Scarborough transit up in the air as Rob Ford disputes financial plan
July 12th 2013
Toronto would need to raise taxes, take on debt and secure hundreds of millions of dollars from the federal government to cover the extra cost of replacing the Scarborough Rapid Transit system with a subway rather than the light rail currently planned.
Abandoning light rail in favour of a subway, a move endorsed by rivals Mayor Rob Ford and TTC chair Karen Stintz, would cost at least $1.1 billion, the city’s top official, Joe Pennachetti, said in a Friday report.
The added cost could rise even higher — to $1.6 billion — if the provincial transit agency followed through on a plan to take away money from the replacement project and transfer it elsewhere. Regardless, Pennachetti wrote, the switch would “reduce budget flexibility to address other council priorities now and in the future.”
Ford, for the first time, endorsed a dedicated property tax increase to pay part of the cost of the switch. But he said he would support a maximum increase of 0.25 per cent each year for four years starting in 2015 — while Pennachetti asked council to approve a “minimum” increase of 0.5 per cent in 2014 and between 1.1 per cent and 2.4 per cent over the next three years.
The chasm between Ford and Pennachetti adds to the uncertainty still permeating the debate as council prepares for the meeting next week where a plan will be chosen. Council may also go into the meeting without crucial information on where the federal government stands.
To keep the tax increase even as low as Pennachetti recommended, the city would have to convince the Harper Conservatives to provide between $418 million and $660 million. They have not committed to the project; Ford said he is meeting Saturday with Finance Minister Jim Flaherty, a family friend, whose press secretary did not respond to a request for comment.
The provincial transit agency, Metrolinx, committed $1.8 billion to the LRT project. But it said in a June 28 letter that it would withdraw $320 million, to pay for the reconstruction of Kennedy, if council chose the subway.
Ford said “the deal’s dead” if the city doesn’t receive the promised $1.8 billion. He said he is meeting with provincial Transportation Minister Glen Murray on Monday.
“My expectation is that the province will honour its original commitment,” Stintz said.
The property tax increases tied to the project would be over and above any general property tax increase. The general residential increase for 2014 is widely expected to somewhere around 1.75 per cent.
Subways are popular with Scarborough residents. Stintz is a potential 2014 mayoral candidate, and Ford, whose unfunded proposal for an eastward extension of the Sheppard subway was defeated last year, is eager to tell voters that he delivered on his subways-for-Scarborough campaign promise in some way.
Pennachetti’s financing plan would require new borrowing that would cost $30 million to $67 million in annual interest payments. The payments could be covered, Pennachetti said, with a “one-time dedicated property tax rate increase in 2014 of 0.5 per cent, and a subsequent increase ranging from 0.6 per cent to 1.9 per cent over the 2015-2016 period.”
Ford’s news conference in Etobicoke represented a personal milestone. He had never before endorsed a city tax increase for transit, insisting until Friday that corporations and the federal and provincial governments could cover the entire cost.
“They’ve always said ‘put some skin in the game.’ Our skin’s in the game now,” Ford said.
“The people of Scarborough got the short end of the stick from day one,” he said. “People in Scarborough deserve a subway. We have to start somewhere, and this is where we’re going to start. I’m a true believer in this, and I’ll fight non-stop for it, and the people of Scarborough want, deserves, and will get subways.”
Under the existing LRT plan, the Scarborough RT is to be taken out of service in 2015. Riders will be forced onto buses until the LRT is ready by about 2020.
Under the subway plan, Pennachetti wrote, the Scarborough RT would be kept alive until 2023, when the subway would be complete.
“No one who is fiscally responsible, genuinely cares about taxpayers, and truly wants to provide rapid transit to Scarborough now would support Mayor Ford’s new plan,” said Councillor Josh Matlow, a midtown centrist.
“Because the mayor didn’t accept the city manager’s plan, there is no plan for a subway in Scarborough. And people in Scarborough could wind up riding buses for the next 20 years,” said Councillor Gord Perks, a Ford opponent who represents Parkdale-High Park.
The planned LRT would have seven stations, versus three for the proposed subway, and cover 9.9 kilometres, versus 7.6 for the subway. Forty-seven thousand residents and employees would be in walking distance to an LRT, according to the TTC, versus 24,000 for the subway.
A subway trip would take 10 minutes, down from 15 for an LRT trip. And a subway would eliminate the need for riders to transfer to a new train at Kennedy station.
Neither the subway nor the LRT would interfere with car traffic: both would be separated entirely from the road.
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