The panel was formed to compare Transit City vs. Ford's Subway plan. Why waste time and money revisiting BRT? It was already ruled out.
BRT was previously ruled out based on the projected demand. With no subway extension, the highest demand on this route is at the approach to Don Mills.
But if the subway is extended to Vic Park, then only the demand east of Vic Park is an issue; it might fit the BRT capacity. A truly impartial study would revisit this (rather obvious) option, and approve or reject it based on the numbers, rather than “we are not doing it because we are not doing it”.
BRT has higher operational costs. When the province has X dollars for infrastructure but no money for operations for the city then LRT makes more sense.
The Sheppard LRT operational costs were not estimated in this study, or any previous study.
It is indeed logical to assume that LRT will have lower operational cost per capacity, because of the higher passenger to driver ratio. But that matters on high demand routes only: for example if you can run an LRT train every 5 min instead of a bus every 2 min, then LRT should be cheaper.
But if the bus is only needed once in 4 or 5 min to handle the demand, and you replace it with LRT that still runs every 5 min to maintain attractive service, then LRT might actually cost more to operate (the operating cost per one LRT train is probably somewhat higher than for one bus, as more things can break in a larger vehicle). Note that the off-peak situation will certainly fit the latter pattern (off-peak service is more expensive with LRT than with buses). Whether the peak advantage of LRT will be enough to offset that, remains to be seen; note that the Sheppard East bus is far from being the busiest bus route on the system today.
You save on the costs the province isn't ponying up for day 2 support and you spread the infrastructure to more routes to achieve those lower operational costs and benefits in more places. The "cheap" bus routes that cost nothing in infrastructure are always what gets targeted with service reductions and cuts because there is no operational budget to pay for those routes. There is no increased investment in the corridor because everyone knows the bus is the easiest to cut in the yearly budget process. With the province giving $8B the problem to be solved is not where the money comes from to build something, the problem is how to pay for it when it is built. BRT gives you increased operational efficiency (reduced operational costs) over a bus in mixed traffic and is cheaper than LRT, but it doesn't give you land value increases, doesn't spawn as much ridership growth, and doesn't significantly impact the passenger to driver ratio.
Land value increases and growth along an LRT route have been observed in medium-size cities, once they built an LRT line through the city center. In that case, the LRT line becomes the backbone of transit system and the focal point of development.
Sheppard East, on the other hand, is a fairly peripheral location within Toronto, and will remain peripheral even with LRT. Light rail can provide very good local service, but it is really appealing only for riders whose origin and destination are somewhere near Sheppard East. For people who travel to other parts of the city (and that’s how many people in a big city tend to travel), it will be a long ride on LRT followed by a long ride on connecting routes. Hence, I doubt that Sheppard East will see land value increases beyond the average trend; or that LRT will facilitate such increases more successfully that BRT.