Three major projects face approvals at Toronto Council and Queen’s Park in coming months.

Should we replace the Gardiner Expressway with an at-grade boulevard between Jarvis and the Don River?

Should “SmartTrack”, John Tory’s signature campaign plank, form a U-shaped line from Markham to Pearson Airport providing both regional and local service in parallel with GO Transit?

Should the Bloor-Danforth subway be extended through Scarborough in place of the once-proposed LRT network, via which route and at what cost?

None of these is a simple problem, and they are linked by a combination of forces: polarized political views of what Toronto’s future transportation network should look like, very substantial present and future capital and operating costs, and competing claims of transportation planning models regarding the behaviour of a new network.

On the political front, Mayor Tory is playing for a trifecta against considerable odds. Winning on all three would cement his influence at Council, but it is far from clear that he will win on any of them. Council is split on the expressway options, SmartTrack has already sprouted an alternative western alignment, and the Scarborough Subway fights for its life with alternative route proposals and the threat of demand canibalized by the Mayor’s own SmartTrack plans.

Financing

The financial front is particularly troublesome, and it has yet to come up for serious debate at Council. For years, Toronto grappled with the combination of falling transfer payments from Ottawa and Queen’s Park, a rising backlog of infrastructure spending, the revenue constraint of tax freezes or barely inflationary increases, and a cap on debt costs as a percentage of tax revenues. These three projects threaten to blow Toronto’s financial model apart.

Council’s financing plans include $232-million (in inflated, as-spent dollars) for remedial work on the eastern portion of the Gardiner. This was established as part of an overall plan to renovate the expressway in place, work that is now underway on the expressway west from Jarvis to the Humber River. However, even to maintain the existing structure is now projected to cost $396m (±10%) while the Remove or Boulevard option comes in at $417m (±20%) and the so-called Hybrid option at $524m (±20%). These are only capital costs for repair and/or construction, not for long-term maintenance. The City faces an initial shortfall of roughly $200m at least, and there is no headroom in the long-term capital borrowing plans to handle this.

The Scarborough Subway Extension (SSE) as approved by Council requires Toronto to contribute $910m to the project’s estimated $3.56b total cost (including inflation). Of this, $745m would be financed through an additional property tax which has ramped up to 1.0% in 2015 and will increase to 1.6% in 2016. The remaining $165m would come from development charges.

Two problems face Council here.

First, there are proposals to shift the location of the SSE and to add one or more stops to the route to improve its attractiveness. Any increase in cost – typically $300m/km plus $150m for a modest station – must be funded 100% with City money as both Queen’s Park and Ottawa have capped their contributions based on the original LRT network plans. The proportional increase to that $745m base would be substantial, and it would require a significant increase above the current tax level.

Second, although the SSE tax finances the capital cost, the city’s debt model looks at borrowing costs as they occur relative to current-day revenues. Yes, there is a tax in place to pay down the SSE debt eventually, but this does little to offset the short-term bulge in total borrowing as the City’s contribution to the project is paid out, mainly in the early 2020s.

As proposed by Mayor Tory, the SmartTrack scheme would cost $8-billion of which the City would pay 1/3, or $2.7b. This would paid through “Tax Increment Financing” as described in Tory’s campaign literature:

To fund the SmartTrack line, Tax Increment Financing revenue will be leveraged over 30 years as development activity and assessed values increase along a new transit route. It is estimated that $2.5 billion in present value dollars can be raised over that time. All revenue estimates are based only on projected new office development in three precincts within the following districts along the SmartTrack line: the Central Core; the East Don Lands site; and Liberty Village. Tax Increment Financing revenue will likely prove higher than $2.5 billion once development near other stations and residential development are added. This requires provincial approval, including a change to the 1 per cent legislative cap.

This paragraph is breathtaking in its assumptions. TIF is intended for “brownfields” developments where only the presence of major public investment allows an area to rejuvenate and a true tax increment (relative to what would otherwise occur) to be available for capture. This is far from the situation in the core or in Liberty Village, and a good deal of the East Don Lands is proposed for or under development even before SmartTrack comes into existence. Tory’s campaign provided no supporting material to justify its claim, nor is there any discussion of the net new taxes actually available after paying for improvements needed to serve any new developments beyond paying for SmartTrack.

A further oddity is that there is no mention of TIF benefits in the areas in York Region and in Mississauga that were first mooted as the real targets of what is now called SmartTrack.

If Toronto is unable to finance its share of SmartTrack through TIF, or if senior governments do not come to the table at the projected level, then either Toronto must find more money for its share, or recognize that SmartTrack, as proposed, is unworkable.

The combined value of Toronto’s capital needs for the three projects could push the city well beyond its target debt limit. Even if we shrug and say “so what”, we would be left with a city with no remaining borrowing room, constrained in launching any other projects without offsetting revenues. There is a point at which simply spending more money will not solve every problem.

Picking a Route: Maps and Crayons at the Ready

The Gardiner options have been described at length elsewhere and I am not going to rehash them here. The core issue is whether an elevated section will remain between Jarvis and the west side of the Don River, and how its alignment would affect neighbourhood development along the Keating Channel.

On SmartTrack, the original plan was for the western leg to run along Eglinton to the business centre south of Pearson Airport. However, the surface alignment originally thought to be available by SmartTrack’s planners does not actually exist. Moreover, a difficult tunnel under Mount Dennis to link the Weston rail corridor to Eglinton Avenue would make connection with the Crosstown LRT station difficult. Recently, another alignment has cropped up in an illustration posted by Chief City Planner Jennifer Keesmaat. (The soft resolution on this image is from the original on Twitter.)

An alternative alignment for SmartTrack would avoid the significant problems of the Eglinton West leg and would add stops in Weston northern Etobicoke. It is unclear how this would relate to the recently opened UPX service that shares much of the same corridor.

In Scarborough, there were many competing alternative routes in response to a concern that the approved McCowan alignment is too close to SmartTrack and that ridership would suffer. This has been whittled down to three options: Bellamy, McCowan and a Midland. Whether any of these is actually viable will depend on key issues such as the frequency and fare level of SmartTrack as compared to the TTC subway. Other options have been proposed but are not in the City/TTC evaluation including a branch off of SmartTrack along the SRT corridor east to McCowan and possibly beyond to Malvern. An important issue that has not been discussed is the question of where, exactly, the “Scarborough Town Centre” station on any of the subway proposals would actually be – within STC itself, or at McCowan – and how these options will serve existing and planned developments, not to mention bus feeder services.

If additional costs become a problem for Council, it would not be surprising to see the leg north of STC lopped off (or made into a “Phase 2”) to stay within the $3.6b overall budget.

An issue for the entire network is that Metrolinx now speaks of the electrification of GO, a prerequisite for very frequent service, as starting in 2023. It is unclear what service levels, not to mention fare integration schemes, will exist on GO by the time various other projects plan to begin operations.

Competing Projections of Ridership and Travel Time

Projections of future conditions – ridership, travel times, road congestion – are central to all three projects. In the case of the Gardiner, there are competing views of how the boulevard option might affect travel times for various trips and types of road users. “Fighting congestion”, a major goal for Mayor Tory, underpins his support for the so-called “Hybrid” option that would leave much of the elevated expressway intact.

SmartTrack was sold to Toronto voters on the basis that it would speed trips into downtown from outer parts of Toronto. What is not yet known is how SmartTrack would relate to GO services in the same corridors, or what sort of fare integration there would be between various transit systems. “Fare integration” is too often used synonymously with “fare media integration” which is far from the same thing. If the UPX cannot break even with fares in the $20 range, what will be needed to support SmartTrack? What size of trains and frequency of service will be required to make SmartTrack a truly attractive option?

The Scarborough Subway evolved from an earlier LRT plan buttressed by claims that demand would be in the range for which subway technology is suitable. However, that demand projection brought in riders from the north (much as regional trips come to Finch Station). These riders quite reasonably should be assigned to improved GO and/or SmartTrack services, not to the subway.

A fundamental problem with all projections is that the set of assumptions built into them is usually far too complex to be articulated in public summaries. Motorists see charts showing a five minute extra trip time, but this has no context including the underlying assumptions, and the behaviour of the wider network. We know that the model presumed many transit improvements, but we are not told how the transit network’s demand will look in 2031, only the expressway. If money is scarce, we should know where the greatest need will be rather than deciding on a Gardiner option separate from the future of SmartTrack and the SSE, not to mention the Downtown Relief Line. This information is supposed to be available later in 2015, and it could significantly change the debate about options and relative priorities.

A further technical issue with demand models is that they generally don’t do well at distinguishing flows between multiple nearby options. Moreover, some modelling has been done without capacity constraints so that projected demands greatly exceed the actual available capacity. This in turn might be used as an excuse for massive expansion rather than evaluation of network alternatives (the Yonge Subway capacity expansion vs the DRL is a classic case).

The Politics of Decision Making

Although Mayor Tory speaks of the need for consensus in Toronto, the Gardiner vote is surely one he wants to win both to show his leadership as Mayor and set the stage for other debates to come. The Star reported that Tory’s office is lobbying for votes:

… his senior staff are lobbying councillors to back the mayor. “It wasn’t an intense as the (former mayor) Rob Ford strangleholds, but it was a heated discussion,” Councillor Paul Ainslie — a member of Tory’s executive who has decided to vote for the boulevard — said of a visit by Tory’s principal secretary. “He said, ‘You’re part of the team, it’s got to be a team effort.’ I’m happy to be part of a team, but I’m not going to support bad city planning when we could spend $500 million on transit, housing and other projects.”

Tory might win on the Gardiner at Council only to face the problem of getting provincial approval for the Environment Assessment as John Lorinc details in a spacing.ca article today. Would Queen’s Park block the Gardiner East project just as the Davis government did so many years ago? Do Kathleen Wynne and her Environment Minister Glen Murray (whose riding includes the Gardiner East) want to engage in this question? Evading the issue isn’t an option because either approval or rejection of the Environmental Assessment sends a strong message about the government’s real priorities.

John Tory has shown that he can change his mind with his position on funding TTC operating subsidies (not enough, by far, and threatened with cuts next year), and on the extremely divisive issue of “carding” by Toronto Police. What other changes might be in store? Does Tory want to govern protecting his right flank from a 2018 election attack by the Ford brothers, or should he aim for a centre-left coalition?

Toronto cannot debate major transportation and financial issues as if each exists as a discrete, isolated decision. What we choose to do affects the transportation network and the city as a whole. That’s a much more complex debate, not an easy path, and pleasing everyone simply is not possible. Telling people what they want to hear might work in an election campaign, but actually running a city and making choices for its future are the challenges facing our city.