Ditching a plan for a Scarborough LRT line and building a subway instead could cost up to $1.6 billion extra, necessitate multi-year property tax increases, and risk skewing Toronto's transit priorities, a highly anticipated report has found.
City manager Joe Pennachetti released his report on Scarborough rapid transit options on Friday, and while it did not recommend council choose one option over the other, it warned that the subway project would present significant financial and planning challenges for the city.
The subway would cost $2.3 billion, only $500 million more than the LRT council approved last year. But the report determined that sunk and additional costs, including $96 million to keep the Scarborough RT in operation until the subway is completed in 2023, would push the total difference to $1.1 billion, or $1.6 billion adjusted for inflation.
To pay for it, Pennachetti recommended council commit to a tax increase of between 1.1 and 2.4 per cent over the next three years, starting with a 0.5 per cent hike in 2014. He also proposed new development charges and asking the federal government to chip in up to $660 million.
The manager noted that the city would have to take on debt to finance the line's construction, something the Ford administration has been reluctant to do. This would "place pressure" on the city to keep debt payments at manageable levels, the report found, and significantly limit its ability to tackle other pressing priorities, including a $750 million social housing repair backlog, and $2.5 billion in work needed to keep the existing TTC system in good condition.
At a press conference at the Etobicoke Civic Centre where he was joined by TTC chair Karen Stintz, Mayor Rob Ford called the report "great news" and said he was hopeful council would endorse the subway project.
"I support the people of Scarborough, and the people of Scarborough want subways," he said. "They've said that loud and clear."
Ford said that he was satisfied "for the most part" with the city manager's report, but declared that he would not support a tax increase of higher than 0.25 per cent, beginning in 2015.
Even that small amount represented a significant shift for the mayor, who has steadfastly refused to endorse tax hikes to pay for transit.
"As you know I'm the last, last person to push for any tax increase. But I call this an investment," he said, predicting the three-stop subway extension would create jobs and stimulate the economy.
TTC chair Stintz, who has sparred with Ford over transit plans in the past, stood by him at the press conference and said she was pleased that he has come around to supporting taxes to pay for rail lines.
"I think it's encouraging that the mayor recognizes that subways cost money," she quipped.
Stintz defended the plan to expend over a billion dollars on the Scarborough line, despite the fact that the report noted it is not among the city's top five transit priorities. The Waterfront West LRT, Don Mills LRT, Downtown Relief Line, Scarborough Malvern LRT, and Waterfront East LRT have all been identified as more important by an ongoing city planning review.
"[We know] if we make this investment that we will spur development along the line as well, so I believe that when we think about the investment that we're going to get, and that we will have subway service link all four corners of our city, that it is the right investment for us to make," she said.
Although the report identified the premium for the subway as $1.6 billion, that number would become a little less daunting if Queen's Park agreed to transfer $1.8 billion from the LRT project to help pay for the subway. The province's transit agency says only $1.5 billion from the LRT budget is on the table.
At his press conference, Ford said that if the province provides "a dime less" than the full $1.8 billion, the subway would be "dead." The mayor will meet with provincial transportation minister Glen Murray on Monday to discuss the issue, and will sit down with federal finance minister Jim Flaherty on Saturday.
Council will vote at its meeting next week on whether to opt for the subway or stick to its agreement with the province to replace the Scarborough RT with light rail.
Councillor Josh Matlow opposes the subway plan, and says that the manager's report should give anyone who supports scrapping the fully funded LRT line pause. He says it "doesn't make sense" to expend so many resources on an underground rail line that isn't among the city's top priorities.
"It would be so terribly fiscally irresponsible," Matlow said in an interview. "No politician who calls themselves fiscal conservative could support this plan."
The manager's report judged that there were "distinct advantages" to both the subway and LRT. Underground rail would be faster, provide the "most-reliable, highest-quality service," and eliminate the need to transfer from LRT to subway at Kennedy station.
Light rail would offer "greater overall geographic coverage, more stations providing greater local access, [a] larger population served, and reliable high quality service at a lower cost."