Updated June 2, 2015: Mayor Tory has sent a letter to his Budget Chief, Councillor Gary Crawford, outlining his goals for the 2016 budget. This includes a better explanation of the two percent goal for budgetary efficiencies, and a

Find at least 2 per cent in savings across all City agencies and divisions. We need to take a determined, practical, business-like approach to eliminate the inefficiency marbled throughout government. This isn’t just about saving money. It is about using our resources responsibly so we can provide better services to the people of Toronto. … Continue investing in transit to cut congestion and gridlock. Transit connects people to jobs. It provides a means of getting around for people who can’t afford a car. As we continue to work towards building longer-term projects like SmartTrack and Scarborough Subway, we must continue to improve and expand services to reduce transit congestion now.

Finding efficiencies and improving transit are not mutually exclusive, but the ever-present problem with transit budgets is that just to “stand still”, to provide the same quality of service to a growing ridership base, costs about 5% in added costs each year. The number could even be higher but for the TTC’s inability to improve peak service.

Meanwhile, the TTC’s CEO Andy Byford said at the recent Board meeting that he would not cut front line services. How both the TTC and the Mayor plan to reconcile competing goals remains to be seen.

The original May 26 article follows below.

Two days ago, as I write this, Mayor John Tory accompanied by TTC Chair Josh Colle and TTC CEO Andy Byford held a press conference at the unlikely location of Kennedy and Progress to announce the next wave of service improvements funded through the 2015 Operating Budget.

Yes, this is the same Mayor Tory whose campaign rejected service improvements out of hand, not to mention the fact that they were not his idea, but Olivia Chow’s, his rival.

Presto Chango! Candidate Tory becomes Mayor and discovers that his predecessor Mayor Ford has stripped the TTC of valuable service. Maybe we should put it back, he declares, and so, golly gee, come June 21 much of what was lost will now be found on many streets of Toronto. As an extra bonus, there will be more night service!

Champagne all around! Well, maybe in small glasses.

No sooner does the TTC publish a report with the detailed list of changes, it also published a preview of the 2016 budget process in which we learn:

Submissions for the 2016 Budgets are due to the City in June. This is a very tight timeline and staff are currently preparing these budgets in accordance with the City submission requirements (guidelines have been received for the Capital budget and are pending for the Operating budgets) and in consideration of the following: A City requirement for a 2% efficiency reduction in the net Operating budget (approximately $10-$11 million for TTC and $2 million for Wheel-Trans).

[Many other items which can be read in the report]

There are two small problems here: Council has never passed any direction that agencies reduce their budgets (which in the TTC’s case means its subsidy requirement).

The TTC will require at least $100-million more to operate the system in 2016. This must come from subsidy, fares or some combination of the two. Mayor Tory seems happy to use the TTC as a backdrop for self-promotion even though budget and service decisions actually rest with the TTC Board and with Council, but is careful not to mention that the TTC could actually face a funding cut in 2016. A related problem faced by both the Mayor and the TTC is the city’s cap on borrowing which is linked to tax revenues. Debt service must not exceed 15% of the taxes (which account for only about 1/3 of the total city budget), and all of the borrowing room is spoken for out into the early 2020s. Part of Tory’s reversal earlier this year included the recognition that the TTC needs more buses. Who is paying for them? The riders through the farebox, not a capital subsidy from the City or Queen’s Park. Here is a summary of where the extra $95m in City subsidy is going for 2015: Part of the cost for new buses will show up in 2016 and will be funded, under current plans, from fares again. However, there is a limit to the amount of capital spending that can be sustained from the farebox considering that the TTC’s annual capital budget (excluding special projects such as subway extensions) run to $1-billion or so, roughly the same as all of the fare revenue. The costs shown for many items above are partial year costs. For example, the service improvements that will come into play in September will only operate for 4 months in 2015, but for 12 months in 2016 and beyond. Money to pay for full year service has to come from somewhere. The sad and outrageous truth is that Mayor Tory is happy to bask in the warmth of publicity for better transit service, but his budgetary goals work in utterly the opposite direction. In August 2014, CEO Andy Byford produced a report listing all of the possibilities for improving the TTC together with their cost. For his troubles, he was the subject of vitriol from, among others, the Tory camp who felt the TTC was endorsing Olivia Chow’s transit platform. Almost all of the recommendations subsequently became TTC and Tory policy. The TTC Board should insist that Byford produce budget options that don’t acquiesce meekly and implement the Tory cut, but actively show what could be achieved if only the TTC had better funding. That’s what the TTC Board and its Chair are supposed to do, not simply to provide a photo op every time John Tory wants publicity.