New Transit Funding Sources

[BurlOak]

This is one of the benefits of PPP projects like the Canada Line. Not only did the Canada Line open 3 months early but came in on budget and the reason for that is that if the line was late there were VERY severe financial penalties and any cost overuns were to be paid 100% by the private partner............none of this "escalated costs" crap that is the mantra at the TTC which basically gives the builders carte blanche to go over budget with little concern for deadlines. If the Spadina ext was built the way the Canada Line was Toronto would save a cool billion and it certainly would not be behind schedule.

This is Toronto you are talking about. Blowing a billion is a prerequisite to being elected. Liberal governments (provincial and federal) continued to enjoy support in Toronto even after blowing huge sums on Gun Registry, Adscam, e-Health, Wind tourbines, Gas Power Plants, etc.

For the remaining voters, I think the first step is to show that you can spend money effeciently and then request new funding sources.

 

[Dan416]

This is Toronto you are talking about. Blowing a billion is a prerequisite to being elected. Liberal governments (provincial and federal) continued to enjoy support in Toronto even after blowing huge sums on Gun Registry, Adscam, e-Health, Wind tourbines, Gas Power Plants, etc.

For the remaining voters, I think the first step is to show that you can spend money effeciently and then request new funding sources.

What about Conservatives spending billions on fighter jets???

 

[BurlOak]

What about Conservatives spending billions on fighter jets???

Military spending seems to be a place where it is easy to blow money - maybe it is the long procurement times. Mulroney ordered helicopters and Chretien cancelled them and paid a heavy penalty. Chretien ordered diesel Submarines and Martin and Harper paid to keep those lemons alive. Martin started the process for these fighter jets and Harper continued it - chosing to spend the big bucks rather than cancelation fees.

I think G8/G20 is a better example of Conservative waste.

 

[someMidTowner]

Military spending seems to be a place where it is easy to blow money

So is transit. Except transit is money well spent where as F-35s are just plain unnecessary.

I think G8/G20 is a better example of Conservative waste.

I still think that bill C-10 is the biggest Conservative waste of all.

 

[ssiguy2]

I don't think Torontonians will ever support higher taxes of any kind for transit expansion.

This, however, is not due to Torontonians not willing to pay it as most would be willing to take some kind of a hit if it improved their commute. The trouble is the TTC, Metrolinx, and City Hall. The TTC and Metrolinx don't even acknowledge each other esistence and coordinating their policies and expansions is near heresy as their are run like fiefdoms. The manderines at both agencies care little for the long suffering Toronto commuters as their over riding concern is to maintain their "turf". The AirLink exemplifies this as Toronto could have a full mMetro service with standard fares serving both the NW area of the city and Pearson but that would require Metrolinx transferring ownership of the line to the TTC which is heresy and Toronto commuters be damned.

This uncoordinated, myopic, irresponsible, bureaucratic indifference is what has led to Torontonians having absolutely no confidence in either entity. People would be more willing to atleast tolerate higher/new taxes for transit expansion if they thought the money would actually be used and their tax dollars respected. This is why Angelos and Vancouverites begrudgingly accept their respective transit taxes............they actually see results. L.A. has expanded it's Metrorail service and BRT at an incredible rate with construction ongoing, another new LRT line {Expo} just opened up, Of course Vancouver's SkyTrain is expanding fast with construction to begin on the Evergreen Line early next year with service to begin in 2015. An 11km totally grade separated mass/rapid transit line which includes trains and a one km underground stretch for just $1.4 billion.

Toronto's prices are ridiculously high as the SRT to LRT conversion exemplifies. Same goes for the $300 million per km Spadina ext in the suburbs that needed to be tunneled so as not to block the view of Walmart and use grandeous stations which it cannot afford.

It was noted above that the Spadina extension is running late due to water troubles. If this was a PPP like the Canada Line that would be irrelevant. Once all the environmental reviews were in and the companies competed on the project that would be irrelevant. They made their bid and Vancouver would make they stand by it and if the line was late the financial penalties would be huge and ANY cost overuns would be born 100% by the private partner.

The meager amount of transit expansion Toronto is getting for $8 billion is mind boggiling.....all that money and it's subway system will actually be smaller in a decade than it is today. This is why Torontonians will not part with their hard earned tax dollars, they don't trust the TTC to build rapid/mass transit in a timely manner, completing it on time, and bring it in on budget with a budget that is the going rate in other NA cities. Look at the DRL report {and even calling it a report is an insult to the word}........don't consider Queen, the AirLink, using rail ROW, DMU, PPP just "give us $8 billion and we will see what we can do".

If Torontonians are EVER going to agree to tax increases for transit the agreement must include, type and amount of taxes and their duration, strict construction timetables, defined routes, defined technology, firm prices, open tendering, type of construction {ie elevated, at grade, tunnel} and a guarantee that if any of those conditions are not met the money is returned to the citizens. The good thing about that is that Toronto would have to entertain PPP for guaranteed timetables and all cost overruns being paid by the private partner.

The TTC have shown themselves to be corrupt and incompetent and only something like that will be enough for the citizenry to vote yes on a plebisite.

 

[M II A II R II K]

Better for transit to get in on the real estate business around new transit since they're inter-related, and as part of the funding not just to receive cash but land rights so they can also receive perpetual lease payments on new developments built by others around the new stations.

 

[smallspy]

This is one of the benefits of PPP projects like the Canada Line. Not only did the Canada Line open 3 months early but came in on budget and the reason for that is that if the line was late there were VERY severe financial penalties and any cost overuns were to be paid 100% by the private partner............none of this "escalated costs" crap that is the mantra at the TTC which basically gives the builders carte blanche to go over budget with little concern for deadlines. If the Spadina ext was built the way the Canada Line was Toronto would save a cool billion and it certainly would not be behind schedule.

Interesting how you skirt over the fact that the construction consortium COMPLETELY changed the methods of construction of the line to one that was far more invasive to an existing community and that they still needed an additional $146mil over what was originally budgeted when the line was tendered in 2006....

But then, those are hardly considered to be benefits of a 3P project, right?

Dan
Toronto, Ont.

 

[rbt]

Interesting how you skirt over the fact that the construction consortium COMPLETELY changed the methods of construction of the line to one that was far more invasive to an existing community

Is there a way to get business tax remitance on a census tract basis? Comparing tax remitance rates for this area around the construction (before/during/after) to the average for Vancouver over the same period would be an interesting exercise.

We know Canada Line had an externalized economic cost which didn't appear on the books (all construction activities do) but I never see a report after the fact on what it actually was. I assume the government doesn't report this type of information due to fear of lawsuits but is it something we can tease out?

 

[ssiguy2]

Yes, Vancouver will be paying for the Canada Line but if the line hits 90,000 passengers a day then it breaks even...........it currently is handling about 102,000. The PPP also means that.....wait for it............the line gets built. Toronto excels at making maps with pretty lines but builds nothing. I bet if you were to poll Torontonians most would NOT expect the Eglinton Line to be completed by 2021 and almost no one would expect it to come in on budget.

The PPP allows for exact pricing and non of this "escalated" dollars crap.........once the deal is signed it would cost the company a fortune to get out of it. PPP also can save billions of dollars on construction by the very fact that they go thru an open bidding process and unionization is irrelevant, the best and most affordable offer gets the project. Another very big added bonus is that a contract is a 2 way street. It provides the city guaranteed cost and timelines but also guarantees the private company a return on investment and that is a very GOOD thing for the transit users as it guarantees that the line will actually be built. The penalties for a government to back out are equally high as if the reverse was true. That just doesn't mean compensation of cancelled parts of the line but the whole thing. This makes it very hard and fiscally disadvantageous for future governments to back out. The transit lines are viewed as an financial contract and not a political whim.

One thing people who oppose PPP often forget is that by getting the much needed capitol from a private company means that the line can actually get built. If the Canada Line was to wait to get all it's funds provided by the government {and worse yet senior governments in Toronto because the City balks at anyone evening mentioning that the City should help pay for it's own infrastructure} the lines would have to wait perhaps decades. In even 10 years the price would go up by probably 30% to 40% and that is REAL money saved.

I am not stating that PPP is a panacea, not at all. At the same time there is a fiscal reality right now, governments of all levels are broke and cities must be willing to entertain alternative types of funding sources and technology. There are NO options, the city must use all potential sources to build real mass/rapid transit if it ever hopes to get the city moving again.

 

[M II A II R II K]

But PPP to build only, not to operate and maintain it afterwards.

 

[ssiguy2]

Why not? The Canada Line is run and operated by the private company but the main thing is that Translink is still the one that sets service levels which are currently every 3 minutes 30 seconds all day.

Like everything the devil is in the details and if the parameters are all set out to begin with and then tenders go out then both parties know what to expect.

 

[diminutive]

Is there a way to get business tax remitance on a census tract basis? Comparing tax remitance rates for this area around the construction (before/during/after) to the average for Vancouver over the same period would be an interesting exercise.

We know Canada Line had an externalized economic cost which didn't appear on the books (all construction activities do) but I never see a report after the fact on what it actually was. I assume the government doesn't report this type of information due to fear of lawsuits but is it something we can tease out?

I would strongly doubt lower tax remittance rates would outweigh the higher marginal cost of boring vs. cut/covering. Very strongly. Toronto only raises around ~1.3billion per year from commercial tax levies. Looking at something like the Spadina extension, obviously the vast majority of businesses in the City would be totally unaffected, and even assuming every business along a cut/cover route closes (obviously not true) the income effect for a city would be on the order of tens of millions per year. That figure is obviously swamped by construction cost premiums in the order of hundreds of millions of dollars per kilometer.

The argument itself is fundementally flawed, though. Obviously cut/covering externalizes certain costs, but then public transportation externalizes almost all of its benefits. It's not as if we charge higher taxes with proximity to transit. Public infrastructure has huge externalities (positive and negative), and those who reap the positive externalities aren't always those who bear the negative. If you insist that all negative externalities be internalized though while insisting the positive remain internalized you'll simply end up with an undersupply of infrastructure.

I'm surprised by how many Torontonians act all snooty at how awful Vancouver is because Cambie St. was shut down for a few years when at least Vancouver has obviously been more succesful at expanding rapid transit. Toronto is soo much better! We've been talking about a Queen/DRL subway for, what, 50 years now?

The reason Toronto opts for extremely expensive construction methods has nothing to do with more externalities and more to do with, ultimately, NIMBYism. Vancouver and Translink's institutional structures promote more regional thinking. Vancouver has their City Council elected at large (and with functional political parties, importantly) and Translink's directors are appointed by Metro Vancouver's mayors. It's harder in that kind of structure to champion local over regional interests. Toronto is the complete opposite. City Council's structure outright encourages parochialism, and the TTC is governed by these same people. Every Councilor knows damn well that they can be unseated if only a few hundred people get upset at some particular development. The current TTC chair even got into politics on the backs of one of these NIMBYish protest votes. And there is no party system to force candidates to endorse any kind of City-wide (let alone regional...) transit vision. Instead everyone wants maximum service to their ward (subways to scarborough uber alles!) and minimum disruption. The basic result is the system is soooo parochial that very little gets built, and what does get built costs much more than it needs to.

 

[ssiguy2]

Now for something totally different......................a GOOD news story.

L.A.'s new transit stats just came out for Oct 2012 and it is very good news and here are the stats:

Metrorail daily ridership {does not include commuter rail} 2010....295k, 2011......303k, 2012.......360k. LA opened up a section of it's new Expo Line in spring but ridership is 21k so the othe lines still grew significantly. In fact 4 of the lines set all time records as did the 2 BRT lines with Orange leading the way at 32k/day. It is also important that bus ridership was also up by 25,000 per day over last year so this was not just a case of people transferring from bus to CTrain-type LRT.
LA transit now has 1,551,000 riders per day, an increase of 83,000 passengers a day over Oct 2011.

One really does have to hand it to LA for making transit a priority and now Metrorail is just shy of SF's BART's daily figures of 375k. This what happenes when a city puts transit as a true priority and when the poulus is willing to put their money where they mouths are and approve the special taxes to make it happen.

So a good news story and hats off to LA!

 

[kEiThZ]

What about Conservatives spending billions on fighter jets???

Honestly, the discussion on the F-35s is even less educated than the subways vs. LRT discussion.

There are strong technical and financial reasons that the CF wants the jets. Not the least of which is long term lifecycle costs (which politicians never discucss except when it serves to scare voters....$325 billion may sound big until you see how what those costs are for the "cheaper" alternatives").

Unfortunately, the Conservatives have been using (what should be a non-political) decision to beat their opponents over the head with. I am dismayed by this. But don't mistake politics for policy.

Now back to talking about subways.

 

[ssiguy2]

How can you possibly bitch at Ottawa for not helping out? The Conservatives have done more for rapid transit expansion during their tenure than probably any other federal administration in history. Also, how exactly can you complain about Ottawa when they offered you $300 million 3 years ago and you haven't even gotten around to spending any of it? How can Toronto tell Ottawa that it desperately needs more transit funding but at the same time aren't desperate enough to kick in one nickel of it's own money. How can Toronto justify being the ONLY city in the country that expects senior levels of government to pay for all it's transit expansion? That extra money Toronto is demanding is money other cities that are willing to put their money where their mouths are won't get.

As for those who will state that Toronto was going to use those funds on Sheppard until Ford cancelled it , well that is total crap. The reality is that money was for Sheppard MOST of the line was cancelled but not all of it. The most expensive part of the whole line was the tunnel from DM to Consumers and that was the only section that both Miller and Ford agreed on so why the hell isn't it being built? If they would have continued that section it would have be done by now.

So bringing up the F-35s is completely irrelevant. The reality is not that Ottawa hasn't been offered money by Ottawa but rather Toronto City Hall and the TTC are to incompetent to manage it.