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Fun With Figures: The Value of Transit Investment

A common, but troubling practice in talking about transit is the attempt to build a “business case” as if city’s transit network can be examined through a rather simplistic management school lens. Everything is reduced to a monetary value, be that direct spending, spinoffs, or the notional value of benefits.

Aside from basic errors in methodology, this approach assumes that the supposed value of transit spending can be gleaned from a one-dimensional view of its so-called worth in dollars and cents. Bad enough that this practice is entrenched in Metrolinx, an agency that sets priorities based on political, not financial, evaluations thereby undermining the credibility of financial analyses. The scheme has trickled down to the municipal level with a TTC/UofT study intended to show that money for transit has financial benefits and should be encouraged for the good of city and country.

You might ask why a transit advocate has misgivings about this exercise, but the answer lies in my long-standing conservatism (with a very small “c”) about public spending generally. Megaprojects bring press coverage, especially with the opportunity to announce over and over the latest step, no matter how trivial, as work inches along. This tactic works as long as there is success to report, and we just don’t talk about abject failures like Line 5 Crosstown any more often than needed.

A huge problem with the TTC’s gaping hole in Capital funding, and to a lesser extent on its Operating side, is that the cry “please, Sir, I want some more” for transit support wears thin with would-be partners. Moreover, everything on Toronto’s wish list does not necessarily align with political priorities elsewhere, and it must compete with demands from other cities and provinces. Thus the desire to show that transit spending has a great “payback”, but that number hides fundamental questions.

The problem with spending for its own sake is that one rarely hears the question “what else might we do with these billions” or “is this project really worth its cost compared to other demands on public funds”. How much is not built or operated because some other project took priority, or the growing cost of works already underway crowded other new schemes off of the table?

Into our political environment, one rife with patronage, cronyism and outright corruption, comes an attempt to justify spending on transit as an inherently good thing.

In 2022, the TTC launched a joint study with the University of Toronto Mobility Network which surfaced as part of the 2023 and 2024 Budgets. The goals of the study were “to identify and quantify the economic and other key benefits resulting from investment in transit and the TTC”:

  • Economic benefits realized from investments in transit services and capital works that enhance TTC’s existing transit network
  • Economic impact of the TTC on the local, regional, provincial and national economy
  • Qualitative and quantitative social, equity, health and environmental benefits and the economic spin off benefits derived from these other benefits
  • Impacts should the necessary service and capital investments not be made in the TTC
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King Street Travel Times: May-December 2023

This article is an update to King Street Travel Times: May-November 2023 incorporating data for December 2023. The charts here show the variation on a day-to-day basis for selected hours of service including the morning peak 8-9am, midday 1-2pm, and hourly from 3pm to 11pm.

Items of note:

  • The problems in late 2023 were predominantly eastbound caused by a combination of auto traffic entering the King Street corridor and filling all available capacity, and by delays eastbound at Church for TTC vehicles making left turns on diversion routes.
  • There are early signs of this problem in the hour from 1 to 2pm, but it worsens dramatically from 3pm onward and travel times do not settle down to normal values until after 7pm.
    • This shows the need for traffic management over an extended period, not just for a short “peak within the peak” interval.
    • The problem receded somewhat in December with the implementation of traffic wardens, but various construction projects, some unplanned, also affected the street.
  • The day-to-day variation in travel times, and by extension in the amount of competing traffic, generally peaks on Wednesday.
    • This was already evident in Spring and Summer data indicating a problem brewing for later in the year as construction affected parallel roads.
    • The peaking within the week, and the different behaviour by time-of-day and direction show the folly of citing “average” values. By extension, the quality of service varied substantially depending on the level of congestion, and this affected entire routes, not just the downtown portion.
  • There is a regular increase in travel times in the evening, notably on Fridays, corresponding to the busy day in the Entertainment District. This is not as severe as the peak period delay eastbound, but it is a quite regular occurrence.

When the January data are available, I will update these charts to show how consistently the December improvements have survived past the holidays and without major construction works on Adelaide Street.

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TTC Board Meeting: December 20, 2023 – Part II

This article continues the series about the December 20, 2023 TTC Board meeting with details of the budget discussion.

Items discussed here:

This article deals mainly with the Q&A session at the Board meeting as I have already written about the 2024 budgets in detail elsewhere.

The 2024 Operating and Capital Budgets

A major problem with TTC budget “debates” is that they are quite perfunctory compared with the size and importance of the reports, and the spending involved. There has been no TTC Budget Subcommittee for years, and even when it existed, it rarely met. The idea of at least part of the Board doing a deep dive into budgets seems to be utterly beyond their idea of “good governance”, at least until the recent change in the Mayor’s and Chair’s offices.

Commissioner Ainslie asked that the Chair work on creation of Budget Committee with a report in 2Q24. He observed that agencies with much smaller budgets than the TTC have budget committees, and the TTC should too. The Board asked staff to report in Q2 2024 on the establishment of a Budget Committee.

It should not be for staff to report on creation of such a committee, but for the Board to say “we need this” and immediately canvass members for their interest. An informed committee will be essential for review of the 2025 budget priorities before the budget is struck. The budget should not come to the Board as a fait accompli based on discussions at the staff level. Moreover, the Mayor’s Office should have visible input to the process. If the level of so-called review by the Board amounts to a once-a-year dog-and-pony show by staff, there is no opportunity for Board input and queries about the underlying policies, assumptions and options available.

Some TTC Board members are strong in their belief that the role of the Board is to provide policy and oversight, and of management to manage. That is a great model provided that the Board actually engages in its role, but for many years there was no sense that the TTC Board actively developed policy, let alone held management accountable.

By the end of the budget debate, Board members were very concerned about the financial status of the TTC, even though quite complimentary about the detail of work presented by staff. Some of these members sat through the years when Mayor Tory ran the show, and the primary message was “everything’s just fine”. They bear some responsibility for problems that have festered for years.

After the staff presentation on the two budgets, there were many questions from the Board. The items below have been consolidated by topic. Illustrations are taken from the presentation deck.

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TTC Board Meeting: December 20, 2023 – Part I

The December 20 Board meeting at the TTC took rather longer than expected, and with a focus on some items that might otherwise have been unremarkable.

Items discussed here:

The 2024 Budget and Capital Plan will be discussed in Part II of this series.

Another report will be covered in a separate article.

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Broadview Station Reopens to Bus Service

The TTC has announced that bus operations will return to Broadview Station in coming days now that reconstruction of the track and paving is complete.

Thursday, January 4:

The 504/505 King/Dundas replacement bus service has operated from Castle Frank Station stopping on street at Broadview & Danforth. It will resume use of Broadview Station. The 304 King Night bus will also return to the station.

The 8 Broadview and 62 Mortimer buses have terminated at Broadview & Danforth using on street stops, and then deadheading to Gerrard to loop near Bridgepoint Hospital. They will return to their normal looping at Broadview Station.

Sunday, January 7:

The 87 Cosburn, 100 Flemingdon Park and 322 Coxwell Night buses have operated to Pape Station. They will resume their normal routes to Broadview Station.

Streetcar Service

Streetcar service is expected to return to Broadview Station on 504B King and 505 Dundas in the mid-February schedule changes.

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When 95% Really Isn’t 95%

Many shouts of “hurrah” have been heard around transit circles with the news that the TTC will be operating service at 95% of pre-pandemic levels on the bus network in early 2024 building up to 97% by the Fall.

The key question here is “95% of what?”

To make this a tad simpler, consider a rider who is told that service is back to 100%. To someone waiting on a street corner, this means that the bus will arrive (or at least be scheduled) at the same frequency as it was four years ago before the covid cuts tore through many routes’ service levels.

At the risk of disappointing readers, they should not rush out on January 7, 2024 when the next schedules come into effect waiting for the miracle of restored transit service to roll down their street.

Politicians and management who trumpet the return to “full service” should qualify their excitement with the fact that service on many routes is less frequent than it was in 2020.

“Service” also includes crowding standards. It is hardly valid to claim full service restoration if crowding standards pack more riders per vehicle before service is improved, and even that depends on available vehicle hours in the budget. It has been many years since the TTC published current loading stats and a list of routes that are operating beyond standards.

Truly restoring full service will require more resources than the TTC has been given or will see in the 2024 budget, and a political will to talk about “service” in a way that reflects rider experience.

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A Short Holiday Gallery

Mount Pleasant & Davisville 1967.12.23
4696 High Park Loop 1967.12.29
4673 Humber Loop 1967.12.29
4550 Mt. Pleasant & Heath 1968.01
4362 Mt. Pleasant Loop 1972.02.20
4362 Bingham Loop 1972.02.20
9062 Doncliffe Loop 1971.12.05
9062 Otter Loop 1971.12.05
Weston Rd. N of St. Clair 1992.01
West of Warden Stn. 1972.03.26
Exhibition Loop 1974.02.11
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TTC 2024 Budget Preview: Part II – Capital

In the first article in this set, I reviewed the TTC’s Operating Budget for 2024. Now, I turn to the Capital Budget and Plan for the year 2024, the 10-year period out to 2033, and the 15-year period to 2038. Reports cited here include:

Capital budgets and plans exist in three formats, each with its own purpose:

  • The annual Capital Budget sets out spending for the coming year. For multi-year projects, only current year spending is included, plus any carry-overs from incomplete work in the previous year.
  • The ten year Capital Plan shows spending planned for the coming decade, and this feeds into a comparable plan at the City of Toronto. Only items for which funding can be reasonably expected are included, and this tends to make the plan lighter on the back end. In past years, some items have been carried “below the line” as unfunded, but desirable, usually major rapid transit projects.
  • The fifteen year Capital Investment Plan shows everything (or almost) that the TTC foresees as capital requirements in coming years. Over the years, it was quite evident that many, many items were not being reported even in the “below the line” portion of the Capital Plan.

The Capital Investment Plan (CIP) gave City politicians and managers a severe case of indigestion when it was first published in 2019 because the total involved, well over $30 billion, was more than three times the size of ten year Capital Plans normally presented by the TTC. This addressed a long-standing problem where capital requests would appear out of thin air because they had never been approved as part of the Capital Plan, and TTC long-range requirements were very different from the numbers usually cited.

Transparency is a double-edged sword because any new scheme will usually show up in the CIP complete with a cost. In the 2024 version, the effect is particularly substantial with a jump to a total of almost $48 billion. Later in the article, I will review the CIP’s evolution over recent years to show the origin of this increase.

A major problem with the various budgets is that they are huge, and the TTC Board has an aversion to long, complex reports. Moreover, there is no Budget Subcommittee of the Board to develop some expertise on the matter, and even when one existed, it met rarely, if ever.

The current Capital Budget was always of most concern because it was usually presented just before it had to be rolled up into the City’s budget, and there was no scope for tinkering. As long as enough money was found somewhere, the immediate financial crisis would pass, and long-range planning would be left for another day. That day rarely came, but it suited the former regime at City Hall not to have the TTC’s or City’s financial peril exposed to much scrutiny. Now that Toronto’s gaping budget hole is out in full view, we can see just how badly the city and transit system have been served by years of pretending our needs were “affordable”.

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TTC Service Changes Effective January 7, 2024

The TTC will adjust service on many routes with the January 2024 schedules.

A summary of all changes is in the spreadsheet linked here showing a before and after view of the affected routes. Note that the “before” data are from the November 2023 schedules which do not include the holiday period’s service cuts. All of those cuts are restored in the 2024 schedule, and they are not listed here.

TTC Service Changes 2024.01.07

Updated December 30, 2023:

  • Maps of route changes have been added from the corresponding TTC Service Changes pages.
  • The revised 501B Queen looping at Broadview & Gerrard has been added.
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TTC 2024 Budget Preview: Part I – Operating

The TTC Board’s meeting agenda for December 20, 2023 deals primarily with the 2024 Operating Budget, the Capital Plans looking forward 10-15 years, the growing backlog of State of Good Repair (SOGR) spending, and a preliminary look at the Five Year Corporate Plan. A few items are carried over from the December 7 agenda that the Board could not complete due to time limitations, of which the most significant is the quarterly financial review.

In this article I will preview the Operating Budget, but will turn to the Capital Budget in a second piece. I will also follow-up the Board meeting discussion and additional presentations from staff.

Major Issues

The overwhelming issue is, of course, funding: who will pay to continue TTC operations at their current level let alone to improve them?

No fare increase is proposed for 2024 “in recognition of the impact current economic conditions have on customers”. This has a cost in increased subsidy, or more subtly in works not undertaken for lack of revenue, if the gap is not filled. In 2024, this gap will use a reserve draw, but that approach is not sustainable due to declining reserves and the escalating cost from year to year of a continued freeze.

A political challenge in seeking profincial and federal subsidies for covid shortfalls is that a fare freeze appears to come on the back of covid payments that might not otherwise be claimed.

More generally, the idea of “covid costs” is going to run out of steam soon as support programs close down at the provincial and federal level. The TTC and City must figure out what TTC plans look like based on current revenue and ridership, plus whatever added subsidy might be available.

Future years include major challenges with a continuing reduction of core area work trips compared to pre-pandemic conditions. While total weekly trips might be lower than historical levels, daily volumes show considerable variation both on transit and traffic conditions. Service planned on the basis of average demand could be overloaded on the peak days.

Although the budget speaks of a return to 97% of the Service Budget level by Fall 2024, this is qualified by a note that this is to address traffic congestion. In terms of actual service level (i.e. buses per hour), riders may not see as much improvement as the 97% figure implies. There is almost no provision for additional streetcar and subway service. Peak subway service continues to operate at a much lower level than pre-pandemic schedules in spite of an overall return to 83% of the former service.

The budget contains little provision for additional service related to demand growth, nor is there any discussion of the implications of a growth rate higher than the assumed value. Ironically, added costs are included for maintenance of the growing streetcar fleet, but not for actual operation of these vehicles. Capital plans for buses see only a modest growth in fleet size and, by implication, in service levels.

There is no discussion of reversing changes to Service Standards implemented by management in 2023 that brought allowable off-peak crowding to almost peak levels. This keeps the cost of service down, but affects its attractiveness.

The net effect of demand changes in the core is that the TTC’s share of the travel market is falling even though ridership is strong for non-core trips with a higher recovery rate.

There is a major disconnect between capital plans for substantial growth in core area capacity on the rapid transit and GO networks, and the very modest plans for service growth to the same area.

This is very much the kind of budget presentation we have seen through many years of the Tory regime with small-scale changes. Given the funding limitations, this is no surprise, but there must also be a reconciliation between political aims for greater transit and what the money sitting on the table will actually pay for.

Other City initiatives, notably a greener fleet and proposals for massive service expansion, affect the Capital Budget and, eventually the Operating Budget, but these must be understood in the context of a basic question: what do we spend our money on? Basic operations and service quality will be compromised by bad choices or by simply hoping that a transit equivalent of the Tooth Fairy will appear.

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