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Sheppard line to face big losses

Fewer riders than estimated will use new $875-million subway, TTC report says

Thursday, December 14, 2000

The long-criticized Sheppard subway line is expected to lose $12.4-million in its first 18 months of operation.

In a report yesterday to the Toronto Transit Commission, officials estimate that the line will lose $4.8-million in its first six months of operation in 2002 and another $7.6-million in its first full year in 2003 — higher than earlier estimates.

On an annual basis, the projected loss amounts to 5 per cent of the city’s $144-million subsidy to the transit system.

“It’s like a very hungry child,” said TTC chairman Brian Ashton, a city councillor who reluctantly voted for the project in 1996.

The 5.3-kilometre line between Yonge Street and Don Mills Road, to be built at a cost of $875-million, initially was to connect to a major hub at the Scarborough Town Centre to justify the huge capital costs.

But now it amounts to only half a line, scaled back after provincial cutbacks and a stagnant economy in the early 1990s. Too few riders, insufficient housing density and a shortage of non-residential development along Sheppard are among the reasons that operating costs are expected to exceed revenues.

The forecast losses are higher than ballpark estimates first made in 1993, but officials yesterday were not sure how much higher. Even with the new, detailed estimate requested this year by TTC general manager Rick Ducharme, the commission is not certain when the line will break even.

“Future-year estimates are dependent on ridership growth and future wage settlements,” according to the report tabled with the commission yesterday.

Mr. Ashton said the lesson from the Sheppard project — for which Mel Lastman pushed hard when he was mayor of North York — is that transit construction should follow population density, not the other way around.

“We’ll have to feed this infant system with higher density along Sheppard and more ridership,” he said.

The forecast losses on the Sheppard line received no attention at yesterday’s TTC meeting, where new and old members of the commission called on the city and the province to develop a new transit “vision” for the Toronto region.

After hearing what he described as a “sobering” presentation on the cost of replacing a now-aging fleet of buses, streetcars and subways over the next five to 10 years, councillor David Miller said, “The TTC clearly has a capital- budget issue that’s going to get worse and worse.”

In his presentation to the new commissioners, Mr. Ducharme said decisions they make in the next couple of years will determine the future level of service on a growing transit system.

For example, the TTC typically spends about $250-million a year to maintain the existing system in good working order. But he estimated that it will cost $500-million a year by 2007-2008 to replace vehicles bought in the 1970s and 1980s.

That scale of spending cannot be carried by the city alone, Mr. Ducharme warned, noting that Ontario is the only jurisdiction in the world that puts the cost of transit entirely on the backs of local taxpayers.

Commission member Joe Mihevc said the proposed capital investments are predicated on only modest growth in ridership to 466 million in 2010. But he and other TTC members said the system would have to expand to accommodate 525 million riders in 2010, if the city attracts the additional one million people it wants to over the next 20 years.