Another day, another subway platform.
Adding his voice to the chorus of calls for subway expansion, mayoral candidate Rocco Rossi yesterday unveiled his own program, this one to be funded using the dividend of his plan to sell off Toronto Hydro and retire the city’s $2.5 billion debt load.
Standing on the Kay Gardner bridge south of the Davisville Station, Rossi said yesterday that he plans to invest $4.5 billion over ten years, with funds drawn from the city’s operating budget. By paying off the accumulated debt, Rossi said the city would save about $450 million a year in interest payments.
The announcement brought a swift put-down from George Smitherman, who issued a release that said, “Torontonians now have the right to question Mr. Rossi’s competence to be mayor” because of “errors” and “holes” in the plan.
The annual savings, according to Rossi’s proposal (dubbed “Transit City Plus”), should pay for the construction of two kilometres of tunnel plus a station every year, with the TTC relying on a continuous tunneling approach to save start-up costs.
Rossi also said he’d delay the Downtown Relief Line in favour of completing the Sheppard subway and extending the Yonge line up into York Region.
Like Sarah Thomson, Rossi wants private sector involvement in these projects to bring costs down, but he rejected road tolls as a way of raising revenue. Also like Thomson, Rossi’s numbers are unrealistically optimistic and fail to account for a range of associated budget pressures.
His plan assumes subway construction costs of $225 million per kilometer, which is almost a third less than what’s being spent currently on the Spadina extension into Vaughan. Nor does it not include the purchase of additional subway cars, the little matter of the TTC’s $400 million a year operating deficit, and the fallout from mounting overcrowding on a Yonge line that will be expected to serve transit-starved 905ers. Finally, he hasn’t factored in the loss of the Hydro dividend payment, which adds about $25 to $50 million a year to the city’s revenue stream.
Smitherman further pointed out that the Hydro sale would trigger a 33% transfer tax.
Rossi’s pitch also presumes the city’s interest payments will remain negligible after he uses the Hydro proceeds to retire the debt. But according to council’s long-term capital plan, the city will spend about $16 billion over the next decade on a broad range of infrastructure improvements (road/bridge repairs, transit maintenance, water mains, etc.), adding $4.7 billion in new net debt.
That’s twice as much debt as we have today, meaning the city will again be faced with a very substantial annual interest outlay, except in a decade, we’ll have no big asset to sell off in order to make that line item disappear.
And thus we arrive at the wing-and-a-prayer aspect of Transit City Plus.
Rossi, like Mel Lastman did over a decade ago, is talking about using the subway expansion to drive high-density development activity along the new lines. Eventually, the density will materialize, but not in the time frame Rossi envisions.
Then there’s the Metrolinx psychodrama. The agency is expected to release a modified version of its Big Move plan on May 19 in response to the province’s move to delay the funding of Transit City and Viva.
Rossi yesterday would not rule out the possibility of asking Metrolinx to take over the subways whole cloth. “That’s part of the discussion we need to have,” he said, adding. “While it’s on the table, [the transfer] is not a foregone conclusion.”
He also hinted that he’d be open to asking Metrolinx to re-allocate part of the $8 billion Transit City funding to the subways he’s proposing. His gambit — and you’ve heard this one before — is that if Toronto shows its got the intestinal fortitude to finance subway construction on its own dime, our provincial overlords will be sufficiently impressed that they’ll give us a top-up if we ask nicely.
But can Torontonians take that one to the bank? Hardly. Just look at what happened with the triple-promised LRT funding.
Give Rossi this much: he’s been willing to cough up a somewhat plausible financing scenario, unlike Thomson or Rob Ford. But for someone who’s fashioned himself as a number cruncher, his arithmetic still leaves much to be desired.
photo by Kevin Steele