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.

First off, if Toronto keeps the subway, it keeps the costs associated with it, and there is a large, unfunded backlog of major subway projects in the pipeline. The City counted on increased gas tax revenue promised by Premier Wynne to offset some of this backlog, but Premier Ford was quick to turn off that funding tap. Big dollars appeared to be coming from Ottawa through the infrastructure fund, but almost all of this has been tapped for a few major projects leaving a lot of the necessary but unsexy work with no funding. The first round of “infrastructure” spending went to a very large order of buses because this was the only work that could be accomplished in the politically-imposed timeframe for spending that would, in theory, be part of an economic stimulus package.

Second, if Toronto buys in to the Ontario Line project, the City will be on the hook for close to $4 billion assuming a one third share of the total cost, and this will be spent in a fairly short time given Ford’s claim that the line would open by 2027. That puts a huge capital burden on the City just when it has no headroom in its (self-imposed) budget rules to borrow more money. This will almost certainly elbow other badly-needed TTC work off of the table.

As for Ottawa, the two major parties have different positions on the Ontario Line:

  • The Liberals argue that the “plan”, including the “Initial Business Case” from Metrolinx, is far too simplistic for a federal commitment. They had already signed on for the TTC’s Relief Line project, but have yet to embrace the Ontario Line as an alternative.
  • The Conservatives say that they will “support” the Ontario Line, but are vague about the dollar amount. Some in the media have claimed that the Tories would pay 100% of both the Ontario Line and the Richmond Hill extension, but that is not supported by actual statements. Moreover, no federal government can afford to get into the business of fully funding transit capital projects because there would be a long queue of cities elsewhere clamouring “me too”. Indeed, it would be ironic to have an “Ontario” line fully funded by the federal government.

But wait! If we cast our minds back to Premier Ford’s plans for transit and Metrolinx’ so-called benefits case, we see that the whole thing is supposed to be magically financed and built by the private sector, not with public money. Why should the municipal or federal governments even have to contemplate “support” for the project when it is intended to be a P3, a private-public-partnership, that is in effect a long-term lease to be paid over (at least) 30 years, not an outright purchase.

Any government “signing on” to the Ontario Line needs to be sure (a) just what they are getting into and (b) make a long term commitment to pay their share of the future lease costs.

Ontario under both the Ford and Wynne/McGuinty governments claims that it needs to be in control and have ownership of projects because the province can “amortize” the cost and therefore do more, faster, than the City could. This is a pile of accounting trickery, to be polite.

Whether a government borrows money or enters into a long-term contract for someone else to build (and possibly operate/maintain) something with financial arrangements stretching over decades, it’s a debt, a need to pay back in the future what was borrowed, one way or another, today. The difference with provincial ownership is that on the books, any debt is balanced by an asset – the  brand new line – and there is no change in the net provincial debt. In a P3 arrangement, there is no debt per se, only a long-term commitment to pay off the P3 contract.

Of course, the only way one could realize the value of the new line would be to sell it, but on paper, the debt that built it vanishes. This arrangement is not available to the City, and its debt is supported by property tax revenue. not the City’s physical assets. That, in turn, limits the amount of debt the City can float, unlike Queen’s Park.

In all of the excitement about the Ontario Line and the on again, off again upload, a few other projects in Toronto have disappeared from view notably the Scarborough Subway Extension. How much of the money earmarked for that project will be siphoned off to the Ontario Line? How does Premier Ford plan to pay for the SSE, and how much does he expect to get from municipal and federal levels? Do we even know what the three-stop version of the subway will cost, or is this still a state secret?

This is further complicated by Mayor Tory’s own pet project, SmartTrack, although if any more pieces fall off of that plan, all that will remain are the blue and green colours of the campaign posters. Today, SmartTrack is nothing more than eight extra GO stations to be built at the City’s expense. Or maybe not depending on how the Ford-Metrolinx something-for-nothing scheme for transit oriented developments and contributions to capital funding actually works out.

Metrolinx remains evasive about actual service levels at the new stations and repeatedly fails to answer basic questions about which service plan they will actually operate. The City’s buy-in to SmartTrack, not to mention its projected ridership and network benefits, depend strongly on the service level and fare structure it will have, but neither of these has been nailed down.

Lurking in the background of all discussions about transit are two coming elections. The first, quite soon, may or may not displace the Liberals from power federally. If Ford does not gain an ally in a Conservative government there, he won’t be able to count on support for his Ontario Line or any other project lacking a rationale beyond his own need to meddle in Toronto’s transit planning. Even so, anyone who thinks a Tory government federally will bring better transit funding beyond a few election promises is dreaming. Recent pronouncements of “support” for the Ontario and Richmond Hill lines have much more to do with vote-getting than anything else. Just ask the people in Scarborough how they are enjoying that new subway they voted for.

The second, in 2022, will depose Premier Ford, although what or who he will be replaced with remains to be seen. The day is not far off when those making ten year transit plans must ask “what will the post-Ford era look like”. Do we spend the next few budget cycles pretending that current plans are real, or do we contemplate a “plan B”?

The entire Ford transit scheme has been half-baked from the day it was announced with all the weight of a finished plan that only later was shown to be very much a work-in-progress. The financial implications for both Toronto and Ontario of shuffling responsibilities for parts of the transit system have never been publicly explored, and frankly even our own transit Commissioners do not understand much of the detail in the TTC’s budget and plans. Now we may have a new plan, or rather the old plan with a few new provincial projects grafted onto it.

Toronto’s Executive Committee will consider this cat’s cradle of projects, costs and political promises on October 23, with the report going to the full Council on October 29. Important questions to be asked include:

  • Just what is the “Ontario Line” beyond a doodle on a map? What detailed engineering has been done to substantiate that it can actually be built as proposed, and what will be the effects on neighbourhoods through which it will pass?
  • How much will it cost, and how much is each level of government expected to contribute to the capital funding?
  • What proportion of the capital cost will be born by the private sector partner in a DBFOM (design, build, finance, operate, maintain) contract, and how will this translate into future annual costs to funding governments and/or the transit system and riders?
  • Can the City afford its share of the capital cost within its debt envelope, and what effect will this have on the timing and financial viability of other City projects?
  • If the province does not upload the existing subway system, what are the financial implications for the City and for the backlog of transit capital projects especially considering the loss of expected provincial gas tax revenue?

Toronto’s transit riders cry out for better service, reliable service, all over the city, but calls for more buses or streetcars bring “we can’t afford it” and “we have no vehicles”. Valuable though parts of the Ontario Line (especially the north branch to Don Mills) may be, that $11 billion project will not make transit one bit better for riders waiting on many street corners across the city.

Before we break out the bubbly to celebrate defeat of the Tory Visigoths, what is the real future of Toronto’s transit system? Do we continue to spend every available penny on vanity projects, or do we look at the wider system, determine what is needed and commit to funding that need rather than propping up political egos and trolling for future votes?

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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Ontario Announces Toronto Subway Plan

On April 10, 2019, Premier Doug Ford announced his government’s intentions to expand transit in Toronto. The plan includes:

  • The “Ontario Line”, a rebranded and extended version of the Relief Line, will run from Don Mills and Eglinton to Ontario Place.
  • The Yonge North Extension from Finch Station to Richmond Hill Centre
  • The three-stop version of the Scarborough Subway Extension from Kennedy Station to Sheppard with stops at Lawrence East and Scarborough Town Centre
  • Extension of the Sheppard Subway east from Don Mills Station to connect with the SSE at McCowan and Sheppard
  • Extension of the Eglinton Crosstown west from Mount Dennis to Pearson Airport

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Toronto’s Omnibus Transit Report: Part II

On April 9, Toronto’s Executive Committee will consider a massive set of reports on the many transit projects at various stages of design and construction in Toronto.

In Part I of this series, I reviewed the financing scheme for four major projects as well as details of the Scarborough Subway Extension, aka the Line 2 East Extension. In this article, I will review the Relief Line, SmartTrack and the Bloor-Yonge Station Expansion project.

The reports applicable to this article are:

  • Main Report: Toronto’s Transit Expansion Program – Update and Next Steps
  • Attachment 1: A status update on all projects

There are related reports about signalling and capacity expansion of Line 1 Yonge-University-Spadina in the TTC Board’s agenda for their April 11 meeting. I will deal with these in a separate article.

After decades in which the focus of transit planning looked outward to the 905 beyond the bounds of Toronto, there is now a political realization that capacity into the core is a major issue for the region’s economy. Politicians and planners may show optimistic studies of suburban centres and growth, but the development industry, a bastion of free enterprise thinking, persists in building downtown because that’s where they can sell at the greatest profit.

The Relief Line, SmartTrack, Automatic Train Control, subway station expansions and even surface transit projects like the King Street Pilot all attempt to address the demand for travel to and through the core area. Looking beyond the city boundaries, there are subway and GO Transit extensions and service improvements. Some of these schemes are more successful than others, and some have very long lead times before any benefit will be seen. Political attention has shifted from the fights over which one project will be built each decade to the recognition that many projects must occur in parallel so that capacity can catch up with latent and growing demand.

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Premier Doug Plays With Toronto’s Train Set

In the continuing circus which is the Ford Family Transit Plan, the provincial government has advised Toronto and the TTC of its priorities for rapid transit construction. The Province is quite firm that since it will be paying for these lines, it will call the shots.

This information broke in two letters dated March 22 and 26, 2019 from Michael Lindsay, Special Advisor to the Cabinet – Transit Upload, and Shelley Tapp, Deputy Minister of Transportation, together with a report from the Toronto City Manager, Chris Murray, dated March 26.

The Province has four priority projects, although some of the information about them is vague:

  • A three-stop Scarborough Subway Extension [SSE]
  • A Downtown Relief Line [DRL] of indefinite scope
  • The Richmond Hill Extension of the Yonge Subway [YNE]
  • Construction of the Eglinton West Crosstown LRT primarily underground rather than at grade

These are the only projects mentioned in the letters. By implication anything else is off of the table as far as provincial funding is concerned except for whatever the subway “upload” still under discussion might entail. More about that later.

The Province refers to “incongruencies between the province and city/TTC with respect to the design and delivery of priority projects”. Most of this should be no surprise given previous statements both by Doug Ford as a candidate, and rumblings from his supporters.

The March 22 letter arose from a March 8 meeting between Provincial, City and TTC representatives. Two things are clear:

  • The Province was not paying attention to, or chose to ignore, information it received or should have been able to access easily through public channels.
  • The City/TTC should have had some idea of what was coming down the pipe over two weeks ago, but there was no public hint of what was in store even with the subway upload on the Executive Committee and Council agendas. This is a classic case of “who knew what and when”, and a troubling question of whether the direction of provincial plans was withheld from public view for political expediency.

The March 22 letter makes statements that were revised on March 26, and which have provoked considerable comment as this story broke. Most astounding among these was:

Per our meeting of March 8, we were informed that the City’s preliminary cost estimates for both the Relief Line South and the Scarborough Subway Extension have significantly increased to nearly double or greater the figures released publicly.

On March 26, the Province wrote:

We acknowledge, in light of the helpful clarification you provided at our Steering Committee meeting [of March 25], that the city’s/TTC’s revised project cost estimates for the Relief Line South and Scarborough Subway Extension projects represent estimates in anticipation of formal work that will reflect greater specificity in design. We accept that the actual budget figures remain to be determined …

This bizarre pair of statements suggests that either:

  • the Province was not really paying attention in the meeting of March 8 which led to the March 22 letter, or
  • they really were, but that their first statement was guaranteed to blow every transit plan to smithereens if it were not retracted.

On March 26, they do not say they were wrong, merely that they were dealing with preliminary estimates.

That is a strange position considering that the SSE is on the verge of reaching a firm design number and budget to be reported in early April to Toronto Executive Committee and Council. The agenda publication date is April 2, and it is hard to believe that a firm estimate for the SSE does not already exist. As for the DRL South, that is in a more preliminary state, but if anything the numbers already published have been rather high.

The Scarborough Subway Extension

For the SSE, there are two conflicting proposals:

  • City: One stop extension terminating at Scarborough Town Centre
  • Province: Three stop extension “with the same terminus point”.

There is no reference to any potential connection with a Sheppard Subway extension. However, the March 26 letter contains this statement:

… we recognize that the city/TTC and province share the intention for a station to be located at Scarborough Centre. However, under the province’s preferred three-stop extension of Line 2, the project would proceed northward from the station at Scarborough Centre.

Given that the TTC’s alignment for STC station is itself on a north-south axis, it is unclear just what this remark refers to especially if STC is to be the terminus of the provincial project.

As I wrote recently in another article, there is an issue of equipment and storage required to allow the SSE to open with full service to STC. One potential source of “additional” cost could well be that works such as a new Line 2 yard at Kipling plus the rebuilding and/or replacement/expansion of the fleet are now counted as part of the overall project cost. This is precisely the sort of hidden cost I warned the Province would face when they started to understand the full scope of the TTC’s infrastructure requirements.

Whether this is the case remains to be seen, but with the Province taking responsibility for delivery of this project and planning to assume the cost of maintenance and expansion of the existing subway, they (or anyone else looking at funding the SSE) will be facing these costs as “add ons”.

One other concern is that there is no mention of capacity expansion for Line 2 either by way of station expansion at critical junction points nor of fleet expansion to allow more service once the line has Automatic Train Control [ATC].

Crosstown LRT Westward Extension

  • City: A substantially at-grade extension from Mount Dennis westward, although there are references from recent public participation to the possibility of some grade separations.
  • Province: A “significant portion of this extension” would be underground, an option “which has not been considered in a material way” as part of the current design.

The March 26 letter revised the characterization of the City’s work to date:

… we recognize that tunnelling options for the project have been considered as part of previous assessment, but that these options are not preferred by the city/TTC.

Again, one must wonder just what the province was doing at the March 8 meeting to have so botched their understanding of the work to date. The work already done is documented on the project’s website. I cannot help wondering how much the original provincial position was a product of political posturing by Etobicoke politicians. Such a gaffe does no credit to Michael Lindsay and his team.

It is no secret that there is strong political pressure from politicians in Etobicoke for the LRT line to be buried as much as possible, and it is no surprise that the Province would embrace this.

Missing, however, is any reference to the portion of the line west of the Toronto-Mississauga boundary and specifically the link into Pearson Airport. Will this be part of the Provincial project?

Relief Line South

The text in this section has provoked speculation in various fora, both the mainstream and social media.

Planning work undertaken by the TTC contemplates utilizing existing technology … the province would propose … a truly unique transit artery spanning the city that is not beholden to the requirements of the technologically-outdated Line 2.

On March 26, the Province changed their tune, a bit:

… we recognize that the city/TTC is contemplating a different technology for the project than that currently deployed for Line 2.

It is hilarious to see Line 2 described as “technologically outdated” when it is this line that the Province plans to extend to STC. At the risk of peering into a murky crystal ball, I will venture an interpretation of what is being said here.

The “outdated technology” is the current fleet of T1 trains which do not have ATC installed. Moreover, TTC plans would not see ATC operation on Line 2 for at least a decade unless the existing fleet is retrofitted.

The TTC has always intended that the DRL would use modern technology, and again I cannot help wonder whether the Provincial reps were paying attention at their March 8 meeting with the TTC. This information is not difficult to obtain. They could even read my blog if they don’t want to spend time wading through official documents, but possibly it is simpler just to slag the municipal agency in a time-honoured Queen’s Park tradition.

The Province wants the DRL to be completely free-standing in that it would not depend on Line 2 and the existing yard at Greenwood, but would be built completely separate from the existing subway network. Moreover, “alternate delivery methods” would be used for this project, a clear indication that this would be a privately designed, built, financed and operated line much as the Crosstown was intended to be before a deal was worked out to let the TTC drive the trains, at least for a time.

The reference to a “transit artery spanning the city” implies something much more extensive than the DRL South from Pape to Osgoode Station, but what exactly this might be is anyone’s guess. It could be a truly different technology, something like Skytrain in Vancouver (which itself has two separate technologies). The construction technique could be changed from the proposed double bore to a single bore line, especially if the vehicle cross-section were smaller. The alignment and station locations could be changed. Any of these and more is possible, but we don’t know. As this is to be an AFP project, a blanket of confidentiality hides everything.

Yonge Northern Extension to Richmond Hill

The primary provincial interest here is in getting the line built as quickly as possible with planning and design work for the YNE and DRL to progress in parallel so that “the in-service date for the extension is fast tracked to the greatest extent possible”.

There is no mention of capacity issues on the existing Line 1 including the need for more trains, nor of the expansion needed at key stations to handle larger volumes of passengers.

Jumping the Gun on Uploading?

The March 26 letter clearly attempts to correct misapprehensions from the March 22 missive. These were presumably communicated privately at or before the March 25 meeting.

The Province is supposed to be engaged, in good faith, in discussions with the City and TTC about how or if it would take control of subway assets and what that control, and associated responsibility for ongoing costs, would entail. One might easily read the March 22 letter as showing that the Province has made up their mind, and all that remains is to “drop the other shoe” with respect to everything beyond the “priority projects”.

On March 26, the Province talks at length about “our priority transit expansion projects”. This has always been the political red meat in that new lines translate into votes, or so the Ford faction hopes. The myriad of details in looking after the existing system do not lend themselves to coverage in a two-page letter, let alone simplistic posturings by politicians eager to show the wisdom of their plans.

The March 26 letter does not discuss any aspect of the existing system including asset transfers or financial commitments. That’s not to say the Province has not considered this, but no details are public yet. That will be a critical issue for Toronto because the degree to which the Province actually plans to pay for the existing subway system will affect future City budgets.

There is a myth that fare revenues will cover off the City’s share, but we don’t actually know which aspects of subway “maintenance” will remain in the City/TTC hands. There are two separate budgets, capital and operating, but there has been no statement of how these will be divided. Although there could be a one-time payment for the capital value of the system, this begs two questions. First, who benefits from appreciation of property value as subway lands are repurposed/redeveloped. Second, what does the City do when the nest egg from selling the subway, assuming they even have anything left over after discharging subway-related debt, is used up.

Another issue to be decided is how the split in ownership and financial responsibility will affect gas tax funding that now flows from both the Provincial and Federal governments, over $300 million in 2018. How much of this will Toronto lose, and what will be offset by costs the Province will assume?

Further System Expansion

The correspondence from the Province is silent on many projects including:

  • Eglinton East LRT
  • Waterfront LRT
  • Finch LRT extension to Pearson Airport
  • Sheppard Subway extension to STC
  • SmartTrack and GO Transit Service Expansion

Eglinton East and Waterfront would, assuming a City/Province divide on surface/subway projects, lie clearly in the City’s court, while any extension of Line 4 Sheppard would be a Provincial project. Oddly, Eglinton East would be a “City” extension of a provincially-owned line, the Crosstown.

The Finch LRT occupies an odd place as a surface line that for historical reasons is being delivered by the Province. Moreover, an airport extension would lie partly outside of Toronto. Who knows what the fate of this will be.

To Be Continued …

The provincial letters have dropped into the Council meeting planned for March 27, and we can expect a great deal of debate, if not clarity, in coming days.

At a minimum, the Province owes Toronto a better explanation of just what they intend with their view of projects. This information should not be “confidential” because we are simply asking “what exactly do you want to do”. This is particularly critical for the Downtown Relief Line whatever the “unique transit artery” it might become.

SmartTrack and GO are important components because they will add to the “local” network within Toronto and could be part of the “relief” efforts that will span multiple projects. SmartTrack is a City project, and we are about to learn just how much it will cost Toronto to put a handful of John Tory branded stations on GO’s Kitchener and Stouffville corridors. SmartTrack also takes us into the tangled net of fare “integration” and the degree to which Toronto riders will pay more so that riders from beyond the City can have cheaper fares.

Finally, there is the question of operating costs. The Ford mythology includes a claim that subways break even, and in the uploading schemes mooted to date, there is an assumption that Toronto will still operate the subway network and pay for its day-to-day costs out of farebox revenue. Even if that were true today, much of the proposed network expansion will not gain revenue to cover its operating cost, and Toronto will face increased outlay. There is still no proposal, let alone an agreement, about the operating costs of the Crosstown and Finch LRT lines from which we might guess at how the combination of three new lines/extensions will affect the subsidy call against Toronto’s tax base.

With clear errors in the March 22 letter, the Province showed that it cannot be trusted to propose policy based on fair and accurate characterization of Toronto’s transit system. One would hope that a “Special Advisor” backed by the boffins at Metrolinx and the Ministry of Transportation might be able to avoid screw-ups. When the Province puts forward a scheme to take over part of the TTC, their rationale should be based on transparent and accurate information. Alas, recent experience in other portfolios shows that this will not happen, and dogma will trump common sense.

$33 Billion and Counting

A political tremour ran through the transit world in Toronto recently with the TTC’s release of a 15-year projection of capital spending requirements at $33.5 billion. This does not include funding for most system expansion projects beyond the already-approved Scarborough Subway.

That number is big, but it’s no surprise to those who have been following TTC budgets for years. A major issue has been that “unfunded” or “below the line” projects don’t get the attention they deserve and are deliberately kept off of the books to reduce the apparent size of the City’s financial problems. Common tactics included omitting projects from the overall budget, or projecting their spending in a period just beyond the rolling ten-year horizon of capital planning.

Transit planning in Toronto and at Queen’s Park is reckless when it downplays the backlog of spending and associated subsidies facing public agencies. New spending and the inevitable photo ops for grinning, back-patting politicians are easier to fit into plans when you can ignore the transit system crumbling in the background.

Several budget reports will be before the TTC Board (and later at City Council) at its next meeting on January 24, 2019.

There is far too much material here to review in a single article, and so I will break this up over multiple posts. Some of the details behind individual projects will not be available until I obtain the full version of the Capital Budget known as the “Blue Books” which expand the line items from the “Blue Pages” into project descriptions and schedules.

A vital part of the new reports is a shift to a longer time frame (15 years) and the inclusion of all projects in the Capital Plan whether they have funding or not. The extent of the problem is quite evident in the following chart. The purple hatched area shows the requirements for coming years while the sold areas show known funding amounts in the medium term and hoped-for income thereafter.

The big drop in the City’s funding share in the early 2020s arises from the lack of borrowing headroom in the overall City budget. A big problem here is the crowding by major projects such as the Scarborough Subway Extension and the Gardiner Expressway rebuild within the overall borrowing plan. Current City policy dictates that the average debt servicing cost should not exceed 15% of City tax revenue over a ten year period. Planned spending in the next few years will eliminate the headroom for additional borrowing. This exactly coincides with the bulge in TTC capital requirements beginning in 2022. To put it another way, if funding continued at 2019 levels across the chart, there would still be a shortfall, but against a much higher base.

Even this chart does not tell the full story because the Capital Plan continues to push major projects beyond the ten-year line, and the financial pressures from system expansion are not fully accounted for here. As things stand today, less than 30% of the ten-year program is funded. Beyond 2028, the level of assumed funding is still well below historical levels.

($ billion) 2019-2028 2029-2033 Total 2019-2033
Funded $6.4 $3.4 $9.8
Unfunded $17.5 $6.2 $23.7
Total $23.9 $9.6 $33.5

System expansion projects will add a further $3.8 billion over the first ten years of the plan:

  • Line 2 Extension (formerly known as the SSE): $3.4 billion (subject to revision when an updated cost report is presented to Council in April 2019).
    • “While the 10-Year Capital Plan includes $3.360 billion in funding for this project (between 2019 to 2028), this project has an overall budget of $3.560 billion. This estimate, which includes $132 million to extend the life of the SRT until the Line 2 East Extension commences operation and a further $123 million to decommission and demolish the SRT, was based on 0% design. The project budget and schedule will be re-baselined in Stage Gate 3 report to City Council in April 2019, factoring in delivery strategy and schedule risk analysis.”
  • Relief Line South: $385 million will be spent in 2019-20 to support early works on this project. Some of this is already funded, but $325 million is being advanced into the current ten-year budget. Of this, the City proposes to provide half and looks to other levels of government for a contribution. The actual RL construction project is a separate entity which is not yet in the budget.
    • “The 10-Year Capital Plan includes funding of $385 million to complete current work only, which includes completing the preliminary design and engineering to between 15% and 30% complete, including developing a project budget and schedule.”
  • Waterfront Transit: The ten-year budget includes only $27 million in 2019-21 for design work on the planned extension from Exhibition Loop to the Dufferin Gate. Design work on any other Waterfront projects, let alone any construction, remains beyond the ten-year window.
  • Spadina Vaughan extension: Outstanding work on this project including close-out costs amount to $60 million in 2019, but this will be funded within the existing project.

[Quotations above are from the 15 Year Capital Investment Plan and 2019-2028 Budget, pp 12-13.]

The Relief Line work includes tasks such as property acquisition, utility relocation and design for the tunnel boring equipment. Now that the line has political support, spending sooner rather than later is on the agenda, and about two years can be shaved from the original project schedule by doing the preliminary work now. This is a major change from the position taken by Mayor Tory during the election campaign, and the need to “do something” as soon as possible is now evident.

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