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Tough times for transit but not the end of the world

Province has no alternative to reduced funding
but long-term commitment remains intact

By Michael Warren

Ontario has run up a deficit of nearly $21 billion in an attempt to soften the impact of a harsh recession. And it is na├»ve to expect anything but unpopular belt-tightening for years to come — regardless of which party controls Queen’s Park.

Don’t expect any more handout announcements. Get used to hearing about financial phasing, program cuts, more taxes, user fees and selling assets. Eventually every provincial service will be affected. Ontario has no alternative. It is facing the worst fiscal crisis in its history.

Given this reality, it was surprising to witness the indignant media and political overreaction to Premier Dalton McGuinty’s decision to delay $4 billion in funding for the province’s “Big Move” 25-year transit plan.

One headline claimed: “When it comes to transit, province has a blind spot.” The piece talked about a “giant step backwards” and suggested that tough times had led the premier to abandon his commitment to investment in mass transit.

An angry Mayor David Miller called the postponed funding a “disgrace.” He argued that the first phase of “his” Transit City plan will now take 20 years rather than seven to complete.

Those closer to the ground think the delay won’t be more than a few years.

Metrolinx recently announced that negotiations are underway to acquire light rail vehicles for the Sheppard, Finch, Eglinton and Scarborough rapid transit lines. This is a clear signal that work is currently proceeding as planned, despite the funding delay mentioned in the budget.

So why the knee-jerk condemnation of McGuinty?

It is largely a reaction to a generation of Ontario governments — of all political stripes — that have announced grand transit schemes, only to abandon them under financial pressure. Their unfulfilled promises are why the GTA is decades behind other urban regions in its ability to effectively move people and goods. It is also why the cost of modernizing the existing system, and providing for future population growth, is now so high.

To be fair, McGuinty has done more to advance the transit agenda in this region than any premier since Bill Davis. He has given tangible leadership to the idea that transportation is a regional issue and that it requires regional solutions.

In 2006 McGuinty established Metrolinx — the regional agency that is now responsible for planning, financing and eventually overseeing a vastly expanded rapid transit network for the GTA.

He gave the mayors in the GTA, who were the initial directors, the resources to draw up a long-term transportation plan for the region. He committed $11.5 billion to be spent on Greater Toronto transit projects, and pressed Ottawa to contribute a further $7 billion.

The resulting Big Move transportation plan forms the rationale for implementing a 25-year, $50 billion rapid transit network across the GTA and beyond. Even without the financial support he sought from Ottawa, McGuinty started flowing his promised funding in late 2008 for the highest priority projects.

Last year he revamped the Metrolinx board by appointing skilled private sector directors and an influential CEO, Rob Prichard, to manage the implementation stage. He followed this by transferring responsibility for GO Transit to Metrolinx to give the agency operating as well as planning and financing responsibility.

The recent budget contains no cuts or delays with respect to GO’s $2.5 billion multi-year capital program. This means that improvements to GO’s Georgetown South line and the eventual link between Union Station and Pearson Airport remain unaffected. Even more significant, McGuinty has allowed construction to continue on the Spadina subway extension, the Sheppard and Viva York lines, and the Union Station upgrade.

Don’t be surprised to see Metrolinx maintain the construction momentum on all these projects with a revised plan that back-end loads the funding delay. In addition to the recently announced negotiations with Bombardier for future rail vehicles, some observers expect Metrolinx to issue a “request for qualifications” for the Eglinton line extension in the next few months.

McGuinty knows full well that the further this construction is allowed to go, the harder it will be to stop, or slow down. This is a premier who still understands that the province’s growth engine, the GTA, will continue to sputter without modernizing its transportation system

However, it is clear that the province does not have sufficient general revenue to finance the Big Move at a rate of $2 billion a year. This highlights the need for McGuinty to begin developing a broader-based transit-funding strategy, one dedicated to transit and that gives the province, local governments and the private sector more ways to fund transit infrastructure.

Metrolinx is scheduled to provide the government with a report in 2013 on how best to finance future transit expansion. The analysis will examine a wide range of funding options, many of which are already in use in advanced cities around the world. They include: a dedicated portion of gas taxes; highway and inner city congestion tolls; regionwide parking surcharges; and partnerships that utilize private sector capital and operating capability.

But 2013 is too late. McGuinty has an opportunity to reconfirm his commitment to rapid transit. He should direct Metrolinx to deliver its report by mid-2011— in advance of the next provincial election. This would give the Liberals a basis on which to propose a more sustainable approach to funding the Big Move, one that would spread the burden and minimize future implementation delays.

This timing would also flush out the opposition, including Conservative Leader Tim Hudak, who seems more interested in searching for scandals than proposing serious regional transportation solutions.

The mayoral candidates running in GTA city elections this November would also be prompted to answer the pressing question: “How should my municipality pay for its share of essential transit expansion in the future?”

In the meantime, McGuinty should continue to allow Metrolinx to implement its planned projects using the remaining provincial funding. This would signal that he is serious about introducing new, dedicated revenue sources after the election — funding that would come on stream in time to maintain the Big Move implementation schedule.

None of this will be politically popular. There will be strong opposition from many quarters. But without sustainable funding for expanded transit, the GTA will sink further into gridlock. And the region’s economy and quality of life will continue to suffer.

Michael Warren is a corporate director and CEO of the Warren Group Inc. He is a former Ontario deputy minister, chief general manager of the Toronto Transit Commission and CEO of Canada Post.