Finance

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A Chat With Minister Murray

Glen Murray has only been sitting in his new office as Minister of Transportation and Minister of Infrastructure for Ontario for about 2½ weeks, but already his comments in the mainstream media (Globe Star) and on Twitter (@Glen4ONT) show that business as usual will not be the style of his office.  We chatted for about 45 minutes earlier today.

I began by asking about the change of his Twitter handle from the suffix “TC” (for his riding’s name, Toronto Centre) to “ONT” and his recent comments about transportation in northern Ontario.  Murray’s focus there is on economic development, and the need for transportation facilities to support investment, especially in mining.  On the question of passenger services, it was a bit harder to nail down the Minister’s position.

Murray is a big fan of High Speed Rail, and feels that the Windsor-Quebec corridor needs that sort of investment as an important first step, followed by improved rail and bus feeder services.  Yes, but what does this do for the north?  Murray sees the need for a spine rail service linking Toronto to the north with bus routes feeding into that spine, but neither details nor any sense of timing emerged.

Two important dollar figures, however, came out.  First, in southern Ontario, current spending on the 400-series highways is about $2.4-billion annually, and there is an argument to be made for upping spending on transit.  Second, mining now brings in about $1-billion annually, and the industry’s primary complaint is the lack of infrastructure, not their tax burden, according to Murray.

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Feeling Congested: Does Toronto Suffer From “The Moscow Syndrome”? (Updated)

The City of Toronto’s consultations about transportation plans and financing continued on the evening of March 4, 2013, with a panel discussion at the St. Lawrence Centre.  The 500-seat Jane Mallett Theatre was packed for the event, and had been sold out for several days in advance.

The participants were:

  • Matt Galloway, host of CBC’s “Metro Morning”, as moderator
  • Jennifer Keesmaat, Chief Planner of Toronto
  • Larry Beasley, retired Chief Planner for Vancouver, keynote speaker
  • Carol Wilding, president and CEO of the Toronto Board of Trade
  • Councillor Peter Milczyn, chair of Toronto’s Planning & Growth Management Committee and member of the Toronto Transit Commission
  • Councillor Michael Thompson, chair of Toronto’s Economic Development Committee
  • John Howe, Vice-President, Investment Strategy and Project Evaluation at Metrolinx

The most newsworthy comments of the evening were a clear break by the two Councillors, both members of Mayor Ford’s Executive Committee, with the Mayor’s position on financing transit.  Michael Thompson stated that getting rid of the Vehicle Registration Tax was “a mistake”, and Peter Milczyn stated that Council (by implication with or without the Mayor) would approve “a suite” of tools to generate the needed revenue.

The message that “the people are ahead of the politicians” on transit financing, first raised by Carol Wilding, was a consistent theme.

Updated Mar. 5, 2013 at 11:10 am:

Although Larry Beasley’s thesis was that Moscow was trapped in an inescapable hole caused by decades of inaction on transit investment, this information appears to be out of date.  As one commenter here has noted, since the arrival of a new mayor and the availability of petrodollars, a lot has been happening.  This can also be seen by a cursory trip around the internet looking at the Moscow system.

Yes, the hole they have to dig out of was very deep, but they’re trying.  Toronto has not yet really acknowledged the effort needed not just to arrest the decline, but to make up for decades when transit wasn’t “important enough” beyond fighting over a vanity subway line or two.

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TTC Announces a Customer Charter

With a modest fanfare (but no flourishing of trumpets), the TTC proclaimed its Customer Service Charter on February 28, 2013, at a press conference held at the busy Bloor-Yonge Station. This is a “good news” story, at least for the TTC for whom “customer service” is the new mantra. Senior management at the TTC seem to be headed in the right direction, but I couldn’t help feeling that I had been offered a banquet and found, instead, a snack.

The question of customer service reaches back into the days of the Miller/Giambrone administration. I have written at some length on this issue before.

Although the earlier exercises were well-meaning, this process has been underway for over three years.  In August 2010, an advisory panel produced a report that included more recommendations for ways TTC passengers could improve their behaviour than ways the TTC could provide better service to riders.  The effort had all the earmarks of a self-serving justification for inaction from an organization far too set in its ways.  Indeed, a panel member confirmed to me that TTC management had a large influence in the report, an obvious conflict where the customer viewpoint should be paramount.

In October 2011, TTC Chair Karen Stintz said that “it would take some time” to implement recommendations as “culture change” is not an overnight thing in an old organization.  That’s a fair comment, but this argument cannot be trotted out forever to imply that some changes will come eventually, just not now.  “TTC culture” is a phrase I have heard for years well back into Adam Giambrone’s term as chair, and it is wearing rather thin after so long.

Those of us who have a long history of TTC watching are inevitably suspicious of this process, and it is with that background I approached the announcement.

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TTC Meeting Preview: February 25, 2013 (Update 2)

Update 2 on Tuesday, February 26, 2013 at 10:00 am:

Additional information from presentations and debates at the Commission meeting has be added to this article.

The Toronto Transit Commission will meet on Monday February 25, 2013.  This month’s agenda is a tad on the thin side, but there are some reports of interest.

  • CEO’s Report (updated)
  • Status Report on TTC Accessible Services
  • Second exit planning & consultation / Response to Ombusman’s report
  • Leslie Barns connection to Queen Street
  • Accommodating strollers
  • Purchase of 126 articulated buses (updated)
  • Amending the Automatic Train Control System contract to include Spadina/Vaughan extension (updated)
  • Update on Bus Servicing and Cleaning Contract (new)
  • Deputation by Merit OpenShop Contractors Association of Ontario (new)

There was also a presentation on new shelter maps and stop poles.  This item is likely to generate a strong response in the comment thread, and I will create a separate article for it.

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Queen Street and New Streetcars: Less Service, Fewer Stops, Wider Gaps?

The Beach Metro Community News reports on a recent meeting to discuss traffic problems on the east end of Queen Street.  Some comments echo the type of remarks one hears elsewhere in the city about increased traffic from redevelopment, the absolute essential nature of parking to prevent business bankruptcies, and the need to rebalance road space to serve all travellers, including cyclists, not just motorists.

Most troubling are comments by the TTC:

TTC’s Manager of Planning Mitch Stambler talked to the residents about plans to change the Queen Street route. With the new streetcars being introduced next year, two or three of the stops will be eliminated, said Stambler. This is a result of the length of the new streetcars.

Stambler also admitted that less streetcars will run along Queen Street because of its increased capacity. Cost of operation and studies related to ridership will dictate how many and how often the new streetcars will run.

One resident who lives at the east end of Queen Street expressed concerns with streetcars stopping idle near the Neville loop. Stambler said he hopes that with the decreased frequency of the bigger streetcars the issue will be eased.

The TTC has been inconsistent in statements about how the new cars would affect service.  Initially, the idea was that larger cars would provide more capacity, badly needed on many routes including Queen.  A few years later, thanks to the penny-pinching budgets of Mayor Ford and TTC Chair Stintz, the idea of actually improving service capacity vanished.  Indeed, the TTC has already relaxed its off-peak loading standards for streetcars to allow more standees in a bid to save on operations.

Add to this the highly irregular headways on Queen and other routes, any proposal to run fewer streetcars can only mean one thing: service, which declined substantially when headways were widened for the 75-foot long articulated light rail vehicles (ALRVs), will get even worse with the new larger low floor cars (LFLRVs).

The TTC likes to talk about how running fewer cars will improve service by reducing the bunching inherent when cars are scheduled more frequently than traffic signal cycles.  This does not, and has not, applied to Queen Street for many decades.  Indeed, the TTC tries to make virtue out of wider headways by generalizing an hypothesis originally developed for a simulation of operations on the busy King streetcar downtown during peak periods.  There is no comparison to the Queen car in The Beach.

As for stop spacing, there have been many comments on this site about the excessive number of stops on Queen and other routes.  Among the most likely to vanish are the Sunday stops especially if any special sidewalk treatment or fare machine installations would be required.  (All of the Sunday stops on Roncesvalles came out as part of that street’s redesign.)  Some other stops are simply too close together, and these are often leftovers of historical traffic patterns dating back to the 50s and beyond.

With all its emphasis on “Customer Service”, the TTC owes streetcar riders in Toronto a clear statement on its intentions for service with the new cars.  Moreover, as a long series of service analyses here have demonstrated, the TTC must aggressively improve its line management to ensure that the headways it advertises are actually delivered to customers.  No more excuses.  No more “mixed traffic, congestion and TTC culture”.  No more bogus stats that use averages to hide the widespread TTC failure to deliver reliable service.

[Thanks to James J. for sending me the link to this article.]

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Service Changes Effective Sunday, March 31, 2013

The TTC budget provides for a spring and a fall round of service improvements in 2013.  In the “March” schedule period (which actually starts at the end of the month), service hours will increase by about 1%.  After a dip for the seasonal reductions over the summer, the September budget includes another 1% increase with a few smaller increments in October and November.

Almost all of the current round of improvements are in off-peak periods because of the limited number of spare vehicles for better peak service.

2013.03.31 Service Changes

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Service Changes Effective Sunday, February 17, 2013

The February schedule period brings only minor changes to TTC service.

The 192 Airport Rocket will be rerouted northbound to use Highway 427 rather than Highway 27, and buses on this route now have luggage racks opposite the rear doors.  For more information on the background to these changes, see TransitToronto’s article.

The schedule for 38 Highland Creek will be revised to minimize layovers at the loop at UTSC and resulting conflicts in bus traffic.

The schedule for 41 Keele will be revised to remove some of the additional running time provided for construction delays at Finch West Station.

The 123 Shorncliffe route’s crew break and relief point will be moved from Sherway Gardens to Kipling Station to reduce time lost by these changeovers.

The schedule for 90 Vaughan will be revised to shift some layover time from the north to the south end of the route to avoid having buses blocking traffic at the north loop.

The following routes have running time adjustments.  These consist of changing layover times into driving time with no alteration in scheduled service:

  • 49 Bloor West
  • 54 Lawrence East
  • 168 Symington

The following routes have time point adjustments that are meaningful only in the sense of measuring whether a bus is “on time” at intermediate locations along the routes.

  • 25 Don Mills
  • 26 Dupont
  • 34 Eglinton East
  • 100 Flemingdon Park
  • 30 Lambton
  • 56 Leaside
  • 51 Leslie
  • 67 Pharmacy
  • 53 Steeles East
  • 112 West Mall
  • 95 York Mills

Service improvements are planned for many routes effective March 31, 2013.  These will be covered in a separate article.

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Metrolinx Math

In a recent comment, a reader questioned the disparity between the $34-billion cost of the Metrolinx “Next Wave” projects and the sum of the individual projects listed on the website.  These projects are:

Brampton-Queen BRT     $  600 million
Dundas BRT                600
Durham BRT                500
GO Expansion            4,900
GO Lakeshore Express    1,700
GO KW Electrification     900
Hamilton RT             1,000
Hurontario LRT          1,600
Downtown Relief Line    7,400
Yonge North Subway      3,400
Total                 $22,600 million

A big chunk of the difference between these two numbers can be explained by a factor which is new in the “Next Wave”, a provision of 25% of whatever funding is available for local transit, regional highways and other smaller projects.  This would eat up $8.5b out of the total leaving $25.5b for the next wave of “Big Move” projects.

I wrote to Metrolinx asking for an explanation of the remaining $2.9b, and this is their response.

Transforming the transportation network in the Greater Toronto and Hamilton Area is similar to any renovation project, and $50 billion was a planning number that was developed in 2008 for the Regional Transportation Plan, also known as The Big Move. As we move through assessments and delivery, we will have harder numbers, so that figure will change.

However, prior to the assessments and delivery, we’ve built a contingency into the $34 billion cost of the Next Wave projects, which accounts for a difference in numbers.

It should be noted that more than $16 billion from all three levels of government has been allocated to the “first wave” of projects drawn from The Big Moves list of top priorities. This is the largest financial commitment to transit expansion in Canadian history. [Email from Metrolinx February 5, 2013]

I will take at face value the statement that the $2.9b is “contingency”, but note that this was not mentioned in any of the presentation materials nor on the website.  To me it looks more like an “oops”.

This is not simply a question of catching Metrolinx out on an incomplete or inaccurate presentation.  We are now engaged in a debate about regional transportation and funding, and it is vital that this take place in a fully informed context.  An amount of $2b/year is commonly used as a reference point for the amount of funding that must be delivered by any new revenue tools.  This was in the original “Big Move” budget of $50b delivered over 25 years, and shows up most recently in the City of Toronto’s “Feeling Congested” outreach program.

That original number was in 2008$ and it included some provision for future operating costs.  However, it did not include inflation, nor did it include the recently added provision for local transit and road projects which would take 25% off the top of any new revenue stream.

The $50b was supposed to finance 52 separate projects listed in The Big Move, but between the “first wave” and “next wave” list, many still remain outside of funding plans.

If the Investment Strategy report expected from Metrolinx late this spring is to have any relevance to the discussion, it must include current estimates of capital and operating costs to be funded from new revenues, and must provide for inflation.  Either the capital provisions must be escalated to future dollars, or the future revenue from new tools must be discounted to present day.  We cannot discuss our long-term funding needs with a mixture of dollar values spanning decades.

Public transit projects have a long history of coming in over budget for various reasons.  Some of this is bad planning and some is scope creep, although it could be argued that these are often related.  There is always the issue of unexpected circumstances, not to mention the treatment of large public transit projects as an opportunity for every nearby utility to have their plant upgraded at the project’s expense.  Past funding for Metrolinx projects has always been announced as $x-billion plus inflation so that a $16b or $34b “commitment” may actually be much larger in as-spent dollars.

A further wrinkle is the use of private sector financing, construction and operation through “AFP” (Alternate Finance and Procurement), a methodology now in favour both in Ottawa and at Queen’s Park.  In this scheme, part of the capital cost of a project is assumed by a private partner, and this can reduce the capital outlay required during construction by the public sector.  However, that money has to be paid someday, and the payments show up on the operating budgets through mechanisms such as leases and revenue guarantees.  That will be a future call on the new revenue streams, and it must be built into the long range Investment Strategy.

Finally, some transit costs have been borne through non-Metrolinx budgets including various transfers to municipalities (now mainly the gas tax, although the infrastructure fund may be revived in a future budget) and a clawback to GO transit via a tithe to help pay for its capital program ($20m from Toronto this year).  All of these funding streams need to be sorted out and presented in one place so that a rational view of what is needed going forward is available for everyone to see.

Metrolinx should take greater care with its announcements and fiscal plans so that its credibility is not undermined by simple questions about arithmetic, and so that the funding they seek will actually match the funding they will need.

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Step Right Up for the Miracle Cure! (Updated)

For those readers here who do not follow the Torontoist website, I have an article there commenting on the City of Toronto’s outreach program for the new Official Plan.

Toronto seeks the opinion of its residents on the purpose and priorities of a transportation network, and on how we might pay for this in coming years.  The City’s heart is in the right place, but the planned consultation has its problems.

Updated February 3, 2013 at 8:00 am:

Toronto City Planning’s website seeking feedback on priorities and revenue tools has been live for a few days now.  It operates in a somewhat different fashion than I had assumed from the presentation by Jennifer Keesmaat at a recent Planning & Growth Management Committee meeting.

The site allows participants to select among a set of priorities, choose their favourite revenue tools and build a budget showing how each tool would contribute to a $2b/year target.

The priorities are a bit wooly and don’t necessarily reflect the linkage between the options and the type of spending that might occur.  For example, the “affordable” priority is described as relating to the cost of using transit, not to the cost of building it.

On the budgetary side, the potential revenue from various sources is given (this was missing from the PGM presentation), but there is no discussion of the ease with which any of the tools could be implemented nor of issues such as fairness in who would pay the new revenue.  A few examples:

  • Congestion charges are aimed at downtown where, ironically, the level of road traffic relative to total travel is very small.
  • A payroll tax charges businesses based on the size and cost of their labour force, not on the level of economic activity they represent.
  • Charges assigned per unit (e.g. utility levies) fall disproportionately on those with the smallest units and low usage (typically poorer family units).
  • Charges related to property value are keyed to notional value (CVA) rather than ability to pay.  Value capture schemes, like CVA, would tax an asset that the owner could not monetize unless the property were sold.  The effect is completely different for residential and commercial uses.

I will examine the various revenue tools in a separate article consolidating the discussion with the recent proposals from the RCCAO (Residential & Commercial Construction Association of Ontario).

Finally, there is no discussion of how the money would be used.  From the Metrolinx “Next Wave” proposal, we know that 25% ($500m/yr) would come to the municipal sector, roads and active transportation options.  This is actually small change beside the ongoing needs for local transportation funding and the backlog of infrastructure repairs.

The consultation does not include any discussion of what, at a local level, the new revenue might fund although this could affect the selection of tools.  Responses do include the selection of where broadly speaking money should go (transit, roads, etc) but with no examples of the implications or needs for each sector.

As I write this, the ranking of responses so far places highway tolls, congestion levies and development charges at the top of the list although even the first ranked gets a score of only 2.46 suggesting that many respondents ranked it in 3rd place or lower.  Some scores are tightly clustered indicating that responses are picking a variety of options.  It is unclear whether the ranking system assigns a value to “not selected” and is assigning scores only to the five items which each participant selected.  No value of “n”, the number of people selecting an item, is given.

How useful this survey will prove in the next stage of the consultation remains to be seen.

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New Premier, New Policies? (Updated)

Updated February 2, 2013 at 12:30 am:  The costing for Next Wave projects has been corrected to reflect that spending for local projects and roads is included in the total of $34-billion rather than as an additional cost on top of that number.

The Ontario Liberal Party has a new leader, and soon the province will have a new Premier.  Although I am not a Liberal supporter, I am extremely pleased by Kathleen Wynne’s rise to head our provincial government.  She represents the progressive wing of the party, and a fresh outlook after the increasingly frustrating reign of Dalton McGuinty.  A change of focus is already evident with social services, education labour relations, job creation and transportation infrastructure getting prominent mention.

Transportation is not first on the list, but it is vital to the GTHA.  Mobility has many benefits for business and for individuals.  Transportation infrastructure, especially transit, has far too often been treated as a cost to be avoided, to be offloaded, to be deferred while we strangle in congestion.  That congestion isn’t just on roads, plugged highways and arterials, but on the very transit systems we keep telling drivers can be our way out of the mess of 21st century gridlock.

The scope of what we need is enormous.  Within Toronto, we are accustomed to annual ridership figures now over half a billion, although this is well below half of all the journeys in the city.  Elsewhere in the greater Toronto area, transit does well to carry 10% of all travel.  The GTHA requires much, much more investment in transit infrastructure and in service to attract a larger share of the market.  Making transit a credible alternative to the automobile will not be easy, and reaching a target of 1/3 of work trips by transit in 2031 requires far more than a few trains and buses.

“More of the same” is not an option for a new government, especially one with a tenuous minority in the legislature.  Transportation problems are too big and have been set aside for another day for far too long.

Later this year, we will see the long-awaited Metrolinx “Investment Strategy”, a document that should have been published at least two years ago.  The necessary background information has been available for some time, but nobody at Queen’s Park wanted to talk about new “revenue tools”.  This lack of political fortitude and leadership, coupled with project funding delays and scope changes, cost the GTHA more lost time and compounded the deficit in transit building.

Fortunately Ontario now has a Premier-designate who is willing to talk about raising the money necessary to improve transit.  The challenge will be to actually go from talk to implementation and the creation of a funded transit plan.

We are at an important time in the political and economic cycle for the debate and real progress to begin.  Too many big announcements came just at high points when the economy boomed, only to lose the momentum to a downturn, retrenchment, and a shift of focus away from transit expansion, let alone changes in government. This pattern stretches back to the early 1970s and the Davis government’s aim to build cities for people with transit rather than with cars.

We are having the difficult, “mature” conversation about new taxes (whatever we might call them) when times are tougher.  Building transit funds into the base of government spending rather than as good-time baubles will be a major change, if it happens.

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