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According to a report prepared by the City for Council's Executive Committee, a property tax increase will be required to fund even the reduced SmartTrack proposal which has emerged (an LRT for Crosstown West to Renforth Gateway and six additional GO stations), an increase Mayor John Tory has long said was unnecessary.
The cost of this part of the 15 year Toronto transit plan is estimated at $3.2bn of which Toronto would pick up $2bn. It is hoped the Greater Toronto Airports Authority and the City of Mississauga will also pay $440m to extend Crosstown West to the airport - but it is unclear what would happen to Crosstown West if they decline.
This report will be considered by a special meeting of the Executive Committee on Tuesday Nov 1st.
Development charges are expected to bring in $440m over the next 25 years (though SmartTrack's incremental impact on development has not been factored in) leaving a 3% property tax increase and contribution from "tax increment financing" (TIF) to cover the remaining cost.
This 3% increase could be reduced to 2% using "Revenue Matched Financing", but according to the funding and finance strategy report this may require additional legislation and would cost more should the expected additional revenue fail to materialize. There is a Tax Increment Equivalent Grant programme to encourage new development along transit corridors but if this continues on SmartTrack corridors, it would cost the city $300-$500m over the next decade, requiring a further 0.5-1% property tax increase. Also, as the report points out, TIF funds used to pay for transit cannot be used to help pay for the increases in services required by additional people and developments, which is why only half are allocated using this model.
To reassure the Province that the City will be committed to its part of the deal, the reports propose a series of "gates" at which point Council would have to re-approve continuation. In the event of cancellation at each point, the City would have to reimburse Metrolinx for all costs incurred as a result of the decision to accommodate SmartTrack. The City estimates the key decision point (when about a third of the planning and design will have been done) will be in summer 2018 for the six new SmartTrack stations and Spring 2019 for the Crosstown West extension.
Costs of funding the construction of the Relief Line and other projects described in the City's 15 year transit plan (eg the Waterfront Transit 'Reset') have been excluded from this report, so it appears either property taxes will need to rise still further, or the transit plan must be further weakened.
Join the SmartTrack or Crosstown discussions in our Forum threads, or leave a comment below.
