Let private enterprise build subways

A century ago, firms ran streetcars for profit, paying fees to government. 

By Lawrence Solomon

Three weeks ago, in a column praising the reform agenda of Rob Ford, Toronto’s new reform-minded Mayor, I invited readers to offer suggestions for additional reforms that Toronto, and other cities, should pursue. You have been coming through with innovative ideas that I will be expanding on and publicizing in this new Post feature, Fix Your City. To kick off this reader-initiated series, I’ll start with a suggestion from Torontonian Graham Smith that deals with Toronto’s transit system.

Mr. Ford is hoping the province will take the money-losing Toronto Transit Commission off his hands, and for good reason — the TTC not only drains the city’s coffers, the rudeness and laziness of its employees are a public scandal, no small matter for a mayor who is rebranding the city as “delivering customer service excellence.” Mr. Ford has another reason for wanting no part of the TTC — a subway line he promised across a low-density part of the city’s northeast makes no economic sense. If the province took over the TTC, he could wash his hands of his commitment.

Mr. Ford is right to want to be rid of the TTC — a city has no business running a public transit system. As urban guru Jane Jacobs advocated, public transit is a business that should be in private hands. But Mr. Ford would be wrong to give the TTC away. He should instead sell it to the highest bidder — the TTC would fetch $2-billion or more if put on the market, depending on the conditions attached (a decade ago, a U.K. company did try to purchase the TTC, but was rebuffed by the province).

Or, if Mr. Ford didn’t want to sell off the TTC holus bolus, he could auction off different routes, as did London, where contracting out was an instant success — the quality of service soared and costs dropped as companies offering everything from minibuses and double-deckers to subways and later trams competed for customers.

This is where a suggestion from Mr. Smith comes in. Instead of building the money-sucking subway that Mayor Ford suggests, Mr. Smith argues that Toronto should instead build a subway under Queen Street, one of Toronto’s busiest downtown streets. His argument — that Toronto would get more bang for the buck by putting a subway along a route rich with people and businesses — is indisputable.

I agree that a Queen Street subway, which would replace the now-crowded Queen streetcar, makes great sense. I further believe it could be built on a free-market basis, and some history bears me out.

A century ago, before governments across the continent took over transit systems, private companies ran streetcars for profit, and even paid cities a franchise fee for the right to use city streets. When traffic later became too heavy for the streetcars to handle, a subway would be built under the streetcar route, and the streetcars would be retired.

This was the formula for success that existed before transit systems became politicized and nationalized, and sometimes afterward, too: Toronto’s transit system, though it became city-owned by 1921, retained its business-like culture for decades.

Early operators of the Toronto transit system, in fact, had plans to build a subway under Queen, and in a 1946 referendum, Torontonians overwhelmingly voted to build a Queen Street streetcar-subway line that would have risen above ground at Logan to the east and Trinity Park to the west. (Unbeknownst to most Torontonians, one subway station of this east-west line would soon be built beneath the existing north-south Queen subway station.) A few years later, the proposed east-west streetcar-subway route was upgraded to a full-fledged subway route.

Then politicians got into the act, following the creation of Metropolitan Toronto in 1954. The TTC, which until then had profitably operated the City of Toronto’s dense urban routes, suddenly was required to also service Metro Toronto’s low-density suburban areas. Metro Toronto marked the beginning of the end of the TTC as a financially self-supporting business.

The viable Queen line was shelved — temporarily at first — in favour of an east-west Bloor-Danforth line that would reach the suburbs. Then temporary became permanent as the suburban politicians now dictating TTC policy gave priority to developing suburban routes, unconcerned that the Queen subway was viable while suburban projects were not. In the end, the TTC — easily the best and most profitable transit system on the continent — became a money-loser, like transit systems everywhere that are run by politicians.

Mr. Ford can end that sad history of wasteful public transit projects by marketing the Queen Street line to the private sector. Private operators would not only value the revenues that passengers would leave behind at the farebox but also the revenues to flow from the Queen stations’ retail potential, given that Queen is one of Toronto’s premier shopping streets and that station operators are increasingly capitalizing on the shopping potential of street-level stations.

An auction of new subway-related surface and sub-surface zoning rights to Queen Street property owners allied with would-be station operators would not only help Mr. Ford meet his budget targets, it would also let Mr. Ford fulfil other campaign promises — reducing the number of city employees, removing streetcars from city streets, and truly making Toronto a “Transportation City.”

Lawrence Solomon is executive director of Urban Renaissance Institute and author of Toronto Sprawls (University of Toronto Press), January 28, 2011. 

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