Let's not forget that even if the BRT is placed in hydro corridor, it is still surface transit that stops at traffic lights. Between Yonge and Jane, hydro corridor crosses 3 major streets, 7 minor streets, and one rail line.
Even with very wide stop spacing, it is not physically possible to make buses run much faster in hydro corridor compared to dedicated lanes on Finch. That is, unless the hydro corridor BRT is bridged over most intersections - which would make it much more expensive, and prompt opposition from residents in some areas (between Bathurst and Yonge, for sure).
Transit in hydro corridors might be a good idea in many cases; but in this particular case, the (small) gain in speed will not compensate for worse accessibility.
There is a huge difference between the speed of at-grade transit in a street median and that of at-grade transit in a separate corridor. It comes down to the effectiveness of transit signaling. I'm guessing that your assumption that "at-grade means red lights" is based on experience with the poorly executed ROWs for TTC streetcars. I live further north where I witness first-hand that the TTC is perfectly capable of operating a highly effective transit priority system on a road quite relevant to this discussion: the Finch Hydro Corridor Busway.
In a street median, it is nearly impossible to guarantee a green for transit, because it takes a very long time for signals to react once a vehicle is detected. Much of this has to do with the size of the street. Wider streets need longer pedestrian countdowns, which slows down signals' reaction time.
Let's examine a hypothetical street with median transit. (If anyone has actual numbers from St. Clair, The Queensway or Spadina, let me know). Assuming an 8 lane wide street (2 traffic lanes/direction + left turn lane + platform + 1 transit lane/direction) the pedestrian countdown is roughly 30 seconds (based on Dufferin Street near my house). On top of that, there are many light phases, which delay the green for transit, and make signaling more unpredictable.
Here are the fixed-length phases.
~30 seconds: Pedestrian countdown
5 seconds: Yellow light
3 seconds: All-way red
~15 seconds: Left turn phase
The current transit signalling system on St. Clair is flawed because it never skips phases. That means that if a transit vehicle is detected as the cross-street is just starting its left turn phase, transit has to wait not only for that, but also for the cross-traffic phase and the left turn phase on the street in question. In the hope that the city changes this impediment to transit, my numbers will assume that all non-essential phases are skipped when a transit vehicle is detected, unlike on St. Clair.
In that case, the longest possible reaction time would be if the transit vehicles is detected while during the cross-traffic phase. The reaction time would be 38 seconds (Pedestrian + Yellow + red). A transit vehicle travelling at 50km/h would have to be detected 528m in advance, which means we can't have 400m stop spacing if we want complete transit priority in a median ROW.
The shortest reaction time is obviously when the light is already green for transit and the light just needs to be held. If transit is detected 528m in advance, the light will be held for at least 38 seconds while the vehicle gets to the intersection. That would annoy many motorists, which makes it unlikely that we will see median-transit signals fixed under the Ford regime.
With a separate ROW on the other hand, signals are very simple. There are two phases: cars and transit. The light is always green for cars, until a transit vehicle is detected. Since transit ROWs are only 2 lanes wide, the pedestrian countdown is very short, making it practical to guarantee a green for transit. The reaction time is roughly 18 seconds, so if vehicles are detected 250m ahead of the intersection, they will get a green light.
The existing Finch Hydro Corridor busway does this correctly, but buses do occasionally get a red light. This occurs when one bus arrives just after another bus has gone through. This could be easily fixed by holding the green light if another transit vehicle is detected during the transit phase. Buses also get red lights before crossing Dufferin and Keele. The red at Keele is due to the complexity of the 5 sided intersection, and the red light at Dufferin happens because there isn't enough room to detect buses far enough in advance (due to the Dufferin/Finch stop).
So to sum up, a busway in the median of Finch would stop at red lights, but a busway in the hydro corridor would not, because transit signaling can be 100% effective. That's why the hydro corridor busway is projected to average a much higher speed, even if it uses the same stop spacing.
