Surprise! – Toronto Transit Projects Deferred

In something that came as not surprise to me, the Ontario budget announced today that several of the major transit investments for Toronto and environs will be deferred pending a “capital spending review” by the Ontario government.  These projects were only announced last year as part of an ambitious Move Ontario 2020 transportation plan that included $11 billion for GTA area transit projects.  As the announcement says, these projects will be delayed but not cancelled as the government grapples with balancing its $20 billion plus deficit.

In my opinion, this is just further evidence that the current way that governments fund capital infrastructure projects actually works against things getting built in this country.  Without dedicated taxes and funding, capital will always be the first thing to go, due to its future benefit and multi-year nature (in this sense, one can see a key difference between the public and private sectors). Unfortunately there is a very strong bias in Canadian governments in favour of the Consolidated Revenue Fund (CRF) model where all taxes go into one pot and are prioritized, starting usually with health care, which in our public monopoly system, cannot be deferred without causing chaos in the system.  Given the rate at which health care costs are rising, it is amazing actually that anything gets built here as a result, even with new tools such as P3s, which only allows payment of the capital costs over time (with interest).

I’m not advocating a radical overhaul of our universal health care model but I think people have to start to see that “free” health care has an opportunity cost.  No subway line can ever compete with granny’s hip, to be slightly flippant. My belief is that until we realize it is necessary to have the people who can afford to pay for a share of their health care (within the public system), we will have to make do with 3rd rate everything else.  Look at the Ontario budget numbers – we need a different way to fund infrastructure, one that recognizes that it provides long term benefits and a basis for future growth, productivity and quality of life.  There was a time, 50 years ago, when the Ontario government spent a third of its budget on transportation, but nearly all of it on roads; if we want to make a similarly paradigm-shifting investment in transit, we need to have the resources to do so.


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