Archived columns and blog posts by Matt Elliott

How Toronto City Council came up $500M short in transit debate

By: Matt Elliott Metro, Metro Published on Thu May 16 2013

There seem to be a number of contrasting narratives coming out of last week's transit funding debate. And I understand why: that meeting was one of the most confusing political events I've ever seen. At several points, councillors had to stop and ask the clerks running the votes whether a “yes” vote meant “yes” or “no.” And sometimes, staff explained, yes did mean no.

Still, it's important to take a step back and retain perspective on where the GTA's debate on transit funding actually stands today. Councillors, after all, were merely playing the role of advice-givers. It'll be the provincial government that ultimately determines the path forward for transit expansion in the GTA.

But it'd be a mistake to let Toronto City Council members off the hook for their performance last week. Those who voted in favour of having the debate on transit funding had one job: to advise the province on how they'd prefer to raise the $2 billion a year in revenues needed for transit expansion. With their rejections of various staff-recommend taxes, this council came up very short.

With that in mind, let's look at how this GTA-wide transit funding debate has played out so far.

Step One: Acknowledging the $2-billion hole

The first step in dealing with the GTA's transit funding problem was to acknowledge that a problem actually exists.

Some politicians have had trouble with this step, instead insisting there would be no problem if only some other government were in charge at Queen's Park and also if we simply reversed Earth's rotation for a bit and retroactively avoided costly mistakes made years ago relating to suburban gas plants and eHealth and so on.

But aside from those protests, most seem to agree there does exist a significant funding gap standing between the region and the transportation infrastructure we need to halt worsening congestion.

We can visualize that gap like this, with an appropriate question mark:


The widely circulated figure is that the GTA needs about $2 billion per year in new revenue to fund transit. Some, like the Toronto Region Board of Trade, have argued that the target should be higher. And they've got a point. While $2 billion is a ton of cash, it's only projected to build enough transit to keep average GTA commute times from getting worse than they are today.

But let's stick with $2 billion as our target for now. I've drawn a red line across the graph so we don't forget about it.

Step Two: A shortlist of favourites

For the next step saw Metrolinx table a shortlist of 11 potential revenue tools that could help get the region to the $2 billion target. (And, yes, “revenue tools” is just a euphemism for taxes. So what?)

Here's how the Metrolinx shortlist stacked up to our revenue goal:

All told, the shortlisted revenues added up to nearly $8 billion per year in estimated revenue. Unless we decide to start looking at transit plans that include bullet trains and underwater monorails, that's way more than we need.

Which is good, because some of the shortlisted revenues would never fly politically. Nearly every local politician in the GTA will stew with rage if you suggest funding transit expansion with property tax increases. And the idea of charging drivers based on how far they drive seems fraught with privacy issues and expensive administrative costs.

But there's a lot here to like, and seemingly more than enough to get us above the $2-billion line. (All revenue estimates, by the way, are taken from the Metrolinx shortlist fact sheet. Land Value Capture is included but barely visible as Metrolinx attached no revenue estimate to it.)

Metrolinx asked municipal governments across the GTA to weigh in on the shortlist of revenues and provide guidance on their final investment report. In Toronto, that meant a report from the city manager laying out which taxes, tolls and fees he saw as most appropriate.

This is what he recommended:

The report recommended a parking levy, a sales tax, a fuel tax and increased development charges, all of which would be applied equally region-wide. This cuts potential revenue way down from the shortlist, of course, but still keeps us well above the line.

The city manager also recommended the region adopt additional revenue tools later, after construction of some of the high priority transit lines included in the initial phase of the Big Move. But let's set those aside for now, and just focus on phase one stuff.

In addition to the taxes, tolls and fees on the Metrolinx list, the city manager studied options like a personal income tax increase, a congestion levy and a vehicle registration tax. But none made the cut.

The final step was what we saw last week. It required city councillors to debate the contents of the city manager's report, make amendments, and ultimately determine whether to send their advice to the province or quash the whole thing. Mayor Rob Ford, of course, was in favour of the quashing, but his objections were overruled after an unprecedented two-thirds of councillors in attendance voted against him.

So the debate happened. Things got derailed by Scarborough subway fantasies, which prompted even wilder fantasies about mythical subways criss-crossing the city. And when it came time to vote, any notion of council actually endorsing a new tax or toll went out the window. Instead, councillors opted to only tell Metrolinx which revenue tools they opposed.

After dozens of individual votes, that left us with this:

A regional sales tax of one per cent and increased development charges bring in a lot of revenue. But not enough to get us to our red line $2-billion figure. In fact, the whole exercise leaves Toronto's recommendation to Metrolinx with an annual revenue gap totalling half a billion dollars.

On Friday, I wrote that council's transit debate wasn't all bad, as messy as it was. And I stand by that. No one would have predicted when Rob Ford was elected mayor in 2010 that his council would, less than three years later, tacitly endorse a region-wide sales tax to pay for transit. That's big.

But there's another side of this story. Councillors who generally support the Big Move and voted to have this debate had a obligation to provide workable recommendations that could help Metrolinx reach its revenue goals. That was the task they signed up for. That was their responsibility. That was their job.

And still this council came up short.

This post was originally published at on 2013-05-16T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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