High Speed Rail: London - Kitchener-Waterloo - Pearson Airport - Toronto

[crs1026]

I think that this is a key observation that may be overlooked in all the skepticism about the project - it reminds me of the Ontario Liberal's gambit on the Ontario Pension Plan and how that contributed to an enhancement of the Canada Pension Plan that encompassed some of Ontario's plan.

Very likely that Wynne is posturing with a private hope that Ottawa steps in - so that no matter how the project plays out, she can claim credit for initiating and advancing it. Desperately hoping, perhaps.

Any version that Ottawa will pay money for, I'm sure that she will accept.

D-S put out comments a while back to state that HSR wasn't really needed. One suspects that he felt he had to, so that VIA's own proposal didn't look like it was missing a mark and so the costs and merits of the two didn't get confused. Especially since anyone arguing against the more fiscally responsible HFR would undoubtedly point to the higher-priced HSR in their rhetoric, so VIA is at risk when Ontario talks HSR.

But - as @steveintoronto points out, there is indeed 'radio silence' between the two agencies. Their private hopes and wishes probably align pretty well, and they can likely live with a number of potential outcomes that advance something, anything better than what we have today.

As for GO transit improvements, they are already going as fast as they realistically can. Look at all the track work, station upgrades and new stations. This is all needed before launching RER. Realistically, how much can they accelerate that timeframe? Moreover, it's those GO RER improvements that make the Kitchener HSR feasible. So it's leveraging investments being made now.

The issue with ML is not that they are not doing stuff. They are doing a lot. The issue is more the political behaviour of promising the moon and the stars but not being concrete or accountable for the 'what by when' of actually doing stuff. ML is a participant/enabler in this although it would be career-limiting for them to directly confront some of the political grandstanding with facts. There is also project management/accountability issue that they don't set a public priority list and stick to it.

In the end, the critical path is still through the bypass. Being a negotiation, we will hear absolutely zilch about it until a deal is done. I do suspect ML is trying hard to advance this. CN's best bargaining strategy, unfortunately, is to rag the puck and let Ontario/ML's angst to get moving drive the price upwards. Or maybe the larger VIA deal will have to come first, as CN would be foolish to set any precedent in the Halton deal that they couldn't live with should VIA want to negotiate towards HFR. If there is any place that Ottawa and Ontario need to come together and act in a united fashion, it's this one. Alas, it may be too low profile to have any political leverage. And so we will wait.

- Paul

 

[TOareaFan]

Actually, barring a recession, it does. Moody's recently upgraded Ontario's outlook (following downgrades in 2012/2015), interest on existing debt continues to drop as they roll it over, and revenue is up. All those things make significant space in borrowing capacity at current tax rates.

Actually, while the weighted average interest rate on Ontario debt is falling as debt is rolled over...the actual debt service cost (the annual interest) on our debt keeps rising because we keep adding more debt. In 2013 our debt service costs were just over $10B .....this year we are pushing $12B.

Borrowing, even at low interest rates, costs money.

 

[jje1000]

Actually, while the weighted average interest rate on Ontario debt is falling as debt is rolled over...the actual debt service cost (the annual interest) on our debt keeps rising because we keep adding more debt. In 2013 our debt service costs were just over $10B .....this year we are pushing $12B.

Borrowing, even at low interest rates, costs money.

Yup, debt servicing is the third largest provincial expenditure after healthcare and public education (even more than transit). Hence the importance of getting funding from the infrastructure bank or a private partner.

Ontario spends $11.4 billion a year just to service its debt — more than it spends on all social services for adults or to run its universities and colleges. It’s the third largest single item in the budget after health care and public education, and that’s in a historically low-interest-rate environment.

http://news.nationalpost.com/news/c...res-what-will-happen-when-interest-rates-rise

 

[jje1000]

Conservative commentary on the plan (will be important in seeing if plans survive past the election):

Statement from Ontario PC Transportation Critic Michael Harris on high-speed rail from Toronto to Windsor
Posted on May 19, 2017
“Southwestern Ontario has been waiting on high-speed rail for years. Now, a year out from the election, the Wynne Liberals have shown up in London to re-announce another transit project they will never deliver on.

“Today’s announcement isn’t about making life easier for Ontario families. It’s about Kathleen Wynne’s short-term goal of re-election in 2018.

“This is not the first time we’ve seen the government make a promise in order to win votes. Before the 2014 election the Wynne Liberals slapped together a last minute study on high-speed rail to sell voters. Years later and we have nothing to show for it. Now, the government is claiming high-speed rail will be operational to London by 2025, yet last year the government confirmed that just the environmental assessment will take roughly five years. This is yet another Liberal stretch goal.

“Whether it’s the Scarborough subway, Niagara and Kitchener two-way, all-day GO, or high-speed rail from Toronto to Windsor, this Liberal government’s legacy is promises made, promises broken.

“What we need is real investment and a commitment to infrastructure that will meet our transportation needs today. People are sick and tired of waiting to see if promised Liberal trains will ever pull into the station.

https://www.ontariopc.ca/statement_...is_on_high_speed_rail_from_toronto_to_windsor

The Liberals are making high-speed rail promises on the premise they’ll be in power two decades from now #PanderExpress #onpoli 1/6

They’ve been in power for 14 years. If they actually wanted to pursue this idea they would have done so #PanderExpress #onpoli 2/6

Del Duca’s like Lyle Manley in the Simpsons episode which at least made us laugh! Here the joke is on Ontario #onpoli 3/6

A promise for 2041 right now is a last ditch effort before an election #PanderExpress #onpoli 4/6

Liberals say this idea is 40 years overdue. They’ve had 14 years to look at this #PanderExpress #onpoli 5/6

We need serious investments in transit, roads and our infrastructure. Not gimmicks. Ontario needs smart government #onpoli 6/6

https://twitter.com/brownbarrie/status/865672794767376384

 

[TOareaFan]

Yup, debt servicing is the third largest provincial expenditure after healthcare and public education (even more than transit). Hence the importance of getting funding from the infrastructure bank or a private partner.



http://news.nationalpost.com/news/c...res-what-will-happen-when-interest-rates-rise

When that Post article was written our new budget had yet to come out. Here's a quote from that document:

Interest on debt expense is forecast to be $11,581 million in 2017–18 and $12,035 million in 2018–19

 

[denfromoakvillemilton]

Why the heck does Ottawa need commuter rail? It's actually bad enough that Stage 2 of their LRT plan takes LRT out of the greenbelt, enabling sprawl when Ottawa has plenty of room to densify inside the greenbelt. You want to add commuter rail to it? No way.

After Stage 2 is completed in 2024, Ottawa will have a transit system that's basically as effective (for its size and layout) as Toronto. At that point, its mostly BRT corridors left and those can be funded with a lot of municipal funding. Intercity rail will become a much bigger issue at that point.

As for GO transit improvements, they are already going as fast as they realistically can. Look at all the track work, station upgrades and new stations. This is all needed before launching RER. Realistically, how much can they accelerate that timeframe? Moreover, it's those GO RER improvements that make the Kitchener HSR feasible. So it's leveraging investments being made now.

To get people from Pembroke, Brockville, Cornwall, etc to work imo. I don't think bringing LRT or BRT to those places is feasible. I agree with intercity rail, but given how the Liberals handle rail promises, I wish it would go faster. For GO, off peak weekday service was promised for Stouffville and the rest of the off peak and weekend Brampton service is not here.

 

[steveintoronto]

The issue is more the political behaviour of promising the moon and the stars but not being concrete or accountable for the 'what by when' of actually doing stuff. ML is a participant/enabler in this although it would be career-limiting for them to directly confront some of the political grandstanding with facts. There is also project management/accountability issue that they don't set a public priority list and stick to it.

More than most any other issue, electrification (the lack of) shows that.

In the end, the critical path is still through the bypass. Being a negotiation, we will hear absolutely zilch about it until a deal is done.

Alas, it may be too low profile to have any political leverage. And so we will wait.

I don't think many folk understand the gravity of the Missing Link. And about same quantity or less understand the Infrastructure Bank (an admittedly poor name, but inherited and established by other nations, orgs). So one can only hope that huge discussion is going on behind the scenes on this. It certainly isn't a vote getter, incredibly important as either are.

From jje's OntCon quote:
“What we need is real investment and a commitment to infrastructure that will meet our transportation needs today."
lol...they STILL haven't stated what their proposals are.

An army has to be more than snipers.

 

[Tuscani01]

Actually, while the weighted average interest rate on Ontario debt is falling as debt is rolled over...the actual debt service cost (the annual interest) on our debt keeps rising because we keep adding more debt. In 2013 our debt service costs were just over $10B .....this year we are pushing $12B.

Borrowing, even at low interest rates, costs money.

Though Moody's looks at it a different way:

"The current low interest rate environment has been beneficial to Ontario," said Michael Yake, a Vice President and Senior Analyst at Moody's. Ontario's interest payments amounted to 8.9% or revenue as of March 31, 2016, little changed from 8.8% eight years earlier."Despite the material increase in debt, Ontario's interest expense has remained relatively stable and is forecasted to continue to remain so."

Debt to GDP, as the government continues to say, is pretty stable.

 

[kEiThZ]

Maybe. Very few complain about the $4B/year MTO is taking on in debt for highway projects. Even on Urban Toronto's own Roads thread, capital costs are rarely mentioned but nearly every transit thread goes over capital costs in great detail. Tory has even been praised for taking on more debt than necessary on Gardiner to accelerate construction.

In short, I don't think the public really cares about $20B in debt BUT you are probably right that many will not tolerate it for a train to London.

The public never cares about individual line items. They only care about the "debt" and they care that services they use work (hence the spending on roads). This creates a sort of chicken or egg situation for transit projects. They won't care about it till they use it. And because they've never used it, they aren't passionate about getting it funded. You need outside capital to break that logjam. Hence the bank. I just can't see Ontario funding this by itself or even lead it.

 

[kEiThZ]

To get people from Pembroke, Brockville, Cornwall, etc to work imo. I don't think bringing LRT or BRT to those places is feasible. I agree with intercity rail, but given how the Liberals handle rail promises, I wish it would go faster. For GO, off peak weekday service was promised for Stouffville and the rest of the off peak and weekend Brampton service is not here.

Do you have numbers for Ottawa commuters from Pembroke, Cornwall and Brockville? Having lived and worked in Ottawa, I would bet money that none of those cities could support more than 3-5 buses in each direction per day. Let alone commuter rail. Read up on Moose Rail. A private intuitive for commuter rail in Ottawa. They can't find capital. For good reason.

 

[TheTigerMaster]

Ontario does not have $20 billion to spend on HSR over the next 8.5 years.

The HSR plan won't cost $20 Billion. Despite the BS the Liberals are peddling, realistically this thing will terminate at London. At 200 km/h speeds, that would have a capital cost of $4 Billion, if I'm recalling correctly.

 

[TOareaFan]

Though Moody's looks at it a different way:



Debt to GDP, as the government continues to say, is pretty stable.

I don't think Moody's is looking at it differently at all....just saying the same thing as me but differently.

"The current low interest rate environment has been beneficial to Ontario," said Michael Yake, a Vice President and Senior Analyst at Moody's. Ontario's interest payments amounted to 8.9% or revenue as of March 31, 2016, little changed from 8.8% eight years earlier."Despite the material increase in debt, Ontario's interest expense has remained relatively stable and is forecasted to continue to remain so."

They note a material increase in debt...and they note that their interest payments as a percentage of revenue is only up by .1%....but 8.9% of Ontario's 2016/2017 revenue is significantly more in dollar terms than 8.8% of 2008/2009 revenue.

The word "relatively" and using it on a percentage of revenue can be misleading.....When you build a fiscal situation that is based on percents of revenue staying "relatively" stable and debt to GDP being relatively stable you really are relying on two things.....for the first you are relying on continued low interest rates....for the second you are counting on continued economic growth.....that may happen but, to a large extent, you are relying on factors outside of your control continuing. If rates rise and/or growth slows/stops, one thing is for sure....the debt you take on today will still be there and will still need to be serviced.

All that said, it means nothing in this conversation.......my point was just in response to someone who said our debt service costs were declining....they are not.

 

[TOareaFan]

The HSR plan won't cost $20 Billion. Despite the BS the Liberals are peddling, realistically this thing will terminate at London. At 200 km/h speeds, that would have a capital cost of $4 Billion, if I'm recalling correctly.

The part to Windsor costs $16B of the $20B?

 

[TheTigerMaster]

The part to Windsor costs $16B of the $20B?

Scenario A (300 km/h)
To Windsor: $20 Billion
To London: $15 Billion

Scenario B (250 km/h)
To Windsor: $7.5 Billion
To London: $4 Billion

Note that these figures don't include contingency

The alleged plan is to complete HSR to London by 2025, and to Windsor by 2031. Realistically, the overwhelming likelihood that this government will only be in power to see it built to London (if even that). Scenario B (200 km/h) is most likely to be chosen, as it provides nearly all the benefit of Scenario A at a substantially lower cost. Building Scenario B to London will cost $4 Billion.

 

[TOareaFan]

Scenario A (250 km/h)
To Windsor: $20 Billion
To London: $15 Billion

Scenario B (200 km/h)
To Windsor: $7.5 Billion
To London: $4 Billion

Note that these figures don't include contingency

The alleged plan is to complete HSR to London by 2025, and to Windsor by 2031. Realistically, the overwhelming likelihood that this government will only be in power to see it built to London (if even that). Scenario B (200 km/h) is most likely to be chosen, as it provides nearly all the benefit of Scenario A at a substantially lower cost. Building Scenario B to London will cost $4 Billion.

yeah, I guess there is a $16B difference ......for some reason my mind's eye compared 20 to 15 and 7.5 to 4.......did not do the full comparison....thx for reply!