Adrian Lightstone
New Member
As the mayoral race in Toronto starts to heat up and the state of affairs at the TTC becomes more and more of a central issue, it’s time we start to look at some real options for improving the service. The TTC receives more than a quarter-billion dollars annually in municipal government subsidies and it appears that the money is being mismanaged. Truth be told, the TTC has been unfairly getting a bad rap. Recent fare hikes, overcrowded services, sporadic bus times, deteriorating stations, construction delays, budget overruns, lack of proper city coverage, and workers strikes have left many riders unhappy. But what most riders don’t know is that the TTC is receiving the least amount of help in the form of government subsidies compared to every other major Canadian urban centre. So it begs the question: ‘Why does it cost the city so much to operate the Rocket and what can we do to fix the problem?’
The answer to the first half of the question lies in Toronto’s sprawling cityscape. In the mid-twentieth century, not only were TTC fares enough to cover it’s operating cost; they often produced a budget surplus. However as the city expanded in the post-war era and new low-density housing started to spring up, the TTC was required to provide these suburbs with transit services. In many low-density neighbourhoods, the revenues generated from fares were not enough to cover the cost of the service being provided due to reduced ridership compared to the high-density urban core. This operating budget shortfall is ever present and it is the municipal government who picks up the difference in the form of a subsidy to the TTC.
But despite the quarter-billion dollars in subsidies, the TTC isn’t doing too badly compared with other urban centres. Of all the major cities in Canada, TTC fare boxes pay for the largest share of transit operating costs. The technical term is ‘fare box recovery ratio’. In Toronto the fare box recovery ratio represents a 75% share. Compare this with Ottawa, which only generates 44%, and Toronto starts to look pretty good. If we go south of the border and compare Toronto’s fare box recovery ratio to the MTA in New York at 37% , Toronto starts to look like a superstar. Yet dropping three dollars into the fare box still seems a bit steep for a ride on what most would agree is a sub-par service. So what can be done to improve Toronto’s transit costs?
One route that many major cities are taking is to privatize public transit. Although it sounds like an oxymoron, it’s not. Stockholm, Sweden, recently entered into a public-private-partnership with MTR, the same transit company that manages Hong Kong’s metro. The cost to the municipality of Stockholm is roughly two and a half billion dollars for eight years of operation. The system is efficient and clean, trains and buses are new, they run on schedule and frequently, the stations are not in disrepair, and the fares are comparable to Toronto's. Not to mention, MTR periodically hands out customer satisfaction surveys on the trains and buses to make sure they are doing their job.
In the case of Stockholm, and other public-private-partnerships, the role the municipality plays is to facilitate, regulate, and guarantee provision of the transit service. The municipality remains responsible for paying for the system, but the operation is left in the hands of the private sector. It therefore allows a company like MTR, whose specialty is transit operation, to run the system more efficiently than the city would have on its own. This can result in improved service in the form of more frequent trains and buses, extended routes, better vehicles, less delays, and lower fares.
However many people, especially union workers, oppose allowing private companies to run public services. Although this view is somewhat shortsighted (if socialist Sweden can do it then so can we), there is thankfully another solution to the TTC’s woes: let riders pay the true cost of transit. It may sound crazy, but this technique is also being used in many cities in the form of zone charges. What zone charges mean to the rider is that where you begin and end your trip dictates how much fare you pay. Longer trips made by commuters coming from the low-density areas, where ridership is less, would pay increased fares to cover the cost of providing transit services to those areas. Riders become more conscious of the true costs of transit and this is often reflected in their choice of where to live and work.
But what the TTC really needs, as much as Torontonians don’t want to hear it, is more help in the form of municipal subsidies. Because of the way metro systems in North America have developed over the past century, it has become impossible to operate a proper transit system without the help of subsidies. The fact that Toronto has the country’s highest fare box recovery ratio means that the TTC is getting proportionally the least amount of subsidies. For the largest metro system in Canada, this is the equivalent of pulling the plug on life support. For the TTC to grow over the next decade, subsidies will be required.
So while Toronto’s riders are destined to put up with the TTC and all its faults for the time being, there are solutions to the TTC’s woes. If we’re lucky, there may be a sea change on its way down the tube in the fall.
