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City vs. province: Who can build transit faster?

City vs. province: Who can build transit faster?
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As the Ontario Progressive Conservatives pursue their , they’re deploying a potentially powerful argument as part of their pitch: the claim that the provincial government can get new transit built faster.

The province has greater financial resources than city hall to ensure new lines get completed, the reasoning from Premier Doug Ford’s government goes, and infighting at city council will only continue to delay projects.

But while the argument could sound persuasive to the thousands of Toronto commuters who spend their mornings packed into overcrowded trains, whether the controversial subway upload would actually result in the rapid delivery of transit projects is far from clear.

Although there’s no question the province can exert greater financial muscle than the municipal government to pay for big infrastructure projects, experts say uploading the subway to the Ontario government is no guarantee projects will be delivered sooner.

And while city council debates can appear messy at times, critics of the Conservatives’ proposal say the provincial government has shown it’s just as adept at delaying or even cancelling vital Toronto transit projects.

Ontario, Toronto release framework for deal to upload city’s subway

Ford’s government only agreed with the city to the terms of talks about the upload last week, and nothing is decided. But the province’s stated goal is to take ownership of the subway network and assume responsibility for maintaining the infrastructure and building new lines. Day-to-day operations would remain with the TTC.

In a letter to Mayor John Tory last November outlining the government’s plans, Transportation Minister Jeff Yurek described transit planning in Toronto as being in a state of “perpetual paralysis” thanks to “conflicting city council priorities” and “challenges experienced by the city/TTC in advancing projects through municipal approvals.”

The province has the ability to expedite the approval of new lines as well as “greater fiscal flexibility” to pay for them, Yurek argued.

According to Matti Siemiatycki, an associate professor at the University of Toronto’s geography and planning department, the minister is correct, at least in theory.

“There are very few restraints on a motivated provincial government,” said Siemiatycki, who is researching the factors that determine how fast transit gets built.

“If the provincial government wants to go quickly and if they have the money available or they’re willing to borrow, at least constitutionally their powers (allow them to build transit fast),” he said.

The province has more tools to raise revenue, including income and sales taxes, and unlike the city, the provincial government can run deficits, giving it more flexibility to borrow and fund big projects.

The city’s revenue raising powers are mostly restricted to the property tax base, and by law it can’t run a deficit. The city also has a council-imposed debt limit that says it can’t spend more than 15 per cent of its property tax levy servicing debt, which further restricts how much it can borrow.

While the current arrangement allows the province to give grants to the city to fund new lines, the Conservatives argue that if Ontario had the subway on its books as an asset, it could amortize the cost of projects over time, freeing up larger investments.

But Siemiatycki notes the Ford Conservatives have made reducing the debt a top priority, which makes it unlikely his government is going to leverage the province’s greater borrowing ability to build transit. If so, it will have to find the money elsewhere.

The province’s three priority subway projects — the Relief Line, the Yonge North Extension, and the Scarborough subway extension — would cost at least $16 billion, an amount that would likely be split by all three levels of government.

Yurek has proposed reducing the direct cost to taxpayers by enlisting the private sector, which he contends would help fund new lines in exchange for development rights above or near stations.

Experts have expressed grave doubts the market-driven scheme could generate enough funding to cover the huge costs new lines, however.

And while the minister has argued that securing funding from developers could let the government start projects sooner, Siemiatycki argued the type of alternative funding model the Conservatives are contemplating could slow down the completion of transit.

Implementing financing arrangements with developers and changing zoning rules to allow for the increased density at station sites would be complex and take time, he argued.

“The more that you look for these alternative funding approaches, and the more a government tries to walk that line of investing in transit without really having to dig into the provincial coffers and borrow the money to invest in it,” the greater risk of delays, Siemiatycki said.

The province’s other main argument for the upload is what it describes as city hall’s indecisiveness on transit, a reputation Toronto representatives have been saddled with at least since a series of high-profile votes when Premier Ford was a councillor and his brother was mayor.

After Rob Ford declared the planned Transit City light rail network dead in 2010, council voted to resurrect the lines in 2012, only to change course a year later and replace one of them with a subway to Scarborough Town Centre.

Councillor Gord Perks, a vocal critic of the Fords when they were at city hall, argued the premier is in no place to blame council for holding up transit projects.

“The only time I have ever seen council reverse policy on a transit project was when Rob and Doug Ford stopped Transit City and therefore stopped transit expansion in the city of Toronto,” Perks said.

He noted that in 1995, during the last time Conservatives held power at Queen’s Park, the party cancelled a four-stop subway on Eglinton that was already under construction.

“The history of Conservatives and transit in Ontario is filling in the hole of a subway that was under construction,” he said.

Perks argued that if the province wants to use its financial power to speed up projects, it could merely increase the funding it provides to the city.

During their 15 years in power the Ontario Liberals also had trouble keeping provincially-owned projects on time and on budget. In 2012 when Metrolinx, the provincial transit agency, signed a deal to build the $1.2-billion Finch West LRT, it was supposed to open by 2020. It’s now expected in 2023.

The $5.3-billion Eglinton Crosstown was also supposed to open by 2020, but now is scheduled for 2021, although the consortium building the line took Metrolinx to court last year seeking an extension to the deadline. Metrolinx agreed to pay $237 million to keep the project on schedule.

Murtaza Haider, an associate professor at the Ted Rogers School of Management at Ryerson University, contends neither level of government has a perfect record when it comes to following through with transit plans.

“It’s a crisis of trust regardless of who you look at, the city or the province,” Haider said.

“But the province has the advantage in that they have the ability to raise debt, they have the much larger tax base, and they have the experience of building large infrastructure projects,” he said.

“If you want to force me to reach a conclusion, it is that. (The province) is the lesser of the two evils.”
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