Finance

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Subway Upload I: The Getting Ontario Moving Act

Transportation Minister Jeff Yurek introduced Bill 107, the Getting Ontario Moving Act, in the Ontario legislature on May 2, 2019.

This is an omnibus bill amending several other Acts to implement various policies, one of which is the first stage of the “upload” of responsibility for subway extensions and new builds from the City of Toronto. Schedule 3 of the Bill amends the Metrolinx Act. In brief, the amendments provide for:

  • The Cabinet (legislatively known as “The Lieutenant Governor in Council”) may “prescribe a rapid transit design, development or construction project as a rapid transit project that is the sole responsibility of Metrolinx”. For such projects, the City of Toronto and its agencies are barred from taking “further action” on the project, and all of the project’s “assets, liabilities, rights and obligations” can be transferred to Metrolinx. Such projects are known as “sole responsibility projects”.
  • The Cabinet may prescribe that a project is “subject to the Minister’s direction”, and for such projects “the Minister may issue directives to the City of Toronto and its agencies”, and the Cabinet may require that “a specified decision about the project be subject to the Minister’s approval”. Such projects are known as “direction and approval projects”.

These provisions address two separate types of project organization. In the first case, control of and responsibility for a project is transferred completely to Metrolinx. In the second, a project could remain in the City’s hands but be subject to Ministerial direction and approval.

Sole Responsibility Projects

Where a project is declared to be a sole responsibility project, the City of Toronto is barred from undertaking a project “that is substantially similar and in close proximity to” such a project. Why Toronto would attempt to duplicate a provincial project such as the extension of Line 2 in Scarborough is a mystery, but Queen’s Park clearly wants to ensure this does not happen. An exception provides that the Minister “may authorize” the City to undertake work on a sole responsibility project.

The Cabinet may order the transfer of City assets related to a sole responsibility project “with or without compensation”. The list of “assets” is quite extensive and includes real estate. This begs the question of how such property becomes “related” to a project as opposed to simply being property previously owned by the City.

The City is required to participate in this process and “take all such actions as are necessary and practicable to give the Corporation possession of property transferred”.

Direction and Approval Projects

A project could be left nominally under the City’s control, but subject to Ministerial direction, in particular that “a specified decision with respect to the project” could be subject to Ministerial approval. The City is barred from taking action that would arise from a decision without such approval. In other words, the City cannot launch work that could be in conflict with a Ministerial approval that has not yet been granted.

Legal Protection

Many of the amendments address the transition of projects from the City to the Province and preclude legal action against the parties for the implementation of the new regime.

What the Legislation Does Not Address

The legislation is completely silent on matters of capital or operating costs of projects undertaken by or under the direction of the province. Specifically, there is nothing to explain:

  • Any aspect of capital cost sharing that might be sought or imposed by the Province on the City of Toronto or other municipalities for sole responsibility projects.
  • The future operation of projects created under the “sole responsibility” or “direction and approval” regimes.
  • The subdivision of “maintenance” costs between the Province and the City of Toronto or any other municipality.

The “other shoe” still to drop is the question of uploading the existing subway network. This is a much more complex transfer that will be the subject of future legislation.

This is the bare bones of legislation needed to give Metrolinx control over rapid transit construction so that Ontario can “get on with the job” of building transit, but much more is involved in actually doing the work.

Minister Yurek is good at repeating his talking points including the bogus claim that there has been no rapid transit expansion for decades. Taking pot shots at the City for alleged chaos in transit planning is easy, although both Premier Ford and the Conservative Party have rampant amnesia about their own contributions. Now Metrolinx and Infrastructure Ontario will have to deliver rather than just posturing.

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TTC Updates Flexity/CLRV Replacement Schedule

Over past months there has been some inconsistency in TTC statements about the fate of the “legacy” CLRV and ALRV fleets with conflicting information that

  • some legacy cars would survive into early 2020,
  • all of these cars would be retired by the end of 2019,
  • all of the buses now operating on streetcar routes would be available for bus service improvements in 2020.

It is self-evident that these statements cannot all be true.

The situation is now clarified in two reports on the TTC Board’s Agenda for May 8, 2019.

The CEO’s Report includes the following:

On streetcar services, we’ll address crowding through the continued rollout of new high-capacity, low-floor streetcars. Low-floor vehicles are expected to be on all streetcar routes by early 2020.

Supplementary bus service may be used on some routes during the busiest times.

…

With the continued delivery of new low-floor streetcars, we are advancing their deployment on more routes.

Currently, the 504 King, 509 Harbourfront, 510 Spadina and 512 St Clair are fully served with low-floor streetcars. We began deploying these streetcars on the 501 Queen in January 2019. We expect that all service on Queen, between Humber Loop and Neville Park Loop will be operated by low-floor streetcars by early summer.

Subsequent routes for streetcar deployment will be: 511 Bathurst (summer 2019), 501 Queen (Long Branch Loop to Humber Loop, fall 2019), 506 Carlton (late 2019), and 505 Dundas (spring 2020). Low-floor streetcar service on Kingston Road will be introduced in 2020 following a review of streetcar services as part of our Five-Year Service Plan. [pp 11-12]

The CEO’s Report now shows the decommissioning plan for all legacy cars in 2019 as “Projected” [p 39].

The 2019-2023 Accessibility Plan includes:

By the end of 2019, the remainder of the order of low-floor streetcars is expected to be received and the TTC plans to retire all high floor streetcars from regular service. [p 27]

The Five-Year Service Plan mentioned above will not be out until December 2019, but with the Capital Investment Plan now showing spending on a further order of streetcars in the mid-2020s, there will be an extended period where expansion of streetcar capacity will be limited to whatever can be provided with supplementary bus service. From King Street, we know that there is a latent demand for better service on the streetcar network, but actually addressing that will be challenging in the current climate.

Crowding is a problem on all parts of the system, but the political focus is on new subway lines that will not address most of these problems, and certainly not in the short-to-medium term. The CEO’s Report now includes a table showing crowding levels, although on a system-wide basis, not for individual routes.

These numbers should be understood in the context of “periods” as defined in TTC schedules. There are five periods through the day:

  • Weekdays: AM Peak / Midday / PM Peak / Early Evening / Late Evening
  • Weekend: Early Morning / Late Morning / Afternoon / Early Evening / Late Evening

The transition points between these periods vary from route to route depending on local demand patterns.

In the chart below, the combination of routes and periods shows that in the first quarter of 2019, 41 bus routes were overcrowded during 82 periods, but this means the combination of one route and one period. With 82 representing only 4.5% of the total, this means that there are over 1,800 possibilities for the bus fleet.

The methodology of counting weekend days individually yields 15 periods overall for most routes. (Some routes do not operate in the Early AM period on the Sunday schedules.) The reason for this is that there is a common schedule for all weekdays, but separate schedules for each of the weekend days. However, this methodology consolidates the majority of the service (weekdays) into only one third of the period count undervaluing the number of riders affected by weekday problems. Moreover, crowding that varies by day-of-week could be masked by averaging over a five-day period.

There also appears to be a mathematical problem for the subway where 7 periods are claimed to be 13.5% of the total. This implies that there are over 50 subway “periods”, but with only 3 lines and 14 periods per line (no early Sunday service), this is impossible (it is unclear where the SRT fits in here). This chart needs work to improve its content.

Reliability of the new Flexity fleet bounced back from a big dip in January 2019, but the mean distance between failures of 13,223 km is still below last year’s performance and less than half of the contracted target. This does not bode well for any move to extend the existing contract with Bombardier.

CLRV reliability continues to track at under 4,000 km MDBF, and the TTC no longer publishes stats for the ALRVs as they have been out of service over the winter. The May schedule plans show a return of five ALRVs to 501 Queen, but this is tentative and the affected runs might simply show up with CLRVs or Flexitys. The CEO’s report notes:

As this legacy fleet is scheduled to be decommissioned by end of this year, maintenance staff will continue to ensure the vehicles are safe to operate in service. However, technical efforts moving forward are being shifted to the new LFLRV fleet and to providing Bombardier with additional assistance. [p 40]

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TTC Service Changes Effective May 12, 2019

The May 2019 service changes bring a number of adjustments across the system:

  • Routes that serve post-secondary institutions have reduced service levels reflecting the lighter demand for summer enrollment.
  • The seasonal extension of 121 Fort York – Esplanade to Ontario Place and Cherry Beach begins, and the 175 Bluffers’ Park weekend service returns.
  • Many routes have “service reliability” adjustments which, for the most part, consist of giving more running time and/or recovery time to buses with slightly increased headways.

Construction projects beginning with this schedule period:

  • Davisville Station paving work will see the 14 Glencairn and 28 Bayview South routes interlined. They will not stop in the station. Also, peak period 97B Yonge service will only serve the southbound stop at Davisville. 11 Bayview and 97 Yonge northbound services will continue to use the station but will change loading spots as the work progresses.
  • Jane Station paving work will displace the 26 Dupont and 55 Warren Park services to Old Mill Station. They will serve Jane Station at on-street stops. 35/935 Jane services will offload in the station, but will load on Jane Street northbound.
  • Constuction work at the Wheel-Trans Lakeshore Garage will close the operators’ parking lot for several months. During this time, service to the garage will remain on 83 Jones, but a new 383 Wheel-Trans Shuttle night bus will operate from Queen and Coxwell west to Leslie and south to Commissioners. The eastbound route will use Eastern Avenue from Leslie to Coxwell.
  • Construction work at Eglinton West Station by Metrolinx will close the station during overnight hours. The 363 Ossington will be cut back to Oakwood and Eglinton and will operate as 363B from 2:12 am which will be the last southbound trip from the station.

Service on the Scarborough RT will be improved by extending the peak period service to 11 am in the morning, and to 9 pm in the evening. There is no change in the peak service level of 5’00” headways due to the ongoing reconstruction of the fleet which leaves only 5 trains available for peak service plus 1 spare.

Peak period service on 72 Pape will be modified by decoupling the 72B Union Station branch from the 72C Commissioners branch. Rather than attempting to operate the same headway on each service, the two will run independently of each other with improved service on the 72C branch and reduced service on 72B to Union.

The last of the old “Rocket” services, 186 Wilson Rocket, will be rebranded as 996 Wilson Express with no change in service levels.

The proportion of 501 Queen service between Neville and Humber operated with Flexity low floor cars will continue to increase, especially on weekends. Actual numbers could be higher than those shown in the schedule. In theory, the schedule provides for five ALRVs on the 501 service, but this is subject to availability. Either CLRVs or Flexitys would be substituted.

504 King service will see changes to the schedule during all periods, although this mainly involves adding running and recovery times, as well as some stretched headways.

  • Peak headways stay the same but with longer times through the addition of 3 cars in the AM and 4 cars in the PM.
  • Early evening service sees the greatest change with a move from service every 6’30” on each branch to every 8’00”. If nothing else, this might placate business owners on King Street who complained that service during this period was excessive.

Construction at Roncesvalles Carhouse has progressed to the point where much of the 504A Dundas West to Distillery service will now operate from that location rather than from Leslie Barns.

The growth of the Flexity fleet, combined with remaining “legacy” CLRVs and ALRVs and construction at Roncesvalles is causing problems for overnight car storage. Service on 304 King will be improved from every half hour to every 15 minutes, and similar changes will occur on other overnight routes in coming months. The reconstruction of old facilities moves to Russell Division in 2020, and so this problem is not going away soon. The TTC is also working on a plan to build a yard for 24 cars at Hillcrest as a base for 512 St. Clair, but this is only in the design stage.

2019.05.12_Service_Changes (Version 2, April 20/19 at 5:40 pm)

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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.

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TTC Board Meeting April 11, 2019

The TTC Board met on April 11 with a full agenda. Among the items discussed were:

  • The joint City/TTC “omnibus” transit report and the implications of the provincial intent to “upload” the subway system
  • Public Deputations at Board Meetings
  • Presto limited use tickets and the TTC/Presto contract generally
  • The Junction Area Study and proposed route changes
  • Subway Closures for 2019

The Board also discussed Line 1 (YUS) Capacity Requirements, State of Good Repair and Automatic Train Control. This is a complex enough issue to warrant an article in its own right, and I wil publish that separately.

Results of the King Street Pilot

The King Street Pilot report that was presented to Toronto’s Executive Committee on April 9 came before the TTC Board on April 11. There was a short discussion of the possibility of extension of the project further west. This review will be rolled into the surface transit network plan to come to the board in December 2019.

One item that may further complicate the taxi exemption for King Street was a proposal that Wheel Trans contracted vehicles be allowed to operate just like a transit vehicle when carrying Wheel Trans clients. This will come to Council when they debate the issue at their meeting of April 16.

The Board endorsed the report’s recommendations.

In future articles, I will update information about travel times, headways and line capacity on King street with data to the end of March 2019.

Continue reading →

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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.

Continue reading →

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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

Continue reading →

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Toronto’s Omnibus Transit Report: Part III

This is the third and final part of my review of the transit reports that will be before Toronto’s Executive Committee on April 9, 2019, and at Council a week later.

In part one, I reviewed the financial issues presented in the reports together with the Scarborough Subway Extension, now known as the Line 2 East Extension (L2EE).

In part two, I turned to SmartTrack, the Relief Line and the Bloor-Yonge station expansion project.

This article reviews the streetcar/LRT projects as presented in the current set of reports.

Relevant documents include:

  • Main report: Toronto’s Transit Expansion Program – Update and Next Steps
  • Attachment 1: A status update on all projects
  • Attachment 3: Waterfront Transit Network – Union Station-Queens Quay Link and East Bayfront Light Rail Transit. [Note: The properties of this attachment were incorrectly set by the authors. Although it really is Attachment 3, it appears on browser tabs as if it were Attachment 2 for the Scarborough Extension.]
  • Attachment 4: Eglinton East LRT
  • Attachment 5: Eglinton West LRT

Much of the LRT network still at some stage of design or construction is a remnant of the Transit City plan announced in 2007. Pieces have have fallen off of that network proposal, notably in Scarborough, but also a few key links that would have knitted the network together allowing sharing of carhouse and maintenance facilities. Confusion about the planning, ownership and funding scheme for parts of the network complicates the situation further.

Although the province has announced that it wishes to take over “the subway”, the boundary is unclear because a previous government decided to take over at least part of the Transit City LRT network, notably the Eglinton/Crosstown and Finch West routes. The Ford government prefers to put as much transit underground as possible, but if Toronto wants to extend an existing route (for example on Eglinton East), the city’s preference will be for surface construction to keep cost within its ability to fund projects.

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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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Toronto’s Omnibus Transit Report: Part I

Planning for many transit projects in Toronto has been underway for years, but the public face of this work took a long holiday in 2018 thanks to elections at both the provincial and municipal levels.

In coming weeks, Toronto’s Executive Committee and then Council will consider an omnibus report that provides updates on many transit projects and recommends a path forward.

Today, that path is murky given uncertainty about provincial intentions and the degree to which consultation between the city and province is actually in good faith. Premier Ford’s approach on other portfolios, coupled with the breezy confidence of his Transportation Minister (seen recently on TVO’s The Agenda), do not bode well. With the arrival of Doug Ford at Queen’s Park, the provincial goal on transit is more about settling old scores with Toronto Council and proving that Ford’s transit vision is correct than it is about good planning. Recent correspondence between the province’s special advisor on a proposed subway takeover revealed just how much the province does not know, or chooses to ignore. This was not a good start and the province wounded its credibility on basic technical points, never mind the political context.

But for a moment, let us consider Toronto’s future from the point of view of what the city hopes to do, if only they have the control and the money to pull this off.

The report is long, and to break this article into digestible pieces, I will focus on groups of issues. This article covers overall financing of the transit expansion project and specific details for the Scarborough Subway Extension (SSE), now known as the Line 2 East Extension (L2EE). I will turn to other components of the plan in further articles.

Many reports are available on the City’s website (scroll down to the end for all of the links). The principal reports are:

Financing Transit Expansion

The most challenging part of any transit project, let alone a complex program, is to obtain funding from governments whose priorities do not necessarily align and which may talk at least as much about the sanctity of “taxpayer dollars” as they do about investment in public infrastructure.

In a media briefing, city staff were quite clear that no project can proceed to the stage of contract tendering and awards unless the contribution agreements underpinning a project are in place.

At the federal level, the primary funding source will be the Public Transit Infrastructure Fund (PTIF) which has two phases. An initial phase was time-limited, and was used in Toronto mainly to fund the purchase of hundreds of new buses. The second, longer-lived phase of PTIF will be used for transit construction projects. There is some urgency to nail down PTIF contributions given the fall 2019 election and uncertainty about this program under a new government.

Note that this entire discussion relates only to projects that would be funded in part through PTIF, not to many others such as the Eglinton LRT extensions or the Waterfront LRT.

Federal funding of $4.897 billion will be allocated by the city, assuming government approval, as below [Main Report, p. 2]:

  • $0.660 billion for the Line 2 East Extension project
  • $0.585 billion for the SmartTrack Stations Program
  • $3.151 billion for the Relief Line South
  • $0.500 billion for the Bloor-Yonge Capacity Improvement project

Negotiations with Ontario are ongoing, and the status of projects and associated $4.04 billion in provincial funding is unclear. This could be clarified in the provincial budget to be announced on April 11, 2019. Provincial interest in and plans for the Scarborough extension and the Relief Line will affect both of these projects.

City funding comes from a variety of sources:

  • Development charges
  • The Scarborough Subway levy
  • The City Building Fund levy
  • Interest on accumulated reserves from the levies

Financial projections are also affected by factors that have changed since projections made in past years:

  • Higher growth rates in development
  • Lower interest rates

PTIF2 has an assumed split of 40-33-27% for the federal, provincial and municipal governments respectively. This creates a breakdown of responsibilities as shown below.

The provincial share is supposed to be “new funding” and the amount here does not include prior commitments to Scarborough transit which originally were for the proposed LRT line, later for a subway. Exactly how much Ontario will contribute remains to be seen given discussions about ownership and the scope of the Scarborough subway project. I will return to this in more detail later.

Within the city share, $2.42 billion is unfunded (no revenue sources have been committed to fund/finance the expense), and only $885 million of the SmartTrack Stations Program has city funding. The report recommends that the city’s CFO and Treasurer report prior to the 2020 budget process on strategies for addressing the shortfall.

The project cost estimates for these are broken down below. In the chart, the acronyms are:

  • LTD: Life To Date
  • PDE: Preliminary Design & Engineering

The possible funding arrangements vary for each project, and these are complicated both by past history and by the uncertainty of early “class 5” estimates. A tentative breakdown is shown below, but this must be taken with a grain (or more) of salt due to technical and political uncertainties. For example, the assumed provincial contribution to the Line 2 Scarborough project is based on inflation of a commitment made in 2010 dollars where the city and province do not agree on the appropriate inflation factor.

Two separate numbers have been used for the Relief Line cost estimate: $6.8 billion in Table 2 above, and $7.2 billion in Table 3 below. In the media briefing, TTC staff explained that the change was due to an alignment revision (Carlaw vs Pape) and changes in construction techniques (mining vs cut-and-cover) at some locations. That may be so, but to have two different numbers for the same project so close together within a report makes one wonder about the care taken in other aspects. On top of that is almost $2 billion as a “provision” for the Relief Line to guard against potential cost increase as the estimate is refined from class 5 to class 3.

This sort of uncertainty is not unusual, but the constant variation in quoted “estimates” makes for no end of problems. The converse is seen with the Scarborough project where the “estimate” for the subway’s cost has remained fixed since 2014 despite major changes in project scope.

The report explains the difference between initial class 5 estimates and the class 3 estimates to be used in setting project budgets:

As a project moves through the three phases, project definition becomes more refined and the information used as the basis for developing a cost estimate is more mature.

  • A Class 5 cost estimate is typical when starting the initiation and development phase, where the project is conceptual (0-2% design level). This an order of magnitude estimate to inform the decision of whether or not to continue to study an option.
  • A Class 3 cost estimate is based on PDE work (10-40% design level), and is the estimate class recommended when establishing a project budget for procurement and construction. A Class 3 estimate should be used to inform full funding commitment decisions. [p. 16]

Note that the term “order of magnitude” has considerable leeway, and a change from one order to the next is a factor of 10. Saying that costs “A” and “B” are in “the same order of magnitude” gives huge scope which on projects of this nature is measured in billions of dollars. Too much past debate has assumed that minor swings in estimates might occur as designs are refined, but this is more wishful thinking and the political hope that a project will not get out of hand even before shovels hit the ground.

Overall Project Status

The map below shows the location of all projects in the transit network plan.

Projects will advance from stage to stage on their own timetables which are summarized in the chart below.

Line 2 East Extension (aka Scarborough Subway Extension)

This section reviews the status of the Scarborough extension as it is presented in the city reports. Obviously this is subject to major change given provincial announcements of support for taking ownership of the extension and for building a three-stop subway.

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