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Gas-tax formula a blow to TTC

City getting less cash than it hoped

Dashes hopes of subway expansion


Toronto can stop dreaming about a subway to York University and other major system expansions if federal gas tax funding is based on population instead of transit riders, says the head of the TTC.

“If it’s per capita you can forget it all … the subway is off the radar,” said Rick Ducharme, chief general manager of the TTC.

Many Toronto officials believed as late as yesterday that the formula to dole out $1.9 billion in federal gas tax revenue over five years would be weighted toward transit ridership in the province.

But federal officials have confirmed Ottawa will announce tomorrow that the money will be handed out to Ontario’s cities and towns based entirely on population, according to the Association of Municipalities of Ontario (AMO).

Toronto has 62 per cent of Ontario’s transit ridership but just 20 per cent of its population. That means Toronto’s share of the $1.9 billion will be closer to $400 million — not the $900 million city officials expected.

Toronto isn’t the only city with needs and it’s only fair that money be spread widely and fairly, said Pat Vanini, executive director of AMO, which represents some 450 municipalities.

“I don’t know how you justify that a taxpayer in one part of the province, whether its northern Ontario or southern Ontario, is any different,” said Vanini, who successfully advocated for the 100 per cent per capita formula.

“Everyone has an infrastructure need.”

The $1.9 billion is Ontario’s portion of the $5 billion, five-year funding announced in February’s federal budget. The rules stipulate the money must be used for “environmentally sustainable,” projects such as improving transit and upgrading sewer and water systems.

While Toronto faces massive TTC costs, small towns, with tiny property-tax bases, face things like multi-million-dollar bridge repairs, Vanini said.

Disagreements between Toronto and the AMO over how federal and provincial funding should be divided are not new.

Toronto used to be a member of AMO but Mayor David Miller took the city out of the organization last year, saying a group that represents small towns can’t speak for Canada’s largest city.

Ontario, because of the premier’s promise to give municipalities more power, stayed out of the formula debate.

That left the federal government to navigate troubled waters and negotiate directly with Toronto and AMO.

Ottawa got some help thanks to the Liberal-NDP budget deal to pump an additional $310 million into Ontario’s transit systems over the next two years.

That paved the way for John Godfrey, the federal minister responsible for infrastructure and cities, to come up with a compromise.

The federal gas tax money will be allocated per capita, as the AMO requested, but Toronto will get a $200 million boost stemming from the Liberal-NDP transit deal.

While Toronto didn’t get the gas tax formula it wanted, Miller said he was “very” happy about what the city would pocket.

NDP Leader Jack Layton said yesterday the transit funding should be made permanent.

“These one-off funding arrangements, in the end, aren’t a solution. You cannot plan the way you have to plan in a city administration if you don’t have some security about the cash flow,” Layton said.


Additional articles by Kerry Gillespie