GO Transit: Service thread (including extensions)

[TOareaFan]

The biggest problem with I have with the notion that "segregating the money for transit makes sure it goes to transit" is that it offers no guarantee whatsoever.....the segregation of the money was the concept of the Hydro Debt Retirement Charge introduced in 1999 to pay off a $7.8B.....Bonnie Lysyk, said last year that the amount collected has grown to $10.6 billion as of 2013 — even though the government claims there’s still $3.9 billion owing.

Today, magically, we are told that it will disappear in 2016....estimates are that the DRC raises about $1B a year.....so, if the $3.9B government figure is to believed, the remaining balance (wherever that came from) will only be half paid off in 2016 yet, for some reason (political?) they can eliminate this charge before the segregated debt it was meant to pay is paid off).

This is an example of what can happen to segregated monies.....and that can happen no matter who is the government.

 

[innsertnamehere]

I'm guessing they added additional hydro related debts to the list that the fee would "retire".

as for the money, the difficulty is rerouting the money as you will be in effect cancelling projects (a physical concept).

It would be like rerouting the current portion of the gas tax that the provinces give to municipalities, while possible, it wouldn't exactly be popular or really realistic.

Wynne was smart to give the gas tax revenues to the fund instead of the taxes she will actually be raisng, as those will replace the general revenues that currently come from the gas tax. Nobody is clamouring over cancelling gas taxes, though a politician (Hudak) may want to cut what was introduced. The new taxes that were introduced however were general revenue, meaning that the cuts would come from general revenue.

 

[TOareaFan]

I'm guessing they added additional hydro related debts to the list that the fee would "retire".

That is precisely the point.....if segregating funds is, as we are told, a way of creating transparency and accountability then the track record is not that great.

as for the money, the difficulty is rerouting the money as you will be in effect cancelling projects (a physical concept).

I was responding to the idea of immediately issuing the bonds before any projects are started to protect the funding.......sure, it is harder once some projects start but it certainly does not guarantee for all time that these segregated funds can/will be used for future transit. Even projects commenced can, as we know, be cancelled.

Wynne was smart to give the gas tax revenues to the fund instead of the taxes she will actually be raisng, as those will replace the general revenues that currently come from the gas tax. Nobody is clamouring over cancelling gas taxes, though a politician (Hudak) may want to cut what was introduced. The new taxes that were introduced however were general revenue, meaning that the cuts would come from general revenue.

This is the smoke and mirrors part of the recent announcement that will be interesting to see it all play out. The money being reallocated to the transit fund are currently funding other government obligations for a government that is running about a $11B deficit....so you are right those monies have to be recouped elsewhere and how they sell that they are not raising taxes for transit will be very interesting.......will anyone believe them? Should anyone believe them?

 

[innsertnamehere]

they have already announced this years deficit, its something like 500 million lower than last year. it will be made up with new cuts, not just larger deficits.

 

[TOareaFan]

they have already announced this years deficit, its something like 500 million lower than last year. it will be made up with new cuts, not just larger deficits.

OK...so deficit is $10.5B...but that is before, what, $1.3B is shifted over to the transit fund(s)? Add in that all the pre-budget announcements that have been made have been new money out.....how do you keep the budget deficit at $10.5B? Not even including they have actually promised to balance the thing by 2016/2017...how does that happen now?

If, as you say, the money taken out of general revenues and shifted to transit is going to be made via cuts to service (although I am pretty sure Wynne/Murray are on the record as saying there will be not cuts to services/programs) how is their funding strategy any different than Hudak's?

 

[rbt]

The biggest problem with I have with the notion that "segregating the money for transit makes sure it goes to transit" is that it offers no guarantee whatsoever.....the segregation of the money was the concept of the Hydro Debt Retirement Charge introduced in 1999 to pay off a $7.8B.....Bonnie Lysyk, said last year that the amount collected has grown to $10.6 billion as of 2013 — even though the government claims there’s still $3.9 billion owing.

Surely there is interest on the debt. Otherwise we could just hold it for 10,000 years then pay it off with a single persons electricity bill in year 12013.

 

[TOareaFan]

Surely there is interest on the debt. Otherwise we could just hold it for 10,000 years then pay it off with a single persons electricity bill in year 12013.

Yes interest is what popped into my mind (although the fact that the Liberals did not come out and say "interest caused this" leads me to believe the original amount included the interest). I also think that Bonnie Lysyk is bright enough to have thought of that if it were the cause.

That said, I did run a quick calc.....if you assume 5% interest is added every year to the opening balance then $1B is taken off at the end of each year...the $7.9B would have been paid off somewhere between 2009 and 2010.

Using that very crude calculation, for there to be $3.9B owing in 2013 the interest rate would have to be 11%.

Even so, to get back to the point of transparency/accountability, if it has taken 14 years of the debt retirement charge to reduce the amount from $7.9B they are now telling us that the same charge will have eliminated the balance in two years?

It just shows you that no matter how segregated and dedicated taxes are....governments (any government) can find ways to shuffle things around.

 

[rbt]

It just shows you that no matter how segregated and dedicated taxes are....governments (any government) can find ways to shuffle things around.

Point taken.

 

[historybuff]

Yes they can buy their own bond back with the money they raised from the issue and the loss (if any) would be minimal. In fact, if rates have gone up they can buy back the bonds at a discount. There is no NPV discount if the bonds are paying their interest in an annual coupon payment (as is the norm)....its not like the buyers of the bonds prepaid for the interest.

During the days of federal and provincial surpluses governments were regularly retiring bond issues.

Bonds are generally issued with a set amount of years for a set interest rate. The idea is that Governments are pretty good credit risks, and unlikely to default (since they can always use taxes to pay their bills). Different bonds have different maturity and rules, depending on what the need for the money is. "Retired" issues are generally bonds that have run their course.

It doesn't make any sense for the Province to issue bonds one year and pay them back before they run to retirement; investors would lose confidence in them, and that would force them to pay higher interest.

If a government is running a surplus, then they might not have to issue _new_ bonds to take over for old; but they aren't retiring currently outstanding debt.

All that said; that doesn't mean the government has to use the money for something a previous administration committed to; "transit" funds could easily become "transportation" funding, and used to expand highways, for instance.

 

[TOareaFan]

Bonds are generally issued with a set amount of years for a set interest rate. The idea is that Governments are pretty good credit risks, and unlikely to default (since they can always use taxes to pay their bills). Different bonds have different maturity and rules, depending on what the need for the money is. "Retired" issues are generally bonds that have run their course.

It doesn't make any sense for the Province to issue bonds one year and pay them back before they run to retirement; investors would lose confidence in them, and that would force them to pay higher interest.

If a government is running a surplus, then they might not have to issue _new_ bonds to take over for old; but they aren't retiring currently outstanding debt.

All that said; that doesn't mean the government has to use the money for something a previous administration committed to; "transit" funds could easily become "transportation" funding, and used to expand highways, for instance.

We may be arguing semantics........if the Government of Ontario sold $29B of bonds to me and I held them....then they offered to buy them back from me at a price that made sense in the market...that would in no way impact the confidence level the market would have in them. If they were 10 year bonds and after 10 years I didn't get my money back....now you have a confidence issue.

That said, I think we are in agreement on the general principal that issuing bonds right away in no way creates certainty that there will be a 10 year $29B transit expansion. There are many ways that could change.

 

[historybuff]

We may be arguing semantics........if the Government of Ontario sold $29B of bonds to me and I held them....then they offered to buy them back from me at a price that made sense in the market...that would in no way impact the confidence level the market would have in them. If they were 10 year bonds and after 10 years I didn't get my money back....now you have a confidence issue.

If you've got a spare $29B hanging around, there are a lot more interesting things you could do with your money then Government bonds.

Most bond investors are in it for the slow and steady; Most invest little bits of money, like less then $100K. If you now tell them, "well, we said we'd pay you X% for 10 years, but we're buying you out at X+something% at 2 years", why would anyone believe the next 10 year Y% bond issue? It's not risk factor, it's investment return confidence. One of the good things about Bonds (for bond issuers) is certainty of interest expense. Unless bond rates have gone up and I can get _more_ interest on my money now, I'd be more wary to invest in future issues. It drives up the interest rate in the future, because those bonds are now not as "desirable".

In any event, bonds are almost always issued for Capital expenses; there are always things to spend that money on -- but you can cut operating funding to zero if you want to effectively kill something.

That said, I think we are in agreement on the general principal that issuing bonds right away in no way creates certainty that there will be a 10 year $29B transit expansion. There are many ways that could change.

Even contracts and shovels in the ground aren't full guarantees, it seems -- so yes, I agree, bonds don't mean that the money will be directed to where it's earmarked.

 

[royalrivers]

The numbers used by Transit to justify NOT having service are flawed and out of date. The average number has INCREASED since its unannounced, unknown to GO riders "test" run of holding buses to train connection. Plus after 2 plus years of trying to get Transit to hold or provide shuttle buses, many have given up and found alternatives including not using the GO train anymore and going back to Greyhound. Sometimes I wonder if the City of Guelph really knows how to run a transit system. Other cities have shuttles or better connections and in some cases ridership has never grown significantly but at least they provide the service. Alas, Guelph doesn't want to do anything leaving no bus connections and no parking. They sure do want another 1993...

Guelph Transit’s schedule to remain at odds with GO Train
By Chris Seto
GUELPH— The creation of additional shuttle services or reconfiguring the current bus schedule are both ways Guelph Transit could improve its connectivity with GO Train service on weekday evenings. But city staff says neither option is worth the cost.

A recent staff report, to be presented to the operations, transit and emergency services committee on May 6, discusses the issues around realigning Guelph Transit departure times with GO Train arrival times.

The current Guelph Transit schedule has buses departing from Guelph Central Station every 30 minutes in the evening. Passengers connecting from GO Transit may have as much as a 27 minute layover before their bus is scheduled to leave the terminal.

The report said a trial was conducted last fall where Guelph Transit changed its schedule and waited for GO Trains to arrive before leaving the station on weekday evenings. During this trial however, the GO Trains were consistently late and only a small number of passengers used Guelph Transit to continue their journey.

The change in scheduling also caused service delays and transfer issues throughout the service system.

Around 65 passengers disembark from each of the two evening trains at Guelph Central Station during the week, the report said. But most of these passengers use an alternate mode of transportation to carry on with their travels, such as walking, cycling, or using the kiss and ride area to connect with another vehicle.

As an alternative to changing the schedule, city staff also looked into running two additional shuttle services to collect travellers as they exit the train, but this would have an annual cost of $89,500.

"Staff are of the opinion that GO should be allowed to address the issues affecting their on-time performance before Guelph Transit considers implementing such a costly (per rider) program," the report said.

Guelph resident Wayne Greenway has been without a car for the past seven years and relying on Guelph Transit to get him around the city. He said he takes the GO Train to Toronto once a week and often uses city buses to take him home in the evening.

He said he doesn't mind the twenty minute or half-hour wait for city buses – he just goes to get a coffee.

Neither transit system is consistently on time, he said, so it's not worth the effort to try to rely on their schedules. If Guelph Transit altered its schedule to meet the travellers exiting the GO Train, it would affect all the other stops and transfers.

"It doesn't make sense to me," he said.

The report said Guelph Transit has undergone a number of service changes over the past few years and is currently working to restore the confidence in its ridership.

"Making another full-system service schedule adjustment would not be in-line with the objective of re-establishing Guelph Transit's reputation as a reliable mode of transportation," the report read.

 

[mpd618]

Sometimes I wonder if the City of Guelph really knows how to run a transit system. Other cities have shuttles or better connections and in some cases ridership has never grown significantly but at least they provide the service.

FWIW, Grand River Transit today cancelled its shuttle from the downtown Kitchener bus terminal to the train station. It had virtually zero use.

 

[royalrivers]

FWIW, Grand River Transit today cancelled its shuttle from the downtown Kitchener bus terminal to the train station. It had virtually zero use.

Unlike Kitchener, where GO ridership growth has stalled, Guelph HAS growing ridership numbers and better potential for seemless transit considering the transit depot is right there at it's doorstep. Other cities like Brampton (Bramalea) have GO Shuttle routes that have ridership that goes up and down, mostly when warmer weather is out it is down, so I do not understand Guelph and its views. It talked a lot about building better transit and here is fails. IMO if they want more trains, they better build the ridership up on what they have now because I really do not think the Conservatives will keep a service with these numbers running four trains a day....1993 all over again....

 

[ShonTron]

FWIW, Grand River Transit today cancelled its shuttle from the downtown Kitchener bus terminal to the train station. It had virtually zero use.

Not surprised. It's easier, me thinks, to walk to King and Victoria and catch the Route 7 from the VIA/GO station.

Brampton cancelled all but one of its GO shuttles in the 2000s as it changed to the grid-based system, though many routes continue to feed the three GO stations there.