The time is now for Toronto to look at off-peak transit fares

Any study of SmartTrack should also look at how off-peak fares could be used to reduce overcrowding on the TTC.

Toronto City Council has an opportunity to rethink transit in the city. It could follow the status quo and direct funds to studying system expansion, or it could try something new and look at how off-peak fares can be used to manage overcrowding on the TTC.

On February 10, City Council will debate whether to allocate more money to study Mayor John Tory’s flagship transit plan, SmartTrack. The Executive Committee last week recommended that City Council offer another $1.65 million in funding – on top of the $750,000 it approved previously – to conduct further studies on SmartTrack’s feasibility and projected cost.

While the city’s elected officials ponder whether they should spend $2.4 million more studying SmartTrack, they should also consider: is new transit the only option? This is an ideal time for the city to consider whether the flat fare model currently used by the TTC is inefficient and a primary cause of the overcrowding that SmartTrack and other expansion proposals are looking to eliminate. It should ensure that any money spent on studies surrounding SmartTrack also look at what it would cost to use prices – particularly peak and off-peak fares – as a tool to ease congestion and promote transit.

Consumer Policy Institute (CPI) has demonstrated that it would be cheaper and easier for the TTC to use prices to reduce overcrowding on its transit network, rather than simply building new lines. In a report last year, CPI showed that if the TTC implemented discounted – or even free – fares in the off-peak travel periods – the hours prior to the morning commute, for example – it would solve the crowding issues currently experienced on the Yonge subway line, while saving the transit agency and its customers billions of dollars in not having to build an expensive subway.

The TTC and other transit officials have repeatedly argued to the public that the city should move ahead with the proposed Downtown Relief Line (DRL) to handle overcrowding on the Yonge subway line. The DRL could cost as much as $8 billion and would operate well under capacity, even during the busiest travel periods. By offering riders a free ride in the hours before the morning commute the TTC could avoid building the DRL and save at least $1.5 billion over the next two decades, according to CPI’s study. Any money saved would help keep fare increases to a minimum.

Mayor Tory’s SmartTrack plan may be as unnecessary as the DRL. SmartTrack consists of 53 kilometres of “surface subway” lines and 22 stations, and will be built by “retrofitting” existing GO Transit lines and adding a new extension along Eglinton. Mayor Tory, when presenting his plan, said SmartTrack would provide “relief” from crowding on the Yonge-University Line and ease traffic congestion by attracting new riders.

Mayor Tory estimates that the proposal would cost $8 billion – though that figure will likely be much higher when the project is fully completed. And while Mayor Tory says he plans on using an innovative method – Tax Increment Financing – to pay for building SmartTrack at no cost to taxpayers or transit customers, that method remains untested and would not cover operating deficits. As with other uneconomic transit plans, any operating deficit on the new line would be covered through raising fares for all customers across the entire TTC network.

If Toronto is serious about easing overcrowding on transit and offering a real alternative to driving, it should certainly be thinking about how we currently price transit and whether customers would be better served by lower off-peak fares. City Council now has the opportunity to direct transit officials to do exactly that.

Over zealous plans for transit expansion should not be the only option presented to commuters and transit customers alike.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or at (416) 964-9223 ext 236.

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