SHOW ME THE MONEY: HOW THE TRANSIT FUNDING MODEL IS BROKEN
In 2017, Toronto Mayor John Tory felt he was treated like a little boy going to Queen’s Park in “short pants” when he approached the province to discuss additional municipal funding.
That’s how most municipalities feel when they request funding, especially for large infrastructure projects such as transportation. Projects like the Scarborough Subway Extension, or its previous iteration the Light Rail Transit (LRT) plan, and the Downtown Relief Line (DRL) have been in flux. While these projects have been held up mainly due to political wrangling, Section 92 of The Constitution makes municipalities creatures of the province, forcing them to go cap in hand to the provincial and federal governments for money. These delays continue to wreak havoc on our cities, getting in the way of addressing the climate emergency before us.
Funding and governance models need to be modernized to reflect current realities. Enter Sidewalk Labs. In June 2019, the organization proposed the creation of a new de facto transportation department that would be responsible for traffic management. They also wanted to use a portion of the property tax to fund transit, namely to build the Waterfront LRT. While the LRT project is not high on the City of Toronto’s list of transit projects, it is for Sidewalk Labs. City Councillor Gord Perks stated in a June 25th 2019 Toronto Star article that this move would be undemocratic. Nevertheless, Sidewalk Labs restarted a debate that has been brewing and raging for a long time already.
Really, this is not a new idea though. In the United States, what Sidewalk Labs is proposing is called a transportation improvement or development district (TID/TDD). According to the US Federal Highway Administration (FHWA), these are special assessment districts to improve the transportation system within a designated zone. While this is a good idea, and pushes the envelope, the problem is that Sidewalk Labs wants to be the delivering transportation agency. The City of Toronto already charges a 30-year levy to Scarborough residents to fund the subway extension. A discussion is required not only about how transit is funded in the City, and the Greater Toronto and Hamilton region, but within a revised governance model as well.
Metrolinx is the regional transportation planning agency and funding administrator of initiatives on behalf of the Province of Ontario for the Greater Toronto and Hamilton Area. Regional transit projects are outlined in the Regional Transportation Plan, which was released in 2018. Unfortunately, the plan was not costed out to determine the value of new projects and maintenance of the current system. The Big Move, the last regional transportation plan, had an investment strategy several years after its release.
In the United States, there are metropolitan planning organizations and regional transportation agencies that hold taxation powers over regional transportation projects. Two examples of regional agencies that hold the purse strings are the San Francisco County’s Metropolitan Planning Commission and Chicago’s Regional Transportation Authority. The closest to this in Canada is TransLink in Metro Vancouver. TransLink currently levies several taxes to fund transportation projects such as a regional property tax, parking lot sales tax and development charges for transit.
There are several opportunities to fund local and regional transportation projects. One well known example is Measures M and R, local sales tax initiatives approved by Los Angeles County voters to fund those projects. The State of California allows the counties to levy such revenue measures, whereas Ontario’s municipalities must fight tooth and nail to get funding. While the City of Toronto Act provides the opportunity to raise additional revenue sources, approval still must come from the Province. A recent case in point was when the City of Toronto proposed to charge tolls on the Gardiner Expressway and Don Valley Parkway to raise funds for transit, and the Provincial Government played politics and denied the City that opportunity.
While there are more intricate issues, such as social equity, that require political maneuvering, when it comes to transit funding and governance, Sidewalk Labs re-opened the discussion on how big-ticket items like transit should be in the control of municipalities and regions. It is time for the provincial government to recognize this and be on par with our American counterparts to progressively build transit sooner rather than later.