A better way to build public transit?

Start by asking how taxpayers are going to pay for it

How do you get 2.7 million people’s heads around the idea of paying for transit? Here’s a start: Nobody say “subways.”

Both the City of Toronto and its provincial overlords are on a mission for 2013: Sell the public on the idea that if they want less gridlock—which is to say, more public transit—then they’re going to have to pay for it with taxes, tolls or levies.

But what the city’s not doing this time around is even more telling. Historically, transit expansion starts with politicians drawing hopeful lines on a map and then trying to find ways to pay for those lines. This has led to decades of transit fiascos as plans got drawn, redrawn, hacked to bits and then finally half-built.

So now, the city is taking a smarter tack: It’s starting with asking how taxpayers are going to pay for transit, while deferring talk about what exactly that money would pay for. It’s counterintuitive—all stick, no carrot—but it makes a great deal of sense.

“What we’re trying to do right now is focus on principles, which is a good place to start,” Jen Keesmaat, Toronto’s new chief-planner told me, as she rolled out “Feeling Congested,” the city’s new consultation. Those principles involve some general talk about priorities, but the nut of the issue is choosing (lucky us) how we’d like to be taxed.

So, despite the protestations of Toronto’s increasingly sidelined mayor, both city and province are making a full-court press to get this through to the general public, in a blitz of live consultations, op-eds and media hits. The city has also put up a website with an online budgeting exercise that’s worth taking a poke at. It assays 14 “revenue tools,” ranging from a sales tax to development charges to parking levies. Among other things, the site hammers at the idea that no single revenue option will be enough; we’ll probably need a combination. And not all revenue tools are created equal: development tools, for instance, yield nowhere near the returns of parking levies.

(Pointedly, some would-be revenue tools the mayor’s office likes to talk up just didn’t make the list. These include vaguely defined “public-private partnerships,” which, for money-losing projects like transit expansion, are more often a method of administering public funds, than of generating them.)

It’s quite a conversation to be having with an electorate that, less than three years ago, voted in Rob Ford on the explicit premise that he’d cut taxes like the Land Transfer Tax and the now-defunct Vehicle Registration Tax. The difference now is the promise of dedicated funding.

“Before, with the LTT, the VRT, it was just another bloody tax,” says Keesmaat. “What we’re doing right now is saying, hold on a minute, what if that tax got you all these transit lines? Then are you willing to pay it? Does that seem worth it to you? That’s very different than kissing your money goodbye and not knowing where it goes.”

But before they start naming all these projects, the city’s bureaucrats want to talk money. It’s a refreshing reversal of the way transit planning has been run for decades, putting politics first and planning second. For the moment, it keeps the unfortunate “subway vs. streetcar” debate at bay. It shouldn’t be complicated: Toronto needs both, but built in the right places for each. Yet there’s no surer way to turn transit planning into a political football, then to start talking about which citizens “deserve” a subway. (“It’s an absurdity to be debating, at a city-wide level, subways versus LRTs,” said Keesmaat.)

The money-first approach is even more meaningful in the long-term. Since the municipality is so limited in the ways it can legally raise money, trying to fund big projects has long meant begging senior levels of government to cough up huge sums.

It hasn’t worked terribly well. In practice, it’s meant waiting for transit-building ambitions to line up with political fortunes. It means waiting for three governments at three levels who are willing to work together, which is like waiting for three gold bars at a slot machine. It also means waiting for the right people to take the right important roles: When the MPP for Vaughan became Ontario’s Minister of Finance, a $2.5-billion subway extension to a scrubby local field managed to become reality.

And then there’s timing. Politicians like legacy projects, but transit schemes take so long to implement that they become ideal targets for cuts when their successors take over. Even if governments survive, their willingness to spend might not. Governments start looking at megaprojects when they want stimulus spending, then lose interest when the economy recovers and the government is left in the red. The result is that we make half-hearted stabs at building transit when the economy tanks, but never keep pace when development’s booming. Toronto’s transit map is dotted with projects that were conceived for bad reasons and cancelled for worse ones.

After all this, the technocracy is fighting back. Shifting transit funding from top-down to bottom-up—cutting a deal straight with the taxpayer—helps depoliticize the process, setting up revenue streams that could survive from one government to the next. Even Ontario opposition leader Tim Hudak, speaking at the Toronto Region Board of Trade, wouldn’t rule out revenue tools, even as he launched once again into how Scarberians deserve subways in order to be “full citizens.”

The irony, of course, is that Rob Ford himself, who wouldn’t talk money, was the one who led us to talk about nothing but. His campaign for subways, subways, subways helped stoke the public appetite for transit expansion, even as he insisted that taxpayers wouldn’t have to pay extra for it. Ford’s rude encounter with reality helped foster a rare consensus that more transit is needed, but that there’s one way to get it built, and it’s not wishful thinking.

“We’re kind of calling that out,” said Keesmaat. “We’re being very clear: There’s no pot of gold. If we want to invest in public transit, we have to find the revenue tools to pay for it. It’s that simple.”




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A better way to build public transit?

  1. It makes no sense at all. Toronto’s transit structure receives less public funding than any other city in the world with even remotely similar population density and a subway. It makes no sense to look at other options until it is brought somewhere near the middle. Furthermore, an individual citizen isn’t a transit expert, they have no idea how much is necessary to deliver an optimum system so what an individual is willing to pay simply can’t be the yardstick.

    That’s not to say that some of the author’s points aren’t in themselves valid, but overall this is no way to be funding public transit.

    • No. They receive $3 a ride, all paid at the fare box. Most transit systems get $2 at the fare box and about 25 cents from tax coffers. The TTC is a bit of a ripoff.

        • Thanks for the chart. It shows things are worse than anyone thought. Not only do we pay the highest fares in North America but government then counts it as 70% and adds another 30%, nearly $1.50 more!!!! For a total ride payment of $4.50. I can take a Go bus to Hamilton for $5.!

          • A number of your facts are wrong. The fare of GO Transit from Hamilton to Toronto is $10.45, not $5. Two, you’re considering the cash fare of the TTC, even though that’s the most expensive fare, and not the fare that most people use. The token fare for the TTC is $2.65, and that’s actually pretty comparable to the fares around the GTA. Mississauga’s cash fare is $3.25, with tickets available for $2.25 or so. York Region Transit has a two zone fare system. You stay within one zone, you pay $3.75 cash fare, or $3.00 per ticket. You travel between two zones, and the cash fare rises to $4.75, or $4 per ticket.

            Also, your subsidy figures are way wrong. You said “most transit systems get… about 25 cents from tax coffers.” The TTC’s farebox recovery ratio is around 74%, meaning that the government offers a 26% subsidy (primarily funded through Toronto’s property taxpayers, although the province pays a small share). If we want to look at the price of a full ride (which is misleading since you’re pricing all rides the same, whether you’re going between Pearson Airport and the Scarborough Town Centre or between the Eaton Centre and the Exhibition), then $2.65 becomes $3.53.

            The other local transit agencies across the GTA have farebox recovery ratios between 40-50%, so YRT’s $3 ticket fare becomes a $6 ride. Looking across North America, Montreal’s transit is subsidized 50% by the Quebec government. Its $2.45 tickets becomes a $4.90 ride. As intensely used as New York’s system is, its farebox recovery is 62%. Its $2.25 fare becomes a $3.63 ride, and New York’s transit also takes in cash from many of the tolls imposed on the bridges and tunnels leading into Manhattan.

            So, really, Toronto transit users aren’t being charged an unreasonable amount compared to other transit agencies, either in the GTA, or throughout North America. And in terms of the government subsidy received, the TTC receives some of the lowest amount of subsidies per rider on the continent. The only other transit agency that comes close is GO Transit, which has a comparable farebox recovery, but charges $10.45 to get you from Toronto to Hamilton. The TTC isn’t ripping anybody off, though I agree that we need more transit, both in terms of frequency and scope. And as a taxpayer, I have to say that I’m willing to pay for it. Congestion is slowing this economy down, so it’s time to make some investments.

          • For some further examples: Calgary’s farebox recovery ratio is 50%, while Edmonton is 39.4%. For Edmonton, that changes their $2.40 ticket fare into a $6.09 ride. For Calgary, their $3 ticket becomes a $6 ride.

          • Also note factors hinted at in my first post – density and subway. Subways cost more than above ground transit so comparing a system without subways isn’t effective, and new york takes itself out of comparison because of how many people live per square kilometre.

          • C’mon TTC, dream big!

            I really appreciate your in-depth look at facts and figures, but I clearly recall the $5 Hamilton buses and I have looked at enough US recovery figures to know that some are temporary, some include expansion costs, and some don’t.

            The most salient figures here are Ontario and Toronto annual spending, which currently total an astounding $19K per person per year for every one of Toronto’s two million residents. We have money for hay for Riverdale Farm, $15M annually for a horse brigade for Toronto police, we have cash to burn in a full one third of our too numerous $1,000-a-day acute care hospital beds now used for seniors who would rather be home with $100-a-day of home care, and 35% too many police and firefighters compared to our neighbors., Yet, neither spendthrift government has a penny for transit expansion! I don’t believe it.

            Although teachers cost only $3K per student per year and schools are built with developer fees, we give $13K per student per year to educators who install $150 pencil sharpeners and take a lot of trips!

            No one need attack anyone at the TTC because the problem is at Queen’s Park and at city hall. Too much waste. Every dollar needs to be weighed with a view to replacing current waste with transit expansion spending.

            I’d like to see the TTC get outside of its box and start to dreamer a lot bigger and in terms of the best solutions for problems, and not necessarily the best TTC solutions. Maybe the answer is the Go, traffic control, parking incentives, or maybe it is a TTC solution. We need to better broader answers. Put it out there! Maybe someone can figure out how to do it. Heaven knows we can afford to trade some horses and hay, and a few other things, for better transit.

          • Out of curiosity, when was the last time you took GO Transit between Union and Hamilton? Because the numbers I quoted are straight from GO Transit’s website: $10.45 for a single fare between the two cities. There used to be about a 10% discount or so for ten-ride tickets, but these have been retired in favour of Presto. GO’s minimum distance fare is around $5. I remember when it used to be around $2, but that was in the early 1990s, I believe — twenty years ago. It’s probably been at least that long before the run between Union and Hamilton was $5.

            GO has been raising fares, which all transit agencies need to do unless the government increases their subsidy. GO Transit’s farebox recovery rate is even higher than the TTC, and the range of its mandate is much wider. It may be possible to take the GO bus to Hamilton for $5 these days, but only if you start from Burlington, and that ride is about as long as a comparable TTC ride.

            In terms of farebox recovery between various systems, the numbers I quoted are actually pretty static. The TTC and GO Transit have had the highest farebox recovery ratios north of the Rio Grande for the past twenty years. In the mid 1990s, the TTC’s farebox recovery ratio hit 82%. That wasn’t a good thing. It meant that people were paying higher fares for poorer service, and ridership dropped by 20%. We’ve lowered the farebox recovery by increasing subsidy, which has increased the level of service, and the TTC now carries over 150 million more riders per year than it did in 1996 (520 million, if you’re interested).

            I’ve been following the debate over farebox recovery for nearly twenty years, and I know that Montreal and New York have stayed within the 50% to 62% range that whole time. New York actually has one of the highest recovery ratios in the United States (Chicago is comparable, San Francisco, Philadelphia and Washington DC are higher). In most other cities i America, public transit is an afterthought — a bare-bones public service that does little to encourage riderhship, and so people don’t really ride unless they absolutely have to. Miami and Detroit are below 20%. Not much has changed between today and 1993.

            So, your statement that “most transit systems get… about 25 cents from tax coffers.” is clearly wrong. All transit agencies in North America (with the exception of GO Transit) get a per-rider subsidy that is higher than what the TTC gets, and it’s significantly more than “25 cents”. That calls your whole premise into question. The TTC and GO Transit clearly don’t have much waste within them. If we want to expand their service, we have to increase their subsidy.

            You suggest that we find that subsidy increase by taking it from waste found in other government services. Fair enough. It’s entirely fair to say that public transportation should have a higher priority than, say, public education or hospitals. Some may disagree, but it’s a debate worth having. However, I doubt that this shift in funds can come completely painlessly simply by targetting waste.

            I have no doubt that there is waste in government and getting rid of it should be an everpresent concern of the government. It’s a shame that people who champion against waste (Stephen Harper, Rob Ford) turn around and attack the very people who can help maintain that transparency and accountability, although that’s another debate for another time. My point is, Ontario has been governed by Mike Harris, and Toronto’s mayor is currently Rob Ford. Both campaigned against waste and promised to eliminate it. However, government spending per capita remains roughly the same between when they took office and when they left it. Any increased spending has been on capital projects that a number of voters deemed necessary.

            Now, were Harris and Ford ineffectual in finding the gravy on the gravy train? Or was the gravy they expected to find highly exaggerated? The truth is, it’s the latter. It’s a misconception to believe that the government is rolling around in waste, and it doesn’t take long before cutbacks go beyond the waste and start taking out services that some voters deem important and necessary.

            You have stated that Toronto spends $18B per year. That’s inaccurate. Toronto’s operating budget is around $4 Billion per year. Add in the spending on agencies, and that brings it to $9 Billion per year. The ten year capital budget from 2012 to 2022 is $14 Billion, or $1.4 Billion per year. And I did google up this information. I don’t know where you got the $18 Billion figure, so I kind of think that throws off your math.

            Oh, and incidentally, the City of Toronto’s population is 2,615,050, not just “2 million”. That’s $3,976.98 per person per year. Even taking your old numbers of $18B in spending and 2 million residents, that’s $9K per person per year, not $19K. Are you sure you didn’t slip a zero somewhere? So it strikes me that the City of Toronto actually has a lot less waste than you seem to expect. Have you read Rob Ford’s letter on the 2013 budget? He seems rather proud of it, even though it doesn’t cut total spending all that significantly.

            I really wish that we as voters wouldn’t reward politicians who simplistically talk about government waste, promising to make cutbacks that won’t hurt the average citizen and deliver a balanced budget without raising taxes. The reality is that there are many things we could use, and limited resources with which to obtain them. We need to talk frankly about what our priorities are, noting that cutbacks will eliminate services and make people’s lives worse off than they were. This is balanced off, of course, by the fact that we can reduce our deficit, reduce the need to raise taxes, and possibly channel funds into other services that can do the people more good. And if that isn’t enough to meet our needs (and it likely isn’t), then we will have to be honest and admit that taxes may have to increase to provide the investment we think is necessary for our future.

            Congestion costs our economy billions a year. Ford promised to cut waste at Toronto city hall and build subways without cutting services to the average Torontonian and he’s been unable to deliver on these incompatible goals. If we want to build subways, we have to pay for them. Certain tax increases will pay dividends in terms of limiting the increase in congestion, allowing our economy to grow at a higher rate than if no moves are made.

  2. Not one dime. Cut through the massive massive waste first. Just 2% will build all transit.

    • QED. People not only have no idea about transit, they think the exact opposite.

      • Few people realize that governments are raking in an ever larger portion of their cash from royalties, fees and hidden charges. Hence Toronto and Ontario spend a whopping $19K per year per person, which is $95,000 for a family of five in Toronto this year. And some in government claim they cannot spare $5,000 from that mega-spendathon on transit? Notably most are silent like deer caught in the headlights. I do not believe more taxes are needed. Why is transit funded only AFTER our money is plunked down for hay, horses, p-cards, 40% extra emergency services than area cities have per person. Does the public even realize how much is being wasted. How many $150 pencil sharpeners? $1,000 beds for seniors who’d rather be home with better care costing $100? The waste and harm through idiotic spending is endless. With one out of six Ontario workers on the provincial payroll there is an endless cheering squad for waste. I think speaking up now could give Toronto world-class transit and save every Ontario taxpayer thousands of dollars. Everyone who is angry about tax waste needs to stand up now and tell government “NO MORE TAXES”, by email, letters, even media postings.

        • Source it…

          13 million people * $19,000/persion = $247 billion. Ontario spends about half that. Based on that, I will assume the rest of yoru claims are BS.

          • I was multiplying $19K times 2m Torontonians. Toronto spends about $18B and Ontario about $22B. My math is correct. Try Googling Ont. and TO budgets. They are online.

          • They are indeed. Toronto’s Levy Operating Budget is $9,389,954,200. Its non-levy operating budget (solid waste management, water and parking, which is covered by fees) is $1,311,524,900. The capital spending for the 2012 budget was $3,037,000,000, giving you a total of roughly $13.74 Billion.

            Now, mea culpa, that’s a bit more than the number I quoted above, but that number doesn’t include the fee supported services, and 2012′s capital expenses are higher than the planned year-over-year average between 2012 and 2021. However, divide that up by 2,600,000 Torontonians and you get $5,284.62 per person per year. So I still don’t know where you got the $18 Billion number for expenditures, or how dividing that among 2 million Torontonians produces a per-person figure of $19K. Curious to see what’s up.

    • oh great plan. All we have to do is wait for all government waste to end….

      we might be waiting a long time….

  3. just apply for an appointment to the senate and you won’t have to worry travel expenses, you can fly the essential air Canada first class service and with baggage yet and meals…remember no strike allowed service.

  4. Here are 2 ideas that cost a lot less than new transit and can be quickly implemented:

    1) REMOVE the freaking bike lanes on 75% of the streets where they were recently put in. 2 lanes of traffic each way instead of 1 because of the bike lane = traffic moves TWICE as fast.
    2) TICKET aggressively whenever courier companies, etc block a lane of moving traffic. Once again, 2 lanes of traffic each way instead of 1 = traffic moves TWICE as fast.

    • Remove non-polluting traffic?

      Why not remove your freaking car and take public transport, coupled with a bicycle? Perhaps a folding bicycle you can easily carry in a subway or commuter train?

  5. How about STOP electing Neo-Conservative politicians. To the best of my knowledge, transit expansion has occured under Liberal, NDP or PC governments (not hard-core Neo-Conservative right wing politicians like Ford and Hudak).
    Where’s former PC premier Bill Davis when you need him. He has a better track record than any other Ontario premier when it comes to expanding transit.

  6. Need money? Talk to the people who scam the system day in and day out! If you think TTC is a ripoff……buy a car,pay for gas,pay for insurance and pay to mantain a vehicle. Getting across the city for 3 bucks is a steal.

  7. Amazing how we’re able to spend billions on F-35s without asking….but when it comes to a known need like public transit….people suddenly get cheap.

  8. No problem. Toss up a toll on all vehicles entering the city. Nothing too crazy, maybe….. $1. Also, a 1% sales tax in Toronto. That leads to stable, long term funding for transit expansion. As for all the whiners in this forum, ignore them. It’s easy to say “not one more dime” when you live in Thunder Bay. Not so much when you live in Toronto and spend 20% of your life in gridlock due to short sighted planning. Lets get on with this.

  9. Public transit, like health care is a money pit and I think it’s unrealistic to think that it will never be a money loser. That’s why it needs to be funded by EVERYONE, i.e. all tax payers. People that think otherwise are only fooling themselves. In my city, the monthly bus passes actually cost more than my gas consumption, so there is absolutely no incentive for me NOT to use my car, as much as I would like to help the environment. At the current price it’s just not worth the extra aggravations and cost. Make transit cheap, and I’ll be the first to use it !

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