On October 16, the governments at Queen’s Park and Toronto City Hall announced a deal to sort out competing transit plans for the city. The current provincial priority projects are the Ontario Line (Don Mills/Eglinton to Exhibition), Scarborough Subway extension from Kennedy Station to Sheppard, Yonge Subway extension from Finch to Richmond Hill, and the Eglinton West LRT extension from Mount Dennis to Renforth.

The main City of Toronto report will be discussed at Executive Committee on October 23, and then at Council on October 29-30.

This article reviews that report with reference to a few parts of its many attachments. I will turn to the technical attachments in a second article. To focus material on each subject for readers, I have grouped related items together or re-sequenced things for emphasis. There are extensive quotations of key material so that readers hear not just my “voice” but that of the report’s authors.

Despite the importance politicians at both levels place on the proposals, the fundamental problem remains that many of the details are cloudy, to be kind. Specifically:

The City of Toronto retains ownership of the existing transit system avoiding a complex realignment of responsibilities and governance, but with this comes total responsibility for funding the ongoing state of good repair.

A large gap remains between the amount of funding needed to maintain and expand Toronto’s transit system relative to the amounts actually available and committed in budgets at various levels of government.

Ontario will build four key projects substantially with its own money, but continued support for transit beyond this is uncertain.

Toronto will redirect funding originally earmarked for its share of the key projects to other priorities, notably the TTC’s repair backlog. However, much of that “funding” does not exist as allocations in existing budgets and new money is required from Toronto to pay its share.

Cost estimates for the key projects are based on preliminary estimates that could change substantially as the design process unfolds. These estimates are in 2019 dollars and make no provision for inflation. The reports are silent on how the proportion of total spending by each contributor might change over the decade or more of construction.

A substantial total of project costs will be born by private sector partners through a “P3” financing mechanism. These arrangement will require future payments for what will be, in effect, a capital lease, but the mechanism for funding this from three levels of government is unclear. The reports are silent on the split between short term borrowing to pay for construction as opposed to long term payments to the P3 financier.

Project details as they are known today will change in response to design work and the need to keep costs within the projected level. This will affect alignments and stations, and what we think we are buying could be quite different from what we actually get.

The challenge in all of this is, as always, the question of money. We can watch the hands of politicians and managers at all levels as they shuffle cards on the table. We hope to “find the Queen”, to win in the subway sweeps rather than being taken for suckers who will cheer any plan, but lose every game. It is far from clear whether the proposal is a “good deal” for Toronto, and there are huge future transit costs that are barely addressed.

The whole exercise is a political deal to bring peace, comparatively speaking, to the transit file which was needlessly fouled by Doug Ford’s insistence that he knows more about transit in Toronto than anyone else. Does Toronto take this as its last best chance to preserve some semblance of control over its transit future, or do we keep fighting for a better deal?

There are a lot of holes in this plan and severe implications both for the City’s finances and the future of Toronto’s transit system. Many questions need to be asked and answered, even if the result will be a whole new plan after provincial and municipal elections in 2022.

The Expert Advisory Panel

Although there was an expert panel convened by the City and TTC, their report (see Attachment 10) dwells far more on questions of governance and the role of a reorganized transit system in the regional context. This has been something of a hobby horse for some local planners whose belief in the creation of an independent regional agency is almost charmingly naïve in a province which under any party is bent on centralization in their own authority with only the most cursory input and no control from municipal politicians.

With the move to leave the existing TTC system in the City’s hands, the panel’s work has a different context, one of making what we have work better. The panel’s key priorities should come as no surprise.

The Panel’s work focused on how these goals could be achieved through a realignment of responsibilities for transit and mobility in the Toronto region. The Panel began by identifying the following key priorities for transit planning in the Toronto region:

Investment in state of good repair is vital and should not be neglected in favour of expansion projects. Both major expansion projects and incremental changes (e.g. service improvements) are important. The long-term operating costs of transit, including those associated with expansion, cannot be ignored. Transit planning should be integrated with land-use planning and broader mobility planning. Equity, accessibility, and transit-oriented development should be priorities. Transit planning and decision-making should be evidence-based and transparent. Coordination (e.g. of transit planning, service, fares) should be improved across the Toronto region, with regional and local interests considered together.



To achieve the goals of the Transit Responsibilities Review while respecting these priorities, the Panel focused on the potential benefits of a full-scale reassessment of the governance of transit and mobility across the Toronto region, and the implementation of a regional governance model with the following features:

a regional body that is responsible for planning all aspects of mobility for the region (e.g. transit expansion, cycling, ride sharing), coordinating local bodies (e.g. fare and service integration), and setting standards for transit in the region (e.g. cleanliness, on-time service, accessibility); local bodies (municipalities or transit agencies) that are responsible for service delivery; a governance structure in which the regional body is not an agency of one level of government but rather is accountable to multiple stakeholders and balances regional coordination with robust local input; and dedicated and predictable funding for all aspects of transit, including expansion, maintenance, operations, and replacement costs. [Att. 10, p 2-3]



By leaving the TTC more or less “as is”, the province dodges the very thorny questions of how governance might be reorganized.

The Bogus Need to Upload

A provincial desire to own Toronto transit assets goes back well before the Ford era at Queen’s Park. When Liberal Premier McGuinty agreed to pay for the Transit City LRT network, it was on the condition that Ontario would own it. This enabled an accounting tactic that balanced borrowing against the value of an asset. As the debt was paid off, the asset was depreciated, and on paper the province’s financial position was unchanged. If the City owned the lines, the money would flow from Ontario to Toronto without that offsetting asset base, and the provincial debt would go up.

This was expanded by the Ford crew as a claim that they needed to own the entire rapid transit network, and this led to the proposed upload of the subway, with a future option to take over the rest of the system as well. They have now thought better of that scheme, possibly because the numbers just don’t work for what was thought to be a “break even” proposition with the backlog of repairs that are now left in the City’s lap.

The Province has determined that it is no longer necessary to assume ownership of the existing subway system in order to expand Toronto’s transit network. [p 2] Through the extensive and ongoing Province-City engagement, we have determined that our mutual objectives could be achieved without the transfer of ownership of the existing subway system, as previously proposed by the Province. [Letter from Minister Caroline Mulroney to Mayor John Tory, p 1]

This is not exactly news, but the political realities of the Ford ego and his desire to seize control of transit took precedence over sound planning, at least for a while, at Queen’s Park.

Ontario’s estimates for its four priority projects are shown in Table 3 (from the report) below.

Of this, about $4 billion would come from the federal Public Transit Infrastructure Fund (see the section on Federal funding later in the article). These are 2019 dollars. Inflation and detailed design will change them. Fed contribs are constant dollars. Some portion of project total will be financed thru P3. Timing of spending and future commitments.

Ontario will finance its share either thru debt or P3 financing. This is not available to Toronto which can borrow only against its future tax revenue stream. However, existing system upload would be very expensive for QP (see previous articles) and has nothing to do with financing expansion. Combination of Ford pique against Toronto/TTC and acquisition of an asset thought to be self-sustaining (it isn’t as backlog shows only too clearly).

City Growth

The need for more and better transit is driven by the growth rate of the City of Toronto. This is not to denigrate growth occurring beyond the City itself, but both the rate of growth and the location within the City have changed since planning projections made when the transit needs were thought to be in the medium to distant future, not “yesterday”.

For context, over the next twenty years, the City’s population is projected to grow by about 960,000 people. By 2041, the City’s population will be more than 3,900,000, exceeding the Provincial Growth Plan forecasts by more than 500,000. Toronto is also expected to meet Growth Plan 2041 employment targets of 1,720,000 jobs long before 2041; 2018 employment is more than 1,523,180 jobs, with growth over the past decade of 22,999 jobs per year. This growth will add pressure to Toronto’s transit infrastructure, resulting in the need for significant investment by all orders of government. These investments will be critical to maintain the safety and reliability of the existing system as well as grow the system to meet mobility demands of the City and region. [p 13] Approximately 88% of all residential development in the City is occurring within 500 metres of higher order transit. Understanding the local context is a priority in order to make this development well-connected and integrated with transit. For the City, developing rapid transit is about more than just moving people more efficiently and cost-effectively; it is also about city-building that includes new housing, employment and the amenities that support liveable communities. [p 30]

Focus continues to be on direct service to development with rapid transit stations even though there is a large and growing population that is not conveniently located nearby. Nothing in the plan addresses the role of the surface network either for local transportation nor as a feeder system to rapid transit lines.

Public Consultation

The City and TTC undertook a campaign through 2019 to gauge public attitudes to provincial plans and to various projects proposed for the TTC system. The feedback received is described in Part 1 of Attachment 9 to the report and further details of the campaign and responses are in Part 2.

The survey revealed considerable distrust for the province as the sole provider of planning and delivery of public transit.

[The] Majority of residents believe that the municipal and provincial government and respective transit agencies should be responsible for planning future rapid transit infrastructure together. Only 1 in 10 feel that the Province should do this alone.

TTC and other GTHA municipal transportation providers are the most trusted public institutions to plan and deliver new public transportation infrastructure.

Generally people were split in their support or opposition for the Province’s proposed plan to take ownership of the subway system, while 905 residents were more supportive of the plan. Support for the upload was driven by hopes for better leadership, better service, and more funding. Opposition was driven by mistrust, an understanding that future planning would be worse, and fear for less funding for the system. [p 33]

The public is aware of major projects now in progress or the subject considerable debate, but less so of the overall capital needs and plans for the TTC. This will inevitably colour reactions to proposed spending and improvement plans.

When testing public awareness on a series of transit funding related needs, there was relatively low awareness of the TTC’s Capital Investment Plan and State-of-Good-Repair needs.

Awareness of the City/TTC’s SmartTrack Stations, and Bloor-Yonge Capacity Improvement plans were relatively low compared to other projects such as the Crosstown LRT, Relief Line and Line 2 East Extension. [p 33]

There was strong support for maintaining the existing system. Indeed projects like Bloor-Yonge and SmartTrack threaten to elbow a lot of badly-needed work out of the way because they consume so much capital from all available sources, and this spending (or at least “commitment”) is used to counter requests for even more subsidy.

People felt that there is an urgent need to ensure adequate funding to maintain the existing system. People were interested in how to ensure the financial sustainability of the transit system as a whole, and suggested that all orders of government play a role in funding transit.

People were interested in how local interests would be represented in transit planning in light of changes around roles and responsibilities for transit expansion projects proposed through Bill 107.

People expressed concern about the timing for delivery of critical projects to support Toronto’s growth needs and were particularly interested in timelines for delivering projects to reduce Line 1 congestion and providing rapid transit access to Scarborough.

People were very interested in learning more about the Province’s proposal to upload the TTC subway and its four transit projects and expressed concerns that the changes may delay delivery of much-needed service.

People felt that ownership of the subway is important and were very concerned about the accessibility from an infrastructure design and network integration perspective if ownership were to change. [p 34]

Notable by its absence from this list is any concern about how the province would actually finance projects, the nominal reason for the proposed TTC takeover. The list reflects a concern for services and facilities that we already have and might lose thanks to politically-driven provincial interference. The government at Queen’s Park has demonstrated its inept handling of policy changes in other portfolios, and this no doubt affects public reaction to any proposed provincial takeover. Launching such a plan in the face of, at least, distrust if not open hostility has little upside especially when the political glory is to be found in building new subway lines, not in making the Queen car run on time.

Status of the Proposals and Preliminary Cost Estimates



City staff take a guarded approach to endorsing the provincial proposals saying that they are “supportable in principle” and that they “have the potential” to benefit the City. This support is not unconditional, however, and things could change as designs for the projects evolve.

Based on the Ontario Line proposal, and the level of design completed to date in respect to the Line 2 East Extension (3-stop), the City and TTC believe the projects as proposed have the ability to deliver positive benefits to Toronto’s transit network, and are therefore supportable in principle. Both projects have elements that are similar to projects previously considered by Council and as such have the potential to bring similar positive benefits to the City, including contributing to the relief of Line 1. Further, both projects will enhance the transit network by providing new higher-order transit lines throughout the city including to equity-seeking communities. The City and TTC have received limited information regarding the Eglinton West LRT and the future plans for the Yonge Subway Extension to date and will continue to work with the Province to better understand the benefits of those projects. As part of the technical assessment, the City and TTC have also identified key areas requiring further discussion with the Province in order to ensure that the projects continue to materially deliver the anticipated minimum benefits and address City expectations. City and TTC staff will also continue to engage closely with the Province on the location of potential portals and tracks for the Ontario Line, and the coordination of major capital construction projects, especially in the area of the Lower Don River. [p 2]

Scarborough Subway Extension (SSE) / Line 2 Eastern Extension (L2EE)

The original one-stop line was estimated at just under $4 billion including contributions from all governments. The City contribution is financed by the Scarborough Subway Tax, a 1.6% levy on property tax bills. The Province proposes that this money would be redirected to State of Good Repair (SOGR) projects.

Line 2 will “match service provided across the subway network”, and this implies full service to Sheppard rather than a short turn at Kennedy whether it is actually needed or not.

The scope of the L2EE is under review, although this will involve only design tweaks, not a wholesale change in the project given that the move back to a three-stop line was a signature part of Premier Ford’s transit announcement.

Metrolinx has assembled a panel of external advisors with the mandate of reviewing previously developed plans and assessing their technical and commercial deliverability to give advice to the Province. It is expected that Metrolinx will develop a Preliminary Design Business Case (“PDBC”), which will reflect any changes resulting from the work of their expert panel. The Province has clearly stated that it does not intend to recommend inclusion of any additional stations beyond the three already identified. [pp 19-20]

Demand on the line is expected to have minimal effect on the existing subway, but growing demand generally will require “future modernization”. This would include new signalling, trains and a yard for which are not fully included in the TTC’s Capital Plans.

Preliminary travel demand modelling suggests that the L2EE will attract approximately 11,000 net new transit riders per day by 2041. Preliminary modelling also suggests that the extension will also increase the peak westbound demand on Line 2 (east of Pape Station) by approximately 1,000 riders in the AM peak hour. The total estimated number of riders of westbound riders on Line 2 is expected to be less than the already expected eastbound demand. Expected demand will require future modernization to Line 2. [p 20]

Transit Oriented Development was already planned at Scarborough Town Centre station, but with the extension north to Sheppard, development could focus on that new station which would eventually be an interchange with a Sheppard service regardless of the technology. At Lawrence, the local land use and topography work against major new development and this station will depend mainly on feeder bus service and the nearby hospital for its demand.

Transit Oriented Development that is integrated with the transit facilities at Sheppard East station are also possible. Growth opportunities at Lawrence Avenue East and McCowan Road are constrained by existing conditions and existing planning policies. [p 21]

The completion date for the SSE/L2EE continues to recede into the future and is now a decade away. Remember that there was a time, once, when the Scarborough LRT would have been running before the Pan Am Games which are now only a faded memory.

The City’s anticipated completion date for the express L2EE was Q2 2026 / Q2 2027 (with and without applicable schedule risk allowance respectively). The 2019 Ontario Budget has estimated a completion date for the 3-stop L2EE at 2029-30. The City and Province, pursuant to further negotiations under the master agreement(s), will continue to discuss responsibility for funding costs for maintaining Line 3 (Scarborough RT) and/or replacement transit service in Scarborough as a result of the change in scope and delivery of the L2EE. Further work with the Province is required in order to validate the cost estimate and schedule, once determined and premised on the current stage of design, noting the extent of change from the express subway design work that had already been undertaken. [p 21]

Relief Line / Ontario Line

The original Relief Line South (Pape Station to Osgoode Station) was to be funded jointly by all levels of government, although the source of funding for the City’s $2.1 billion share had not yet been found. This would be net new borrowing for a city with no headroom in its financial plan unless new revenues were found to service the new debt. The Province proposes that the City share would go to SOGR, but the City share does not actually exist anywhere.

If the City were to redirect these funds to other transit projects, a funding source will still need to be identified for the $2.106 B. [p 7]

Work on the Relief Line North (Pape Station to Science Centre Station) was at a very early stage when work stopped for the last provincial election, and there is neither a cost estimate nor a funding source in the City’s budget.

On a modestly brighter note, the Province will compensate the City for work to date on the Relief Line with an estimated value of around $200 million.

The City describes the Ontario Line with three sections.

The Ontario Line as currently proposed is a 15.5-kilometre higher-order transit line with 15 stations, connecting from Exhibition GO Station to the Line 5 Science Centre Station at Don Mills Road and Eglinton Avenue East. For the purposes of this report, the project is described in three distinct sections: Western Section: From an interchange at the Exhibition GO station to downtown, connecting with Line 1 at Osgoode station. This section has not previously been studied by the City/TTC;

Central Section: From Osgoode station on Line 1 to Pape station on Line 2, which coincides with the Relief Line South project study area; and

Northern Section: From Pape station on Line 2 to an interchange with the Eglinton Crosstown LRT at Don Mills station, which coincides with the Relief Line North project study area. [p 16]

As design evolves, the Western Section is probably the weakest as it does not relieve existing Line 1, but rather takes on a “Union West” function for relief on LSW corridor. It will also be expensive with a deep tunnel from Osgoode Station under a well-developed condo district to the Exhibition Station terminus.

Design problems, not to mention pushback from affected neighbourhoods, face the Ontario Line.

There are major differences in some areas, such as elevating the alignment over the Lower Don River and travelling above grade within the Lakeshore East GO rail corridor in the central section. Similarly, in the northern section, the Ontario Line follows one of the alignment options that was studied in the Relief Line North assessment, but with the line being elevated through Thorncliffe Park and Flemingdon Park. [p 17] … As planning, design and delivery of the Ontario Line proceeds, potential temporary and permanent impacts to residents and businesses will need to be mitigated and well-managed. The portions of the line that are above-grade or on an elevated guideway have the potential for permanent noise and vibration, property, traffic, and visual impacts. For example, the section between Cherry Street and Gerrard Street East has the potential for significant impacts on the existing community and will require great care during the design process and during construction. Operational impacts may also result. Design and construction of the elevated crossing of the Lower Don will need to be well coordinated with numerous major infrastructure improvement projects, including planned flood protection mitigation measures and the Gardiner Rehabilitation Project. [p 18]

What happens if this alignment does not work out? Will the residents of Riverdale show up with torches and pitchforks at public meetings?

It is important to note that these findings are based on an assessment of the early conceptual level of planning that has been completed to date, the project scope, such as the alignment and station locations, may change significantly through further design and the P3 delivery process. [p 19]

Of vital concern here is the sequence of events. Public participation must inform the design refinements, not merely be a rubber stamp for whatever Metrolinx proposes, especially if the actual as-built version is substantially different from whatever was presented to the public. Any attempts to hide changes within “the P3 delivery process” are nothing less than bad-faith “public participation”.

Potential demand on both the new line and on the existing network is, of course, central to the entire proposal.

A design capacity of at least 34,000 riders per hour for the Ontario Line will meet demand in the project corridor for approximately 50 years. The Ontario Line will help relieve demand on Line 1. The modelling suggests that the Ontario Line is projected to reduce demand on Line 1 north of Bloor by between 700–2,000 riders per hour and between 3,200-5,400 riders south of Bloor in 2041.

This would reduce the demand north of Bloor to 31,000-38,500 passengers per hour and south of Bloor on Line 1 to approximately 33,500-36,000 passengers per hour; the upper end of these estimated ranges match or exceed the projected capacity of the line. [p 17]

The line may have a design capacity of 34k with an opening day level of 20k [p 22], but the effect on the Yonge line is considerably lower, and is notably lower than projections in earlier TTC/Metrolinx studies of the Relief Line. This is in part due to the line stopping at Eglinton, but a further extension north to Sheppard and Don Mills is not likely in the cards for decades unless the crunch at Bloor-Yonge becomes unbearable.

What is really needed is a detailed report on the way that projected demand will rearrange itself on the expanded network as various segments open. How quickly will latent demand soak up new capacity on the Yonge line even without the Richmond Hill extension? Will traffic from Scarborough on Line 2 switch at Pape or continue west? How much of that traffic is actually destined for the core area as opposed to midtown destinations such as the University of Toronto? What will be the effect of Line 5 Crosstown along Eglinton? When we only see end-state numbers, and only for selected lines, we have no way to evaluate the effect of building the network’s components.

There is a considerable exposure to cost changes, and hence pressure for modification of the design presented so far.

The 2019 Ontario Budget included a preliminary cost estimate of $10.9 billion, while the IBC estimates the capital cost at $10.2 billion (2019$), assuming the representative 15.5-kilometre alignment with 15 stations at a conceptual planning stage. This is a Class 5 cost estimate undertaken by an international project management consultant. Accuracy ranges for a Class 5 estimate can be anywhere on the low end from -50% and on the high end of +100%. [p 19]

The Province claims the Ontario Line will be in service in 2027 and that it will open before the Yonge Extension. There is no guarantee this would actually happen thanks to changing political priorities. Any further delay to “relief” will push York Region to demand that its subway open, especially if it has already been built.

Given the current stage of the project and the early state of design and development, the City and TTC are unable to assess the validity of the stated timetable or the estimated cost at this time. [p 19]

A side note about the technology choice: In some comments and discussions on other online venues, the question of alternate technologies comes up. It is important to remember that the Ontario Line concept depends on the use of trains with smaller dimensions than conventional Toronto subway trains to reduce the size of some infrastructure, and to permit a design to specs (curves, grades) that would not be suitable for subway trains, let alone even less flexible equipment such as mainline commuter railway stock. If one changes the train configuration, one must also completely redesign the infrastructure on which it will run.

Eglinton West LRT Extension



The future of this extension is uncertain because there has been strong pressure both at the municipal and provincial level for part of the line to be grade separated. However, this will affect the business case for the extension by driving up the project’s cost and it is likely that only the future link to Pearson Airport will sustain interest as a strategic part of the network.

Design is at an early stage with only a class 4 cost estimate, and a final design, including number of stops and potential grade separations has not been decided by Council. The staff recommended option of an at-grade LRT in EX4.1 had a preliminary cost estimate of $1.8 B.

Under the terms of the Agreement-in-Principle (AIP), Toronto would have been responsible for 100% of the capital costs of the Eglinton West LRT for the Toronto segment, subject to agreement on the scope of the project between the parties through the stage-gate process outlined in the AIP.

Capital contributions to Eglinton West LRT are unfunded. [p 8]

Also:

The April 2019 report to City Council (EX4.1) indicated that City staff had concluded that the surface-running LRT was the preferred amongst all LRT concepts based on a broad assessment of project benefits and costs. This assessment was consistent with previous analysis and recommendations in 2010, 2016 and 2017. At the time, further analysis of regional benefits of the Toronto segment was expected from Metrolinx. Metrolinx was also continuing work to define the Airport segment, from Renforth Gateway (Commerce Boulevard) and the proposed Regional Passenger Centre at Pearson International Airport. In a March 2019 letter, the Province proposed that a significant portion of the EWLRT be “subterranean” (i.e., tunnelled). Subsequently, in the 2019 Ontario Budget, the Province proposed changing the scope of the Eglinton West LRT extension from a surface-running LRT to put a portion of the extension between Mount Dennis and Renforth underground, primarily between Royal York and Martin Grove Roads. The Province also stated it is committed to connecting to Pearson International Airport through future phases of the project. It is understood that the Province is in the process of developing a revised Initial Business Case for this project, evaluating the similar surface-running and tunnelled options generally considered in the previous IBC developed jointly in 2016. City and TTC staff have received a high-level presentation from Metrolinx summarizing the IBC, but have not received any additional information regarding elements such as cost/benefit analysis, cost estimates, schedules or approach to procurement or construction. [p 25]

At this point, the province has committed only to the segment to Renforth Gateway, in part because the Airport Authority has not yet finalized its plans for a transportation hub at Pearson (YYZ).

Yonge Extension to Richmond Hill



This extension has been on the books for years and the idea dates back to an era when the TTC claimed to have surplus capacity on the subway which could handle the extra load from north of Finch. Politically, an extension to Richmond Hill is a plum long awaited by York Region politicians even though they now face the problem of network capacity as delay plus growing demand have completely changed the framework for a Line 1 extension.

In EX25.1, Council authorized the City Manager and CEO, TTC to enter into an MOU with Metrolinx and York Region, to undertake the preliminary design and engineering phase only for the project in order to advance the project to procurement readiness and develop a Class 3 cost estimate and schedule.

At this time no Class 3 cost estimate has been determined for the project and there has been no decision taken on what portion of the capital costs, if any, the City would agree to assume.

As no costs were envisioned at this stage, there are no funds to consider redirecting. [p 8]

Work on design is at roughly 15% stage, but there is no updated cost estimate.

Metrolinx has initiated a value engineering exercise for the purposes of ensuring that the project scope and budget remain in alignment. The Province is currently undertaking a “challenge function” that includes reviewing the scope of the Yonge Subway Extension (YSE) to determine whether changes may be required from what is currently planned. These changes could include eliminating some stations, adjusting the alignment, or changing the size/location of bus terminals. In addition, Metrolinx has assembled a panel of external advisors with the mandate of reviewing previously developed plans and assessing their technical and commercial deliverability to give advice to the Province. It is expected that reports generated by the Panel will be shared with the City and TTC when available. [p 24]

Given the political importance of this project, it is hard to believe that Metrolinx would publish anything suggesting that the scheme is not a good idea. However, a project change such as elimination of stations could turn the extension more into a regional service running express from Steeles to Richmond Hill than a tool for development around stations along the way. This is a conundrum for TOD advocates – without stations, there is no “transit” around which development can grow, but stations are early targets for cost control because they can be eliminated without hobbling or killing the entire project. To put it another way, if removal of a station trumps the value of development it might generate, then the TOD concept is not all it’s made out to be as a business proposition at least for expensive underground stations.

Municipal Costs

Although the City may celebrate its retention of the subway network, that comes with a cost, one that Queen’s Park was clearly unwilling to assume. The need for the City to provide subsidy of any new lines within its boundaries will almost certainly drive up transit costs in an era when “no new taxes” fights against any attempt to pay for new services.

The TTC will continue to operate the existing network, and will maintain day-to-day operations of the four Provincial priority projects as they come into service, including labour relations. With respect to maintenance functions and service levels/standards, the Province will work with the City and TTC to further define roles and responsibilities through operating and maintenance agreements. Farebox revenue will be used to defray operating costs, and the Province has committed to negotiate ongoing and commensurate operating contributions from other municipalities where subway service is provided. Under the proposal the City will be responsible for funding any net subsidy required to operate each of the priority projects. The Province’s proposal indicates that it would not seek capital contributions from the City for the Province’s four priority expansion projects (Ontario Line, Line 2 East Extension, Yonge Subway Extension, and Eglinton West LRT), in accordance with the commitment that the City will redirect the capital contributions it would have otherwise been expected to make toward incremental investments in the state-of-good-repair needs of the system, as illustrated in the letter attached from TTC CEO Rick Leary. The Province would also consider the redirection of these funds to investment in other transit expansion priorities identified by Council, based on a fully developed business case, and subject to credible progress to the relief of the state of good repair backlog in the subway system. [p 3]

This may look like a fair trade, but it leaves the Province with four projects it will pay for on the never-never with P3 schemes while the City faces substantial costs to maintain and upgrade the existing network.

City Council direct that the City Manager, in consultation with the Chief Executive Officer Toronto Transit Commission, to report in 2020, prior to the launch of the 2021 budget process, on funding and financing options for the reallocation of funds previously approved, identified, or contemplated for the provincial priority projects, for the purposes of state-of-good-repair of the TTC subway network informed by Attachment 1, and other expansion projects. City Council direct the City Manager to work with the Provincial and Federal governments to develop a long-term plan for dedicated and stable funding to support ongoing transit operations, state of good repair, and expansion projects. [pp 5-6]

These are fine words, but we are dealing with a provincial government that froze the gas tax contribution that was planned to double over a five-year period, and a federal government that has already provided billions through both PTIF and its own gas tax transfers. Depending on the makeup of the next government in Ottawa, transit funding could be frozen for years.

The principle terms, Attachment 6, discussed with the Province and recommended by staff provide a starting foundation for agreements that are expected to result in substantial investment in new higher-order transit in Toronto and allow the City to reallocate its resources to fund the TTC State of Good Repair (“SOGR”) backlog and other unfunded transit expansion priorities. … The proposed terms, if endorsed by Council, would represent a new cost-sharing arrangement for capital costs for the Province’s four priority projects. Under the new arrangement, the City would no longer be expected to provide any portion of the capital costs with the caveat that the funds otherwise spent would be directed to incremental subway SOGR or other approved transit expansion priorities. The City will assume the operating costs and the farebox revenues will be used to defray operating costs with any net operating costs will be the responsibility of the City/TTC. The Province has committed to negotiating contributions to further defray costs for the portions of the lines that extend into other municipalities. The maintenance life cycle costs will be subject to future negotiations and agreement(s). As a required part of this arrangement, the City would redirect the funds it would have otherwise considered spending, on the Relief Line South, Line 2 East Extension, Eglinton West LRT and Yonge Subway Extension projects toward the TTC state of good repair backlog and other transit expansion priorities as determined by the City. [p 6]

There is some confusion about just where the City funds, to the degree that they even exist, originally earmarked for what are now provincial projects would end up. There is a huge, unfunded pile of SOGR projects both for subway and surface assets, but there is always competition from something new and shiny that provides vote-getting photo opportunities. There is talk, including from Mayor Tory, that this new-found money might accelerate construction of the Eglinton East LRT to the University of Toronto’s Scarborough campus. However, there is a wrinkle in the provincial proposal.

Eglinton East LRT and Waterfront Transit Network – the Province has indicated a willingness to discuss the other transit expansion projects approved by Council, subject to the terms of the agreement including a viable business case and credible progress towards relieving the state of good repair backlog on the existing subway system. [p 32]

Also:

The province welcomes discussions with the city in respect of other transit expansion projects approved by City Council on April 16, 2019. Final decisions on city proposals to redirect capital contributions to these projects will be informed by: (1) fully developed business cases; and, (2) the vital necessity of making credible progress to relieving the state of good repair backlog on the existing subway system. [Letter from Shelley Tapp, Deputy Minister of Transportation to Chris Murray, City Manager]

“Credible progress” will be difficult when there is a backlog of over $30 billion, and the “new” City money is only $5 billion, most of which is not yet actually funded.

Redirection of Funds: The Provincial proposal is based on the principle that each of the City and Province will be responsible for a proportional share of the required investment in state of good repair and expansion, representing an incremental investment in transit in Toronto. Below is a summary of staff’s assessment of the minimum amount of City capital that will be redirected to incremental subway SOGR and other City transit expansion priorities: $1.2375 B of funded contributions in the Capital Plan to Line 2 East Extension can be redirected.

$2.106 B in capital contributions for the Relief Line South that the City would have been required to make in order to maximize the PTIF2 contributions. This amount is currently unfunded.

$1.8 B in unfunded capital contributions for the Eglinton W LRT can be redirected once a funding source is identified. Once a funding source is identified for the currently unfunded $3.9 B in capital contributions noted above, at a minimum approximately $5.1 B in City funds will be required to be redirected to TTC subway SOGR and/or expansion projects. The Province has conveyed in their letters a nominal expectation of City contributions based on committed amounts to the one-stop Line 2 East Extension and the Eglinton W LRT, as well as a 27% share of the current estimate for the Ontario Line and a pro rata share of the Yonge Subway Extension. The Province has communicated that they estimate this contribution to be approximately $6 B. The needs of the approximately $24 + B unfunded TTC SOGR backlog, plus the funds needed for other City expansion projects exceeds by multiple factors the funding considered above. Additional funding above and beyond the $5.1 B identified here will be required to meet TTC SOGR and expansion needs. [p 9]

The $5.1 billion is not sitting in a City account just waiting to be spent, and Toronto faces severe pressures on its budget and tax levels to come up with this money, not to mention funding the many other TTC needs.

This overall arrangement represents substantial net-new investment in both transit expansion and state-of-good-repair funding in Toronto, and reflects the long-standing City position that all three levels of government have a role to play in funding transit. As a result of this arrangement, the City will redirect at minimum $5.1 billion to address the SOGR backlog and to other transit expansion projects as identified by Council. [p 28]

Unsaid is the fact that this net-new investment requires net-new revenues that have not yet been “identified”, a euphemism for finding new money under a rock, or pillaging other City accounts.

An important distinction between the portions of the overall plan Ontario proposes to fund and those left in the City’s lap is the timing of actual spending. The provincial projects that will be undertaken with private sector financing do not actually have to be paid for until they begin operation, and they show up on the books as a long term payment commitment offset by the asset of the new line which the province will own outright at the end of the P3 contract period. The city projects, notably SOGR spending, cannot be amortized in the same way, and are financed through borrowing that occurs when the major repairs/replacements of system components occur adding to the city’s debt load and putting pressure on other budget lines.

There is an underlying assumption that new riders and their fares will pay for the added operating cost of subway expansion projects as they come online. However, most of the projected riders on the Ontario Line are already using the TTC, and they do not represent new revenue. This is akin to the problem on the Vaughan Extension where most riders were already using the TTC, albeit less conveniently, but shifting them to the subway did not add to the fares collected.

There is a further potential problem if cross-border fare sharing reduces the fare/rider received for the TTC portion of a journey. This would affect not just new riders, but also those now making cross-border trips. This is a major concern for the Richmond Hill extension.

The City/TTC will be responsible for the net operating cost of the lines and the Province intends to negotiate with the relevant municipalities into which rapid transit lines will be extended to secure an ongoing operating contribution commensurate with the service provided in that municipality. [p 10]

The language is a bit stronger in the Province’s proposed Term Sheet for the agreement:

7. (c) in respect of a Provincial Project that extends beyond the City boundary, the Province shall negotiate with the relevant neighbouring municipality an ongoing operating contribution commensurate with the level of subway service provided.

The report is silent on what would happen if, say, York Region refused to pay the cost of operating and maintaining the Richmond Hill extension from Steeles northward. They are now paying almost nothing toward the O&M cost of the Vaughan extension.

We can only hope that the City is not saddled with unexpected costs for projects that they have blindly agreed to.

Exact determinations of operating, maintenance, and potential lifecycle costs will be the subject of future negotiations as the projects proceed through the development process.

Financial impacts will be determined and reported to Council as appropriate and as the negotiations and projects advance. [p 10]

There’s more:

The following matters have been identified and will have to be resolved as part of further negotiations of a master agreement(s). These matters will have financial implications that cannot be assessed at this time. Responsibility for funding costs for maintaining Line 3 and or replacement transit service in Scarborough as a result of the change in scope and delivery of the L2EE;

The City receives approximately $185 M in annual funding from the Provincial Gas Tax Program (PGT). Funding is based on a 30% population and 70% ridership allocation of funds across municipalities. Potential impacts to the PGT program in future from the province owning a portion of the TTC-operated network are not known at this time and are subject to the evolution of the program over time;

Roles and responsibilities for day-to-day and lifecycle maintenance of the four provincial expansion projects, including funding as appropriate;

Impacts to budget, schedule and design of other approved and/or ongoing City and TTC infrastructure projects; [p 11]

On many, many points City Council is asked to endorse a proposal with a blank cheque and little opportunity to escape the responsibility for unknown future costs.

TTC Priorities

Although the TTC Board has asked management for a way to prioritize capital projects, they still do not have such a list. When it appears, this will be a double-edged sword that will condemn lower tier projects to never being done. This is a hard political decision just to publish, much less to defend, a list that means having to say “no” to many potential improvements.

Funding sources are required, but there is too much focus on getting others to pay rather than upping Toronto’s contribution. The Province is giving Toronto the subway and leaving them with the surface system, and there is no Federal commitment beyond PTIF (which is completely spoken for) or the existing gas tax stream. Both governments focus on capital expenditures, not operating, and even for capital the money goes more to new projects than to SOGR.

Prioritization “will inform recommendations to the TTC Board in 2020”. This will certainly be interesting to see. Many projects are interrelated and effectively exist as a group. Other projects, notably those related to fleet replacement and expansion, have a direct bearing on the TTC’s ability to improve service. Failure to invest in garage capacity beyond one new location (McNicoll Garage, opening in 2020) hogties the TTC with limited ability to house a large fleet even if money were provided to buy buses and to pay for their operation.

At best a priority list can only be constructed in broad groups, and there would inevitably be outcries from supporters of projects that did not fall into the top tier. Moreover, there is no guarantee that even that first tier would be funded by the City or by others.

A letter from the CEO of the TTC, provided as Attachment 1, provides an overview of the update and prioritization process underway to determine the most critical base capital needs within the CIP and highlights priority elements of the CIP that pertain to the subway network. This process will inform recommendations to the TTC Board in 2020, future year budgets, as well as the report back to Council recommended by this report regarding the reallocation of funds previously identified as the City’s expected funding for the four priority projects to other critical transit needs, focused on state of good repair to the subway system. [pp 13-14]

Federal Funding

All that is on the table from the Federal Government at this point is PTIF where the Toronto allocation is fully spoken for, and the ongoing rebate of gas tax. Although there is broad support in the election campaigns, or at least an attack of “me too-ism” among parties unwilling to short-change Toronto (at least until the ballots are counted), there is little reason to believe we will see even more transit support from whoever is in charge after October 21. Any federal program must address not just Toronto, but many other medium and large size transit operations across Canada while avoiding the impression in smaller centres that they don’t really matter to the country’s transportation policy.

… the Province is seeking the City’s endorsement of the re-allocation of the funding under the Investing in Canada Infrastructure Program Public Transit Infrastructure Fund Phase 2 (ICIP-PTIF2) to the Ontario Line and the Line 2 East Extension projects, consistent with the ICIP-PTIF2 approvals framework. The Province and the City will continue to advance the SmartTrack Stations Program and Bloor-Yonge Capacity Improvement project through the federal ICIP-PTIF2 program.

The Province and City will work together to seek further federal engagement and funding commitment to all priority projects. [p 4]

Also …

Subject to entering into the Preliminary Agreement, and in anticipation of the realization of the City’s project expectations including project benefits as described in this report, City Council endorse the re-allocation of the federal funding under the Investing in Canada Infrastructure Program Public Transit Infrastructure Fund Phase 2 in accordance with the following, and direct the City Manager to advise the Government of Canada and the Province of Ontario accordingly: a) up to $0.660 billion for the Province’s proposed three-stop Line 2 East Extension as described in the 2019 Ontario Budget; and

b) up to $3.151 billion for the Province’s proposed Ontario Line as described in the 2019 Ontario Budget and Initial Business Case. [p 5]

The federal contribution to what was then called the Scarborough Subway Extension was originally separate from (and predated) PTIF, but Toronto never quite got around to starting that project and claiming the loot. Delays to Scarborough project and “use it or lose it” meant that this commitment was rolled into PTIF rather than being separate from the national program.

Although even the Prime Minister has endorsed the proposed deal, the PTIF contributions are not yet nailed down:

The ICIP-PTIF2 program requires the completion of a detailed federal business case Projects must be sufficiently advanced in preliminary design and engineering (PDE) so as to be able to complete the business case requirements which include questions about scope, schedule, costing, and procurement, amongst others. This information is typically available once a project has reached Class 3 cost estimate and a Level 3 schedule. The City and TTC therefore anticipate that as the Province advances the design of these projects and proceeds through to the submission of applications under the ICIP-PTIF2 program, changes to the scope of the projects may arise. While refinements to planning and design are normal in the evolution of a project through its lifecycle, the City and TTC will need to ensure that the projects continue to materially meet the City’s expectations regarding currently proposed scope, that the projects ultimately deliver the benefits currently anticipated, and that the City’s areas of concern are addressed/mitigated. [pp 28-29]

Although the Feds may have standards for what they will approve, we are in the midst of a very close election race, and parties are falling over each other to endorse this plan whether its components are ready for prime time, or not. However, the Conservatives’ plan to cut future spending by (at a minimum) stretching out the period for doling out PTIF money puts future “commitments” or any growth in federal funding in jeopardy.

Of equal concern is the possibility that pieces will fall off of the projects to which federal subsidy money would be going, and Toronto might not get the value it expects out of the new lines.

Other major projects

In EX4.1, Council directed the City Manager to advise the federal government of the following two City priorities under the program: $500 million for the Bloor-Yonge Capacity Improvement project, as described in Attachment 1 (to EX4.1); and

$585 million as previously approved by City Council in April 2018 (EX33.1) for the SmartTrack Stations Program. The Federal government announced ICIP-PTIF2 funding for the SmartTrack Stations Program and for the Bloor-Yonge Capacity Improvement Project and the Province is working with the City to advance these two projects. [p 10]

SmartTrack

John Tory’s SmartTrack scheme has been dying on the vine for some time now. What was once advertised as a “surface subway” is now a collection of six new GO stations on the Weston and Stouffville corridors with service, probably, every 15 minutes. Of these stations, two are endangered. The Province does not include Lawrence East or Gerrard in its demand modelling because the former duplicates the nearby subway station, and the latter conflicts with the Ontario Line. The City’s demand model does include these two stations, but one can easily see the writing on the wall especially when the Province expects its share of costs to come from nearby development. There is also a potential conflict between a GO station at Lawrence East with continued SRT operation.

Sheppard East

Sheppard East is not on the current provincial priority list in any form.

The Sheppard LRT is still officially in plans, but the Province talks of extending Line 4 to McCowan where there would be an interchange station with Line 2. There would not be through running between the two lines.

Emerging modelling results also show that L2EE will reduce the estimated usage of the future Lawrence East SmartTrack Station, and that it will increase transit ridership on the Sheppard Corridor east of McCowan, but reduce it west of McCowan. Further work is required to fully assess these impacts. Further analysis is also needed to assess the implications of a potential extension of Line 4 (Sheppard), as referenced in the 2019 Ontario Budget. [p 20]

To Be Continued

I will continue my review of the City’s reports, specifically the technical attachments, in my next article.