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DISCUSSION PAPER

Build Regional Transportation Now


Founded in 1845, the Toronto Region Board of Trade is the chamber of commerce for Canadas largest
urban centre, connecting more than 12,000 Members and 250,000 business professionals and inuencers
throughout the Toronto region.
The Board fuels the economic, social and cultural vitality of the entire Toronto region by fostering
powerful collaborations among business, government, thought leaders, and community builders.
Toronto Region Board of Trade plays a vital role in elevating the quality of life and global competitiveness
of Canadas largest urban centre.
Membership with the Board offers the opportunity to be part of a network of our regions most inuential
business leaders, who are working together to help shape the future of the Toronto region.
2014 Toronto Region Board of Trade
CONTENTS


MESSAGE FROM THE PRESIDENT AND CEO .........................................................................................1
EXECUTIVE SUMMARY ............................................................................................................................2
INTRODUCTION .......................................................................................................................................7
PILLAR 1: LEVERAGE TRANSPORTATION INVESTMENT TO DRIVE ECONOMIC GROWTH .................9
PILLAR 2: SOUND LEADERSHIP AND GOVERNANCE ...........................................................................13
PILLAR 3: LONG-TERM AND SUSTAINABLE FUNDING ..........................................................................20
CLOSING THOUGHTS ..............................................................................................................................22
APPENDIX 1: GOVERNANCE MODEL OPTIONS/INTERNATIONAL CASE STUDIES .............................23
REFERENCES ............................................................................................................................................30
With a provincial election now behind us and municipal
elections just around the corner, we are excited to release
Build Regional Transportation Now, the latest paper in our
Think Twice, Vote Once Decision 2014 campaign.
Much has changed since the Board launched our campaign in
January, but getting the Toronto region moving again remains
a top priority for Members and the public. Whether were
polling our Members, or media is polling the pubic, poll after
poll reveals that transit and transportation are right at the top
of voters minds.
In June, the Provincial Liberals won re-election with a
majority and a commitment to invest $15 billion over the
next 10 years in transportation in the Toronto region. This
historic commitment builds on provincial, federal and
municipal dollars already being invested across the region.
It offers hope that our decades long quest to wrestle with
traffic gridlock is moving in the right direction.
It is encouraging then to see public transportation take such
a prominent role in the platforms of municipal mayoral
candidates across the region. In just a few short weeks
municipal leaders will be elected and re-elected with a clear
mandate from voters to resolve this issue.
Its commonly agreed that gridlock is a regional issue
whose solutions will require a new level of cooperation
and coordination among our regions municipalities and
Queens Park. Today, we have a unique blend of alignment,
opportunity and urgency.
Outlined in our report are some actionable ideas to break our
regions crippling gridlock. With funding secured we must
ensure we spend this money wisely. We have the momentum
to finally realise our regions transportation vision, but
getting there does mean we have some tough choices ahead.
The stakes are high. We are making investments that are
multi-generational. Our regional transportation vision must
be able to withstand the winds of political change.
As we reveal in this report, regional transportation solutions
dont happen by chance. They are carefully planned, consulted
upon, and executed. There must be discipline in place to
see these plans through to completion and a structure to
ensure that discipline is enforced. We are putting forward a
range of globally proven approaches for delivering regional
transportation solutions. More than ever, we need to find
ways to develop a common plan for our region.
Our thanks to our Board of Directors, policy pillar
committees, most notably our Infrastructure Committee,
and Advisory Council for their important contributions to
the final paper. Our thanks as well to a number of external
stakeholders for their peer review of this important report.
The time to build regional transportation is now.
MESSAGE FROM THE PRESIDENT AND CEO
Carol Wilding, FCPA, FCA
President & CEO
Toronto Region Board of Trade
Build Regional Transportation Now / 1
2014 promises to be a pivotal year in the political and
electoral history of the Toronto region. Municipal campaigns
are gathering major steam and a provincial election is now
history, with a majority government in place for the next four
years. With this political landscape in mind, in January 2014,
the Toronto Region Board of Trade (the Board) launched
its campaign, Think Twice, Vote Once - Decision 2014 with
the objective of getting candidates, Members and the public
focused on the issues that matter most to the long-term
competitiveness of the Toronto region.
Few issues loom as large in the regions public psyche as
transportation, the subject of this paper. Specifically, how
do we get on with building a truly regional transportation
system and begin to break the stranglehold of traffic gridlock
and congestion? For more than a decade, the Board has
championed solutions to this challenge. The numbers speak
for themselves - up to $11 billion per year in productivity
sapping losses for the Toronto region (Dachis 2013, HDR
2008). Not surprisingly, for the regions businesses, traffic
gridlock is their number one public policy concern, a message
the Board has heard loud and clear from its membership.
Each day, millions of people move across the region to work,
study, shop and entertain. Yet getting to ones destination
is often an exercise in frustration and stress, due to our
clogged roadways and crammed transit systems. This
massive movement of people across municipal boundaries
demonstrates that this is a regional problem, requiring
regional solutions. Congestion does not recognize municipal
borders. Traffic flows dont suddenly stop at Steeles Avenue;
a fact that urban regions the world over understand by
planning and delivering transportation solutions at a
metropolitan level. Just as we have argued that a regional
economy needs one regional body to coordinate inward
investment and cluster development, so too must public
transportation, which traverses jurisdictional boundaries,
be planned for and delivered on a regional basis.
Unquestionably, some progress has been made in advancing
regional solutions to these transportation challenges. The
development of, The Big Move, the regions transportation
plan, is a notable milestone. Similarly, the rollout of major
regional transit projects such as, the Union-Pearson Express,
York Viva Bus Rapid Transit and the Toronto-York Spadina
subway line extension are more than welcomed after
years of underinvestment and little development of new
transportation infrastructure. Yet these are merely a small
down payment toward a more fully built out and integrated
transportation system.
Just recently was the 60
th
anniversary of the opening of the
Yonge subway line, Canadas first. News reports at the time
talked breathlessly about a new ticketing technology, known
as the token, that worked flawlessly on its 1954 debut (Filey
2014). Six decades on, it is highly revealing that the regions
largest transit system, the Toronto Transit Commission (TTC),
trudges on with the venerable old token, the last major transit
system in North America to do so (Garlock 2013); surely a
sign that change is needed. Getting the region back on track
and into the 21
st
century will not be easy. It will require a bold
vision, based on what the Board believes are three critical
and interrelated pillars of public transportation.
EXECUTIVE SUMMARY
Build Regional Transportation Now / 2
Leveraging Transportation Investment to
Drive Economic Growth
In this years Toronto as a Global City: Scorecard on Prosperity
and our recently released report, Toward a Toronto Region
Economic Strategy, the Board spoke directly to the economic
imperative of developing efficient transportation systems
in the Toronto region. What they highlighted were very
troubling economic trends such as lagging productivity
growth (the worst performance of any major city-region in
North America) and high unemployment. Although the causes
of this are varied, the biggest drag on our global economic
competitiveness is our regions frayed transportation
networks. When making decisions on transportation projects,
it means giving strong weight to criteria like connectivity
to major employment hubs and the potential for high-value
commercial and residential development around major
transportation hubs. Key to making this happen is a joint
development strategy, which brings together the public and
private sectors to look at how they can optimize the economic
value of investments in new transportation infrastructure. A
good example of this kind of approach was the collaborative
relationship nurtured between Londons business community
through the organization, London First, and all levels
government. This helped give impetus to the realization of
major projects such as, the Crossrail line connecting eastern
and western portions of the London region. In a Toronto
context, the regions business community can potentially
play a similar role by proactively engaging government
and transportation officials regarding opportunities for
the promotion and development of critically needed
transportation projects such as, the Yonge Relief Line and
electrification of GO train services.


Leadership and Organization Matter
Second, is the issue of leadership and governance; in
particular, how we go about making decisions on public
transportation and actually implementing them in a cost-
effective way. As any savvy investor will tell you, before
investing in any company ther are some basics you need to
know. Do you have a credible business plan? Is the financing
in place? Do you have the right people, organization and
systems to make it happen? When it comes to transportation,
these are the same questions the Boards membership is
asking. It is simply untenable that we be asked to make
contributions toward major infrastructure investments
without safeguards to ensure it will be spent wisely.
Unfortunately, the ongoing Scarborough rapid transit
debate is just one of several examples which highlight
major shortcomings in leadership and governance. Most
notably, who is the final decision maker on transportation
projects? The Province? The municipalities? The Metrolinx
board? There is also little clarity around the roles and
responsibilities of Metrolinx versus local transit services like
the TTC. If this is the template for future transit projects such
as the Yonge Relief Line, we will never develop the kind of
regional transportation system we need to compete with the
worlds best-in-class city regions.
Added to these concerns are major operational challenges
such as, a lack of cross-GTHA boundary service and fare
integration, two serious barriers to getting people out of their
cars. All of this calls into question the ability of the regions
transportation agencies to effectively work together to deliver
region-wide transportation benefits.
Build Regional Transportation Now / 3

Who is the nal decision maker on


transportation projects? The Province?
The municipalities? The Metrolinx board?
Its About the Money
Lastly, there is the basic question of how to fund and finance
needed public transportation improvements in the region and
what revenue sources we are prepared to tap to cover these
costs. It is vital that a financial framework be in place that can
allow us to make these much needed investments, without
threatening the long-term fiscal health of the province and its
municipalities. We, thus, reaffirm the Boards core position on
the need for dedicated revenue tools that will generate annual
revenues in the range of a minimum $2 billion per year.
Indeed, the provinces commitment to provide substantial,
long-term and dedicated funding ($15 billion over 10 years)
to support transportation infrastructure expansion in the
Toronto region marks very real progress. Its a generational
opportunity we cannot squander by having transportation
infrastructure dollars lost to competing fiscal pressures,
whether it is deficit reduction or health and education
spending.
SUMMARY OF KEY RECOMMENDATIONS
Pillar 1: Leverage Transportation
Investment to Drive Economic Growth
1. Economic criteria must be given priority weighting
in selecting future transportation projects - Given
the strong linkages between economic growth and
transportation connectivity, strong weighting must be given
to economic factors, including:

labour market impacts
connectivity to major employment districts and
potential for driving high-value commercial and
residential development.
2. Robust and transparent cost-benefit analyses -
The consideration of these economic benefits needs to
be in the context of robust and transparent cost-benefit
evaluations of each transportation project. These analyses
must be readily and easily available to the public to review
and comment on.
3. Public-Private Joint Development Strategy - Metrolinx,
municipalities and private sector partners, including the
development industry, should work together on land-value
capture (LVC) and other joint development strategies to
drive high-value residential and commercial growth and
private sector contributions toward the cost of stations and
other infrastructure. This collaboration could be facilitated
by the creation of a public-private advisory council,
which would bring together government representatives,
transportation officials and business leaders from across
the region to explore opportunities for the promotion
and joint development of critically needed transportation
corridors such as, the Yonge Relief Line.
4. Joined-up transportation and land-use planning -
In order to optimize the economic potential of
transportation projects, provincial and municipal planning
rules must be reviewed to ensure they direct high-density
residential and commercial development adjacent to major
transportation hubs and corridors. Vancouver, London,
Copenhagen, Stockholm, Frankfurt and Hong Kong, to
name just a few, are among the major urban regions with
policies that direct commercial/industrial employment
development to hubs on the regional rail system.

Build Regional Transportation Now / 4
Pillar 2: Governance and Leadership
1. Maximize commuter convenience and transit system
efficiency by integrating transit route planning and creating
one regional network, fare system, schedule and public
transportation brand for the Toronto region. An important
element in supporting this integration should be effective
marketing and promotion to encourage increased uptake of
public transportation and providing easily accessible user
information.
2. Clarify accountability and de-politicize transportation
decision making - If the region is to move toward a truly
integrated transportation system, political responsibility for
final decisons on investment strategies and transportation
plans need to reside in one place, whether provincial (e.g.,
minister), municipal (e.g., council of GTHA leaders) or joint
provincial/municipal governing board.

With that in mind, consideration also needs to be given to:

Clear time-bound debate and decide decision-
making processes that allow for political input well
before project development processes are launched;
thus allowing for the effective rollout of multiple projects
on a concurrent basis. This could be acheived through a
strong legislative and planning framework that requires
the approval of a long-term transportation plan (e.g.,
20 years) with a suite of projects, which, once approved,
are delivered on a concurrent basis, with changes only
subject to prescribed plan review periods (5yrs).
Encourage the de-politicizing of decision-making by
insisting that elected officials do not approve projects
unless they are validated through solid, thorough
business detailed case analyses (Transit Investment
Strategy Investment Panel 2013).
3. Review governance options for improved coordination
and integration of transportation related planning,
management and operational functions - Consistent
with international best practices, there must be improved
coordination and integration of all public transportation
related strategic planning and operational management
responsibilities now undertaken by distinct municipal
and provincial bodies. As a first step, there needs to be
an independent assessment of the role and mandate of
Metrolinx and the regions other transit bodies. A review
of this nature should explore a continuum of approaches
outlined more fully in Appendix 1. This would include at
one end an enhanced status-quo scenario that maintains
existing transit agencies in the region but imposes a stronger
regime of coordination in key areas of planning (strategy and
operations) and service delivery. At the other end, would be
a consolidation of all transit providers into one provincial or
municipal special purpose body.
4. Review project management and delivery goverance
structures to ensure projects are delivered on time and
on budget This should examinine all issues related to the
delivery of major transportation infrastructure investments,
including the best public, private sector and P3 approaches
for managing major project procurements. Drawing on
international best practices (e.g., Crossrail), the review
should look at ways of building up this kind of specialized
expertise in the Toronto region.
5. Consider opening up regional transportation
operations and maintenance to competitive tendering
- As part of any review of regional governance structures,
there must be a consideration of opportunities for open
and competitive tendering processes, which allow private
companies to bid on fee-for-service contracts to deliver
maintenance and operations of vehicles
(e.g., subway trains, buses) and facilities(e.g., stations,
lines, tracks). When implemented properly, these contracts
Build Regional Transportation Now / 5
5
establish and maintain high service quality standards and
reward operators based on meeting and exceeding agreed
upon benchmarks.
6. Draw on national and international transportation
related expertise - In stark contrast with the Toronto
region, the past two decades have seen leading American,
Asian and European city-regions massively expand their
transportation networks under highly integrated regional
governance models. Any consideration of reforms outlined
in our paper will necessitate drawing on the experience
and expertise of top international transportation specialists
from these regions for advisory and operational support.
Pillar 3: Long-term and Sustainable Funding
1. Apply dedicated revenue tools (Parking Space Levy,
Sales Tax, Fuel Tax, HOV pay lanes) - to fund Metrolinxs,
The Big Move (the regions transportation plan), delivering,
in some combination, the necessary minimum $2 billion
annually to build out The Big Move over the next two
decades.
2. Transportation investment strategy must adhere to the
following principles:
Dedicated and time-bound revenue streams, meaning
that all monies collected through any new tool must only
be used for public transport infrastructure and subject
to a sunset review (e.g., after a 20-year timeframe)
Absolute clarity on what are the policy and revenue
generation objectives of each of the revenue tools
Openness and transparency about how and where
public money is being spent
Rigorous cost-benefit analyses to evaluate all of
the potential economic, social and environmental
implications of any new revenue tool or transit project
Ensuring maximum value-for-money for taxpayer
dollars spent through the adoption of best-in-class
project management models and practices
Fairness and equity related considerations must
be part of any revenue tool evaluative framework;
this includes assessing the impacts of a revenue tool on
economically vulnerable individuals
6 Build Regional Transportation Now /
Build Regional Transportation Now / 7 6
2014 marks a critical milestone in the political and electoral
history of the Toronto region. For the first time in a decade,
municipal and provincial elections are being held in the
same year. Long-simmering regional challenges like traffic
gridlock, job creation and a growing gap between the most
and least prosperous parts of the region are top of mind
issues for voters across the region. Against this backdrop, in
January 2014, the Toronto Region Board of Trade launched its
campaign, Think Twice, Vote Once - Decision 2014 with a focus
on four priorities shaping our future:
Building regional transportation
Dealing with aging infrastructure
Creating jobs, and
Closing the gap between rich and poor

Across all these priorities we want to see both the provincial
government and municipal mayoral candidates present
credible plans with credible means to address them.
An essential component of any plan is recognizing our
city-region reality. Our economy, lifestyles, environment
and commuting patterns transcend municipal borders.
Common challenges require common solutions and effective
collaboration by all orders of government and agencies.
This brings us to the focus of this paper, how do we get
on with building a truly regional transportation system
and begin to break the stranglehold of traffic gridlock and
congestion? For more than a decade, the Toronto Region
Board of Trade has championed solutions to this challenge. As
we have detailed in our, Toronto as a Global City: Scorecard on
Prosperity series and 2013 discussion paper, A Green Light To
Moving The Toronto Region: Paying For Public Transportation
Expansion, overstretched transportation networks are the
most serious barrier to economic growth in the Toronto
region. The numbers speak for themselves - up to $11 billion
per year in productivity sapping losses for the Toronto region
(Dachis 2013, HDR 2008).
As a recent report by the CD Howe Institute highlighted,
these economic losses are not just about the costs of missing
important business meetings or products not getting to
market. They are much deeper. In a well-functioning regional
economy, people can access jobs that better match their skills,
share knowledge face-to-face, and create demand for more
business, entertainment and cultural opportunities. This, in
turn, benefits other people and businesses. However, when
congestion makes these kinds of urban interactions too costly
to pursue, these benefits are foregone, adding significantly to
the costs of congestion (Dachis 2013). The cost of gridlock for
the typical commuter could reach $800 per year in lost time
and wages, plus another $700 per year for drivers who burn
more gas while idling in gridlock (Pembina Institute 2014).
Think of it as lost economic potential on a vast scale.
Certainly, the Board has heard from large, medium and
small businesses about the massive costs and strategic
disadvantage traffic gridlock is causing their firms. Similarly,
polling consistently identifies public transportation as the
most pressing concern of residents in the region. From the
Boards perspective, transportation is the single biggest issue
facing the region and needs to be atop the list of priorities for
incoming municipal and provincial governments in 2014.
Undoubtedly some progress is being made in advancing
transportation development in the region. Metrolinx has
secured approximately $16 billion in funding from all levels
of government toward realizing development of the regional
transportation plan known as, The Big Move. This includes
major transit infrastructure projects now under construction
in the region, such as the Union Station revitalization, the
Eglinton Crosstown line and recent expansions of Bus Rapid
Transit (BRT) in York Region.
INTRODUCTION
7
Last year also saw some encouraging signs on ensuring a
long-term funding strategy. Following the release of the
Boards discussion paper, A Green Light To Moving The
Toronto Region: Paying For Public Transportation Expansion, a
wide range of think tanks, industry associations and business
groups weighed in on the issue with serious and well thought
out proposals. Also contributing to this thoughtful discussion
were the many media outlets that devoted considerable time
and coverage to exploring and analyzing the subject from
a variety of political, economic, social and environmental
dimensions.
And most recently, the provincial governments announcement
to provide regionally dedicated funds for investment in
transportation infrastructure and public transit is a sign of
positive movement on this file. Its commitment to provide
substantial and long-term financing ($15 billion over 10
years) to support transportation infrastructure expansion
in the Toronto region is a vital step forward. As more details
emerge about this plan, we will assess its merits against the
principles and criteria we outlined in our 2013 discussion
paper, A Green Light To Moving The Toronto Region: Paying
For Public Transportation Expansion, (e.g., dedication of
revenues, fairness, optimizing P3 and land value capture
opportunities). We need to ensure that a financial framework
is in place which can allow us to make these much needed
investments without threatening the long-term fiscal health
of the province and its municipalities.
Going forward, we need clear direction from all elected
officials about how they intend to modernize and pay for the
next generation of public transportation investments urgently
required in the Toronto region. The time is now to make
the definitive move towards a truly regional transportation
system. A system with integrated fare structures, schedules
and transit routes, combined with region-wide traffic
management approaches.
Our campaign discussion paper puts a spotlight on three
crucial and interrelated pillars, which should form the
backbone of a revitalized transportation strategy for the
Toronto region.
Pillar 1: Leveraging Transportation Investment to Drive
Economic Growth - First, given the huge costs of needed
infrastructure and operational investments, it is vital
that transportation projects be prioritized on the basis of
robust business cases. This means ensuring that approved
projects have clear economic benefits such as improving
productivity and connections to major employment hubs in
the region.
Pillar 2: Leadership and Governance - Second, is the
critical pillar of leadership and governance, namely how
our public officials, elected and unelected, go about making
and implementing decisions. As international best practices
highlight, having the right people and organizational
structures in place are critical success factors in delivering
high-quality public transportation services
(Kennedy et. al 2005, IMFG 2012).
Pillar 3: Long-Term and Sustainable Funding - Lastly,
is the basic question of funding, who pays and how?
Without stable and reliable revenue sources any talk about
transportation enhancements or expansion is pointless.
Under each of these pillars, the Board will be putting forward
concrete ideas and approaches to help inform and shape this
very important debate.

The time is now to make the denitive


move towards a truly regional
transportation system. A system with
integrated fare structures, schedules and
transit routes, combined with region-wide
trafc management approaches.

8 Build Regional Transportation Now /


THE CHALLENGE
Transportation and the Economy
In this years Scorecard on Prosperity and our recently
released report, Toward a Toronto Region Economic Strategy,
the Board spoke directly to the economic imperative of
developing efficient transportation systems in the Toronto
region. What they highlighted were very troubling economic
trends, such as lagging productivity growth (the worst
performance of any major city-region in North America) and
high unemployment. Although the causes of this are varied,
as a multitude of reports from the OECD, CD Howe Institute
and PricewaterhouseCoopers spotlight, the biggest drag on
our global economic competitiveness is the regions frayed
transportation networks.
But as we highlighted, in our 2014 Scorecard, there are huge
upsides to making essential investments in transportation
and other critical infrastructure. In short order, they would
translate into more business investment, more talent, 165,000
more jobs, and a healthier environment. For working people,
it would mean less time stuck in traffic, more time with family
and friends, and $2,165 more dollars in their pocket each year.
However, realizing these and other important benefits means
focusing an economic lens on how we prioritize and carry out
transportation infrastructure investments. This means giving
strong weight to criteria like:
Labour market participation Transportation
infrastructure can make it easier for people to travel to
work, encouraging more people into the labour force
and facilitating the creation of new jobs. For example,
improved transport links facilitate getting to work in new
places. Infrastructure can also have the reverse impact as
slow, costly and unreliable infrastructure networks can
drive people out of the labour force, discourage them
from entering the Labour market, or make it harder to
run a business.*
Regional and local impacts Transportation
infrastructure can have a significant impact on regional
economies. A well-planned major piece of infrastructure
such as a road link can deliver benefits to the local
economy and, under the right circumstances, help facilitate
greater economic activity.
Potential for creating additional economic value -
Infrastructure development can be a major driver of, or
even a necessity for, major economic developments, both
commercial and residential. Planning strategically creates
an opportunity to add significant value in a particular
place, if infrastructure and other development are
coordinated in a better fashion.
*Source: UK Government, Green Book, 2011
Linking Transportation to Employment
Robert Puentes, a Senior Fellow at the Brookings Institute in
Washington D.C., suggests that the global financial crisis and
weak economic growth in its aftermath have reinforced the
need for transportation investment (IMFG 2012). However,
the framing of the issue is shifting from a sole focus on
environmental sustainability to economic development and
long-term prosperity. Policymakers worldwide recognize
that regional transportation networks help create the
foundation for sustainable and inclusive economic renewal
(IMFG 2012). Puentes argues that access to employment
should be the priority when making decisions regarding
transit investment and service levels (IMFG 2012).
Build Regional Transportation Now / 9 8
PILLAR 1: LEVERAGE TRANSPORTATION INVESTMENT TO
DRIVE ECONOMIC GROWTH
9
However, transit planning in the Toronto region is not always
aligned with these important economic objectives. As the
Canadian Urban Institute highlighted, the Toronto region
has 200 million square feet of office space (one of the four
largest concentrations in North America), but less than half
of it is currently within reach of rapid transit (Canadian
Urban Institute 2011). Thirty years ago, almost two-thirds
of the GTAs offices were on subway lines (Canadian Urban
Institute 2011). Indeed, in the 1960s and 1970s, the Metro
government of Toronto, effectively the bulk of the Toronto
region at the time, had a policy of directing new office
construction to locations served by the subway (Schabas
2013). Unfortunately by the 1980s and 1990s these policies
were largely jettisoned across the Toronto region with office
and other industrial development spread across vast swathes
of land with little or no public transit access (Schabas 2013).
Little surprise then that traffic gridlock is as bad as it is across
suburban parts of the Toronto region.
Poor transport connectivity to these important employment
hubs impacts the regions labour market efficiency. For many
businesses trying to attract skilled young employees to
professional services positions, a lack of transit connectivity
can be a serious impediment to recruitment. This is especially
the case in suburban areas of the region, including the
905 and inner suburbs within the City of Toronto. Many
employers are now taking into account the costs associated
with attracting, training, and retaining talent in their
calculations of per-square-foot occupancy cost and as a result
eschewing many suburban work locations with inadequate
transit connectivity and amenities (Canadian Urban Institute
2011).
The metro Vancouver area serves as a useful example of how
public transportation development is linked to economic
objectives. Its Skytrain and commuter rail system were
developed to explicitly link together suburban employment
nodes with each other and with downtown Vancouver
(Schabas 2013). Meanwhile, new suburban developments in
the region are designed for service by feeder buses that direct
passengers to these rail systems (Schabas 2013).
Driving High-Value Development through
Effective Public-Private Partnerships
There are also opportunities to drive economic growth and
development through increased promotion of land value
capture instruments. These investment models attempt to
recoup a portion of increased property values resulting from
transit development to support infrastructure investments.
Examples from the UK and elsewhere point to this being a
good model to encourage high-value mixed use developments
adjacent to key transit hubs and also as revenue stream to pay
for transit infrastructure such as stations.
A good recent example from the UK is the role being played
by the private sector in helping develop and build the massive
$24 billion Crossrail project, currently Europes largest
construction project. When the line begins operations in
2018, it will connect to destinations in eastern and western
Greater London and beyond, increasing rail capacity in
the region by 10 per cent and connecting Londons key
employment, leisure and business districts.
In addition to direct private sector contributions via local
business taxes ($7.5 billion), the regions business community
is also contributing approximately $1.2 billion through a
variety of joint ventures focussed primarily on commercial
and residential developments along the Crossrail route. In
exchange for development rights around key transit hubs,
developers are building and covering the costs of new station
buildings and facilities.
10 Build Regional Transportation Now /
Playing a critical role in both advocating for the Crossrail
project and coordinating private sector participation was
London First. This is a London-based business coalition with
membership from many of London regions largest and most
prominent firms. Indeed, London First was heavily involved
in funding talks with the UK governments Treasury and
Department for Transport ministers in the weeks leading
up to the formal announcement of the Crossrail projects
go-ahead in 2007. Formal legislative authorization (i.e., royal
assent of the funding bill) took place in 2008.
An important element to note about the Crossrail project
was its strong emphasis on helping drive economic growth.
This was seen as being achieved in particular by better
connecting people to where the jobs are in the London
region, most notably major employment hubs such as Canary
Wharf, akin to Torontos Bay Street financial district. While
the Crossrail business case to the UK government referenced
environmental and other benefits such as enhanced road
safety, its overriding objective was to Support sustainable
economic development. With such an economic focus
and benefits for business through enhanced workforce
accessibility, new redevelopment opportunities and property
value uplifts, there was an obvious incentive for business
to participate and contribute financially towards the
construction of the line.
These approaches hold great promise in the Toronto region.
However, what is clear is that we are not optimizing the
revenue generation and economic development potential
of such partnerships. Numerous reports by the Neptis
Foundation, Transportation Investment Panel and Metrolinx
point to significant re-development and land value capture
opportunities that are being missed such as, along the
Eglinton Crosstown route now under construction. Moreover,
they note that transportation agencies in the region such as,
Metrolinx and TTC, need to strengthen their capacity in the
real estate field and proactively engage the private sector in
joint development opportunities. In order to support these
kinds of developments provincial and municipal planning
rules must promote zoning that supports intensification
along transit corridors and around stations, something that
has not been the case for large portions of the Bloor-Danforth
and Spadina lines.
Finally, it is also important that the Toronto regions business
community take a leadership role, much like the London First
model, in helping support such high-value infrastructure
development. In a Toronto context, the regions business
community can potentially play a similar role by proactively
engaging government and transportation officials regarding
opportunities for the promotion and development of critically
needed transportation corridors such as, the Yonge Relief
Line. This support can help the government in building the
business case for new investments and also ensure that
important economic considerations such as, impacts on
the labour market and business environment, are front and
centre in the prioritization of new transportation projects.
Such a relationship could be facilitated by the the creation
of a public-private advisory council, which would bring
together government representatives, transportation officials
and business leaders from across the region to explore
opportunities for the promotion and joint development of
critically needed transportation corridors such as, the Yonge
Relief Line.
Build Regional Transportation Now / 11

We are not optimizing the revenue


generation and economic development
potential.

11
Knowing Cost-Benets of Projects Important
Putting an economic value on a major transportation
project can only occur with strong cost-benefits evaluation
systems in place. It is also vital from the standpoint of
transparency and the extent to which we as taxpayers have
a clear understanding of the rationale and business cases for
major regional transportation infrastructure projects. Public
trust and willingness to consider revenue tools is highly
contingent on having these facts in plain view. Without a
full understanding of the total costs and benefits, including
operating, economic and environmental, of any proposal, we
are into the realm of highly subjective and emotive debates
about subways versus LRTs, buses versus streetcars, etc. We
need concrete and easily digestable figures and numbers, not
baseless assertions.
As a recent report prepared by transportation expert, Michael
Schabas, for the Neptis Foundation points out, Metrolinx
has not released a Benefits Case Analysis (BCA) for certain
projects, despite making a committment to doing so in
2008. Most notably no BCA has been issued that justifies the
Scarborough subway, which the Province, at the behest of
Toronto City Council, says it will now fund (Schabas 2013).
However, it is important to note the positive steps Metrolinx
has recently taken to address this issue. Its website, has now
posted BCAs for such projects as Eglinton Crosstown and
Hurontario - Main rapid transit project.

WHAT IS NEEDED
Economic criteria must be given priority weighting in
selecting future transportation projects - Given the strong
linkages between economic growth and transportation
connectivity strong weighting must be given to economic
factors including, labour market impacts, connectivity to
major employment districts and potential for driving high-
value commercial and residential development.
Robust and transparent cost-benefit analyses -
Consideration of these economic benefits needs to be in
the context of robust and transparent cost-benefit evaluations
of each transportation project. These analyses must be readily
and easily available to the public to review and comment.
Public-Private Joint Development Strategy - Metrolinx,
municipalities and private sector partners, including the
development industry, should work together on land-value
capture and other joint development strategies to drive
high-value residential and commercial growth and private
sector contributions toward the cost of stations and other
infrastructure. Such a relationship could be facilitated
by the creation of a public-private advisory council. The
council would bring together government representatives,
transportation officials and business leaders from across the
region to explore opportunities for the promotion and joint
development of critically needed transportation corridors,
such as the Yonge Relief Line.
Joined-up transportation and land-use planning - In order
to optimize the economic potential of transportation projects,
provincial and municipal planning rules must be reviewed to
ensure they direct high-density residential and commercial
development toward major transportation hubs and corridors.
Vancouver, London, Copenhagen, Stockholm, Frankfurt and
Hong Kong, to name just a few, are among the major urban
regions with policies that direct employment development to
hubs on the regional rail system.
12 Build Regional Transportation Now /
THE CHALLENGE
Calling all Leaders
It has often been said that the secret of business success is the
combination of smart processes and having smart committed
people. One feeds off of the other. Without the right systems
and processes, businesses cannot optimize the performance
of their employees, nor attract the best and brightest talent.
Yet, an absence of the human element, crucially leadership,
makes the successful execution of any business strategy
impossible.
In trying to understand the difficulties the region faces
in effectively addressing the problem of gridlock, we see
evidence of both weaknesses on the leadership side and also
in the structures and ways we go about planning, deciding
upon and executing transportation infrastructure strategies
in effect governance.
By leadership, were talking in simple terms about the ability
of elected officials to mobilize the electorate to not only
recognize its most pressing problems, such as traffic gridlock,
but to also deal with them (Bertlemann Siftung 2006).
In raising the leadership question, by no means are we
making a partisan statement. It is now a decades old
predicament that cuts across party lines and levels of
government. Recent analysis from the University of Torontos
Martin Prosperity Institute highlights how, since 1989,
Ontarios per capita investments in public transportation
(roads and public transit) have consistently lagged well below
its provincial peers (Gilligan et. al. 2013). The failure to make
transportation infrastructure investment a priority is one for
which governments of all stripes over many decades share
a responsibility.
As such, any hope of addressing the problem of traffic
gridlock in the Toronto region is impossible without effective
political and civic leadership. It is encouraging then to see
public transportation issues take a prominent role in the
recent provincial election and in the platforms of municipal
mayoral candidates across the region. Work undertaken
by the Institute on Municipal Finance and Governance
demonstrates the ability of elected leaders to engage the
public and regional stakeholders around shared challenges
and to shape a region-wide vision. This is a critical success
factor in advancing the transportation agenda. This fact is
evident in jurisdictions as diverse as Stockholm, London and
Los Angeles, which were able to get public buy-in for new
taxes and road tolls to pay for public transit expansion (IMFG
2012, Booz Allen Hamilton, 2011).
Decison-Making and Project Execution
a Struggle
By bringing the discussion onto the matter of governance,
the question we are posing is simple. Do we have in place
the right organizations with the requisite powers, expertise,
responsibilities and processes to deliver a truly regional
transportation system? The question is important; as a wide
range of academic research demonstrates that a failure in
governance leads to poor decision-making processes and
ultimately a substandard transportation network (PTUA
2008). It also jeopardizes the roll-out of major multi-billion
dollar projects. A study by the UK government found that
5 of the 8 common causes of infrastructure project failures
were governance related (HM Treasury 2014). Globally it is
much the same story. A 2012 LCW global study on project
management trends identified that weak governance was the
main contributor to project failure (HM Treasury 2014).
PILLAR 2: GOVERNANCE AND LEADERSHIP
13 Build Regional Transportation Now /
At the heart of any sound governance structure is
accountability and efficient decision-making. These elements
were clearly not in place with the on going Scarborough
subway versus LRT standoff. Indeed, it demonstrated much
confusion around the roles and responsibilities of Metrolinx
and who exactly was accountable for driving regional
transportation expansion. Despite Metrolinxs transportation
planners reccomending an LRT line, including close to
$100 million in sunk costs associated with environmental
assessments and other preparatory work, Metrolinxs advice
was, in the end, ignored by both the Province and the City
of Toronto. Over the span of several weeks, the agency was
compelled to first endorse a subway proposal from the
then provincial Transportation Minister and later Toronto
Councils approved subway route.
An obvious question then is, who acts as the final decision-
maker? Is it the Minister of Transportation, TTC, Metrolinx
Board of Directors or local councils? Taxpayers just want to
know, where does the buck stop? This is not a trivial question.
As the region considers major transportation projects
such as, the Yonge Relief Line and Richmond Hill subway
extension, we cannot afford a repeat of the Scarborough
experience with its costly delays and jurisdictional turf wars.
This cannot be the template for how we make decisions with
hugely significant and long-term implications for the region.
Yet, even when projects are finally given the go-ahead, a
lack of clarity around project planning and management
governance structures creates further problems. One
example was the recent power struggle between the TTC
and Metrolinx over who should manage construction of
the Crosstown LRT project and the role of P3 approaches.
Again this stalled work and created doubt among
potential investors and other private sector partners,
adding both delays and costs due to heightened political
risk. International experience demonstrates that private
infrastructure investment and participation in project
development and delivery relies on a solid and reliable
political stamp of approval with clear direction on what are
the rules of the game over the long-term. Recently, weve also
seen delays and cost-overuns with respect to renovations of
Union Station. As a recent report to City of Toronto council
noted, many of these issues were related to the challenges of
coordination among key stakeholders including, Metrolinx,
the TTC and private contractors (City of Toronto, Staff
Report, 2014). Again pointing to the need for clear project
governance and accountability mechanisms that set out who
is ultimately responsible for ensuring projects are delivered
on time and on budget.
Regional Fare Integration Still in the Distance
The problems with the regions transportation governance
structure go beyond bottlenecks and opaqueness in decision-
making and project management processes. They also
manifest themselves in serious operational shortcomings
and a failure to innovate through the adoption of new
technologies and systems. Just recently the City of Toronto
celebrated the 60th anniversary of the opening of the Yonge
subway line, Canadas first. News reports at the time talked
breathlessly about a new ticketing technology known as the
token that worked flawlessly on its 1954 debut (Filey 2014).
Six decades on, the regions largest transit system, the TTC,
continues on with the token, the last major transit system in
North America to do so (Garlock 2013).
14 Build Regional Transportation Now /

Taxpayers just want to know, where


does the buck stop?
Internationally, most transit systems have long moved
on from the token to automated smart card and ticketing
systems, which reduce delays and needless confrontations
between passengers and frontline staff (Higgins 2010). At the
same time, they provide features such as electronic transfers,
easy inter-regional transit connections, and the increased
convenience of standardized methods of payment, including
credit and debit cards, across their respective transit service
areas (Higgins 2010). These systems also facilitate the
adoption of pay-by-distance or graduated fare systems which
allow prices to vary according to distance; just think, no more
tokens, tickets, or transfers (Higgins 2010).
Sadly, even though we all criss-cross multiple municipal
borders on a daily basis to live, work and study, we are
still light years away from having a truly integrated and
automated fare system. With multiple vertically integrated
transit authorities in the region (each with their own
planning, management and operational responsibilities)
the roll-out of major region-wide transportation initiatives
is often time consuming and inefficient because of differing
fare setting and operational policies. This was the case of the
PRESTO fare card, which will not be fully implemented until
2016 (Metrolinx 2013). It was finally introduced after much
debate and discussion between the TTC and Metrolinx, but
still falls far short of the kind of smart-pricing fare cards
one sees in London, which allow for fare pricing based on
time of day (Quarmby 2014, Schabas 2013). Such smart
pricing with differential fares for peak and off-peak travel
can generate more revenue, while attracting more riders onto
the system (Quarmby 2014, Schabas 2013). The work needed
to bring the PRESTO card to this level of performance must be
made a priority and expedited.
Cross-Border Travel not a Breeze
Along with the need for truly regional fare structures, it
is essential that commuters be able to easily plan and use
public transportation to travel across the region. This is not
the case now. Although GO has over the years expanded its
rail services (e.g., half-hour service on Lakeshore line) and
bus network, it is still very much a peak-hour operation with
limited service during non-rush hour times (Schabas 2013).
Similarly, while regions like Peel and York are developing
and operating new priority bus lanes and Bus Rapid Transit
(BRT) routes, cross-boundary service integration is often
poor, which discourages travel from different points in the
GTHA (Schabas 2013). There are many streets on which
services overlap and where passengers may be confused by
the number of different operators, with different fares and
timetables (Schabas 2013).
Travelling from Square One in Mississauga to the Toronto
Zoo in Scarborough requires a dizzying array of transit
combinations including, Mississauga Transit, Go buses and
trains, combined with TTC buses and subways (Schabas
2013). Such convoluted transit connectivity cannot be the
norm going forward. As the region begins to expand its
subway network from the City of Toronto into York Region,
the need to have well connected transit hubs becomes even
more pressing. Moreover, without these kinds of customer
friendly practices in place, it will be impossible to lure people
from their cars and reduce congestion.
Build Regional Transportation Now / 15
15
Operational Efciencies and Innovations
not a Priority
A hallmark of stellar transportation governance structures
is their ability to drive continuous improvement through
innovations in service delivery and operations with a clear
customer orientation. Such approaches reduce costs, improve
efficiency and maximize output. These characteristics were
recently spotlighted on the Boards podium in a speech by
David Quarmby, head of the team which designed Transport for
London, Greater Londons lead transport authority. In London
a singular focus on improving the commuters experience put
a premium on delivering integrated fares, schedules ticketing,
marketing and traveller information, both pre-journey and
realtime; in essence single journey planning. The results speak
for themselves, bus usage is up 75 per cent, car usage is down
25 per cent in the central core (Quarmby 2014).
Conversely, poorer performing systems are characterized by
a pattern of operations that is convenient for personnel, rather
than for passengers and longer term operating efficiency
(Vuchic 2005). International transportation expert Vukan
Vuchic points out, that such issues are typical of transportation
agencies that have developed a kind of inertia due to a long
period of operation without many innovations or substantive
service delivery re-organizations (Vuchic 2005). Regrettably,
elements of this description apply to the Toronto regions
public transportation system. Indeed, there are signifcant
opportunities for improvements in operational performance
that could reduce costs and free up funds for ongoing
maintenance and infrastructure expansion.
Take the operation of GO and TTC trains. TTC subway trains
operate with two drivers, whereas normal practice in Western
Europe has been single-person operation since the 1980s
(Schabas 2013). Increasingly, there is also a move toward
driverless subway/LRT operation, as is the case in Paris and
Vancouver (Schabas 2013). Meanwhile, GO transit operates
its trains with three-person crews, with a driver, conductor
and ticket inspector (Schabas 2013). This contrasts with the
practice in most of Europe where commuter trains operate
with a single driver and the occasional inspection on trains
and at stations (Schabas 2013). Given that labour comprises
about two-thirds of operating costs, a ratio that is quite high
by international standards, opportunities such as increased
automation must be considered across the system
(Schabas 2013).
As well, unlike other national and international jurisdictions,
the regions transit systems have taken only tentative steps
toward private-sector outsourcing and competitive tendering
of transportation services. While GO and York Region Transit
have outsourced operation and maintenance of trains and
buses, across the region we still do not see the complete
opening-up of subways, LRTs and bus lines to private
competition, as is the case in Hong Kong, Stockholm and many
other European cities (PTUA 2008, Schabas 2013). Structured
properly, such competitive tendering approaches are proven to
deliver increased transparency, efficiency and greater value for
money, up to 40 per cent cost savings in the case of commuter
rail services in Germany (Litman 2013, Schabas 2013). Under
such an open tendering model, public agencies may own
transportation infrastructure and establish performance
standards, while private companies (including worker
cooperatives) bid for the right to operate buses or trains,
based on cost-efficiency and service quality (Litman 2013,
Quarmby 2014).
Worth noting as well is the highly fragmented nature of
transportation delivery in the region, which does not always
facilitate the transfer and sharing of best practices. There is no
reason, for example, why York Regions highly regarded Viva
BRT model could not be adopted in parts of the City of Toronto,
given its many long and interconnected arterial roads.
Build Regional Transportation Now / 16
International Experience Helps Point to
Where we Need to Go
As we have discussed in this section, leadership and
governance arrangements are critical to delivering sound
regional transportation solutions. To make this a reality, it is
vital that Metrolinx, or a similar body, be given the authority
to carry out its responsibilities in making certain that the
regions transportation agencies effectively work together to
deliver region-wide transportation benefits.
Making the kind of step change needed to pull our
transportation infrastructure from the 20
th
in to the 21
st

century will not be easy. It requires new thinking about how
we as a region plan for and deliver public transportation. In
this regard, it is useful to look at international best practices
(discussed in more detail in Appendix 1). Of course, no one
model achieves ultimate perfection and there is a great deal
of variation in how metropolitan regions organize their public
transportation systems. As a recent study of transportation
governance in the US noted: No two regions are alike; every
region brings its own history, politics, culture and legal
contexts to the choice of governance for public transit and
the governance change process (Booz Allen Hamilton, 2011).
One sees this reflected in the diversity of organizational
models used to deliver regional transportation such as,
Germanys transit federations (Verkehr Verbuenden), which
see multiple transit agencies work together in planning and
coordinating transit delivery or Transport for London,
which has all of Greater Londons transportation, strategic
and operational planning consolidated under one roof.
All this to say, there is no off-the-shelf governance
model that can be wholly adapted to the Toronto region.
Nonetheless, there is no question that most of our leading
city-region peers from Los Angeles, to London, to Hong Kong
have made considerably more progress over the past decade
in expanding their public transportation systems, improving
the passenger experience and reducing gridlock. As such,
there is room to consider some of the key ingredients of
success from these governance models and look to see how
they can be adapted in a Toronto region context. For example:
Clear political accountability for major policy and
strategic decisions Policy and strategic level decision-
making is assigned to an identifable, accountable and
elected person or body. In London it is an elected Mayor,
in Greater Manchester it is a committee of regional council
leaders, in US jurisdictions like Portland, the state govenor,
and in Germany superivisory boards representing different
levels of government. In the cases of London and Greater
Manchester, this accountability is buttressed by strong
legislative and planning frameworks. These frameworks
require the approval of a long-term transportation plan (e.g.,
20 years) with a suite of projects, which once approved, are
delivered on a concurrent basis, with changes only subject
to prescribed plan review periods (5yrs).
Robust and regionally integrated transportation
planning and service provision This means
organizational structures that deliver a single journey
commuting experience, with integrated fares, schedules,
ticketing and marketing under a single regional brand. This
can be achieved under a variety of scenarios including joint
service agreements between transportation agencies such
as in German jurisdictions like Munich and Frankfurt and
US metro regions like Phoenix and Seattle. Conversely, this
type of integration can also be achieved under consolidated
organizational models such as in London or Stockholm,
which have one agency solely responsible for planning and
coordinating service delivery.

Build Regional Transportation Now / 17
17
Independent transportation agencies with strong
leadership and capability High performing
transportation systems need strong and independent
transportation agencies with high quality, multi-disciplinary
teams of professional transit officials. These officials
command the respect of elected officials and must
provide credible, evidence-based planning that drives the
investment projects and programs. Their role is to advise
the elected representatives and deliver the plans
as approved.
Opening up regional transportation operations and
maintenance to competitive tendering Though
relatively rare in a North American context, as mentioned
earlier, a great many European and Asian jurisdictions have
acheived considerable cost savings and improved service
delivery by opening up the operation and maintenance of
vehicles and facilties to the private sector operators.
WHAT IS NEEDED
Maximize commuter convenience and transit system
efficiency by creating one regional fare, schedule and
public transportation brand for the Toronto region.
An important element in supporting this integration
should be effective marketing and promotion to encourage
increased uptake of transportation and easily accessible user
information.
Clarify accountability and de-politicize transportation
decision-making - If the region is to move toward a truly
integrated transportation system, political responsibility for
final decisons on investment strategies and transportation
plans need to reside in one place, whether provincial (e.g.,
minister), municipal (e.g., council of GTHA leaders) or joint
body (e.g., superivisory board) with municipal and provincial
representation. With that in mind, consideration also needs to
be given to:
Clear time-bound debate and decide decision-
making processes that allow for political input well
before project development processes are launched; thus
allowing for the effective roll-out of multiple projects on a
concurrent basis. This could be acheived through a strong
legislative and planning framework. This framework
would require the approval of a long-term transportation
plan (e.g., 20 years) with a suite of projects that, once
approved, would be delivered on a concurrent basis, with
changes only subject to prescribed plan review periods
(5 yrs).
Encourage the de-politicizing of decision-making
by insisting that elected officials do not approve
projects unless they are validated through solid, thorough
business case analyses (Transit Investment Strategy
Investment Panel 2014).
Review governance options for improved coordination
and integration of transportation related planning,
management and operational functions - Consistent
with international best practices there must be improved
coordination and integration of all public transportation
related strategic planning and operational management
responsibilities now undertaken by distinct, municipal and
provincial bodies. As a first step, there needs to be an honest
assessment of the role and mandate of Metrolinx and the
regions other transit bodies.
Build Regional Transportation Now / 18
A review of this nature should explore a continuum of
approaches outlined more fully in Appendix 1. This would
include at one end an enhanced status-quo scenario that
maintains existing transit agencies in the region, but imposes
a stronger regime of coordination in key areas of planning
(strategy and operations) and service delivery. At the other
end, would be a consolidation of all transit providers into one
provincial or municipal special purpose body.
Review project management and delivery goverance
structures to ensure projects are delivered on time and
on budget - This should examinine all issues related to the
delivery of major transportation infrastructure investments,
including the best public, private sector and P3 approaches
for managing major project procurements. Drawing on
international best practices (e.g., Crossrail), the review should
look at ways of building up this kind of specialized expertise
in the Toronto region.
Consider opening up regional transportation operations
and maintenance to competitive tendering - As part of
any review of regional governance structures there must be
a consideration of opportunities for open and competitive
tendering processes, which allow private companies to
bid on fee-for-service contracts to deliver maintenance
and operations of vehicles (e.g., subway trains, buses) and
facilities (e.g., stations, lines, tracks). When implemented
properly these contracts establish and maintain high service
quality standards and reward operators, based on their
meeting and exceeding agreed upon benchmarks.
Draw on national and international transportation
related expertise - In stark contrast with the Toronto region,
the past two decades have seen leading American, Asian and
European city-regions massively expand their transportation
networks under highly integrated regional governance
models. Therefore, a consideration of reforms outlined in
our paper will necessitate drawing on the experience and
expertise of top international transportation specialists from
these regions.
Build Regional Transportation Now / 19
19
THE CHALLENGE
As we argued in our March 2013 discussion paper, lofty
transportation visions and plans are of no value without a
credible strategy to pay for them. In the end, it really is about
the money. The Board was thus encouraged by the provincial
governments recent announcement to provide dedicated
funds for investment in transportation infrastructure and
public transit, which is a development of note. As more details
emerge about this plan, we will assess its merits against the
principles and criteria we outlined in our 2013 discussion
paper, A Green Light To Moving The Toronto Region: Paying For
Public Transportation Expansion (e.g., dedication of revenues,
fairness, optimizing P3 and land value capture opportunities).
WHAT IS NEEDED
The Board articulated its policy position on the critical
issue of how to fund public transportation development
in the region with the March 2013 discussion paper,
A Green Light to Moving the Toronto Region: Paying for Public
Transportation Expansion. As the Board noted at the time, and
continues to do so, our proposal was not cast in stone. It was
intended to spark a serious debate. Nevertheless, if opposed
to the Boards proposal, we invite others to come forward
with a credible alternative.
The paper put forward four revenue tools (Parking Space
Levy, Sales Tax, Fuel Tax, HOV pay lanes) for serious
consideration that must be dedicated to funding Metrolinxs,
The Big Move, the regions transportation plan. The proposed
tools, in some combination, would deliver the necessary
minimum $2 billion annually to build out The Big Move over
the next two decades.

Recognizing that there were major direct and indirect
benefits to reducing traffic congestion, the Board
recommended a mix of society-pay tools (i.e., sales tax) as
well as more user-pay tools which encourage a shift to
transit, walking and cycling such as the fuel tax and parking
space levy. This approach was seen as not only acheiving
certain positive policy objectives, but also helped ensure the
burden of paying for these new fees was spread across the tax
base and did not hit one sector or user group hard.
Supporting our revenue tool recommendations was
analytical work undertaken by AECOM and KPMG, which
provided, among other things, a consideration of the
economic effects of different revenue tools. This latter point
was a key variable in the criteria the Board used to select its
proposed revenue tools.
PILLAR 3: LONG-TERM AND SUSTAINABLE FUNDING
Revenue Tool
Approx.
mid-range
rate
Annual
Revenue
Potential
Regional Sales Tax 1% $1.0 - 1.6B
Parking Space Levy
$1 per space
per day
$1.2 - 1.6B
Regional fuel tax 10-cent/litre $640 - 840M
High-occupancy
toll lanes
30-cent/km for
single drivers
$25 - 45M
Build Regional Transportation Now / 20
In addition to our revenue tool recommendations, there were
a series of principles the Board will use to evaluate the merits
of proposals to fund public transportation infrastructure:
Dedicated and time-bound revenue streams, meaning
that all monies collected through any new tool must only
be used for public transport infrastructure and subject to a
sunset review (e.g., after a 20-year timeframe)
Absolute clarity on what are the policy and revenue
generation objectives of each of the revenue tools
Openness and transparency about how and where
public money is being spent
Rigorous cost-benefit analyses to evaluate all of the
potential economic, social and environmental implications
of any new revenue tool or transit project
Ensuring maximum value-for-money for taxpayer
dollars spent through the adoption of best-in-class project
management models and practices
Fairness and equity related considerations must be part
of any revenue tool evaluative framework; this includes
assessing the impacts of a revenue tool on economically
vulnerable groups and particular business sectors and
identifying measures (e.g. tax rebates, exemptions) which
could offset negative impacts on vulnerable groups.
Responsible debt financing and borrowing strategies
which effectively manage risk and ensure payment
obligations are met and retired within a fixed timeframe.
Maximizing revenue and cost-effective project
management opportunities through:
Land value capture
Public-private-partnerships (P3s)
Federal contributions through the renewed Building
Canada Fund or a national transit strategy
Build Regional Transportation Now / 21
21
Undoubtedly, many of the transportation related challenges
we outline in this report are daunting. From securing long-
term and sustainable funding streams, to creating a truly
integrated transportation system that seamlessly moves
people to and from destinations across the Toronto region.
They require a strong combination of vision and leadership
from not only public officials, but importantly private sector
leaders as well.
It is for this reason that over many decades the Board has been
an advocate for effective and regionally based transportation
planning and development. Indeed, going as far back as
the 1950s, the Board proposed the creation of a regional
commuter rail system along the lines of GO Transit. More
recently, we were among the first stakeholders to recommend
the establishment of a regional transportation planning
agency, which eventually became Metrolinx. Its mandate to
develop, adopt and implement a region-wide transportation
plan and ensure the efficient and cost effective resolution of
matters respecting transportation, including the optimal use
and location of transportation infrastructure, is as relevant
now as it was then.
We now stand at an important juncture. Notwithstanding
the progress made in recent years, the future of the next
wave of transportation projects envisaged in The Big Move
is far from certain, unless we make major changes in how we
go about palnning for and executing decisons about public
transportation.
Our regions past can be our inspiration. From the mid 1950s
to early 1980s the province and its municpal partners built
a public transportation system in the Toronto region that
was the envy of the world. Its innovations in linking surface
bus and streetcar routes to subway lines made it a must
stop for visits by international transit officials. Likewise, the
development of the GO Transit commuter rail system was
unique in a Canadian and North American context.
Put simply, there is no reason why we cannot demonstrate the
same kind of vision and ambition today.
CLOSING THOUGHTS
Build Regional Transportation Now / 22
In preparing this report, a review was undertaken of regional
transportation governance models outside of Canada. Broadly
speaking, three approaches were identified and case study
examples of these are included in the appendix. Interestingly,
the Toronto regions structure of multiple transit authorities
working together to deliver regional transportation is not
uncommon in Europe. This suggests a regional system
with mulitple transit authorities, as is the case in most of
Germanys largest metros, can be made to work with the right
systems and processes in place.
Worth noting is that under all these models, operations and
maintenance functions such as, vehicle operation and facilities
maintenance, can be contracted out to external providers
through a competitive bidding process like in many European
jurisdictions.
Improved Status Quo Model
Option 1: An enhanced status quo scenario would maintain
existing transit authorities, but would seek to enhance
regional integration and planning along with improved transit
decision-making through a number of changes/reforms to
existing system. These could include:

Clarifying political decision-making by introducing a
legislative and planning framework, which requires the
approval by one level of government or designated body of
a long-term transportation plan (e.g., 20 years). The plan
would include a suite of projects, which, once approved,
would be delivered on a concurrent basis, with changes only
subject to prescribed plan review periods (5yrs).
No approval of projects without solid business cases.
Creating GTHA consortium of transit authorities to
regionally coordinate and deliver transportation planning
including, service levels, network route design, fare
structures and prices, public marketing, branding, etc.
Joint service agreements to facilitate the sharing of
vehicles and facilities among operators in the region.
Establishing supervisory board with elected officials
representing province, regions and municipalities to oversee
consortium and provide final approval of plans.
International examples include: German transit
federations Verkehrverbuenden (e.g., Hamburg, Berlin,
Frankfurt, Munich), Zurich Switzerland.
Provincial Agency Model
Option 2 (Single Provincial Agency): Upload of all policy/
planning, infrastructure expansion/project management,
and transit operations/maintenance responsibilities now
undertaken by multiple bodies to a single agency. Potentially
this could mean amalgamation of GO Transit, TTC and other
local transit authorities under an expanded Metrolinx or other
provincial ministry department or agency. Agency would be
politically accountable to a minister (e.g., Transportation).
International examples include: Portland TriMet, New York
City: Mass Transit Authority.
Build Regional Transportation Now / 23
APPENDIX 1: GOVERNANCE MODEL
OPTIONS/INTERNATIONAL CASE STUDIES
23
Municipal Special Purpose Body Models
Option 3 (Single Special Purpose Body appointed by
GTHA municipalities): Consolidation of all policy/planning,
infrastructure expansion/project management and transit
operations/maintenance to a single agency. Potentially this
could mean amalgamation of Metrolinx, GO Transit, TTC and
all local transit authorities under one municipally appointed
special purpose body. Such a body could be accountable to
a board of directors comprised of the regional chairs (York,
Durham, Halton, Peel) and the mayors of Hamilton and
Toronto, which would have responsibility for approving all
major policy decisions such as overall strategy, finance etc.
International examples include: London - Transport for
London, Stockholm - Storstockholms Lokaltrafik.
Option 4 (Separate Special Purpose Bodies appointed
by GTHA municipalities): Consolidation of all regional
transit governance responsibilities under two separate
municipal special purpose bodies, dividing policy/planning
responsibilities from operations and service delivery. These
bodies as in Option 3 could be accountable to a board of
directors comprised of the regional chairs (York, Durham,
Halton, Peel) and the mayors of Hamilton and Toronto, which
would have responsibility for approving all major policy
decisions such as, overall strategy, finance, etc.
International examples include: Manchester: Transport
for Greater Manchester Committee/Transport for Greater
Manchester.






International Governance Case Studies
Enhanced Status Quo: German transit alliances
Verkehrsverbund
One of Europes best-known and most successful examples of
integrated transport is Germanys Verkehrsverbund system
of coordinating public transport within metropolitan regions.
Originating in Hamburg in 1967, it has been adopted by major
cities in Austria, Germany and Switzerland including Berlin,
Frankfurt, Hanover, Munich, the Rhein-Ruhr region and Zurich.
The systems motto is one network, one fare, one schedule.
Under this model, public transit service coordination and
regional integration is achieved by voluntary agreements
involving state and municipal governments and transit
authorities. Political oversight and final approval of
transportation plans is provided by supervisory boards
with elected officials from municipal, regional and state
governments participating in the federation. A good
example is the Hamburg region where three states, 140
cities and towns, and seven public transport firms formed
the Hamburger Verkehrsverbund (HVV) to coordinate public
transport planning and service delivery.
Key HVV functions include:
Public transport planning
Service delivery levels and scheduling
Network route design
Fare structures and prices
Distribution of fare revenues to member firms, and
Public transport marketing, advertising, and public relations
Private operators under contracts to the HVV provide the
transport service and make decisions over such matters as:
Build Regional Transportation Now / 24
Vehicle choice
Staffing
Maintenance
Within the HVV, an integrated timetable and ticket system
allows the passenger to use the areas buses, metro trains (the
U-Bahn), suburban railways (the S-Bahn), and ferries using a
single ticket, without transfer fees.
Hamburg and other German regions draw on a wide
local tax base, including high fuel taxes (the equivalent of
over $1 per litre) that provides public authorities with
considerable financial independence in raising revenues
to pay for public transportation. As well, they benefit from
high usage of public transit which delivers a high proportion
operating costs, over 75 per cent.
Considerations for the Toronto region:
Approach would not require major organizational
restructuring to implement
However, would require high degree of political
collaboration and also planning and operationally related
co-operation among transit authorities in the region to make
it happen.
Would necessitate that authorities take a more regional
perspective to transit delivery
Sources:
http://abp.unimelb.edu.au/files/miabp/integrated-transport-final.pdf
http://www.citylab.com/commute/2012/10/5-reasons-germans-
ride-5-times-more-transit-americans/3510/
http://www.gmfus.org/doc/Governance_Structures_English.pdf
http://www.sutp.org/component/phocadownload/category/65-
td4?download
Provincial Agency Model
Portland Tri-Met
Portland Tri-Met is a corporation established by the State of
Oregon to deliver public transportation in the area of Metro
Portland, which has a population of just under 2 million.
Tri-met is responsible for both planning (routes, fares,
investments etc.) and delivery of public transportation in the
region, which includes bus, LRT, rail, street car and commuter
rail services. These services are primarly delivered by
Tri-Met staff.
The agency is supervised by a 7 person board which is
appointed by and accountable to the State Govenor. Each
member represents a specific geographic area of Metro
Portland. The Board is comprised of a mix of business and
community representatives.
Almost 60 per cent of operating funding comes from
dedicated taxes, including payroll taxes. The rest comes from
fares, federal and state grants and other sources. Its LRT
system is funded by dedicated grants, local contributions and
bond proceeds.
Overall the system performs well in a North American
context. Although 24
th
in population, it ranks 13
th
in transit
ridership in the US. Moreover, its transit use is growing
faster than auto use and is also a growing mode of transport
for not just work, but for other purposes like leisure. Over
the past decade, Portlands transportation system has
received multiple accolades both in the US and abroad for its
commitment to sustainable transit oriented development and
its ease of use for both residents and tourists alike.
Build Regional Transportation Now / 25
25
Considerations for the Toronto region
Applying the Portland model to the Toronto region would
necessitate consolidation and uploading of planning and
operational responsibilities now carried out by multiple
transit authorities (e.g., TTC, Viva) into provincial agency,
potentially an expanded Metrolinx.
Transitioning from current model would require a
significant amount of time and careful planning to execute
successfully.
Political accountability would be fixed at the province and at
either the Premier or ministerial level.
Sources:
www.translink.ca/...translink/governance.../governance_review/
translink_ governance_review_appendix_3.ashx
http://trimet.org/about/inthenews.htm
Municipal Special Purpose Body Models
Transport for London
Transport for London (TfL) is the integrated agency
responsible for the London regions transport system, serving
32 muncipalities and the Corporation of London. Established
in 2000, its main roles are to implement the London Mayors
Transport Strategy for London and manage transport services
across the capital for which the directly-elected Mayor has
responsibility. TfL covers an area with a population of 8.2
million people.
TfL is responsible for implementing the Mayors
transportation strategy for London and managing
transportation services across Greater London. TfLs main
operational responsibilities include: roads, highways, traffic,
cycling and transit (bus, streetcar and rail). Transit services
are delivered on a contractual basis by external service
providers, including private sector operators.
Although the bulk of Londons transit is solely managed
by TfL Crossrail is a joint venture between TfL and the
Department for Transport, which sees them collaborating
to build a new railway linking the Greater London regions
of Maidenhead and Heathrow in the west, to Shenfield and
Abbey Wood in the east.
The overall governing agency for Greater London is the
Greater London Authority, which has responsibilities for
transport, spatial planning, housing, economic development
and culture. Enabling legislation provides the directly elected
Mayor of London with the duty to develop and implement
policies that promote transport accessibility and efficiency
for the region. TfL is the implementation and operating
agency for the policies and directions developed by the
Mayors office.
TfL has its own board appointed by the Mayor. This board is
chaired by the Mayor, has a size allowed to range from 8 to
17 members, most of whom come from a transportation or
business background, including a licensed taxi driver and
CEO of British Airways. The Mayor is the public face for the
organization and plays a prominent role in new transport
initiatives.
Over 70 per cent of TfLs operating costs are covered by fares,
congestion charges and other operating revenues with the
rest coming from central government grants. In little over
a decade, TfL has become a world leader in delivering high
quality and cost-effective public transport. Indeed, a recent
study by Imperial College of large urban transit systems put
London at the top or near the top of the rankings in multiple
categories:
Build Regional Transportation Now / 26
Build Regional Transportation Now / 27
Lowest subsidy per-passenger
Operating cost per vehicle, fourth lowest (without sacrificing
quality and with increased ridership)
First to achieve fully accessible fleet
Third lowest CO
2
emissions per passenger
London has double the number of daily passenger compared
to the next nearest city.
Considerations for the Toronto region
Obviously, certain aspects of TfL, including the role of the
Mayor and London regional council would not be applicable
in the Toronto region given the absence of such structures.
That said, the notion of creating a special purpose body like
the TfL for the Toronto region with similar powers is worth
considering, given the success of TfL
One could perhaps see a TfL type agency created by the
province (perhaps a reconstituted Metrolinx) assume all
of the current planning and operational responsibilities of
municipal transit agencies.
Such an agency could be accountable to a board of directors
comprised of the regional chairs (York, Durham, Halton,
Peel) and the mayors of Hamilton and Toronto, which would
have responsibility for approving all major policy decisions
such as overall strategy, finance, etc.
Like TfL, operational issues like efficiency, effectiveness,
and customer service could be delegated to agency staff
with perhaps oversight of a management board comprised
of community representatives and members of the board of
directors.
Role of the province would need to be considered, both
from a funding perspective and potential role of Board
of Directors.
Sources:
www.translink.ca/...translink/governance.../governance_review/
translink_ governance_review_appendix_3.ashx
http://www.bot.com/newsroom/speeches/PDF/20140409DavidQ
uarmbySpeakerNotes.pdf
http://www.siemens.co.uk/pool/about_us/cities/world-class-tfl-
report.pdf
Region of Greater Manchester (United
Kingdom): Transport for Greater Manchester
Committee (TfGMC) and Transport for
Greater Manchester (TfGM).
Public transportation, including roads, traffic management
and transit fall under the jurisdiction of the Greater
Manchester Combined Authority (GMCA), a statutory
federation of regional municipalities. Greater Manchester
is comprised of 10 district municipalities: Bolton, Bury,
Manchester, Oldham, Rochdale, Salford, Stockport, Tameside,
Trafford and Wigan, with a population, just under 3 million.
Regional transportation planning and delivery is the
purview of two GMCA bodies: Transport for Greater
Manchester Committee and Transport for Greater
Manchester. The system is comprised of LRT, buses and
commuter rail and also includes responsibilities for traffic
management.
27
Transport for Greater Manchester Committee (TfGMC)
The Transport for Greater Manchester Committee (TfGMC)
is a joint committee of the Greater Manchester Combined
Authority (GMCA) comprised of the ten municipalities in
Greater Manchester. It is responsible for advising the GMCA on
transport policy, recommending how much money is spent on
public transport and monitoring the quality and performance
of transport services.
The committee is made up of councillors appointed by the 10
Municipal Councils in Greater Manchester and is supported by
full-time GMCA staff and also staff from local municipalities.
The committee makes recommendations in the following areas
for approval by the Combined Authority:
Setting the operating budget and the issuance of a dedicated
transport levy
Borrowing /debt financing
Capital programme and approving schemes to be funded
by the Greater Manchester Transport Fund (a joint fund
with contributions from all the regions municipalities
Local Transport Plan (LTP), which is a 15 year public
transportation plan equivalent to The Big Move. The LTP is
reviewed and updated every 5 years as a single project as
opposed to project to project approvals.
Ratifying the appointment of a Chief Executive and other
executive and non-executive directors for Transport for
Greater Manchester.
Transport for Greater Manchester (TfGM) Transport for
Greater Manchester is the public transportation delivery arm
of the elected body GMCA and executes the strategies and
policies approved by the GMCA. This includes:
Owning and supervising operation of Metrolink, the regions
LRT system
Distributing operating subsidies to the regions bus operators
Owning and supervising operation of the regions bus
stations and stops
The installation, maintenance and management of traffic
signals
Maintaining highway databases, surveys, modelling, analysis,
appraisals and advice
Highway route performance, incident response and event
management via a traffic control centre
Both TfGMC and TfGM are accountable to a committee of
GMCAs council leaders (i.e., Mayors). This includes the final
approval of the LTP, which includes its transit projects, budgets
and revenue tools and requires a majority of seven votes to be
adopted.
Key funding sources include:
Dedicated regional transit levy, which works out to about
$120 per person a year
Fare revenues
Central government transfers
European Union grants
Municipal contributions that are earmarked towards a
common transportation fund (currently $2.4 billion).
Land value capture/development opportunities
Earned-back agreement with central government,
which permits the region to keep a portion of the tax take
attributable to increased economic growth in the region. Has
potential to generate about $134 million per year in new
spending power
Build Regional Transportation Now / 28
In little over two decades, the region has made considerable
progress in terms of performance. 70 per cent of trips are by
public transport, walking or bike, compared to just under 30
per cent in the GTHA. Its LRT network currently covers 73.4
km, with 40 stops; part of the network, including 17 stops, are
former rail corridors reconverted for LRT usage. The latest
expansion of the LRT system due to be completed in 2016, will
make Metrolink the largest network of its kind in the UK and
three times the size of when it opened, covering approximately
100 km of track, with 99 stops.
Unlike the TfL, which was created by enabling legislation
from central government, Manchesters model has evolved
from bottom-up voluntary initiatives started in the mid-
1990s and directed by the strong leadership of the regions
largest council, the City of Manchester. These initiatives were
eventually codified in legislation with the creation of the
Combined Authority. Key figures in moving forward regional
collaboration in transportation and other areas, such as
economic development, were the citys top elected official
Sir Richard Leese, the council leader, and its Chief Executive
Officer, a public official, Sir Howard Bernstein.
Considerations for the Toronto region
Given the abscence of a regional mayor or assembly as in
London, the Manchester model has some applicability to a
Toronto region context.
One could envisage planning and operational bodies
reporting to a planning/policy committee perhaps
comprised of the regional chairs (York, Durham, Halton,
Peel) and the mayors of Hamilton and Toronto and a
management board covering operational issues (e.g.,
service quality, schedules) with councillors and community
representatives.
However given current political dynamics and little cross-
regional collaboration among municipal governments,
such bottom-up adoption of regional governance is not
foreseeable in the immediate future.
Adoption would likely need to be led by the province and
would entail consolidation of all the current planning and
operational responsibilities of municipal and provincial
transit bodies under two new agencies.
Sources:
www.translink.ca/...translink/governance.../governance_review/
translink_ governance_review_appendix_3.ashx
http://www.tfgm.com/journey_planning/LTP3/Documents/LTP3_
Summary_060511.pdf
http://www.tfgm.com/Corporate/Pages/TfGM.aspx
http://www.tfgm.com/ltp3/Pages/Local-Transport-Plan.aspx
Build Regional Transportation Now / 29
29
Bertlemmann Siftung, Political Leadership in the 21st Century, 2006
www.fundacionbertelsmann.org/fundacion/.../EN_LiderazgoPol.pdf
Booz Allen Hamilton, Regional Organizational Models for Public Transportation, January 2011
www.apta.com/.../Organizational_Models_TCRP_J11_Task10.pdf
Canadian Urban Land Institute, The New Geography of Office Location and the Consequences of Business as Usual in the GTA,
March 2011
http://www.canurb.com/cui-publications/the-new-geography-of-office-location-and-the-consequences-of-business-as-usual-in-
the-gta.html
City of Toronto, Union Station Revitalization Project Status Update, July 24, 2014
www.toronto.ca/legdocs/mmis/2014/gm/.../backgroundfile-72162.pdf
Dachis, Ben, Cars, Congestion and Costs: A New Approach to Evaluating Government Infrastructure Investment, July 2013
http://www.cdhowe.org/pdf/Commentary_385.pdf
Filey, Mike, TTC subways 60th anniversary, Toronto Sun, March 29, 2014
http://www.torontosun.com/2014/03/29/ttc-subways-60th-anniversary
Garlock, Stephanie, City Lab, September 11, 2013
http://www.citylab.com/commute/2013/09/transit-hack-day-sleek-card-hold-torontos-old-school-tokens/6849/
Gilligan, Shawn, Stollarick, Kevin, You Cant Get There from Here: Ontarios Transportation Funding Gap, August 2013
http://martinprosperity.org/wp-content/uploads/2013/08/Transportation-Funding-Whitepaper_v011.pdf
HDR Corporation, Cost of Congestion in the Greater Toronto and Hamilton Area: Impact and Cost-Benefit Analysis of the
Metrolinx Draft Regional Transportation Plan, December 1, 2008
http://www.metrolinx.com/en/regionalplanning/costsofcongestion/ISP_08-015_Cost_of_Congestion_report_1128081.pdf
Higgins Chris, The TTC and the Presto Smart Card, June 24, 2010
http://www.citynews.ca/2010/06/24/opinion-the-ttc-and-the-presto-smart-card/
HM Treasury, 2014, Improving Infrastructure Delivery, Project Initiation Routemap, Governance Module
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/330378/Governance_Module.pdf
IMFG, Moving Our Region: Funding Transportation For Our Future, No.1/2012
munkschool.utoronto.ca/imfg/imfg-forum-moving-our-region
30 Build Regional Transportation Now /
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