Toronto Star. The Cost of Fixing Gridlock: Billions

TTCriders has their say in the Toronto Star's article on how we're going to pay to fix gridlock.

This article appeared in the business section of the Toronto Star on December the 7th, 2013.

It’s 9 a.m. on a recent Thursday and Union Station has just disgorged the last of the morning rush hour. Business executives, students, office workers all squeeze and jostle for space as they navigate the narrow passage between Union Station and Toronto’s subway system.

The busiest transportation hub in the region, Union Station funnels more people through its ornate doors than Pearson International Airport.

The 86-year-old railway station is also the epicentre of at least four different transportation projects – involving GO, the Toronto Transit Commission and VIA Rail -- designed to get the region moving again.

The soaring metal cranes, temporary chain link fences and makeshift wooden planks are all visible evidence of an aging public transportation system finally being pulled into the 21st century, says Bruce McCuaig, the head of the regional transportation agency, Metrolinx.

“Sometimes I think people think nothing’s getting done,” McCuaig said in a recent interview in his office in the former station master’s quarters.

“They read the stories about the Scarborough subway vs. the LRT and other debates. I think some people they get the impression we’re stalled in these political issues and questions about what to build,” he says.

In fact, there’s so much on the go -- $16 billion worth – the region sometimes seems choked with transit construction projects that, in a cruel twist, have made getting around even more difficult in the short term.

And more is coming – if the money can be found.

“People are going to see lots of changes over the next little while. However, we have to keep going because we’re growing by 100,000 people every year. It’s like bringing the equivalent of Kingston or Barrie every year into this,” McCuaig says.

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The agency created to co-ordinate a regional transit plan for the Toronto-Hamilton area has another $34 billion worth of projects on its wish list, including a downtown relief line for the overcrowded Yonge subway line and electrifying the GO train rails, the first step in creating a high-speed rail network between Hamilton and Oshawa.

The question is who’s going to pay for it?

Virtually everyone agrees congestion has reached a critical point.

From transit users to major business groups, it ranks as one of the biggest challenges facing the region.

“There’s a clear urgency to act,” says Carol Wilding, president and chief executive officer of the Toronto Region Board of Trade. Failure to do so means “our problems are going to get worse and our competitiveness is going to continue to decrease.”

Clogged streets and inadequate transit have created one of the longest round trip commutes – 82 minutes on average – in North America, the board says.

But catching up on years of neglect is going to cost billions.

With a minority government at Queen’s Park and a provincial economy still in the doldrums, it’s going to be a challenge.

……………….

The Big Move is the main blueprint for upgrading the region’s aging transit infrastructure. Created in 2008 by Metrolinx, the provincial agency charged with co-ordinating the effort across the Greater Toronto-Hamilton Area, it’s based on the theory that better public transit will also get more cars off the road, result in less smog, and of course reduce commute times.

The grand vision contains $50 billion worth of projects spread over a 25-year period.

The first wave, about $16 billion worth, has been approved and funded, much of it by the province, which has committed $8.4 billion to transit projects in Toronto.

Many are under way, including a massive overhaul of Union Station, an extension to the Spadina subway line, and a new network of bus rapid transit lines across York Region.

But there’s another $34 billion worth of projects on The Big Move wish list with no funding attached to them.

The cost of fixing gridlock doesn’t end there. Local transit authorities and the regional GO Transit system have their own capital budgets

The Toronto Transit Commission, for example, has $9 billion worth of projects earmarked for the decade ahead, most aimed at keeping the existing system up to speed.

But, like Metrolinx, the TTC also has a shortfall in its funding to the tune of $2.7 billion.

And none of this takes into account the higher cost of operating an expanded system.

The TTC is already struggling to keep up with its current network of streetcars, buses and trains.

Despite being North America’s third largest transit system, the TTC says it receives the lowest level of government subsidy. Riders pay nearly 80 per cent of the cost.

And it’s getting worse.

In November, the TTC set a $1.6 billion operating budget for 2014, of which $500 million will come from the City of Toronto.

Apart from a small amount in gas tax transfers from the federal and provincial governments, advertising and parking lot revenues, the rest must come from riders.

To close the gap, the commission reluctantly approved fare increases, which brings the cost of a ride to $2.70, up 5 cents per token, and a monthly pass to $133.75, up $5.25.

Not without protest.

The commission also struck a task force of senior TTC and city hall officials to lobby both the provincial and federal governments for more permanent, sustainable, long-term funding.

“I’m very clear we need more sustained, affordable, adequate funding,” TTC chief executive officer Andy Byford said in an interview.

…….

To complete The Big Move, Metrolinx says it will need $2 billion a year.

To raise the money, the agency suggests creating new “revenue tools” that would be dedicated to transit projects. They included:

  • 1 per cent hike in the HST
  • 5-cent-per litre gas tax
  • 25 cent commercial parking levy and
  • 15 per cent increase in development charges.

For the average family, that would add $477 a year to cost of living in the Greater Toronto-Hamilton Area, the agency said. Less if you’re a senior or student with limited access to a vehicle.

But the cost of doing nothing is higher, Metrolinx says, estimating congestion costs the average car-owning household at $1,619 a year.

Many cities that compete with Toronto and Hamilton for new business already have these kinds of resources, McCuaig of Metrolinx says.

Paris and New York have dedicated payroll taxes. Vancouver and Montreal have fuel taxes. Even Los Angeles, where the car is king, was able to introduce a dedicated sales tax to fund public transit after holding a referendum on the issue.

“People want congestion to be dealt with,” McCuaig says. The challenge is getting them to recognize “we all need to make a contribution.”

Not everyone agrees.

The Toronto board of trade has endorsed the concept.

“The businesses I have spoken to large and small feel very strongly about making a contribution,” the board’s Wilding says. “They see what it will bring back to them in terms of employment and day-to-day productivity because it’s a talent issue trying to get people in and around the region.”

But other groups, representing specific interests, such as truckers, developers and small businesses, say they’re already paying enough. Governments should find the resources out of existing revenues.

Grassroots transit advocates say business and high-income earners should carry more of the load.

“We think they should look at a range of progressive revenue tools, including raising corporate taxes and taxes on high-income earners,” says Jessica Bell, spokesperson for TTCRiders says.

Another group has proposed a blend of approaches.

The corporate income tax rate has fallen to 11 per cent from 14 per cent since 2010. Meanwhile, the HST has fallen to 13 per cent from 15 per cent since the mid-2000s when Ottawa decided to lower its share of the combined federal provincial sales tax.

There’s room to increase both, says the Canadian Centre for Policy Alternatives, a left-wing think tank.

……………..

But the biggest threat to solving the region’s congestion problems may be the endless political wrangling over what to build and how to pay for it, observers said. The Scarborough subway debate is the latest example.

Amid a provincial by-election in Scarborough in July, Toronto city council unexpectedly reversed its decision to replace Scarborough’s aging rapid transit line with a light rail line. Instead, it opted for a more politically popular — and expensive — subway extension from Kennedy station to Sheppard Ave.

Toronto Mayor Rob Ford, long opposed to tax increases, agreed to a tax hike to cover the estimated $1 billion higher cost because the people of Scarborough “deserve” a subway.

The province, facing its first electoral test since the gas plant scandal, agreed to devote $1.4 billion previously earmarked for an LRT to a subway extension

And the federal Conservative government, which had been virtually shut out of the GTA in the last federal election, came up with $600 million in funding.

A project that would have cost $1.8 billion ballooned to at least $3 billion.

Throughout it all, Metrolinx continued to say an LRT was the best choice — matching capacity to demand at the best price. But Metrolinx is just the adviser. It doesn't hold the purse strings. Or have any political power.

The board of trade was furious. “Scarborough is the poster child for how not to advance transportation planning,” Wilding said.

“The whole regional transportation file became over politicized, hyper politicized. Politics trumped progress,” she said. “That continues to be a big concern for us.”

Others said they were disheartened.

“We’re going to be paying for that subway for decades,” says André Côté, manager of the Institute on Municipal Finance and Governance at the University of Toronto.

To win public support for new taxes and fees, businesses and consumers need to believe the money will be used for its intended purpose and spent wisely, Côté says.

“Highly politicized decision-making simply produces bad results and erodes public trust,” Côté says.

Making the wrong decision can be a drain on the city’s budget, says the City of Toronto’s chief planner Jennifer Keesmaat.

The Sheppard subway line, a three-stop line from Yonge to Don Mills, requires a $17 per ride subsidy to operate because it’s so underutilized, she notes

The city’s official plan tries to address the mismatch by encouraging development along transit corridors, she says. But that’s only part of the solution.

“Even if you build a high-speed train from Hamilton to Toronto, people are still going to be commuting for an hour and a half a day. A high-speed train doesn’t solve anything,” she says. “We need to moves less.”

Cities need to encourage the development of more multi-use communities, where people can live, work and play within walking or cycling distance, she says.

“If you create communities where the only way to get to the theatre or visit your friends or get to work is to get in the car, then we’re going to have gridlock,” she says.

Young people get it, she says, noting the fastest growing part of the region is downtown Toronto where the “echo boomers” in their 20s and 30s say they like the fact they can live within walking distance of work.

…..

The Big Move is currently under review by the Transit Investment Strategy Advisory Panel, appointed by Ontario Premier Kathleen Wynne in mid-September to advise it on Metrolinx’s revenue proposals.

Sometimes referred to as the Golden panel, after its high-profile chair, Anne Golden, it has already released three discussion papers and held four public meetings.

Among other things, some projects may need to be re-prioritized; others may need to be broken down into more manageable chunks, the panel has said.

The downtown Relief Line, intended to ease congestion on the overcrowded Yonge subway line, needs to benefit both the city core and the suburbs, the panel says.

The panel has come up with a new revenue formula, Golden said in a recent interview with the Star, one that builds on Metrolinx’s proposals.

While she declined to be specific, she didn’t rule out contributions from all three levels of government.

“Everyone will pay and it will not be too onerous,” she said.

Big expensive transit projects are a tough sell, the panel found during its public consultation process. People don’t really understand how it will relieve traffic congestion or that it could eliminate the need for a second car.

Public distrust of governments is also high, Golden said.

“There’s an interesting disconnect,” Golden said. “Everybody believes were at a tipping point when it comes to congestion on our roads and crowding on our major transit lines, and yet we are not agreed on how to pay for it and nobody really wants to pay for it.”

With the panel due to release its proposals on Thursday, Dec. 12, the debate is about to heat up.

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