Metrolinx Board Meeting Wrapup February 17, 2017 (Updated)

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

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

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

Continue reading

The Metrolinx Fetish for Fare By Distance (III) (Updated & Corrected)

Correction: The original version of this article stated that the “Income and Transit Use” paper was the work of Steere Davies Gleave (SDG). This was an assumption on my part – that it was a continuation of their previous work. I have been advised by SDG that this paper is not their work, but that of Metrolinx staff. All references to SDG in connection with this paper have been modified appropriately. My apologies to SDG for mis-attributing work to them.

Updated: This article was updated on February 19 at 6:45 pm to include comments on the things Metrolinx should also be studying, but omitted in their review of incomes and transit use. Scroll down to the end to see the update.

In two previous articles, I have examined the February 2017 update to the Metrolinx Board by staff on Regional Fare Integration, and a June 2016 background study by Steere Davies Gleave [SDG] on fare integration concepts.

This article reviews another June 2016 study by Metrolinx Staff on income equity: GTHA Fare Integration: Income and Transit Use

The context for this study, nominally, is to determine whether a new fare scheme will affect low-income households.

In reviewing potential modifications to the transit fare system across the Greater Toronto and Hamilton Area (GTHA), the social equity implications of transit fare policy must be considered. Lower-income households rely more on transit for their mobility, are more sensitive to the fare they pay for their transit trips than higher-income households, and, as a result, fare policy choices may impact them more. [p. 1]

However, the selective examination of effects by Metrolinx staff focuses on the benefits of a lower fare for “short” trips while playing down the effect on “long” ones.

For the purpose of the analysis, Metrolinx looked at a fine-grained version of census data, “dissemination areas”, where each element contains less than 1,000 people.

[these …] typically exhibit greater homogeneity in the household incomes of their residents than larger geographic units. [p. 2]

Each of these areas would lie within one geographic section of travel surveys (the Transportation Tomorrow Survey which, at the time of writing would have been based on 2011 data), and the transit usage for each dissemination area was taken from the corresponding TTS area’s results. Census data on income was used to assign each census area to one of ten income ranges, and through this to map transportation patterns to incomes.

Note that there was no adjustment to reflect the availability of transit in any of the census areas, and the results merge data across the region. The income groupings are based on dividing a population of 6.5 million into roughly equal groups of 650,000. “Equivalent income” is a value derived from a combination of household income and household size.


The actual distribution of income shows a familiar pattern with higher incomes along the Yonge Street corridor and in some parts of the 905, notably those well-served by GO Transit.


Continue reading

The Metrolinx Fetish For Fare By Distance (II)

Back in June 2016, Metrolinx received two reports from its consultant, Steere Davies Gleave, that give some insight into the work and philosophy to that point on fare by distance schemes that Metrolinx contemplated.

GTHA Fare Integration Concept Evaluation Backgrounder

GTHA Fare Integration: Income and Transit Use

This article reviews the Concept Evaluation report. I will turn to the Income and Transit Use report in a separate post.

At that point, three concepts were under review:

  • A modified version of the existing flat fare system with adjustments to deal with the high premium for cross-border travel to and from Toronto.
  • A zone-based system
  • A hybrid system with flat fares region-wide for “local” buses (including local expresses and BRTs) and distance based fares for subways, SRT, LRTs and GO Transit (rail and bus).

The recently added fourth option, a full fare by distance tariff, was not in the mix.

The breakdown within the “hybrid” option was acknowledged to be incomplete with assumptions such as the placement of BRT and the need for additional classes of service still up for debate.


The starting point for all sample fares was the then existing $3.00 cash fare on the TTC. The exact value is less important than the ratio between that base value and other proposed fares.

For Concept 1, there are only two changes. First, transfers between service providers would include a 50% discount on the second fare. This would reduce the cross-boundary fare from 200% of the base value to 150%. On “regional” service (GO), trips up to 7km in length would charge the base fare, and beyond this a distance based tariff would kick in. This would reduce the high premium now charged by GO for very short trips including those within the City of Toronto.

For Concept 2, the zone structure is built on the 7km screen used in Metrolinx proposals for “local” trips. The chart above is misleading for local trips because the chart shows a base fare of $2.60 with an additional $0.78 per zone, but because the second tier of pricing is set at 15km, it adds two extra zones. The pricing for trips that did not involve GO transit and the ratios to the “flat” fare would be:

Distance Fare Change
0 to 7 km $2.60 13.3% discount
7 to 14 km $3.38 12.7% premium
14 to 21 km $4.16 38.7% premium
21 to 28 km $4.94 $64.7% premium

For Concept 3, “local” services (buses) would retain the base flat fare, but rail modes (plus GO buses) would see an incremental fare for trips beyond 7km. The example shown here is a $3.45 trip (a 15% premium) for a 15km “rapid transit” trip, but there is no specification of how this pricing would scale for longer or shorter journeys.

Longer “regional” trips on GO would change by up to 10% because the longest trip prices (now lower on a distance basis than short trips) would have to be rebalanced to offset the reduced short trip fares.

This all looks quite reasonable from the abstract viewpoint of a “pay for what you use” philosophy, but the effects on riders are not spelled out geographically. The 7km cutoff for zone size and for the onset of distance based fares implies a fare increase for many trips. To put this in context, here are the bounds of a 7km trip from various points within Toronto. Note that these are “crow fly” distances, not trips plotted on the transit/street network.

From North South East West
Queen & Yonge .7km N of Eglinton Ave N/A .8km E of Woodbine Ave Grenadier Pond
Scarborough Ctr Stn .7km N of Steeles Ave S of Kingston Rd W of Meadowvale Rd E of Don Mills Rd
North York Ctr Stn .5km S of Highway 407 S of Eglinton Ave W of Victoria Pk Ave .7km W of Keele St
York University N of Rutherford Rd .5km N of Lawrence Ave Yonge St .2 km E of Kipling Ave
Finch & Kipling .8km N of Langstaff Rd .8km N of Eglinton Ave .7km W of Keele St .4km E of Airport Rd
Six Points Highway 401 N/A Dundas & Bloor Sts .4km E of Cawthra Rd

The “old” City of Toronto is rather compact, and a great deal of it lies within 7km of the core. This is not unlike the old “Zone 1” of the TTC before zone fares were eliminated. The suburbs are quite another thing, and 7km does not get one very far. Scarborough is 15km east-west at Ellesmere, and 13km north-south at McCowan. Cheaper “local” fares might apply to short trips within Scarborough, but not to trips anywhere else in the region. The “crow fly” distance from STC to York University is almost 20km, and to the business district downtown 17km.

With the goal of reducing cross-boundary fares, a whole new set of “long” trips that will pay a substantial premium for travel simply within the “amalgamated” City of Toronto will be created. Indeed, those cross-boundary riders will not see much of a benefit unless they live fairly close to their work locations. Scarborough Town Centre is more than 7km away from most of the area north of Steeles Avenue. Anyone working living in Rexdale but commuting to Markham faces a trip that will not bring the “cheaper” fare for short hops across the boundary. Richmond Hill is more than 7km north of Steeles.

The big savings would actually come to GO customers who now pay a full TTC fare to switch to that system. Their “local” fare would be bundled with their “regional” one at a premium of at most 10% over current fares.

Continue reading

The Metrolinx Fetish For Fare By Distance

On Friday, February 17, the Metrolinx Board will consider yet another update in the long-running saga of its attempt to develop an integrated regional fare policy.

It is no secret that for a very long time, Metrolinx staff have preferred a fare-by-distance system in which riders pay based on the distance travelled, possibly at different rates depending on the class of service with fast GO trains at the top of the pile. The latest update tells us almost nothing about the progress their studies, but does reveal that a fourth option has been added to the mix.


Option 1, modifying the existing structure, simply adds discounts to smooth the rough edges off of the existing zones between service providers. This has already been implemented for GO Transit “co-fares” with systems in the 905, but it is notably absent for trips to and from the TTC. Riders face a full new fare to transfer between a TTC route and GO or any of the local 905 services.

Option 2, a more finely grained zone structure than exists today, would provide a rough version of fare-by-distance, but would still have step increments in fares at boundaries. Note that this scheme also contemplates a different tariff for “rapid transit”.

Option 3 is a “Hybrid” mix of flat fares for local services and fare-by-distance for “rapid transit” and “regional” services for trips beyond a certain length. The intent is to charge a premium for faster and longer trips on services that are considered “premium”.

Option 4 is new, and it eliminates the “flat” section of the Hybrid scheme so that the charge for a trip begins to rise from its origin and there is no such thing as a “short” trip at a flat rate. The rate of increase would vary depending on the class of service.


Ever since Metrolinx began to treat “rapid transit” as a separate fare class, this created an inevitable conflict with the Toronto transit network’s design as an integrated set of routes where subways provide the spine. Riders are not penalized with a separate fare for using the subway because it was built to replace and improve on surface streetcar and bus operations. This is fundamentally different from GO Transit which replaced no significant existing transit services in its corridors, and which was designed as a high speed operation to attract commuters out of their cars.

Continue reading

TTC Presto Update December 2016 (Updated)

Updated January 5, 2017 at 7:00 pm: Information has been added about Presto sales within TTC subway stations. See the end of the article.

With a modest fanfare, both the TTC and Metrolinx celebrated the completion, if that’s the right word, of their planned 2016 roll out of the Presto fare card system. The work is not yet finished, and the full conversion away from existing “legacy” media is a year off. According to the TTC:

“Tickets, Tokens and passes will be available for sale and use throughout 2017. We will stop accepting these in 2018.” [Presentation, p 8]

Still to be worked out is the actual final date beyond which any tokens or tickets bought in 2017 can be used or redeemed. With the TTC Board committed to a fare freeze in 2018 (election year) the old media won’t expire on their own, and of course tokens are always good for “one fare”, whatever it may be.

At some point in 2017, the TTC will begin to offer Metropasses on Presto. This will include regular and monthly discount plan versions, but the fate of the bulk purchase “VIP” program is still uncertain. According to the TTC, the roll out of passes by Presto had been delayed awaiting capacity upgrades in the central system to handle the volume of transactions passes will bring. This was confirmed by Metrolinx who said:

“As with any major system expansion, related upgrades are scheduled to roll out gradually as we test and optimize our system for anticipated increases in future use. These upgrades are deliberate and measured, and they include improvements such as the migrating to our new data centre. The system has been built with enhanced scalability features that will accommodate Metropasses.” [email of Dec. 21, 2016]

For now, Metropass users should remain on the “legacy” cards until the same functions and pricing are available through Presto.

Riders wishing to purchase Presto cards have faced a challenge thanks to the limited number of TTC outlets selling them. This is about to change. Already Presto cards can be bought at many Gateway News outlets, and Metrolinx expects this to expand in 2017:

“We are pursuing plans to expand the PRESTO card distribution footprint through a partnership with a third-party retail network. This network would also enable us to increase our ability to set special concessions, such as student and senior discounts. We expect to have more information to share in the new year.”

An important part of the sales process is that riders who are entitled to concession fares will be able to buy cards with that option pre-loaded. However, there is a potential conflict with the TTC’s intended implementation of discount fares that could complicate this type of purchase and account setup.

For a few classes of rider, the TTC proposes that a “Photo ID” be available. This would not be a separate card as in the early days of the Metropass, but a photo integrated into the user’s Presto card and account. The exact mechanism for loading this photo have yet to be determined. Also, it is not yet certain that photos will be required for seniors because, unlike children and students, their eligibility never expires, and linking the card to the rider for fraud prevention is less of an issue. One side effect the TTC did not mention is that a return to photo ID makes the card non-transferable, and this would produce limitations on its use that do not exist with current media.

Continue reading

Who Deserves a Fare Subsidy?

Updated: Further information on the history of seniors’ fares has been added at the end of this article.

With the never ending problems of balancing the TTC’s budget, the question of trimming or eliminating various forms of fare subsidy are back on the table. This shows up as a quick fix to revenue problems with the assumption that “if only riders paid more, there wouldn’t be a problem”. The target group varies from time to time, but the premise is the same – somebody is freeloading and “my tax dollars/fares” should not be paying their freight.

A basic problem with this argument is that it will not fix the revenue shortfall permanently, only increase the cost of using transit by whichever group is targeted. If, for example, all discount fares were eliminated in 2017, we would be right back at the same position in 2018 wondering how to deal with increased costs, but without that convenient list of scapegoats.

A quick review of the “concession fares” is in order to put the question in context.

  • Adults who are willing to purchase tokens up front (or preload their Presto cards) get a discount relative to riders who pay cash.
  • Adults who want to prepay even more can purchase daily, weekly or monthly passes which cap their costs within a time period.
  • Special passes and validation stickers are available to extend the range of services covered by adult passes to premium fare routes and to other transit systems.
  • Daily pass holders get a special “family” deal on weekends and holidays when up to six people, maximum two adults, can travel on the pass.
  • Monthly pass holders can obtain various extra discounts based on a commitment to buying 12 months’ worth of transit (the Metropass Discount Plan or MDP), and bulk-buy discounts are available to organizations that resell passes (the Volume Incentive Program or VIP).
  • A Convention Pass is available to allow for bulk purchase of transit service for large groups at a price considerably below the cost of a day pass.
  • Students and seniors have passes priced at a 20% discount from adult passes, and MDP pricing provides for a further discount. Cash and ticket fares are discounted about 33% from adult rates.
  • Children ride free.
  • A limited number of designated groups (the blind and war amputees) travel free.
  • WheelTrans users are entitled to be accompanied by a Support Person at no extra charge.

Some of the concession fares have been around for a very long time:

  • Children’s fares predate the TTC’s formation in 1921 and until recently floated between 1/3 and 1/2 of an adult fare. A “child” was defined by height with rings embossed on the stanchions at vehicle entrances to give operators an unambiguous measure. Older vehicles (PCCs and the Peter Witt) bear witness to how the standard was changed over years as the average height of children rose.
  • Scholars’ fares date from the 1950s, and they lie partway between the fare for children and adults.
  • Seniors’ fares came along by the 1970s in recognition of the then-new issue of a growing aged population and their relative poverty. The CPP was less than a decade old, and “house rich” oldsters benefiting from the real estate market were unknown.
  • The Metropass dates from May 1980, and its cost has fluctuated between 52 and 47 “token” fares depending on the prevailing political and fiscal mood.
  • Post-secondary student passes were added to the mix in 2010 after several years of lobbying by student groups.
  • Free rides for children were granted in early 2015 as a political move by then-new Mayor Tory to “do something” quickly on the transit and poverty files.

Continue reading

TTC Board Meeting: November 30, 2016

The TTC Board will meet on November 30, 2016 at 1 pm in the Council Chamber at City Hall. This is not a budget meeting, but the agenda contains a number of items of interest.

  • CEO’s Report for November 2016
  • Purchase of Air Conditioning Parts for T1 Subway Cars
  • Purchase of land to expand bus storage capacity
  • Reports related to the Hillcrest Complex including a review of property usage, approval of new equipment for Duncan Shops, and approval of a new Streetcar Way Building.
  • Expansion of Davisville Carhouse
  • St. Patrick Station Easier Access Elevators

Continue reading

TTC Approves 2017 Fare Increase, Punts Service Decision to Council

On November 21, the TTC Board approved the fare increase proposed by staff in their Operation Budget for 2017. Adult and Senior/Student token/ticket fares will rise by ten cents to $3.00 and $2.05 respectively. Metropasses for both fare classes will rise by $4.75 with the result that the “multiple” (the ratio between the pass price and the single token/ticket) for seniors/students drops slightly (by about 0.5) while for adults it is unchanged. Here is the full table of old and new fares.


There was a long parade of deputants at the meeting who, despite a motion by Deputy Mayor Denzil Minnan-Wong to limit presentations to three minutes, mostly managed to push the envelope out to the normal five minutes simply by taking a rather long time to “wrap up” when Chair Josh Colle gave the three minute warning. Their comments overwhelmingly spoke to the effect of a fare increase, but also to the question of service quality. Despite the TTC’s claims that they are not limiting service growth and causing crowding, actual experience does not match these claims, a point echoed by Councillors who sit on the TTC Board and who receive many complaints about this from their constituents.

To soften the blow, the TTC Board voted to direct staff to prepare the 2018 budget on the basis of no fare increase so that, in effect, over a two year period fares would only have gone up five cents per year. This is a Catch-22 decision going into an election year because somehow Council will have to find the money to pay for the idea just when tax increases are regarded as political suicide, but service cuts would be equally unpalatable.

The most contentious part of the debate turned on Appendix C to the report which described various options for higher fares and lower service. Included on the list was the cost of free passes for the Blind and War Amps ($2.1 million), and even considering this shows a breathtaking insensitivity.

This was described by CEO Andy Byford as the “Armageddon Appendix” in an interview with CBC’s Metro Morning, an presents a menu of extremely unpleasant options to close the remaining gap between TTC’s planned revenue, including the fare increase, and projected costs. This amount has three components totaling $99 million:

  • A $35.1 million shortfall in the “conventional” system’s operating budget.
  • A $26.4 million shortfall in the WheelTrans operating budget.
  • A proposed transfer of $37.5 million from the TTC’s operating budget to the City’s capital budget. This scheme has not been endorsed by the City Manager, and is simply an accounting trick to bump the TTC subsidy without showing it as part of the annual increase. Either way, it would mean increased City spending whether as “operating expense” or “capital from current”.

Byford was at pains to emphasize that he would not recommend any of the changes, but produced the list because he was asked for it. What is missing, of course, is a sense of the effect of any of the changes at the individual level: how many riders benefit from which discounts, which services would be affected by changes to standards? It is easy for the budget hawks on Council to talk about “efficiencies” when they are single-line descriptions, a dollar amount, but with no specifics about what would happen.

For their part, members of the TTC Board seemed unable to grasp the difference between sending an unbalanced budget to Council without recommendations on how to fix it, as opposed to taking a strong stand saying “we oppose these cuts”. This evolved as the meeting wore on with some recognition of the need to take a stand, but this did not find its way into the final motions (see below).

The Board may have punted the issue over to Council, but nothing prevents Council from saying “TTC, you are only getting this much subsidy, you figure out how to deal with it”. Even a desire to save service improvements implemented at Mayor Tory’s behest will require someone to decide either on new revenues to fund transit, or on which of these improvements will die on the altar of “efficiency” and “saving taxpayer dollars”.

Continue reading

TTC’s 2017 Operating Budget: More Creative Accounting (Updated)

The TTC’s 2017 Operating Budget will be discussed at a special Board meeting on Monday, November 21, 2016. When work began on this round, the TTC stared at a $231 million hole in its potential 2017 funding, and it was apparent that the Mayor’s request for a 2.6% cut in subsidy was small change beside the TTC’s much larger problems.

Updated November 17, 2016 at 6:40 pm: Responses from the TTC clarifying the treatment of externally recovered costs have been added to this article.

The Budget Report is now public, and initial media comment suggested that the TTC had wrestled that huge potential deficit to the ground. However, a lot of that is spin and accounting trickery, not a real reduction in the TTC’s needs.

Still facing a gap of $61 million, TTC management list many unpalatable ways that operating costs could be trimmed. In effect, the message to Council, and especially to Mayor Tory is this: being a “transit mayor” costs money, and it’s time to pay up.

This article looks at the Operating Budget, the one that provides service and handles day-to-day maintenance activities. In a separate article, I will review the Capital Budget.

Understanding The Budget Mechanics

The TTC (and all City agencies and departments) begin work on their next year budget midway through the year. The 2017 budget has been “in the works” for months and in many ways is based on 2015 rather than 2016 results because the year was barely half-over when the 2017 budget cycle started. This can lead to problems when the “current” year does not turn out as expected as happened in 2016.

An important first step in looking at TTC budget numbers is to recognize that any year-to-year comparisons are relative to the 2016 budget, not to the probable actual results for the year. This has some important effects:

  • The fare revenue projection for 2017 is based on a lower projected ridership than was used, but not actually achieved, in 2016. Therefore, revenues go “down” in this budget (without allowing for effects of a fare increase) simply to get the estimated ridership back to a reasonable level. 2016 was described as a “stretch target” for ridership, and the budget elastic didn’t stretch as far as hoped.
  • Some 2016 costs are coming in under budget, notably for employee benefits but also for diesel fuel. These are savings in actual spending in 2016, but they also show up as “reductions” in 2017 when they are rolled into the budget. It is important to distinguish between reductions in costs that affect actual spending in 2017 as opposed to simply being a lower budget number.
  • The 2015 budget included a “capital from current” item for the purchase of new buses. This is not an “operating cost” in the traditional sense, but it avoided putting the item on the City’s Capital Budget. For this reason, 2015 is an odd year in any stats unless the capital portion is factored out (notably from the claimed subsidy per rider). There is no such payment in 2016, and so a direct comparison with 2017 is possible without adjustments, at least until some of the TTC’s new budget tricks are factored in. For 2017, the TTC proposes to shift some operating costs onto the Capital budget and, as a result items that were billed to “operations” and counted as part of the rider subsidy in past years would disappear. The City Manager’s Office does not concur with this tactic. The point here is that year-to-year budget and subsidy comparisons cannot always be made without adjusting the figures to a common basis.

Another important factor is that in the total numbers reported in the media, the “conventional” and Wheel-Trans (WT) budget numbers are often conflated. When demand for WT is growing quickly, as is now the case with improved eligibility criteria from Queen’s Park, costs for this service grow proportionately. This cannot be wished away by budget hawks who care only to limit tax increases, but worse it can create a situation where the conventional system is pillaged for dollars to handle the WT demand. That is not the sort of conflict we should be seeing in budget debates, but it is inevitable when the extra cost of WT for 2017 is almost equal to the revenue from a 1% property tax hike.

Finally, there is a distinction between true savings that represent lasting reductions in expenses, and one-time benefits from procedural changes or special accounting provisions. The impression can be given that a budget is in much better shape than reality by giving the impression that a large initial deficit can be whittled down.

Getting From $231 Million to $61 Million

The budget gap was “closed” by a number of measures, some of which are simply savings against the 2016 budget that are carried forward into 2017. On an “actual spending” basis, the savings have already happened. They are not the result of new, recent actions by TTC management.


As I reported previously when reviewing at the Budget Committee discussions, the reduced healthcare costs were actually achieved as a saving in 2016 against that year’s budget. They are a reduction in 2017 only on a budget-to-budget basis because the $10.3 million was part of the 2016 budget as a starting point.

The recommended savings in the current report are:

  • Reduced PRESTO fees due to the delay in rolling out Metropass support. With less of the TTC’s revenue flowing through PRESTO, the cost of serving this does not have to be included in the budget. Note that this treats PRESTO costs as a net addition and does not include an offsetting saving in handling costs for Metropasses likely because the two modes would co-exist during a transition period.
  • As in past years, energy costs are expected to be lower than the previous year’s budget level. The saving shown here is $12 million, but $5 million of that is already projected to be saved in 2016 actual results as per the October 2016 CEO’s Report, p. 50.
  • Capitalization of City construction impacts. When the city tears up a street (for example the Queen Street watermain project now underway), the TTC incurs extra cost to divert and supplement service. This has been borne out of the operating budget but without an explicit chargeback to the capital project for which this should rightly be a cost. This appears to be a new practice for 2017 and it is unclear whether the City and its agencies have agreed to pay these charges. (See update below)
  • Elsewhere in the budget, there is a section on cost recoveries from Metrolinx for its construction project effects on service. This would be done on a cost recovery basis as with City construction, but it is unclear why one of these has been included as a “saving” but not the other. (See update below)
  • Delays in Bus Reliability Centred Maintenance. TTC management had proposed a higher fleet spare ratio and maintenance practices to pro-actively get ahead of failures rather than doing predictable repair work after a vehicle had already passed the likely failure time and possibly actually broken down in service. In the Capital Budget, the TTC is proposing a very large order of buses to replace the Hybrid fleet before its due date, and this would reduce maintenance needs by substantially lowering the average age of the fleet. It would also place a large chunk of the fleet under warranty effectively transferring operating maintenance costs to the Capital budget. This tactic has a downside as the TTC has seen in the past when a homogeneous fleet reaches its non-warranty period, and later the higher cost of maintenance (and staffing requirement) of older vehicles. This is a time bomb built into the budget even though it could “solve” a short term problem.
  • Reduced contracted services. It is unclear what this refers to, and I have sought details from the TTC. The largest “contract service” the TTC has is the provision of service in York Region, but this is done on a full cost recovery basis. If YRT takes over a service the net change to TTC’s budget should be zero. (See update below)

Update: The TTC has clarified the handling of externally funded costs in an email from Vince Rodo via Brad Ross.

With respect to City construction projects:

It has been a long standing practice for the TTC to charge the incremental cost of service to TTC capital projects.  For example, when we tear up streetcar track, we run replacement bus service during the construction period.  We charge the difference between the regular streetcar service and the bus service to that project as part of the cost incurred because of the project.  In the past, we have not done that for City of Toronto construction projects.  The city has agreed that the practice for TTC projects can be used for city projects too.  So for example, if the city were closing an intersection for work and we had to re-route service round that, we will now be able to calculate that extra cost and bill it to the city, who will charge it to that project.  Since these costs had to be covered by the TTC operating budget in the past, they have been included in the TTC operating budget.  From now on, they will not show in our expenditures because there is no net cost to the TTC.

With respect to Metrolinx cost recoveries:

The Crosstown Master Agreement calls for Metrolinx to reimburse the TTC for incremental operating costs associated with the impact of Eglinton Crosstown construction on TTC service.  For 2015, we billed them and they reimbursed us for $5.2 million.  I don’t have a final figure for 2016, but I suspect it will be in that range.  That is not included in our budgets because there is no net cost to the TTC.  For 2017, it is similarly not included in our budgets because once again there will be no net cost to the TTC. So the treatment of this and the city construction above will be completely consistent on a go-forward basis: no net cost included in the TTC budget.  We flagged this in the 2017 budget report because: (i) the quantum is increasing substantially in concert with the ramping up of Crosstown construction, (ii) it stays high for at least the next 5 years and (iii) because we are hiring 169 TTC employees to provide this augmentation of our service.  If it were the same range as 2056 and 2016, we may not have highlighted it.

With respect to York Region cost recoveries:

The service the TTC operates in York Region under contract to YRT is included in the budget as both an expense and a revenue and that has been the case for decades.  It is the service they request us to operate on their behalf.

With respect to contracted services:

The “reduced contracted service” has nothing to do with any of the items mentioned above.  It has to do with reduced purchases of services such as IT, human resources, IT licenses, cell phones, etc.  No impact on service on the street.  It all about saving money everywhere we can.

The different treatment appears to arise from whether there is a net delta in the budget (i.e. a new condition, and therefore reported as a budget-to-budget change) or a continuation of an existing practice where costs and expenses always balance out. [End of update]

Four additional sources of revenue or savings are proposed:

  • A draw of $14.4 million from the Transit Stabilization Reserve. This money comes from “surpluses” (planned subsidies that were not needed in good years) that have been banked against lean years of which 2017 is most definitely one. This is not a “saving”, but rather one time revenue that can offset the budgetary pressure for 2017 only. The underlying costs will not disappear, and they will show up as part of the 2018 pressure.
  • A fare increase of 10 cents on the adult token rate, pro-rated through other types of fare (the details are discussed later in this article). The added revenue is net of the anticipated loss of riders. If pushback from the increase is less than expected, then the TTC could do better with new riders than planned, but many other factors will affect riders’ decisions about staying with transit.
  • The TTC proposes that the cost of new batteries for Hybrid buses of $8.5 million be transferred to the Capital budget. This is an interesting accounting debate because parts replaced during a major bus overhaul (typically at mid-life) are paid for from capital, while parts replaced in normal day-t0-day maintenance count against operations. However, the lifespan of these batteries is short enough that capitalization is an odd treatment.
  • Some TTC capital assets are not subsidized by the City in part because their lifespan is too short, and in some cases this is likely a holdover from the days of provincial subsidy when certain items were excluded from that funding. As an accounting mechanism, the TTC funds these purchases out of working capital, and recovers the money as a depreciation charge against the operating budget over their lifespan. The TTC proposes that this amount be treated by the City as a capital cost thereby shifting $29 million out of the operating budget.

The City’s response to the final two items is not exactly welcoming:

Both of these items were reviewed with City staff and not supported because they reflect a shift from the operating budget to capital, requiring City capital funding. Staff suggest these items be given further consideration by the City as they might help address the operating pressures while immunizing customers from service adjustments or further fare increases, to the extent possible. [pp. 5-6]

Fare Increase Options

TTC management recommend a ten cent increase in the adult token fare from $2.90 to $3.00 with proportional changes in all other fares except cash which would stay at $3.25. This is expected to bring in $27 million in new revenue, net of the loss of 1.2 million riders and the PRESTO fees that are a percentage of the revenue stream.


There is no discussion of the issue of special fares as a social benefit, and that issue will get tangled up in proposals to deal with the (at least) $61 million remaining gap between projected revenues and expenditures.

One set of proposals involves larger fare increases. These would inevitably trigger higher ridership losses than the proposed ten cent level, but this is really uncharted territory for the TTC. Moreover, there is the question of perceived value, and whether riders feel they would actually be ripped off by a fare increase if service did not materially, and fairly quickly, change for the better. Paying more for what many perceive to be inferior and declining service is no recipe for retaining customers.


In addition to fare increases, there is the question of the many forms of discount fare. The table below shows the estimated “cost” to the TTC of these fares. This is the sort of issue where fare:ridership elasticity can get very tricky depending on the nature of each market and the extent to which elimination or reduction of a discount is considered to be “unfair”. A related problem is the TTC’s perennial treatment of these concession fares as a cost, as if giving people cheaper rides drives up the cost of service, or represents revenue that might be available if only we could get everyone to pay a higher fare. This is directly contrary to many City objectives to reduce barriers to travel among many groups of citizens, and the recognition that mobility has a value.


Note: The 8 million lost rides by children does not incur a cost because they are travelling free today. However, it is an indication of how much more riding is done today by children, and the degree to which this unexpected bump in one rider class is masking declines in others, notably adults.

Service Cuts

Another way to trim the TTC’s budget gap is to roll back service improvements, possibly even to levels below those imposed by the Ford/Stintz regime. This would be a bitter pill for the “Transit Mayor” to swallow, and in the midst of such grandiose spending plans as we see on major capital projects, the idea that these services would not be funded should be deeply embarrassing.


This table shows quite clearly that the usual poster children for “waste” in the transit budget will not yield a great deal of savings, notably the “low ridership, high subsidy routes” and the night services. The big money is to be found is reducing Service Standards, and rolling back both the 10 minute network and the full service 19-hours-a-day policy.

Here are the current loading standards for TTC vehicles. Note that these are based  on averages over a peak hour and some vehicles will have more passengers while others are half-empty either due to bunching, or because they are short-turned and are of little use to many riders. The TTC only reports averages, not max-min values nor standard deviations.


As things stand, the service budget for 2017 includes:

  • A 0.4% increase over the budget for 2016 for the target ridership level of 545 million, but no provision for ridership growth.
  • Annualization of improvements made in 2016 including express buses and earlier Sunday service.
  • Restoration of full streetcar operation on all routes including the conversion of 511 Bathurst and 514 Cherry to Flexity operation.
  • Opening of the Spadina extension (TYSSE) in December 2017 and concurrent reductions in contracted service for York Region.
  • Provision of new bus service to the Renforth Gateway.

Major Changes in Expenses

Several cost areas will contribute to the increase expense budget for 2017:

  • Collective bargaining agreement increases: $24.3m
  • PRESTO commissions and new faregate maintenance: $14.5m. This cost is almost entirely due to PRESTO fees because maintenance costs on the new faregates are largely offset by savings in maintenance on the old ones. At this point there is no offsetting saving shown for staff reductions due to PRESTO, but a discussion of this comes up later in the report.
  • TYSSE opening: $6m for 2017, projected at $30m for years following. Note that the extra cost of operating the extension is equivalent to revenue from a 1% property tax increase.
  • Cap & Trade: A $5.2m additional cost in fuel. According to the report “This is expected to increase the TTC’s diesel costs by 4.7 cents per litre and its natural gas costs by 3.3 cents per cubic meter.” The TTC has not produced consolidated figures showing the combined effect of price changes in fuel, the benefits of hedging, changes in consumption, and the new tax.
  • Hybrid bus battery modules: $8.5m. This is an operating cost that the TTC seeks to transfer to the Capital Budget as described earlier.
  • Accident claims: $6.2m. Actuarial evaluation of existing claims indicates a need to increase the provision for settlement. TTC self-insures except for disaster coverage.
  • Traction power and utilities: $5.5m. Again, it is clear that “lower energy costs” of $12m cited as savings earlier in the report have offsets elsewhere in the budget.

A full list with explanations is in Appendix D of the report.

Workforce Effects

A perennial issue at City budget time is the matter of “headcount”, to the point that some Councillors fetishize this to the exclusion of any other measure of a budget. Transit service, of course, requires people to operate and maintain it. If you buy a bus or a subway train, someone has to drive it, someone has to maintain it, and in the case of a subway, someone has to maintain the infrastructure the train runs on. The TTC projects changes in their workforce for 2017, but the big increases come in two areas: operators needed to provide service that will be paid for by others (Metrolinx) resulting from their construction projects, and additional staff needed to operate and maintain the subway extension net of savings on the surface network.


Of the 210 staff covered by 3rd party payments, 169 are for service operation in the Eglinton corridor where the TTC expects to receive $72.5 million from Metrolinx from 2017 to 2021. 36 are to provide frontline PRESTO support for which Metrolinx is responsible, but the TTC is acting as their agent. The remaining 5 are for vehicle repairs that are charged to others.

The staffing required to open a subway extension is considerable as shown in this breakdown for the TYSSE. Note that the saving in bus operators is considerably lower than the extra staff needed to operate and maintain the subway.


As for the PRESTO rollout, the lion’s share of savings from elimination of Station Collectors will be offset by the new staffing model for subway stations. Something that the TTC has never made clear is the degree to which the value of the Collectors was included in the fare collection costs that PRESTO is supposed to offset. Whether the “evolution” of stations will “meet and exceed customer expectations” is difficult to say considering that we still do not know the actual function and service quality the new Customer Service Reps are expected to provide.


A complete description of the purpose of all workforce changes is in Appendix G of the report.


The Wheel-Trans budget is a major source of cost pressure for the City of Toronto. Demand is rising quickly due both to demographic changes and increased eligibility mandated by Queen’s Park. It should be noted that the TTC (and other municipalities) receive no provincial subsidy for their accessible services. Indeed, the cost of running WT in 2017 will be about 90% of the value of the operating and capital gas tax contribution Ontario makes to Toronto. This is not to suggest that increased WT service is bad, indeed it is long overdue, but to show the relative level of provincial support for transit generally against the cost of providing just this component.

Wheel-Trans expects to carry 28% more trips in 2017 than in 2016 which itself is expected to be 14% over 2015. WT has almost no revenues (fares cover a trivial amount of the total cost), and this rate of increase means a big jump in subsidy requirements from the City. The extra demand is projected to add $24m to the WT budget offset by only $1.5m in fares.

There is a very small increase in WT workforce because the additional trips will substantially be handled through contract services, not the TTC’s own fleet. Indeed, the TTC projects a reduction of trips carried on WT vehicles as trips shift to other modes and as the new “Family of Services” program diverts more trips to being partially served by the conventional system (i.e. WT handles the “last mile” portion of a trip between a subway station and the rider’s origin and/or destination).

How successful the TTC will be in shifting its WT demand between various types of service remains to be seen. This will involve not just a more complex booking system, but also the ability to ensure that connections between legs of mixed-mode trips actually work as planned.

Accessible transit is a fast-growing part of Toronto’s network, and City Council should ensure that it can be properly funded without endangering the base system used by all riders, including ambulatory WT passengers who can, in part, ride conventional transit if it is “there” and not crowded or erratic beyond their endurance.

Ridership Growth Strategy

At Budget Committee meetings, there has been talk of a new “Ridership Growth Strategy” to improve the TTC’s attractiveness and to return to an era of steady growth on the system. A report on this is supposed to be coming before the TTC Board early in 2017, although the rather grim situation painted by the budget report suggests this will be a wish list for the future. One might joke that it’s just the sort of thing someone might run on for re-election in 2018, if only there were a sense that there would be political support to pay for it.

Just keeping the TTC at the level it is now at in service and fares will be a huge political struggle with a Mayor and his supporters on Council who cannot get past their promise to limit tax increases and fund any growth or improvement from those mythical “efficiencies” we have heard about for years.

Anyone who looks through the list of “savings” in the TTC budget will realize that little of the reduction from that original $231 million gap for 2017 and the now-proposed $61m number is due to  management actually squeezing blood (or possibly gravy) out of a stone. Some is the luck of changing costs, some is a matter of accounting, and some is wishful thinking that the City will take on more costs without actually treating them as part of the “operating subsidy”.

The shell game continues.

Presto’s Problems Multiply

From the Toronto Star:

Presto’s rollout on the TTC is over budget and fraught with problems. This is not new to anyone who has been following the project, or at least following it to the degree that the agencies involved provide reliable information.

As of March 31, however, the agency had spent $276.7 million deploying Presto on the TTC, according to numbers provided by Metrolinx. That’s almost $22 million higher than the agency’s 2012 estimate of $255 million.

The $276.6-million figure doesn’t reflect work that has yet to be completed or was finished after March 31; those jobs include completing Presto deployment at all subway stations, installing additional self-serve reload machines and fare vending devices across the network, and rolling out fare card readers on all 1,900 TTC buses and 500 Wheel-Trans vehicles.

Also unaccounted for are the future cost of upgrading the Presto system — which currently enables riders to pay their fare with a tap of a prepaid card — to allow for direct payment using credit or debit cards, and the cost of migrating TTC passes onto Presto. [From Ben Spurr’s article]

Metrolinx attempts to offload their problems on the TTC. Reliability problems were first blamed on unusual power supply issues on the older streetcars, but then the issue turned out to be far worse on the bus fleet. Presto’s primary implementation to date is on buses, and this is hardly a new environment for the fare card machines.

Now the cost increases are blamed on scope creep in the TTC contract including the fit-out of the old streetcar fleet and the installation of new fare gates in subway stations.

Meanwhile, complications for riders are legion as Ed Keenan describes: difficulty in obtaining and loading money on fare cards, inconsistent rules for their use, overcharges (and undercharges) for transit rides, and a complete lack of benefits compared to the existing system.

Metrolinx loves to deflect criticism to others, but is slow to accept the blame for shorcomings of its own system’s design.

At the outset, Presto as it existed was a more primitive system designed for a simpler environment: GO trains and buses, with riders who mostly took predictable commuting trips to and from Union Station. As its role expanded to other systems, the shortcomings became obvious to the point that the “Next Generation” Presto was developed for Ottawa. Even then, it had major implementation problems.

The GTA fare structure has long been biased against trips to and in Toronto. Unlike the 905 systems, there is no “co-fare” between the TTC and connecting systems notably GO Transit, and GO’s fares within the 416 compound this problem by charging substantially more to travel shorter distances.

Presto has been touted as the basis for “regional fare integration”, but this has different meanings to different people. At its simplest, Presto would be one card that could “talk” to any fare machine and charge the appropriate “local” fare, little more than standardizing the “currency” of fare transactions without any other changes. On a more aggressive level, fares would be “integrated” so that the cross-border penalty would be reduced or eliminated. It is self-evident that getting rid of fare penalties will cost somebody money in the form of higher fares overall, or increased subsidy. However, Queen’s Park wants a “revenue neutral” scheme so that added subsidies are not required.

Metrolinx has wrestled with new fare structure concepts for a few years, and push-back on their original proposals has delayed the production of a final recommendation. Behind the scenes, the always-preferred option was “fare by distance”, a concept familiar to GO, although not actually implemented “fairly” across its network. This brings very substantial operational problems because the fare system must “know” both the origin and destination of each trip requiring “tap on” and “tap off” for each leg of the journey. This evolved into a scheme to make “rapid transit” a distance-based premium fare zone, a scheme that preserves GO’s rail premium, but destroys the “integrated” nature of the subway within Toronto’s system.

The effect might be to lower fares for cross-border trips (a small minority of all GTA travel) and improve the attractiveness of GO+TTC rides, but at a higher cost to TTC users for whom the subway is an integral part of most travel.

Metrolinx also neglected to determine whether LRT and BRT lines would be “rapid transit” because none of them existed in the data used for their study. Such is the quality of forward thinking at our provincial agency.

In this context, a decision by the TTC on the fare structure to be implemented has been almost impossible, although the TTC must be faulted for keeping a real discussion of the options and limitations under wraps for so long. The TTC missed a chance to market the new fare system with more convenient fares and refuses to address a simplified fare structure, notably time-based transfer validity. That decision immensely complicates the fare calculation requirements for Presto in determining where a “new” trip starts and a second fare should be charged.

For its part, the TTC opted to enlarge its fare gate upgrades from a limited scale needed to bring Presto and accessibility to all entrances, to a full-scale replacement across the system. And, oh yes, with the capability to require “tap out” for all passengers (ignoring that a huge volume of passengers transfer to and from surface routes without using a turnstile). In effect, TTC management enabled by stealth a fare structure that has not been debated or approved by the TTC Board (at least publicly) or by City Council.

The TTC also decided to accelerate the Presto implementation by a year so that it would be fully operational at the end of 2016. This would serve two purposes. On one hand, Metrolinx could brag that the Toronto rollout was “complete” and trumpet huge additional usage (along with the service fees) by Presto. On the other, the TTC could move ahead with its redeployment of station staff who would no longer be selling fare media. Things have not quite worked out as planned, and it is likely that we will not see substantial conversion to Presto until the end of 2017.

Presto itself has design limitations, not least the fact that so much of the fare calculation occurs between the card readers at stations and on vehicles and the card itself, rather than in a back-end system. This is responsible for the oddity that updates to Presto accounts do not actually arrive at the card when they are made online, but only later when all devices in the system learn of the changes through periodic updates. “Open payment” support for credit cards is coming, but until the tracking and calculation of fare discounts is done by a central system, credit cards will only support the equivalent of a cash fare, not the discount schemes available to Presto cardholders. That is not a truly “open” system.

We’re not supposed to talk about any of this because everything Metrolinx and its masters at Queen’s Park do is perfect, Ontario is a transit Nirvana for transit policy going back decades. If we were honest, we would be discussing the alternatives, including technical limitations and funding requirements, but instead the only important work is the manufacture of ever more photo ops.

Try harder.