The Ttc: Private, Public, or Private-Public Partnership?

In July 2012, the TTC was evaluated and given a disappointing grade by TTCriders Group based on its performance at five aspects. These five aspects are about fares, transit expansion, accessibility, service frequency, and environmental impact (“TTC gets”, 2012). Unlike any other major city in North America, the TTC fares covered 70% of its operating cost, which was the highest fare box ratio within the 11 major North American cities (See Appendix 1). After derailed for 16 months, transit expansion plan finally came back on track, still with concerns about certainty of funds. Due to budget constraints, the target timeline of making all new and existing subway accessible has been pushed back several times from 2020 to 2024, then to 2025. The TTC ridership increased by 12.5% in 2011 while service levels only rose by 8.4%, resulting in insufficient service to connect our neighborhoods. As for the environmental impact, the TTC collected no data for this purpose (“The state,” 2012). All these issues are mainly accounted for prolonged budget deficits, which the TTC has been struggling for many years.

HISTORY OF THE TTC

The Toronto Transportation Committee (TTC) is a public transport service agency established in 1954, the third largest transit system in North America that operates streetcar, transit bus, and rapid transit service (subway and RT) in Toronto. The TTC consists of four repaid transit service lines with 69 stations, 149 bus routes and 11 streetcar lines, making 243 connections among them. In 2011, the ridership went up to 500.2 million, which exceeded all historical records. The TTC service covers the Greater Toronto Area benefited 4.5 million people. Particularly, the TTC provides Wheel-Trans service that is responsible for door-door accessible transit service for physically disabled people, 2.7 million trips made through this service in 2011 (“2011 TTC,” 2011).

Toronto Private Transportation Companies 1849-1921

The Williams Omnibus Bus Line was the first private-owned transportation company in Toronto, which carried passengers in stagecoaches drawn by horses serving a limited area along Young street in 1849. With the population growth, Williams Omni Bus Line was heavily loaded. The city then gave the first transit franchise for a street railway to Alexander Easton’s Toronto Street Railway (TSR) in 1861. After the franchise expired in 1891, the city passed on the right to a new company, the Toronto Railway Company (TRC), under James Ross and William Mackenzie. The TRC made the first electric car ran on August 15, 1892 to meet the franchise requirement. The city limits had extended greatly by 1912. The city attempted many times to force TRC enlarge its serve area, and failed. In order to build several routes and better serve the greater area, the city created its own street railway operation, the Toronto Civic Railways (TCR). By 1921 when TRC’s franchise expired, the city created the Toronto Transportation Commission combined with the TCR (Filey, 1996).
Toronto Transportation Commission 1921- 1954

Toronto Transportation Commission went through boom times and down times from 1921 to 1954. Streetcars and railways served progressively in the extended Toronto area. There were many remarkable milestones during this period such as: 575 new “Peter Witt” street cars entered service in 1921; first gasoline-electric hybrid bus entered service in 1926; in 1927, TTC expanded its lines of service with Island ferry, hydro-electric railway, and other intercity bus service; TTC overcome the stock crash in 1929 and made improvements; 745 PPC streetcars, which are also called “red rocket”, entered service in 1938; The great moment came on Sep.18, 1949, that the city of Toronto was symbolized with its opening ceremony of “ Canada’s First Subway”; in 1954 Toronto Transportation Commission was renamed as Toronto Transit Committee (“A cavalcade,” 1954).

TORONTO TRANSIT COMMITTEE AND ITS BUDGET ISSUES

Financial Situation at Beginning

From the early 1950s, Toronto Transit Committee had been operated by the supervision of Metropolitan Toronto, which was under the auspices of Province of Ontario who united Toronto with other 12 suburbs.

Since the opening of its first subway in 1954, TTC had planned to expand its subway due to increasing needs of the largely adjacent Metro area. This plan was facing obstacles because of the quadrupled bus service and the pressure from Metro Toronto to set up unprofitable service to the suburbs. The development of the TTC went forward because of the subsidy of Metro Toronto as well as the Province of Ontario, making the entire capital budget came from taxpayers.

In the 1970s and the 1980s, the Toronto Transit Commission was seen worldwide as a ‘transportation showcase’. From 1979 until 1990, it won awards after awards for safety and design (“A BRIEF,” 2012).

From 1972, the TTC’s operating profit was greatly affected by the request from the City’s political pressure, which was to eliminate the fare zone system to prevent the suburban paying an additional fare. By the late of 1980s, the subsidies from Metro Toronto and the Province was up to a quarter of the taxpayers’ money, which was 32% of the TTC total revenue, however, the subsidy level within the North American cities was still the lowest (“A BRIEF,” 2012).

Budget Cuts from the Province

By the late 1990s, budgets shortage became a major issue for the TTC. Previously the TTC’s subsidies were split in halves provided by the Province and the City. On Feb.18, 1996, the newly elected government of Mike Harris ended the province subsidy for the TTC. In 1998, provincial government put an end to the federal system of Metro Toronto and let Toronto become a unified City.

The result was a significant cutback in transit services. The City of Toronto’s subsidy of the TTC was roughly $150 million, and the TTC had a continental high farebox recovery of 82%. With passengers paying far more for far worse service, the TTC’s ridership had dropped to roughly 360 million (“A HISTORY,” 2012) (See Appendix 2).

From that point on, the TTC has been always struggling among its fare box recovery, city subsidy, and possible subsidy from the province of Ontario. The TTC would sacrifice its frequent service and routes to save its operation cost. The TTC also have many employees working overtime to compromise the labor cost, saying that this way can be more cost efficient than hiring more employees. Nevertheless, the TTC was renowned because of its sunshine list that has more and more employees every year earning more than $100,000 annually.

Other Problems

Along with struggles for its budget subsidies, the TTC also had been dragged off by other problems such as service cuts, fare hikes, and union strikes. In February 2012, The TTC reduced its frequency service on more than 35 routes in order to meet its targeted operating budget (“TTC bus,” 2012).

In November 2009, the TTC board discussed a fare increases proposal that would generate $62 million (“TTC fare,” 2009). This fare hike was implemented on January 3, 2010 (Litwinenko, 2009) (See Appendix 3).

The bargaining between the TTC and its union had been on and off for decades. In March 2011, at the request of Mayor Rob Ford, the Ontario government agreed to ban transit strikes in Toronto and would pass a bill to set the TTC as an essential service. In a long-run, critics argued that this would cost taxpayers more because TTC contract disputes could cause bigger raise to settle in the arbitration (“Liberals close,” 2011).

OPTIONS FOR THE TTC

Given the facts that the TTC consistently facing budget shortage, frequent service reduction and routes cut, and union issues, the discussion of finding solutions for the TTC has been ongoing for a long time. Some people think that privatizing the TTC would make the TTC operating efficiently and profitably in the hands of private company. Others argue that private sector emerging in a public transit could be a better option, giving the reason that private sector infuse profitable drives and boost skills in a public transit system. Many others defend that the TTC should stay public in order to serve better for the public rather than only chasing profit as what happened in private companies. Each of them gives insights of this transportation crisis.

Privatizing the TTC

The voices of privatizing the TTC is not sound nowadays comparing to 1990s.

Corcoran (1990) stated blankly “mass transit and mass losses go hand in hand”. He doubted the reason of government so heavily involved in public transportation and the seemingly inherent unprofitable operations. Despite the fact that government rejected the proposal by five developers for investment to build the subway extension, a public transit system proved its ability in managing this mass system, which was badly managed, underfinanced, poorly planned, and heavily subsidized.

Private-Public Partnership

With regards to privatizing the TTC, many people generally meant to privatize parts of the TTC because they still want the TTC remain the function to serve and benefit the public. Which parts should be privatized could be a complex process of evaluation.

City councilor Karen Stintz thought “adding some private-sector appointees could boost skills on the TTC board without reducing its accountability to the public. Private-sector members could contribute project management, financial and customer service skills” (Kalinowski, 2010).

Staying Public

Staying public remains its power in many people’s thoughts towards the TTC. These people think public transit should benefit the public in its full strength. Serving the TTC riders at its very best could be conflict sometimes with gaining profit through the operation. Knowing and still offering some money-losing services to benefit its needed riders differentiate the public system from the private or so-called private-public partnership system.

“Keep TTC public”, the message was given through a coalition, the public transit alliance with the members from the Toronto Environmental Alliance, the Amalgamated Transit Union, Local 113, and community activists. They held a $500,000 ad campaign for “Keep TTC public” to claim that private or private-public partnership can be a disastrous experiment for Torontonians, and the TTC should stay public (Yuen, 2010).

The video of “Keep TTC public” presented compelling reasons against transit privatization, compared with other cities’ transit system that were in either private or private-public partnership. The examples used were London, Melbourne, Auckland, and Vancouver. In 2003, a Private-Public Partnership was introduced in London transit system. This partnership ended in 2009 because the 30 years contacted of £ 17 billion was used up in 7.5 years, and even overspent more than £ 1 billion. Private companies ran Auckland transport by using the zone system. Due to the tickets difference, riding the similar distance as from Scarborough to Etobicoke would cost $16.5 in Auckland. When Melbourne government decided to privatize its transit system, its original objective was to reduce the city’s subsidy and increase the quality of service by using the private company. By 1999 when the privatization became effect, the subsidy to the transit system doubled the previous level when it was in public. Till 2010, comparing between Melbourne and Toronto, the subsidy to Melbourne transit system was 4 times than the subsidy for the TTC, while the ridership of Melbourne transit system was just 1/3 of the TTC. Vancouver Canada line was another example for PPP (Private-Public Partnership) which drown money from the bus fares to subsidize this rapid transit line. This video logically presented the historical cases from different angles to demonstrate the disability of the private system to public transit, giving an inevitable statement that the private company operates for the profit rather than the benefit to the public (“Keep TTC,” 2010).

CONCLUSION

In December 2011 the 2012 Budget Committee meeting, the TTC presented its less services on many routes because of the subsidy budget cut (Munro, 2011). It is a definite scheme that the TTC will still be facing various problems due to its political context, budget structure, service range, and union issue, simply put as its complexity. Looking back its history and steps of its developments, the TTC managed to meet the service requirement and survived in public for today’s economy. However, the debate of whichever is the best solution for the TTC will still be ongoing. There is no simple answer for this question, but only hopes that people wish the TTC carry on its responsibility in better serving the people in Toronto.

REFERENCES:

A brief history of transit in Toronto. (2012). Transit Toronto. Retrieved from: http://transit.toronto.on.ca/spare/0012.shtml

A calvalcade of progress. (1954). TTC.ca. Retrieved from: http://www.ttc.ca/About_the_TTC/History/cavalcade_of_progress.jsp

A history on fares on the TTC. (2012). Transit Toronto. Retrieved from: http://transit.toronto.on.ca/spare/0021.shtml

Corcoran. T, (1990). Privatizing the TTC would relieve strain on subway service. The Globe and Mail. Retrieved from: http://search.proquest.com.ezproxy.library.yorku.ca/business/docview/385631727/1383962EB1D56AD7336/2?accountid=15182

Filey. M, (1996). The TTC story. Toronto, Ontario: Dundurn Press. Retrieved from: http://www.ttc.ca/About_the_TTC/History/The_first_75_years.jsp

Kalinowski. T, (2010). TTC board could could be public, private mix: Non-elected members, bring new skills: Stintz. Toronto Star. Retrieved from: http://search.proquest.com.ezproxy.library.yorku.ca/docview/812554793?accountid=15182

KeepTTCPublicToronto, (2010, September 17). Keep TTC public. Video retrieved from: http://www.youtube.com/watch?v=xAmnmehAy3w

Liberals close debate on bill declaring TTC essential service. (2011). The Canadian Press. Retrieved from: http://www.cp24.com/liberals-close-debate-on-bill-declaring-ttc-essential-service-1.614350

Litwinenko. J, (2009). TTC fare hike approved. Blogto. Retrieved from: http://www.blogto.com/city/2009/11/ttc_fare_hike_approved/

TTC bus service cut back. (2012). Toronto Star. Retrieved from: http://search.proquest.com.ezproxy.library.yorku.ca/business/docview/921300938/138368A888C7C5B89BC/2?accountid=15182

Munro. S, (2011). Can the TTC survive budget 2012?. Torontoist. Retieved from: http://torontoist.com/2011/12/can-the-ttc-survive-budget-2012/

TTC fare hike is unavoidable. (2009). Toronto Start. Retrieved from: http://search.proquest.com.ezproxy.library.yorku.ca/business/docview/439627577/1383691789B38A6B670/8?accountid=15182

2011 TTC operating Statistics. (2011). TTC.ca. Retrieved from: http://www.TTC.ca

TTC gets failing grade from TTCriders group. (2012). City News Toronto. Retrieved from: http://www.citytv.com/toronto/citynews/news/local/article/215620--ttc-gets-failing-grade-from-ttcriders-group

The state of public transit in Toronto. (TTCriders, 2012). Retrieved from: http://www.ttcriders.ca/wp-content/uploads/2012/07/The-State-of-Public-Transit-in-Toronto-July-2012.pdf Yuen. J, (2010). Keep TTC public-coalition. Toronto Sun. Retrieved from: http://www.torontosun.com/news/torontoandgta/2010/09/20/15415186.html

APPENDIX 1

REVENUE/COST RATIOS - CANADA TTC Montreal Ottawa Vancouver
70% (2011) 56% (2009) 43% (2009) 48% (2009)

REVENUE/COST RATIOS - U.S.
TTC
 Atlanta Chicago Los Angeles New York Philadelphia Boston Washington
70% 29% 40% 29% 54% 38% 42% 45%
(2011) (2009) (2009) (2009) (2009) (2009) (2009) (2009)

Source: City of Toronto Toronto Transit Commission 2011-2020 Capital Plan, http://www.toronto.ca/budget2011/pdf/presentation11_ttc.pdf

APPENDIX 2

TORONTO STATISTICS FOR 1921-2004

APPENDIX 3

References: A brief history of transit in Toronto. (2012). Transit Toronto. Retrieved from: http://transit.toronto.on.ca/spare/0012.shtml A calvalcade of progress A history on fares on the TTC. (2012). Transit Toronto. Retrieved from: http://transit.toronto.on.ca/spare/0021.shtml Corcoran Filey. M, (1996). The TTC story. Toronto, Ontario: Dundurn Press. Retrieved from: http://www.ttc.ca/About_the_TTC/History/The_first_75_years.jsp Kalinowski KeepTTCPublicToronto, (2010, September 17). Keep TTC public. Video retrieved from: http://www.youtube.com/watch?v=xAmnmehAy3w Liberals close debate on bill declaring TTC essential service Litwinenko. J, (2009). TTC fare hike approved. Blogto. Retrieved from: http://www.blogto.com/city/2009/11/ttc_fare_hike_approved/ TTC bus service cut back Munro. S, (2011). Can the TTC survive budget 2012?. Torontoist. Retieved from: http://torontoist.com/2011/12/can-the-ttc-survive-budget-2012/ TTC fare hike is unavoidable 2011 TTC operating Statistics. (2011). TTC.ca. Retrieved from: http://www.TTC.ca TTC gets failing grade from TTCriders group The state of public transit in Toronto. (TTCriders, 2012). Retrieved from: http://www.ttcriders.ca/wp-content/uploads/2012/07/The-State-of-Public-Transit-in-Toronto-July-2012.pdf Yuen. J, (2010). Keep TTC public-coalition. Toronto Sun. Retrieved from: http://www.torontosun.com/news/torontoandgta/2010/09/20/15415186.html APPENDIX 1 70% (2011) 56% (2009) 43% (2009) 48% (2009) REVENUE/COST RATIOS - U.S. 70% 29% 40% 29% 54% 38% 42% 45% (2011) (2009) (2009) (2009) (2009) (2009) (2009) (2009)