How to Spend a Billion Dollars Without Really Trying

TTC Streetcars

Part of the Seeing Beyond Statistics course at Common Sense University would be a class on the public’s infatuation with large, round numbers.

I’ve spoken about this before. A billion dollars sticks in the public mind as a huge number, and if critics are able to link that number to a government program they wish to discredit, they will jump on it, even if the number is inaccurate, or taken out of context. This is why we had our first “Billion Dollar Boondoogle” in the form of the controversy over the HRDC grants, even though audits could only show that $50 million, 0.5% of the fund, was badly spent. The number has been so often misused by critics of government spending that it runs the risk of becoming meaningless.

On the other side of the coin is the government’s propensity to claim that they are spending billions to address a pressing need when, in fact, they’re spending far less. Consider, for example, the headlines which accompanied news that Paul Martin might be commiting money to the Toronto Transit Commission. $1B to boost TTC. Wow! What a windfall! Paul Martin must be really serious about meeting the needs of cities at last! Except, not when you read the fine print.

The billion dollars would actually be spent over a period of five years, and only a third of that money would come from the Federal Government. Another third would have to be paid for by the province of Ontario, and the final third would have to come from the City of Toronto — either as part of the money they’re already committing to public transit, or as new money. Year over year, the total commitment for the federal government for the TTC would come to $66.67 million.

By comparison, when miserly Mike Harris brought forward a capital funding plan for the TTC back around 2000, he also proposed a similar three-way split, but committed a total of $3 billion over ten years. His year-over-year commitment to the TTC would have been $100 million, although he failed to deliver his promised funds.

All of this tends to go unnoticed in the announcements, and the media do us no favours by leaping on the big numbers and trumpeting them across the headlines. There’s no real conspiracy here; it’s just that “$66.7 million for the TTC, year over year, for five years, assuming that Ontario and Toronto kick in matching funds” doesn’t fit nearly so neatly across a page of newsprint. It lets our governments off the hook, however.

We can also talk about the politicians propensity of unveiling funding announcements with maximum political effect, but minimum fiscal commitment. So, what if the federal government commits its share over the next five years, and the TTC receives a billion; what then? The TTC, as with all municipal infrastructure, needs funding year after year in order to keep on running and to keep the economy (literally) moving. Will the Feds come through with more funding and make a splashy announcement when the money runs out in 2009? Such moves can get boring after a while, and it’s nowhere near the commitment the TTC needs in order to plan out its five and ten-year capital budgets.

And this doesn’t even deal with the fact that a billion dollars over five years, if that’s all the TTC receives, may not be enough to maintain current service levels and the current state of repair. Mike Harris was barely meeting the TTC’s needs when he announced his plans to arrange for $3 billion in spending over ten years. Moreover, there is talk that some of this money might be earmarked to projects that don’t maintain the current system, but expand it (a necessary goal to be sure, but one which should only be addressed only after current needs are met).

Unfortunately, announcing that you’re spending money in order to replace aging buses and shore up tunnel walls isn’t as sexy as building new subway walls and other bold new transit infrastructure. It is for this same reason that former federal Transport Minister David Collenette favoured spending $400 million on a questionable high-speed rail link to the Airport rather than chanelling that money into rebuilding streetcar tracks, for example. Likewise, committing to build specific projects that you can cut ribbons in front of is far more tempting to politicians than simply supplying a regular stream of funds, or granting municipalities the power to raise the necessary funds themselves.

It’s a sorry situation. In the year 2006, the TTC is going to need almost $700 million in order to keep functioning at current levels. One billion over five years, or $250 million per year, with no guarantee of new funding beyond 2009, is not nearly enough.

All of this is masked by our perception of a billion as a big number. Unfortunately, until our sensibilities adjust to allow us to view billions (our moves) in the context of trillions (our needs), our politicians will continue to be able to play billion dollar games with us.

Waterloo Region Wants Some Provincial Transit Cash


I guess it was inevitable. Waterloo Region, in the guise of its champion, the KW Record, has spoken out against suggestions that Dalton McGuinty might favour Toronto public transit users over other users throughout the province.

Dalton McGuinty continues to mull over his party’s campaign promise to transfer two cents of the provincial gasoline tax over to municipalities for use by public transit systems. He remains committed to making the transfer, but the formula by which the money is divvied up is under debate. Should municipalities receive the funds on a strict per-person basis? Or should highly effective public transportation agencies such as the TTC be rewarded by receiving the funds on a per-rider basis?

For the TTC in Toronto, and for OC Transpo in Ottawa, the two agencies which carry the bulk of the province’s public transit passengers, a per-rider formula is obviously favoured. There are strong arguments for this: the TTC plays a substantial role in keeping the GTA moving, which plays a substantial role in keeping the Ontario economy rolling, but the commission is hard pressed to keep up that role, thanks to their very size and the conditions they work in.

But hold on, says Waterloo Region: if the gas tax were distributed on a per-person basis, Grand River Transit would receive $15 million. On a per rider basis, the GRT would get a paltry $5 million. That’s not fair. For one thing, it fails to recognize the fact that Waterloo Region is investing heavily in Grand River Transit to try and increase ridership.

They have a point. Waterloo Region is something of a special case. This young and growing urban area outside the GTA has, surprisingly, decided to face the issues of urban sprawl and car-dependency head on. The Region has imposed an urban boundary, and has substantially increased its public transit subsidy. Since taking over Kitchener Transit and Cambridge Transit and uniting them into the single Grand River Transit, Waterloo Region has increased service by as much as 20% (50% in Cambridge). Ridership is up by as much as 17% from three short years ago.

As with any new initiative, there was a lag before the public got on board. This allowed the more miserly members of council to claim that Waterloo Region was paying good money to run empty buses around the region. But as anybody who has been in the death cycle of service cuts and ridership losses will tell you, you need to spend money, sometimes a substantial amount, in order to reverse the cycle and make public transit viable again.

And here is the flaw of the per-rider funding option: it penalizes those transit agencies who are trying to substantially increase public transit, or build it up anew, in order to turn decades of car-dependency around.

Waterloo Region’s argument aside, I think it is more important, for the economic health of all Ontarians, that Toronto’s economic engine be properly lubricated. To do that, the importance of its public transportation network has to be recognized, and for that, funding should be tailored to ridership. However, I am willing to support a compromise that will allow smaller municipalities to get their own public transit organizations off the ground.

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