-fare arrangement ends thanks to lack of funding from Queen’s Park. This has already affected riders on the UPX who no longer get a UPX+TTC discount. All the marketing efforts in the world can be undone by fiscal policies that affect fares and service.

Presto Quarterly Report (Video at 1:28:08)

Director Janet Ecker asked about efforts to minimize TTC criticisms of Presto. From what she is reading, criticisms of the system way off base. She asked how Metrolinx is trying to deal with this.

Phil Verster replied that it is illuminating to see how some comments get headline status and do not reflect what’s happening on the ground. Things are challenging, he said, and Metrolinx continues to work closely with TTC. There are claims that Metrolinx feels are not valid, and they have encouraged the TTC “to put this behind us”, not to go to dispute resolution.

Annaliese Czerny, Executive VP, PRESTO, felt that it was a shame the story is not about new products and better experiences. Verster was optimistic about making progress with TTC to move to a better future – new devices, open payments – and that this will be the story rather than problems. Czerny noted that TTC is an active and positive partner in the process for future developments.

This was the usual positive Metrolinx spin on PRESTO, but it was undone by the TTC when they released their agenda for the Board Meeting to be held on September 24. In it, the CEO’s Report is quite clear that the TTC will pursue arbitration under their PRESTO contract in an attempt to obtain payment of lost revenue due to non-delivery of a working fare system.

With PRESTO readers on every bus, streetcar and fare gate, and with PRESTO fare vending machines and self-serve reload machines at every station, the provincially-led fare card system has given our customers many benefits, but also many challenges.

Over the summer, I met with Metrolinx President and CEO, Phil Verster, to discuss the outstanding claims between the parties and the status of the outstanding deliverables of the contract for the implementation of PRESTO on the TTC. It is clear from our discussions that Metrolinx considers the contract deliverables complete.

So, while these discussions were informative about the positions of each organization, we were not able to reach a common understanding and agreement. We did agree that the next step is to proceed with arbitration, which is the dispute resolution process provided in the contract.

We are working with external counsel to review the process and finalize material and submissions. As we outlined in our report to the Board in June, the TTC does not consider the contract closed. Rather, there are significant deliverables outstanding, including open payment and account-based technology (which includes equipment), equipment to provide PRESTO Tickets on buses and streetcars, an acceptable third-party distribution network and Service Level Agreements for all equipment.

[TTC CEO’s Report at p. 14]

A major problem with Metrolinx’ perception of a “working” system is that they assume that any rider who encounters a fare machine that is out of service will use an alternate just as they would at a GO station. However, on crowded transit vehicles getting to another reader, let alone another fare machine for tokens or cash, can be very difficult and many riders do not bother to try. If they have a Metropass on their card (or a two-hour fare from a previous tap), this really does not matter because they have already paid, but for other riders this represents lost revenue to the TTC. Credit card holders cannot pay at all because this function rarely if ever worked.

Regular riders are familiar with the situation and just shrug when their tap does not register. I personally encounter this problem at least once a week, and see others having the same problems with unresponsive machines even more often. Things may be improving, but perfection is some distance off and Metrolinx has a lot to answer for from the earlier days of their PRESTO implementation.

Metrolinx tests the availability of fare equipment by “pinging” each device (sending a signal to a machine that elicits a response simply saying “I am here”). However, that function takes place at a low level within the hardware and the application software could be hung even though the “ping” gets a positive response.

Metrolinx measures of PRESTO access are likely too rosy because of assumptions about how easily riders can access the machines and about what constitutes a “working” box when tested remotely.

The Ontario Line: Metrolinx’ Initial Business Case

After leaks to the Star and the Globe, and a private release to the City of Toronto, Metrolinx made public its Initial Business Case for the Ontario Line, Queen Park’s proposed alternative to the Downtown Relief Line.

The entire document reads as if it were drenched in perfume with a rosy comparison of a modern, inexpensive Ontario Line to an expensive DRL complete with outmoded technology. It is as much a sales manual for the Metrolinx proposal as it is an apples-to-apples comparison. Indeed, the DRL comparator is doomed to look worse simply because it is the shorter version of the line. The intent is to convince the reader that no reasonable person would support any other scheme.

The chart below is one of many that inevitably shows the OL as superior for the simple reason that it covers more ground. The question is whether it can all be built for the price quoted and in the projected timeframe. There may be arguments for parts of the OL compared to the DRL, but the Metrolinx comparison goes out of its way to denigrate the DRL wherever possible and in the process reveals some short-sighted “planning” that is more a question of scoring political points than of giving a technical comparison.

Any new rapid transit line, regardless of technology, cannot help but succeed in the DRL/OL corridor given the density of population and jobs along its length. Contrary to the long-established Toronto practice of building rapid transit where politicians and their developer friends hope to spur local centres away from downtown, the DRL/OL corridor is packed with potential demand already. Even more demand will come from provision of an alternate route into the core from the existing crowded subway network.

Travel times from Thorncliffe Park and neighbouring areas to the core are substantially improved by a new line, no surprise at all.

Planning for downtown growth is years behind what is actually happening.

Population and Employment growth in Downtown Toronto has accelerated, and has already exceeded 2031 forecasts. Population growth is also very high in the Downtown; however population density itself is more diffused, with pockets generally along existing subway lines as well as in neighbourhoods with lower average household incomes. [p. 19]

At this point, the OL cost estimate is very preliminary because there is no detailed design for the line. From experience with other Toronto projects, we know that there is a very wide margin for error in cost estimates. Metrolinx flags several potential issues along their route, but gives no indication of how these might affect the design, the cost or the potential construction period. It is simply not practical or reasonable to give a “business case” or a “cost benefit ratio” when there is such a huge potential variation in the estimate.

Moreover, Metrolinx gives a discount to the Ontario line on the dubious pretext that with risk transfer to a private sector partner, the costs incurred will be lower. This depends on a very well-written and managed contract, as well as an owner (the province) willing to hold a loaded gun to the builder’s head if they don’t deliver. The 3P (a purpose created coalition) always has the option of going bankrupt, or asking for an enticement as happened to get the Crosstown project back “on time”.

CEO Phil Verster was filled with optimism speaking on CBC’s Metro Morning, but somewhat more guarded talking to The Star’s Ben Spurr:

On Thursday, Verster gave his clearest acknowledgement yet that it’s possible that date could end up out of reach.

“(The deadline of) 2027 is hugely ambitious,” said Verster, but “this is the time for us to be ambitious.” He asserted that by building much of the line above ground, it can be completed quickly.

But, said Verster, that when Metrolinx starts the procurement process next year, if the bidding companies say “it can’t be done in 2027,” his agency “will declare that immediately.”

That’s all very well, but delivering the full OL two years before the proposed completion of only the DRL South segment from Pape to Osgoode Station is a big selling point, along with the lower pricetag. Get double the line at only a modest extra cost, and get it faster. Who would choose anything else?

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Ontario’s Transit Plans: Details Emerge in City Report

When Premier Doug Ford announced his new transit plan in April as part of his first budget, there was plenty of hype about provincial transit investment, but few details about what would be built or how far design had progressed beyond doodles on bar napkins. Four projects comprise the Ford plan:

  • The “Ontario Line” from the Science Centre at Don Mills & Eglinton to Ontario Place replacing Toronto plans for the Relief Line
  • The Richmond Hill extension of Line 1 Yonge
  • The Scarborough Line 2 Danforth extension to Sheppard & McCowan with at least three stops rather than the one in the current Toronto plan
  • A modified plan for the Eglinton West LRT extension with underground construction for part of the route east of Martin Grove
  • Extension of the Sheppard subway east to McCowan to meet the northern end of Line 2

Information about these proposals came more from rumours than from specifics, notably from Metrolinx, the agency charged with planning and delivery of the scheme.

Staff from the City of Toronto and the TTC have been meeting with their provincial counterparts, and details begin to emerge in a staff report to Toronto’s Executive Committee.

The Ontario Line concept proposed by the Province is at an early stage of design. [p 5]

This is not a “shovel ready” project, nor is the revised Scarborough subway, in spite of claims that the Ontario line can be open by 2027. That is very much a political date based on the need to have relief capacity in place before new demand is added to the Line 1 Yonge route from the Richmond Hill extension. The government, knowing the votes available in York Region, needs to show progress on that extension, but actually operating it would totally overload the subway system without substantial diversion of ridership to a relief line.

Previous studies by Metrolinx foresaw a drop in ridership at the Bloor/Yonge choke point provided that a new line went at least to Eglinton rather than stopping at Danforth. This is not news, but the political change lies in recognition that a line to Eglinton is not some future, “Phase 2” option, but an essential part of reducing demand on Line 1. Whether the construction timing and possible opening dates for the Ontario and Richmond Hill lines can be achieved is quite another matter. In a political context, the important date is 2022, the next Provincial election. By that time, visible “progress” will be needed to shore up support for the government, but the target dates will be far enough off that the inevitable slippage will not yet be evident.

Public Consultation

In parallel with the technical work on provincial plans, the City of Toronto has launched a public participation campaign about the shift in responsibilities for transit between the municipal and provincial governments. This is all a bit vague at present because the details of what Queen’s Park actually intends remain rather vague. The government has given itself the power to take over projects completely or in part, and to seize Toronto assets with or without compensation. However, the financial details are murky including the problem of expected contribution to capital projects by other governments and the as-yet unaddressed question of cost sharing for day-to-day transit operations which includes a substantial component of running maintenance, not just driving the trains.

The City will bring a wider range of issues than a few new lines before the public for comment. Four public meetings are planned over the coming month:

Thursday, June 13, 6:30 to 8:30 p.m.
Father Serra Catholic School
111 Sun Row Drive, Etobicoke

Thursday, June 20, 6:30 to 8:30 p.m.
North York Memorial Community Hall
5110 Yonge Street, North York

Saturday, June 22, 10:30 a.m. to 12:30 p.m.
Scarborough Civic Centre
150 Borough Drive, Scarborough

Thursday, June 27, 6:30 to 8:30 p.m.
City Hall, Council Chamber
100 Queen Street West, Toronto

Although one might despair that the Ford government cares about or will listen to concerns by Toronto citizens, this consultation will be important if only to gauge overall public feeling. The challenge will be to conduct real consultation without having sessions hijacked by Ford Nation supporters.

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61 Questions And Counting (Updated)

Update: Council’s action on this report has been added at the end of the article.

As I write this article on April 17, 2019, it has been three weeks since Toronto learned that Premier Doug Ford’s love for rewriting transit plans would turn Toronto’s future upside down. Ford’s special advisor Michael Lindsay wrote to Toronto’s City Manager Chris Murray first on March 22, and then in an attempt to paper over obvious problems with the provincial position, on March 25.

Just over two weeks later, Ford announced his transit plan for Toronto, and this was followed by the 2019 provincial budget.

A hallmark of the process has been a distinct lack of details about design issues, funding and the future responsibility for an “uploaded” subway system. In parallel with these events, city and TTC staff have met from time to time with Lindsay and his team to flesh out details and to explain to provincial planners the scope of TTC’s needs, the complex planning and considerable financial resources required just to keep the trains running.

On April 9, Toronto’s Executive Committee directed Murray to report directly to Council on the effect of provincial announcements, but his report did not arrive on Councillors’ desks until early afternoon April 16 with the Council meeting already underway.

The report reveals a gaping hole in the city’s knowledge of provincial plans with a “preliminary” list of 61 technical questions for the province. So much for the idea that discussions to date have yielded much information. Click on any image below to open this as a gallery.

 

To these I would add a critical factor that always affects provincial projects: cost inflation. It is rare to see a provincial project with an “as spent” estimate of costs. Instead, an estimate is quoted for some base year (often omitted from announcements) with a possible, although not ironclad, “commitment” to pay actual costs as the work progresses. This puts Ontario politicians of all parties in the enviable position of promising something based on a low, current or even past-year dollar estimate, while insulating themselves from overruns which can be dismissed as “inflation”. The City of Toronto, by contrast, must quote projects including inflation because it is the actual spending that must be financed, not a hypothetical, years out of date estimate from the project approval stage.

That problem is particularly knotty when governments will change, and “commitments” can evaporate at the whim of a new Premier. If the city is expected to help pay for these projects, will the demand on their funds be capped (as often happens when the federal or provincial governments fund municipal projects), or will the city face an open-ended demand for its share with no control over project spending?

Unlike the city, the province has many ways to compel its “partner” to pay up by the simple expedient of clawing back contributions to other programs, or by making support of one project be a pre-requisite for funding many others. Presto was forced on Toronto by the threat to withdraw provincial funding for other transit programs if the city did not comply. Resistance was and is futile.

How widely will answers to these questions be known? The province imposed a gag order on discussions with the city claiming that information about the subway plans and upload were “confidential”. Even if answers are provided at the staff level, there is no guarantee the public will ever know the details.

At Council on April 16, the City Manager advised that there would be a technical briefing by the province on the “Ontario Line” (the rebranded Downtown Relief Line) within the next week. That may check some questions off of the list, or simply raise a whole new batch of issues depending on the quality of paper and crayons used so far in producing the provincial plan. It is simply not credible that there is a fully worked-out plan with design taken to the level normally expected of major projects, and if one does exist, how has it been produced in secret entirely without consultation? The province claims it wants to be “transparent”, but to date they are far away from that principle.

The Question of Throwaway Costs

Toronto has already spent close to $200 million on design work, primarily for the Line 2 East Extension (formerly known as the Scarborough Subway Extension, or SSE). The province claims that much of this work will be recycled into their revised design, and this was echoed by TTC management at a media briefing. However, with changes in both alignment, scope and technology looming, it is hard to believe that this work will all be directly applicable to the province’s schemes.

The city plans to continue work on these lines at an ongoing cost of $11-14 million per month, but will concentrate on elements that are likely to be required for either the city’s original plan or for the provincial version. The need to reconcile plans has been clear for some time:

In order to minimize throw-away costs associated with the Line 2 East Extension and the Relief Line South, the City and TTC will be seeking the Province’s support to undertake an expedited assessment of the implications of a change at this stage in the project lifecycle. The City and TTC have been requesting the Province to provide further details on their proposals since last year, including more recently through ongoing correspondence and meetings under the Terms of Reference for the Realignment of Transit Responsibilities. [p 4]

The city/TTC may have asked “since last year”, but Queen’s Park chose not to answer.

The city would like to be reimbursed for monies spent, but this is complicated by the fact that some of that design was funded by others.

Provincial Gas Tax

As an example of the mechanisms available to the province to ensure city co-operation, the Ford government will not proceed with the planned doubling of gas tax transfers to municipalities. This has an immediate effect of removing $585 million in allocated funding in the next decade from projects in the TTC’s capital program, and a further $515 million from potential projects in the 15 year Capital Investment Plan.

At issue for Toronto, as flagged in the questions above, is the degree to which this lost revenue will be offset by the province taking responsibility for capital maintenance in the upload process. Over half of the planned and potential capital projects relate to existing subway infrastructure, but it is not clear whether the province understands the level of spending they must undertake to support their ownership of the subway lines.

Public Transit Infrastructure Fund (PTIF)

City management recommends that Council commit much of the $4.897 billion in pending federal infrastructure subsidies from PTIF phase 2 to provincial projects:

  • $0.660 billion for the Province’s proposed three-stop Line 2 East Extension project instead of the one-stop Line 2 East Extension project; and
  • $3.151 billion for the Province’s proposed ‘Ontario Line’ as described in the 2019 Ontario Budget, instead of the Relief Line South. [p 3]

This is subject to an assessment of just what is supposed to happen both with proposed new rapid transit lines and the existing system in the provincial scheme.

Mayor Tory has proposed an amendment to the report’s recommendations to clarify the trigger for the city’s agreeing to allocation of its PTIF funds to the provincial plan, so that “endorsing” the plan is changed to “consider endorsing”. Reports would come back from the City Manager to Council on the budget changes and uploading process for approval that could lead to the city releasing its PTIF funds to the province.

The Status of SmartTrack

Part of the city’s PTIF funding, $585 million, is earmarked for the six new stations to be built on the Weston, Lake Shore East and Stouffville corridors. The future of these stations is cloudy for various reasons:

  • The Finch East station on the Stouffville corridor is in a residential neighbourhood where there is considerable opposition to its establishment, and grade separation, let alone a station structure, will be quite intrusive.
  • The Lawrence East station on the Stouffville corridor would be of dubious value if the L2EE includes a station at McCowan and Lawrence. Indeed, that station was removed from the city plans specifically to avoid drawing demand away from SmartTrack.
  • There is no plan for a TTC level fare on GO Transit/SmartTrack, and the discount now offered is available only to riders who pay single fares (the equivalent of tokens) via Presto, not to riders who have monthly passes.
  • Provincial plans for service at SmartTrack stations is unclear. Originally, and as still claimed in city reports, SmartTrack stations would see 6-10 trains/hour. However, in February 2018, Metrolinx announced a new service design for its GO expansion program using a mix of local and express trains. This would reduce the local stops, including most SmartTrack locations, to 3 or 4 trains/hour. I sought clarification of the conflict between the two plans from Metrolinx most recently on April 3, 2019 and they are still “working on my request” two weeks later.

Some of the SmartTrack stations will be very costly because of the constrained space on corridors where they will be built. The impetus for Council to spend on stations would be substantially reduced if train service will be infrequent, and the cost to ride will be much higher than simply transferring to and from TTC routes. Both the Mayor and the province owe Council an explanation of just what they would be buying into, although that could be difficult as cancelling or scaling back the SmartTrack stations project would eliminate the last vestige of John Tory’s signature transit policy.

The Line 2 East Extension

The City Manager reports that the alignment of the provincial version of the three-stop subway is not yet confirmed, nor are the location of planned stations. Shifting the terminus north to Sheppard and McCowan and possibly shifting the station at Scarborough Town Centre will completely invalidate the existing design work for STC. This is an example of potential throwaway work costs the city faces.

The design at Sheppard/McCowan will depend on whether the intent is to through-route service from Line 2 onto Line 4, or to provide an interchange station where both lines would terminate. The L2EE would have to operate as a terminal station for a time, in any event, because provincial plans call for the Line 4 extension to follow the L2EE’s completion.

An amended Transit Project Assessment (TPAP) will be needed for the L2EE, and this cannot even begin without more details of the proposed design.

The Ontario Line

Although this line is expected to follow the already approved route of the Relief Line between Pape and Osgoode Stations, the map in the provincial budget is vague about the stations showing different names and possibly a different alignment. This could be a case of bad map-making, or it could represent a real change from city/TTC plans to the provincial version.

A TPAP will definitely be required for the extended portions of the line west of Osgoode and north of Pape. A pending technical briefing may answer some issues raised by the city/TTC including details of just where the line would go and what technology will be used, but the degree of secrecy to date on this proposal does not bode well for a fully worked-out plan.

Council Decision

The item was approved at Council with several amendments whose effects overall were:

  • The City Manager and TTC CEO are to work with the province:
    • to determine the effects of the provincial announcement,
    • to negotiate principles for cost sharing including ongoing maintenance and funding arrangements, and
    • to seek replacement of funding that had been anticipated through increased gas tax transfers to the city.
  • The city will consider dedication of its PTIF funding for the Line 2 extension and for the Relief Line to Ontario’s projects subject to this review.
  • The city requests “confirmation that the provincial transit plans will not result in an unreasonable delay” to various transit projects including the Relief line, the one-stop L2EE, SmartTrack Stations, Eglinton and Waterfront LRT lines.
  • Discussions with the province should also include:
    • those lines that were not in the provincial announcement,
    • compensation for sunk design costs,
    • phasing options to bring priority segments of the Relief Line in-service as early as possible,
    • city policy objectives such as development at stations, and
    • public participation on the provincial plans.
  • The City Manager is to investigate the acceleration of preliminary design and engineering on the Waterfront and Eglinton East LRT using city monies saved from costs assumed by the province.
  • The City Manager is to report back to Council at its June 2019 meeting.

Former TTC Chair Mike Colle moved:

That City Council direct that, if there are any Provincial transit costs passed on to the City of Toronto as a result of the 17.3 billion dollar gap in the Province’s transit expansion plans, these costs should be itemized on any future property tax bills as “The Provincial Transit Plan Tax Levy”.

This was passed by a margin of 18 to 8 with Mayor Tory in support.

Ontario’s 2019 Budget: Transit Effects in Toronto

The Ontario Government introduced its 2019 budget on April 11. The section on transit and transportation begins with the usual statements about the cost of congestion, and the economic benefit of transit and highways. Transit specifics focus on the recent Toronto subway announcement. Metrolinx/GO continues on its expansion path, but with more emphasis on what has been done than what is to come.

The Subway “Upload”

Ontario reiterated its intention to take ownership of the Toronto subway network, but it is now clear that this will be done in two parts. First will come responsibility for system expansion as announced on April 10 with the existing system assets to follow in 2020. This puts the more complex problem off nominally for a year, but that debate is really underway now with negotiations between the City of Toronto, TTC and province.

By separating the upload into two distinctive parts, the Province can begin building subway extensions and new lines immediately while giving proper due diligence to the state of repair of the existing assets and fulfilling its commitments to consultation under the Terms of Reference.

The Province remains steadfastly committed to the full upload of the TTC subway network. [p. 64]

That “due diligence” is the nub of any transfer. Past provincial statements imply that the cost of life cycle maintenance (major repairs and replacement, items found in the TTC’s capital budget) would shift to the province leaving day-to-day costs to the City of Toronto. The problem lies in the inevitable tug-of-war between transit expansion and state of good repair. Provincial Treasurer Vic Fedeli, speaking on CBC’s Metro Morning, claims that the investment in new transit lines more than offsets gas tax revenue promised by the former Liberal government. However, this leaves a major hole in planned funding for system upgrades.

Gas Tax Transfer

Fedeli claimed that the Gas Tax can only be used for specific type of spending, but this is not true. The money today goes partly to subsidize day-to-day operations and partly to capital for state-of-good-repair (SOGR). Across the province, few cities are building rapid transit expansions, and their gas tax allocation goes to operation and maintenance of existing systems. Fedeli, in parliamentary language, is “badly briefed”.

The gas tax transfer from Ontario to Toronto for 2018-2019 will be $185 million, and this was expected to double in stages over the next four years. This increase has been cancelled in the new Ontario budget.

Beginning in 2019, Ontario will gradually increase the municipal share of gas tax funds up to a total of four cents per litre in 2021-22. Based on the averages from the past 10 years, gas tax funding is estimated to be about $642 million in 2021-22. There will not be any increase in the tax that people in Ontario pay on gasoline.

Year                            2018-19 2019-20 2020-21 2021-22

Municipal share (cents/litre)   2.0     2.5     3.0     4.0
Estimated funding (millions)    $321    $401.3  $481.5  $642

Source: Enhanced Gas Tax Program, Ontario Government Backgrounder, January 27, 2017

Note that the dollar funding above is for all of Ontario, not just for Toronto, although it gets the lion’s share due to its size.

The Province will not move forward with the previous government’s proposed changes to the municipal share of gas tax funding. The Province will continue to support municipalities through the existing Gas Tax program and ensure it continues to meet the needs of the people of Ontario in alignment with provincial priorities.

Over the next few months, the government will consult with municipalities to review the program parameters and identify opportunities for improvement. This review will be informed by the goals of responsible planning and a more sustainable government to ensure taxpayer dollars are being spent as effectively as possible. [p. 75]

Toronto allocates almost half, $91.6 million, to the TTC Operating Budget, leaving $93.4 million for capital in 2018-2019.

Planned spending based on federal and provincial gas tax transfers is summarized in the city’s 2019 budget papers. This document details the allocation of federal and provincial transfers planned over 2019-2028 with $1.358 billion broken out by TTC budget line. Note that this is less than the total that would have been expected over ten years because the “out years” of the TTC’c capital plan is constrained by city financing plans. Many projects are “below the line” in the budget, especially in the outer five years, and the rise in gas tax funding could have helped to bring some of these projects to approved, above the line status.

About 70% of planned provincial gas tax spending by Toronto is for assets that are subway related. If Ontario transfers responsibility for all of this to the provincial level, then this would offset the loss of expected gas tax. However, that depends on just what budget lines Ontario chooses to take on. When capital subsidies began under the Davis government, there was something of a shell game between Toronto and Queen’s Park over the classification of expenses because “capital” received at least a 50% subsidy while “operations” only got 16%. This sort of thing will bedevil negotiations between the two governments on funding of the uploaded subway system’s SOGR projects.

The table below summarizes the categories listed in the city’s budget and splits them between subway and surface networks. The breakdown is based on my experience in reviewing TTC budgets. Although some adjustment of percentages might be argued, the overall balance will not change much.

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