Depending on what the toll amount is, it may break even after quite a number of years. On-going revenue is very important to a project like that. Having said that, the toll highway should be owned by the City, not a 407-style private company.
That's the key. I think if one were to do the rough math, one would find the toll amount would be completely unreasonable.
Here's one attempt at the numbers:
Say we've got 100,000 cars/day on the Gardiner (and we'll assume they'll all be tolled). That's 500,000/week (5 days/week). For 50 weeks a year, that gives us 25,000,000 cars/year. Quite possibly many of those are twice a days for their round trips.
Where are we tunneling from? Let's say Dufferin to Yonge since that would be a shade more than 4km. Any further and you can just add to the totals.
We'll ignore the crazy costs and likely impracticability of actually having exits from the tunnel anywhere between the start and finish (is there actually any room for access ramps at say Bathurst, Spadina, York, Bay, etc? Probably only if you take out a few existing condo towers.)
What would be a reasonable cost for that stretch, $3, 4 billion? I'm just guessing.
Let's go with $4 billion.
What would be the time frame the investors will want to see a return on their full investment? Does 20 years seem appropriate?
What rate of return would they want for risking that kind of cash for that length of time? How about 10% annual return? We'll completely ignore inflation (since we'll assume tollpayers will have no issue with annually increasing tolls).
Using TD's mortgage calculator, that spits out a monthly amount of just under $40,000,000 or about $460,000,000 per year. We'll also assume maintenance on this structure will be within any kind of estimation errors in these numbers.
So, for our 25,000,000 trips per year, we need to generate $460,000,000 to make it worthwhile for private investment. That gives us a toll of over $18. More like $37 a day for those who commute in and then out.
The question then becomes, is it reasonable to think that there are 50,000 people willing to pay $37 per day to use a 4km stretch of tunnel?
What happens once they exit the tunnel? Since we've now added extra capacity on the expressways, presumably more people are going to be enticed to drive downtown (whether they take the toll road or the free road). Does anyone think there is spare capacity on the local downtown streets or parking facilities for this extra traffic?
We're now left with people paying $37/day to save themselves five or ten minutes on a small stretch of the Gardiner so they can then spend an additional 15 minutes getting from the Gardiner to their final downtown destination, only to have pay more for parking that will probably be farther away.
I think it's safe to say that isn't reasonable, so the logical extension would be that there will have to be significant public money put in to this project. That should be a given as only a fool would think that invoking the 'private sector' clause automatically mean any and all public infrastructure would be 'free'.
The question then becomes, is that the best use of that public money? If taxpayers are going to be funding several billions of dollars for some transportation project, would they be getting better bang for their buck by dumping more cars into downtown or maybe getting more bodies downtown via something like the DRL?
Feel free to play with the numbers above. Dropping the cost of the tunnel by 50% still leaves a $9 toll for 4km of tunnel and increased congestion once you get out of said tunnel. Making the tunnel longer or figuring out how to squeeze in exits only makes the cost higher.