Subways & LRTs & Operating Costs

As part of the Ford administration’s chaotic efforts to shout down Karen Stintz’s transit strategy, Councillor Norm Kelly sent around an email of talking points last week designed to contradict the arguments in favour of using surface rail on Eglinton Avenue East. As mentioned previously, The Grid’s David Hains did good work smashing it with a bevy of facts and figures.

One of Kelly’s more salient points related to the long-term costs of underground vs. above ground transit:

[Underground Transit is] the least expensive over time.

“Blending” capital costs (higher for sure for an underground option) and operating costs (considerably lower for the underground route), the underground option is less expensive.

This claim bugs me because it’s so impossible to verify either way. Transit agencies don’t arrange their budgets in ways that make a fair comparison possible.

But, prompted by a blog post by Jacob Louy, I decided to take a look at the impact the Sheppard Subway had on the TTC’s operating budget when it opened in 2002. It’s not a definitive comparison, but it helps provide a basis for looking at what it really costs to operate a new subway line.

From the TTC’s 2002 budget, written before the Sheppard Subway opened:

Sheppard Subway Opening: $6.9 million. After adding costs associated with opening the line, minus changes to surface routes resulting from the opening, a total of 146 net new operating positions have been created.

via TTC Operating Budget 2002 | TTC.ca. (Emphasis Added.)

New hiring! $7 million in extra spending!

The next ¬†year’s budget document paints a similar picture, with a section on the increased subsidy needed to operate the new subway line:

During the first several years of operation, the Sheppard Subway will experience sizeable operating losses as costs exceed incremental passenger revenues. This deficit will place substantial additional pressure on the operating budget shortfall. Consequently, additional subsidy is required.

via 2003 TTC Operating Budget | TTC. (Emphasis Added.)

To cover those sizeable losses, the TTC asked the city for a special $8 million “ramp-up” subsidy for Sheppard. That $8 million represented about 5% of the city’s overall transit subsidy that year.

The 2003 report also notes that similar ramp-up subsidies were required in 1978 following the construction of the Spadina extension to Wilson. For its first decade of operation, that line required $67.3 million in special subsidies — about $7 million a year. In that case, those costs were covered by the province. They still funded transit back then.

Given that our current plans for underground transit would travel through the same sorts of low-density areas we saw with the Spadina & Sheppard lines, these numbers present a daunting challenge. It doesn’t really need saying, but here it is anyway: regardless of the financial implications over the super long-term, the city doesn’t have the funds to subsidize the operating losses that are inevitable following the opening of a suburban subway. Not even close.

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