TTC customers on the hook for congestion “solutions”

Solving traffic congestion through uneconomic transit expansion leaves transit customers picking up the tab for a problem they didn’t create.

The TTC’s expansion projects will drain the agency’s finances and cost current and future customers at the fare box. More importantly, while transit officials and political leaders highlight transit expansion as a means to solve Toronto’s congestion woes, they don’t mention that these projects will be paid for, not by those causing the bottlenecks – drivers – but by TTC customers through higher transit fares.

Take the Spadina subway extension from Downsview station to Vaughan – recently in the headlines as the cost and timeline to complete the project continue to escalate – as an example. The project, which was initially supposed to end at York University before political pressure moved it further north, was proposed as a way to tackle traffic congestion in the York region and beyond.

First, the cost to actually build the Toronto-York Spadina Subway Extension (or TYSSE as it is known) has continued to creep higher. Scheduled to cost $2.6 billion (after much scope creep) and open by 2015, the TTC now says that the project’s final price tag will be at least $150 million more (and counting) and might not open until 2019.

Second, when the project does open, it won’t be financially sustainable on the basis of fares. The TTC – which initially opposed extending the subway to Vaughan, arguing that it would siphon resources from other, more pressing needs – is on the hook for the majority of the subway extension’s operating costs. While the cost to operate the extension is expected to be around $33 million annually, the line will only generate about $19 million in new revenue – leaving the TTC with a $14-million financial hole to fill.

That hole will be filled predominantly by hiking fares for existing customers and, to a lesser extent, a request for an increased operating subsidy from City Council. Those responsible for congestion in the York region and beyond – drivers – will pay nothing to solve the problem.

The controversial Scarborough subway – proposed as a way to both ease road congestion and crowded subway trains – will also require fare and subsidy increases to stay afloat. While the TTC expects Scarborough subway to move around 9,500 passengers per hour per direction during peak hours, it would have the capacity to move more than 30,000 – meaning that more than two-thirds of the subway’s capacity would be wasted. And that’s only considering times of peak operation.

Torontonians are already paying a property tax levy to fund the subway, yet that money will only go towards the capital costs associated with construction. Because the subway will run an operating deficit, transit customers will also see increases in fares to offset those loses. Again, those causing congestion won’t be paying for the misguided plans to solve it.

And finally, the Downtown Relief Line (DRL), a proposal to deal with an influx of long-distance and suburban TTC customers by offering a smoother, less crowded ride downtown, suffers from similar economics. The DRL would operate well under capacity, according to TTC ridership forecasts. Ridership on the DRL during the busiest period – the morning commute – is estimated at 11,000, or about 30% of its total capacity.

Like other expansion projects, the DRL would be unable to cover a significant portion of its operating costs through fares, leaving the TTC to raise fares for all customers.

Uneconomic transit expansions are not the solution to Toronto’s congestion woes. Instead, these expansions will result in continued faster-than-inflation fare increases and a deteriorating transit system, given that the TTC is already billions of dollars behind in its maintenance programs. Meanwhile, those actually causing congestion are not on the hook for any of the costs associated with the traffic jams they cause.

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 by phone at (416) 964-9223 ext 236