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We learned on Tuesday 23rd that no fewer than 89 projects in Toronto will receive part funding from the first $474m phase of the federal government's Public Transit Infrastructure Fund. But as we have noted before, this money will only go to projects which are otherwise un-funded and must be matched dollar for dollar by the city, the province, or both.
The agreement was signed by the Infrastructure Ministers of Canada and Ontario and makes Ontario ultimately responsible for overseeing the projects.
But it seems that Ontario will not be picking up any of the tab for this first phase of work, except via its gas tax. It already has its own transit infrastructure priorities, which include $16bn for GTHA transit as part of the Moving Ontario Forward plan, $13.5bn of which goes towards GO Regional Express Rail.
The Ontario Ministry for Economic Development and Growth told UrbanToronto, "projects under the Public Transit Infrastructure Fund will be funded 50 per cent federally, and 50 per cent municipally." Jacquelyn Hayward Gulati, Toronto's Acting Director of Transportation Infrastructure Management told a similar story, saying that the City would be providing 50% of the funds for the projects that relate to cycling and pedestrian improvements outlined in the federal/provincial agreement.
Mayor John Tory has not been preparing Council nor the public for any increases in expenditure. Indeed, he has opposed tax raises or additional taxes and successfully called on councillors to direct the City's departments—including the TTC—to find 2.6% savings in the 2017 budget, and larger savings in future years, including to capital expenditures.
Is Tory seeking cuts in order to come up with "new money" to match federal funding? If so, how would he and Council avoid the charge that the federal funds are being used to patch up Toronto's finances instead of encouraging genuinely new spending on needed projects?
In any case, the amounts needed appear to dwarf what could be found in efficiency savings. The City's capital spending plan in the 2016 budget was $21bn over ten years; the additional spending envisaged this year would add about 22% to the 2016 target figure. The money could be borrowed, but Council set itself a target of paying no more than 15% of property tax income to service its debt, and it is already at that level. Any interest rate rises would only make the problem worse (and more debt might imperil Toronto's credit rating, which would raise the cost of borrowing). There will also be another $366m available from the fund in future years, but again only if the federal contribution is matched.
And all of this is only phase one of the infrastructure fund's work. In phase two, which will begin to be outlined in September, more federal money will be available for longer-term projects. Is Tory expecting the Government of Ontario will ride to the rescue in future years? Or will he accept that higher taxes are a price worth paying to release billions of dollars of federal spending to get Torontonians moving again?
Join the debate in the comments below, or join the discussion in our forums, including the ongoing debate about future transit funding sources.
