Financing Subways

While the Chinese raised money on the Hong Kong Stock Exchange to build modern transportation like the Shanghai maglev train that moves at 400 km/h, all that David Miller’s crew managed to build in seven years, was the St. Clair Avenue Horse & Pony show.

When you are stuck with a regressive city regime for seven years that made its reputation by tearing things down instead of building them, things like this happen. There hasn’t been a new major road built in Toronto for 40 years. It’s easy to see why many Torontonians can’t see how to raise money for subways or anything else that isn’t part of the gravy train. If we want anything useful to happen in Toronto anytime soon, we must make every effort to drag the former David Miller councillors into the 21st Century to support Rob Ford.

How can we find money to build subways?

We’ll start by convincing Dalton McGuinty to allow Toronto to use the four billion dollars earmarked for a useless LRT system to build subways. That should be enough money to complete the first two subway phases proposed by Rob Ford, the Sheppard Subway from Fairview Mall to Scarborough Town Centre and the conversion of the Scarborough RT to a surface extension of the Bloor-Danforth Subway. At a cost of roughly $200.00 million per kilometre, the total of 14 kilometres for the two, amounts to 4.2 billion, or probably less because a surface subway on the already existing right of way should be cheaper than $200.00 million per km to build (in Madrid, Spain, recent subway construction was complete for only $95 million per km.)

The Sheppard Subway must take precedence to avoid costly cancellation fees for the already signed LRT construction contracts.

If we were to build the Eglinton line as a subway next, it would make no sense to build an underground LRT at a cost of $220 million, when for a similar amount, you can build a really efficient subway. Consistent transportation across the city makes for economies of scale. The Downtown Relief line would come next, possibly along Queen Street.

I also believe that the Federal government would be willing to invest money in subways in Toronto now that we finally have a fiscally responsible administration.

Our City fathers must remind the Federal Government that they are now collecting an extra $1.2 billion per year for HST on our gasoline taxes. Surely, they should be willing to spend much of that on subways and roads.

Additional funds for Eglinton and the Downtown Relief line could easily be raised by way of a public offering or bond. There are billions of public funds available in Canada for investment by pension funds including the Canada Pension Plan Investment Board*. Some pension funds have recently invested hundreds of millions in large shopping malls in England, U.K., while the Canada Pension Plan has purchased toll road in Australia at a cost exceeding 3 billion dollars and for other projects all over the world. I believe they could be convinced to invest money right here in Canada.

* CPPIB’s Wiseman focuses on Asia, Globe and Mail Dec 2, 2010