Are Scarborough’s 650, 000 residents in need of the new Scarborough Subway Extension?!

If you live in Toronto, chances are the closest TTC bus stop is in the proximity of your home with frequent service.

If you live in Toronto, chances are the bus that arrives at that TTC bus stop will get you to the closest TTC station in under 30 minutes. (Unless you live in the upper west side, we shall take a moment of silence for your dreadful downtown commutes.)

Now, imagine having to live on the outskirts of Toronto where the TTC access to the proximity of your home becomes further and further. More specifically the residents of Scarborough, where their only plug into their inner-city jobs and Toronto’s stellar, well serviced subway line is through an aging Scarborough RT that goes less than 40 mph (more like 4 mph in the winter) and passes through 5 stops.

ttc mapFigure 1. Map of the current TTC Subway line. Blue Line shows the Current Scarborough RT. Source

This means over 650, 000 and more of Scarborough’s residents’ best option to reaching Toronto’s Bloor-Danforth Line through public transportation is through a 35 year old Scarborough RT line (with hardly any upgrades). Not to mention, that the targeted lower-income communities in the RT’s area who would benefit the most, already lack many resources and municipal financial support.

Should these residents’ location be what stops them from having the same opportunity for public transit as many closer to home Torontonians? If so, we should cut all the phone lines that reach out to the vastly smaller populations of Nunavut, Yukon, and the Northwest Territories, because that’s why our friends at Bell and Rogers charge between $20-30 a month for your regular home phone landline.

Mayor John Tory, had already promised many of these suburban communities and families a solution back in 2014. A quote that came from his mayoral campaign in 2014 says:

“It’s time to build, it’s time to say to Scarborough, you are included in One Toronto.”

With the financial support and go-ahead of federal and provincial governments, John Tory and his council are proud to show you the solution to this problem: The Scarborough Subway Expansion!pic 1

Figure 2. Map of the future TTC Subway line after the expansion. Blue Dotted Line shows the Current Scarborough RT. Source

Now, what exactly is the Scarborough Subway Expansion? It is a $3.35 billion project that will connect the TTC’s Bloor-Danforth Line to the one stop Scarborough Subway line, which will stop at Scarborough town centre, while scrapping the previous old Scarborough RT Line mentioned in (Figure 1). This means riders will get from Scarborough to Toronto much quicker through easy access.

How much will the Subway Expansion really cost?

Yes, the project is looking to cost around $3.35 billion, but the TTC is being allocated $3.56 billion to deal with the transit. This still doesn’t cover the fact that there is an extra $600 million worth in additional costs, which puts the project total just under $4 Billion dollars. This means there is roughly $400 million left and probably some more as projects usually require that needs to be allocated for this project to run.

Ridership is also included in the equations and budgeting for this expansion, where the new study puts the daily new ridership from the expansion at only 2,300 from the previous Scarborough RT Line.

That means the city would be paying approximately $1.45 million for every new rider the subway attracts.

With the actual approx. project costs at just under $4 Billion, and the cost of $1.45 million for every new rider, the project looks extremely costly to taxpayers. The costs of the project have been committed from all three levels of government.

The provincial and federal governments committed to funding $1.48 billion (in 2010 dollars) and $660 million respectively.

Taxpayers will now ask why they should pay for the benefit of another person’s access to public transit. That is where equity, efficiency, and equality come in to play, so this is where the politics really come in!

1. Efficiency

Efficiency is defined as the economic state in which individuals are able to become better off without making others worse off. The resources in the economy are allocated to serve each individual with minimal waste. By analyzing the proposed extension, it appears that the subway extension is somewhat inefficient.

It would make the residents of Scarborough better off, at a sizable cost to residents in Etobicoke, Downtown, North York, and other regions in Toronto. This shows inefficiency because the taxpayers of those other regions would not benefit as much, and their tax dollars would be traced back to the initial cost of the project, $3.35 billion. Yet, this isn’t a waste of their tax dollars because the expansion will still prove to be useful to many of those residents in further areas who may end up travelling to Scarborough or even the Town Centre shopping area. The expansion will result in a growth of the area that can attract those residents who may not see an everyday use for the transit.

2) Equity

An equitable economy is  a system where every individual receives according to their “fair share”, or enough resources are distributed to them to ensure that everyone is brought to the same economic standing. The underlying goal of the Scarborough extension project was to modernize the transit network there, along with providing a better route to many commuters going into Toronto, as well as encouraging growth for the Scarborough Town Centre area. With that being said, it’s the region out of Toronto’s six large neighborhoods that deserves this transit revitalization the most, especially with the lack of resources for many of those Scarborough communities as mentioned earlier. In essence, the Scarborough extension is equitable.

3) Equality

The equal solution would require a subway line to reach every corner and stretch of the GTA, and by that point we’d be Greece (sorry bad joke). That includes areas where ridership would be extremely low, yet regardless the equal solution to benefit them with the same resources/opportunity would be necessary. The Scarborough Expansion seems to impact the most people, and the people who need it most, but it also encourages a lot of other communities to think “Why don’t I get a subway line?”.

TTC’s Real Concerns

Although I thoroughly support this project, and the equity of giving scarborough residents a good link to Toronto’s public transit, I still believe TTC has some other things to take care of. The TTC runs to break even, even though it is public transportation that receives funding from different levels of government. TTC is currently running as a nonprofit that tries to break even every year. Yet for some reason we see prices going up every year. I believe integrating the infrastructure in to a more government controlled subsidy which runs at a loss every year would truly provide a better service for Torontonians.

As an everyday user of the TTC, along with the fact that my family does not have ownership of a car, the costs of public transit are important to me, but my easy access to getting wherever I need to go has made me very grateful. I think it’s fair for other neighbourhoods and communities to have that same opportunity.

My Verdict

In conclusion, I believe that the city should continue and run with their plans of creating a Scarborough Subway Expansion. It is extremely important to keeping an equitable environment for Scarborough residents to having the same or similar opportunities as Torontonians with their public transit. This subway line makes transportation a lot faster and easier for travelling between Toronto and Scarborough, along with shutting down an outdated RT line, which will open up land space for future developments.

It should also be mentioned that the areas which will prosper the most from this expansion happen to be lower income communities that already have a lack of resources and funding for the city. This expansion allows for development of our Canadian communities, along with a creation of jobs. It also allows an opportunity for Scarborough’s Town Centre to receive a development and growth which will see many improvements.

Another thing to take note of is the exponential growth of Scarborough and the GTA’s outskirts/suburbs. Although ridership may not currently seem enthusiastic, the growing suburb and extension of Toronto’s outskirts will show a growth of in those areas, long with an increase in their populations.

The decision ultimately comes down to politics. What is fair? When does equality and equity come in to question. Why do the small communities in Nunavut or Yukon get access to a home phone landline which then boosts the prices for everyone else? The residents of those those Nunavut communities deserve the opportunity of communication, just like the Scarborough communities deserve the opportunity to a better public transit.

yea boy

 

 

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Rationality

Have you ever noticed yourself to buy an item you didn’t want or need but you happen to buy it anyways?

To be more specific have you ever been put into a state where you don’t need or want something but

  1. You ‘like’ it
  2. Everyone has it
  3. There something I said positive about it so

 

……. I’m going to purchase it.

Do you agree with any of the above? Yeah? but why do we do this? Why do we always make our minds to buy something for the reasons that are not even connected to our values or uses?  Well the answer is simple because I am a human, you are  a human.    

As an individual I usually want to think of myself as a rational thinker and decision maker just like each and everyone of us assume we are. When we make a decision to buy, we make the a rational and informed evaluation of the product considering the factors of comparisons and the alternative choices we could have selected. And these choices we made and make comes from the satisfied purchases we made from our selections.

A minor change in our lives such as drinking a cup of coffee from one place to another alters our and variable conclusions. For say, one day you notice a different coffee shop (B) for your daily coffee rather than main coffee joint (A) and you decide to walk in. This new place has different prices and is more expensive and a completely different theme than your dominant shop, but instead of leaving empty handed you decide to further your decision on buying your main go to coffee. Meanwhile, after this step your interpretation of you previous step shows that you decision from before was finalized because that coffee place is your coffee style.  Making you continue to revisit the shop constantly shop there. Causing you to make an initial decision with a stream of decisions which becomes a habit.  The shop (B) outlook is to convince the customers that is was not like another shop including shop A by illusions. So now anything that was different than the new shop becomes irrelevant.

Anchoring Effect

The way individuals value an object when a first piece of information offered to them and that information is the bias that is heavily relied on. What you pay for the same item that is old under two companies won’t be the same due to the anchor. What you knew before on the coffee shop you used to go to become irrelevant. Once decision making comes along. Anchoring come to role play to use that information and make a judgment that would benefit us under whatever position you are at.

Supply and Demand

 

The graph above shows us that at (300,1.00) the item reaches equilibrium.  The equilibrium price is determined by both the supply and demand.

The basic foundation: Many factors determine the supply and demand called determinants.                                                                                                                                         Supply determinants; number of sellers, seller’s expectations, cost of factors of production, technology and prices/profits of other goods.                                                              Demand determinants; number of buyers,  buyer’s expectation, buyer’s income, buyer’s preferences/consumer taste and the price of other goods.

But the real question is can goods be overpriced?  This is when there is a point above the equilibrium. For say, if there is a point at (1.25, 200) the good is not only over priced the supply of the good decreases. A good cannot be overpriced because it is dependant on the whole market price. So once the equilibrium changes there will be a shift in the market.

To clear things up a bit, if you decide to go shopping at any store, one of your favourite preferably, at a chilly day, you walk into a store with employers that assist you and one helps you out and suggest you to to take a look at a limited edition beautiful coat. When going into the store you might have not thought of specifically going for the new limited edition coat. But with the push of the seller you are tempted or even forced to look at it. And with the given factors you decide it’s a nice coat because it’s on sale, limited edition, and it’s the perfect season. You try it on and the buyer compliments you on how it’s the total fit and colour matched your complexion. And you buy it.

We can relate this decision to 6 factors which  Dr. Robert Cialdini describes (https://www.influenceatwork.com/wp-content/uploads/2012/02/E_Brand_principles.pdf ) that make us decide what we decide:

  1. Liking;  the influence of the people we think positive of.
  2. Reciprocity – we are ready to do something and or give something to someone who has already done to you.(At the offing, they paid me you compliment. That affects your decision, they gave you something, engaging the principle of reciprocity.. Now it creates the scene that it was time you to give something back: buying something from them perhaps to neutralize)
  3. Social Proof – we do thing that people like or do which make us feel better and when we think of it if everyone is doing something we tend to follow it assuming there’s good reasons for it.
  4. Consistency – behaviors and attitudes that are kept stable and constantly comminuted and are inclined to fulfil of.
  5. Scarcity  –  the thought of something being less of makes us want to have it more. (the coat was limited edition making the buyers expectation of the product to be sold out faster and for a limited time)
  6. Authority – looking for guidance for our decisions from someone who you think is more knowledge on the topic than you. (with the assistance of the seller in the tore it opens the door of some who has knowledge in the fashion industry may have a better view on what’s right with their input of opinions)

All in all, Are the prices we pay for goods rational? Can a good be overpriced? According to what we pay are rational compared to the market. So what makes us irrational overall? Even though the prices aren’t the irrational part it’s the decision maker’s. Being human it’s in our natural habitat to make imperfect decisions.

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Is Scarborough Subway the way to go?

My family first moved to Scarborough after immigrating to Canada. To this day, I still prefer living in Scarborough over North York. One of the things that saddened me about this city was that there were no options of reaching downtown from Scarborough by the subway. Scarborough is a fairly large city with many people living in it. So it’s not surprising if people wondered why the subway system was limited to Downtown Toronto and the North York area. Therefore, like other people, I thought the city was finally doing a good job when they decided to build a subway to connect Scarborough to the other subway line. But honestly, dreams aside, with the cost going up to $3.36 billion to make this subway, I began to wonder if this subway construction is worth it or not.

Over Whelming Cost

City council of Toronto has been going on for years now on whether or not to build a subway in Scarborough. It first started with Transit City wanting to build Light-Rail Transit (LRT) which would have been connected to the Scarborough RT and would have made seven more stations throughout Scarborough. But all of that went to drain when Rob Ford stepped up and scrapped this idea so he can build a “subway” which later became an “one-way subway” to replace the Scarborough light rail line. And till this day, City Staff are still debating over building the LRT or the subway.

I mean it is a hard decision considering both options have great benefits. By implementing the subway,

  • The citizens of Scarborough can get themselves a faster and easier transit from scarborough to downtown
  • The citizens will also finally get results from paying their fair share of taxes
  • The subway sytem will last longer
  • It will be a great long-term investment for jobs and
  • Scarborough will become a great economic hub with greater job opportunities.

So you may ask, why haven’t we started building this thing yet? But that’s before you know what the estimated cost of building this one-stop subway will be. In 2016, the estimated cost  was $2 billion which have now spiked up to $3.36 billions. Wait, did someone say $3.36 billion? And that’s not all. Researchers say that the estimated cost could even jump to $5.5 billion by the time they finish building this subway. Frankly to me, the cost seems outrageous compared to the fact that the city is only building a one-stop subway. And along with the cost, the number of new riders this subway is attracting keeps going down. Last summer, the number was 4500 riders which went down to 2300. So then really, why is building this subway even an option?

It maybe Equitable but is it Efficient?

Equity means that everybody get’s his/her fair share. By building this “one-way subway,” the citizens of Scarborough will finally be getting their fair share of fast transit. According to The Star, one of the reasons Mayor John Tory is so pinned to building this subway is because he thinks “Scarborough subway is long overdue.”  It’s good that he is finally thinking of the citizens in Scarborough, but is this idea going to result in an efficient economy?

An economy is efficient if it takes all opportunities to make some people better off without making other people worse of. Most of the cost of this “one-way subway” that is still continuously rising, will be paid by the money of the tax-payers in Canada. It’s good that this subway will help the citizens of Scarborough travelling downtown but it’s cost is also halting some of the projects that will fulfill other citizens stated goal. For example, Zuzana Betkova, a former resident of Scarborough told the star:

“I’m wondering, though, about the people in Scarborough who do not want to go downtown Toronto, who want to live and work in Scarborough and who do not have transit options within Scarborough and I don’t see how this one-stop Scarborough extension will help those people,”

Data referred by the city also backed up her point as they mentioned that ” 23 per cent of all transit trips that begin in Scarborough are destined for downtown and 48 per cent of trips started in Scarborough end in Scarborough.” Which is why Zuzana Betkova, like many is also in favor of the LRT option. And in my opinion I believe that the opportunity cost of building this “one-stop subway” is the LRT option that many citizens want.

Opportunity cost is the value of the benefit of the next best alternative that could have been chosen but was not. A seven-stop LRT is the next best alternative that is being forgone by our Mayor. If the seven-stop LRT is built, it can connect from Scarborough Town Centre and end up at Sheppard Ave. This will give many citizens a chance to walk  to different stations and allow them to stay in subway for longer route instead of taking a crowded, delayed bus. To further elaborate, the Star even had a quote of a petition that read:

“It’s time for our politicians to understand that we do not just want one stop on the subway; we want transit that takes us to work, school and all the opportunities this city has to offer.”

Another great thing about the seven-stop LRT is it’s cost, which is estimated to be about $1.6 billion and way cheaper than building the one-stop subway. This also gives the TTC the chance to use tax-payers money for other service. Since it will cost around $1.6 billion, the city can make the seven-stop LRT using the provincial government’s money and use the rest of the federal governments contribution to make the 18-stop Eglinton East LRT that the city has also planned to make. If not, they can always use the money to invest in more buses so that the bus services can stop getting delayed and buses stop getting overcrowded during rush hour.

In the end, the Mayor needs to make a mindful decision on what to build and what not to. He needs to clearly see which option is going to benefit the citizens the most and work his way from it. The Star, representing most citizen’s voices said:

“The right thing is to serve the residents of Scarborough and the rest of Toronto with the best available rapid transit, while being mindful of overall costs.”

I think that way everyone will be treated fairly. But ultimately seeing how hard Mayor Tory is trying to convince others to build the one-stop subway, Councillor Josh Matlow opinion stood out to me the most as he said:

“Considering the options, if a multi-billion dollar subway station actually made any sense, they wouldn’t have to sell it as hard.”

 

Thoughts on the Scarborough Subway Extension

The key to planning and developing a successful city in the modern age is building an efficient, reliable and effective rapid transit system. In recognition of that, there has been a strong and consistent push for construction of new transit infrastructure in Toronto and the replacement of aging rapid transit infrastructure in Scarborough is a major part of that endeavour. Two main proposals have been put forward and discussed for replacing the TTC’s obsolete Line 3: a subway extension and an LRT line. Unsurprisingly, the economic factors relating to the decision on which proposal to adopt were on the forefront of the debate on this topic.

Building a subway extension is the sensible decision. It will provide a strong transportation backbone as communities in the area continue to develop and while the upfront cost may be quite significant, it is a one-time investment that will continue to serve the community for decades to come. Additionally, plans and arrangements to build the subway extension have already been put in place between all levels of government and having to renegotiate those arrangements in the event of a switch to the LRT proposal would waste valuable time.

Efficiency

Image result for ttc rush hour
Commuters exit a crowded train during rush hour at the TTC’s Dundas station Source

Subways allow for rapid movement of large numbers of people. As congestion in the area rises, the capacity of a properly constructed and operated subway system allows for the fastest possible movement of the largest number of people in the given circumstances. Despite reports that the extension will attract lesser numbers of new transit users in the short-term, the long-term benefits are far greater. Those benefits include incentives for property developers to build more residential and commercial developments in close proximity to the proposed extension. Units of these developments would have easier access to rapid transit and would therefore fetch a higher price on the market.

Fairness

The subway extension proposal is a fair solution. It will provide the local community with a lasting transit infrastructure backbone that can support expansion and growth for decades to come.

Costs and Benefits

Upfront costs of the project are significant, with the current estimate being $3.35 billion. In the short-term, the costs outweigh the benefits and in the short-term, an LRT would provide greater benefits for less cost. However, in the context of city planning it is important to note that decisions made now will continue to define the city’s growth, expansion and progress for decades into the future and that a subway provides lasting, high capacity infrastructure that will be able to handle higher demand in the future. Indeed,  the subway extension is ideally suited to support potential growth and development well beyond the short to mid-term.

Opportunity Costs

The primary opportunity cost of the subway extension is that it means that an LRT will not be built. The LRT would provide greater benefits in the short-term, including better coverage and significantly lower cost, with the downside of lower capacity and more limitations on future expansion.

Funding Scheme

The project will be jointly funded by the municipal, provincial and federal governments. The municipal government enacted a special property tax in 2013 to pay for the city’s $910 million share of the project’s total cost. This is an optimal and fair way to fund the project as the high cost is spread out and absorbed by gathering funds from a large number of people over a longer period of time without significantly impacting taxpayers’ finances and without cutting other municipal services.

Priorities of public transit development in Toronto

After decades of neglect and next to no development with respect to Toronto’s high capacity rapid transit system; it is imperative that the municipal government, along with their provincial and federal partners, takes immediate action to commence construction on new rapid transit projects such as the SSE. The last few decades have seen Toronto outgrow the capabilities of existing transit infrastructure, and in the interest of ensuring that new residential and commercial developments have sufficient and fair access to mass transit, these projects must be undertaken efficiently and responsibly.

To that end, the TTC should focus on completing the long overdue Line 1 extension and then shift its focus to completing the Crosstown LRT project and the SSE. It should then focus on projects such as the proposed Yonge relief line. The overarching objective of all of these developments should ultimately be to ensure that the city’s residents have adequate access to efficient and reliable mass transit. This will bring Toronto’s transit infrastructure in line with other major cities across the globe and ensure that Toronto remains a competitive option for both new residents and new businesses alike.

Final Thoughts

The proposed Scarborough Subway Extension is the right decision for Toronto’s future transit development.  The long-term benefits outweigh the short-term costs. It is a long-term investment that will provide the area with a strong rapid transit backbone that will encourage new residential and commercial development and support economic activity in the area for decades to come.

Are we paying too much for products?

Imagine walking into your local Tim Horton’s and ordering your usual hot cup of coffee, the barista rings you up and tells you that your total comes out to be $100.00. Taken aback by this ludicrous price you decide to walk across the street to the Starbucks where you order your Venti chai latte with extra foam for $7.99. Many people would agree that the $100.00 coffee at Tim Horton’s is ridiculously overpriced and that no sane person would spend that much for a coffee but as an economist it is interesting to ask oneself if there even is a possibility for something to be overpriced. In order to answer this seemingly straightforward question one must first ask oneself what constitutes something for being overpriced in the first place, or even more general question as to how prices are set.

You may think that as long as the price is set above costs a profit is made and even more in depth when looking at classical economics the desired price is one that meets the price of which the demand and supply will support an equal quantity of units sold.

Using the supply and demand chart in this context, if a price is set higher than what its customers demand then the company would be lead with an excess quantity of product, being faced with the need to lower its price to its equilibrium for maximum efficiency.

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Seems simple enough right? But that does not explain how some companies are allowed to sell seemingly overpriced products and still ‘get away with it,’ the solution to this puzzles relies on the most complex piece of them all… human nature!

In reality, when determining the price for an item much more decision making is necessary and a large portion of it relies on psychological factors of spending when it comes to consumers. The bottom line is this: when we buy something we don’t usually see what we pay for.

 

Before you start scratching your head, try asking yourself why popcorn at movie theaters cost far more than ones at the store but cease to fail in drawing customers. Assuming that both quality and quantity of store bought popcorn and movie popcorn are the same then there must be something more that is driving up the price and that being one of the unseen factors of convenience. Areas in which people are more likely to pay more for products at their earliest convenience are those in which you can observe some of the highest prices. Many items in which are highly regarded in being ‘overpriced’ ride exactly on this bandwagon of being in the exact atmosphere such as movie theatre popcorn, hotel minibars, and coffee (from a cafe).  A large percentage of people simply do not want to be bothered enough to take greater measures for a lower price.

Image result for movie theatre popcorn
Image Retrieved

This still doesn’t explain for the products that don’t offer such services but still manage to be considered ‘overpriced.’ Going back to the idea of our strange human nature, tests have shown that people actually enjoy spending more money(!). This isn’t to say that you will be happier if I am now charging you $100.00 for this cup of coffee instead of $7.99 but more to do with the notion that since you are spending more you believe that you should be experiencing an equal or greater amount of pleasure. Economist and author Tim Harford explains this phenomena when discussing the topic for which priced wine should a consumer buy, he writes:

 

“You assume that the price of the wine and its quality can be neatly separated out. This seems reasonable, but is wrong. Price changes the very experience of quality. Neuro-economists have found, for instance, that while placebo painkillers work, they work best if the subject thinks they are expensive. Energy drinks give you less energy if you buy them at a discount. (Yes, really.) And of course, wine tastes better if you believe that it is expensive.

If this all starts to be making sense then you may be asking then how come everything in our world isn’t priced higher? It’s important to remember that people will only buy things they feel that is worth spending, what in question is though is how people decide on that value. Although we think we may rationally decide this value based on cost of production of the product, in reality we far more reference arbitrary benchmarks from past experience than anything else. Researchers call this the “anchoring effect” and it refers to the human tendency to fixate ourselves on initial values (anchor points) and estimate from that point on. This tendency is used and abused by companies all the time as we never truly know the true value of the items produced, like the cost of all the parts in a car, or total manufacturing process of a handbag; instead we’re simply given a carefully thought out number to help manipulate our decision making process. This doesn’t mean that Walmart should be selling $400 bags in order to be able to raise the demand of their other bags. The reason some companies are able to set their benchmark so high is due to luxury marketing philosophies that seem counter intuitive at first glance, but work very effectively to appeal to our irrational human nature. Vincent Bastien, a marketing professor, who worked with companies such as Louis Vuitton regard these “anti-laws of marketing” as powerful strategies to increase brand recognition. By making products associated with factors such as being difficult to buy,Increase in value over time, unresponsive to rising demand and being known to consumers who are not target market, a brand name is made and desire is formed.

 

Image result for louis vuitton
Image Retrieved 

 

So even though the economic model of supply and demand says that equilibrium price is most optimal in reality, it isn’t necessarily the best choice. Products cannot be overpriced but they can only do so in the right context. Before you go running to make your $100 a cup cafe remember that high prices with low costs still have meaning and reason behind it. By pinpointing external factors such as location, comfortability, or internal such as brand recognition, or imitated experience, a company can effectively increase the cost of any product and it would not be overpriced.  

 

Is The Scarborough Subway Extension A Mistake?

The Scarborough Subway Extension is one of TTC’s many “improvements” to our subway system, if it can be called that. What does this extension entail, exactly? According to their website, the SSE is a one-stop, 6.2 km subway that will connect Kennedy station to the Scarborough Town Centre.

pic 1
Map of the planned update (blue dotted line). Source

This long, unnecessary extension is still in the planning phase, and it needs to be known to the public that it is a complete waste of time and resources. Here’s why:

COSTS

According to a news article by The Star, the planned costs of the subway extension rose to $3.35 billion. This cost has gone up from the original estimate of 2 billion in early 2016. and that estimate could be off by over 50%, which means that the overall extension could cost as much as $5.02 billion! With the cost continuously rising like this, there’s still not a concrete price. The price could continue to skyrocket into the ~$6 billion range, and all of that money is coming out of taxpayer’s pockets. This money could be used to actually give the Residents of Toronto and Scarborough some benefits, such as cleaner and more reliable buses.

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Many people are forced to wait in the cold for the TTC due to its unreliable service. Source

In addition to this, the ridership of the Scarborough line is extremely low compared to the rest of the TTC. The Toronto Star compared ridership numbers between various 6 kilometre segments of the subway, and they found that the Kennedy to Scarborough Centre section had the lowest amount of riders at 64,000, while the Museum to Bloor-Yonge section had over 755,000. Having a multi-billion dollar extension for the lowest amount of riders seems like a very poor use of money.

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Graph comparing the amount of riders of various 6km sections of the TTC Subway. Source

Benefits

As The Star reports:

“City staff have estimated up to five minutes will be saved by replacing the existing Scarborough RT with a one-stop subway extension. That doesn’t include the elimination of a transfer at Kennedy Station. It also doesn’t factor in the bus trips for individual users, who may spend more time on a bus getting to a rapid transit station with the one-stop plan. It also doesn’t consider or compare the travel time of the original plan to build a seven-stop LRT to replace the SRT.”

Saving five minutes of time seems to definitely be worth the billions of dollars that the extension costs. The one fact that really tops the cake, however, is that this five-minute quote doesn’t factor in the external travel time, which would end up costing people more time in the long run.

The Scarborough Subway Expansion will still benefit the residents of Scarborough by providing them with an easier way to get from Kennedy Station to Scarborough Town Centre.

In Summary:

Costs:

  • Possible $5 billion or more to build one stop
  • Might hinder more people than it benefits
  • Not enough riders to be considered viable
  • Spends money that could be used elsewhere, such as the Eglinton LRT

Benefits

  • Possible time-save for most Scarborough residents
  • Better transportation experience (less traffic, less garbage, etc) for riders

 

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Breakdown of subway costs. Source

Is This Extension Efficient/Equitable/Fair?

To put it simply: no.

According to Investopedia, efficiency is defined as “…a process that uses the lowest amount of inputs to create the greatest amount of outputs.” This extension already costs $3.35 billion dollars, and it only affects ~64,000 riders. This is definitely not an efficient solution to the “problem” that the Scarborough line has.

Equity is defined as a fair distribution amongst everyone in a society. Even though the Scarborough Subway Extension benefits the residents of Scarborough, it does not benefit the taxpayers. According to this article, there is a special property tax that was approved in 2013 in order to pay for the city’s $910 million share. That $910 million, over 30 years, is coming out of taxpayer’s pockets. This is definitely not a fair distribution amongst society, because the entire city has to pay for an extension that will only affect the residents of Scarborough.

What Opportunity Costs Are There For This Expansion?

Investopedia describes opportunity costs as: “a benefit that a person could have received, but gave up, to take another course of action.”

The major opportunity that is lost while constructing the SSE is the loss of funding for a light rail along Eglinton Avenue. This light rail proposed 17 stops for only $9.1 billion dollars, which sounds like a much better deal than 1 stop for $3.35 billion.

Another opportunity that is lost is the LRT network that was previously proposed. This LRT would have 25 stops, over 2 light rail lines; one seven stops, the other 18 stops. The 25 stop LRT was proposed to be $1.67 billion in 2010 dollars, which would be an amazing improvement over the 1 stop $3.35 billion SSE. If the SSE goes through, we will have missed out on an amazing opportunity for less money.

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Source

Other Options For The TTC

The TTC, instead of constructing the SSE, could spend the money on more worthwhile endeavours. They could:

  1. Improve the quality of most trains and upgrade the tracks for higher trafficked areas, such as line 1 and the downtown portion of line 2
  2. Improve the reliability of most bus times, since many people have to wait for long periods of time outside in the cold
  3. Fund the Eglinton LRT (even though it costs more money at $9.1 billion, it still provides more for the city)
  4. Fund the Scarborough LRT network, which costs less and provides more for the residents of Scarborough
  5. Put more funding into the SmartTrack, which will provide new options and choices for people to get around the city

Even though the SSE might seem like a decent idea to John Tory, it is not something that should be considered for the residents of Scarborough. I feel like John Tory is pulling some strings to get the Scarborough Subway Extension through, especially after this report of him being investigated by the auditor general for the approval of the extension. Mayor John Tory promised residents both the one-stop subway and the Eglinton East LRT line with the $3.56 billion cost, which is a blatant lie. I think that the mayor only wants to complete this subway expansion because he wants to be the mayor that completes an endeavour.

Overall, I think that the Scarborough Subway Extension should not be continued. The costs outweigh the benefits (there are barely any benefits anyway), it is not fair/equitable/efficient, and there are better things that the government and the TTC could spend their money on, that would affect everyone positively. It’s not too late to cancel the Scarborough Subway Extension, so that is exactly what we must do. This extension is definitely a mistake.

The Proposed Scarborough Subway Extension

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Figure 1: Congestion in Toronto on a regular day. Source: Metro News.

Before I moved to North York in 2013, I lived most of my childhood in Scarborough. I attended elementary and middle school there, and my primary means of transport was the TTC. Bus delays and conga lines (as illustrated in figure one) made arriving on time a miracle when it happened, if ever. This year, I applied to UTSC, and got accepted for an International Business program. After taking a five-year hiatus from the Scarborough transit system, I can’t wait to be back, except for reacquainting myself with the delays.

But, the City of Toronto seems to have heard my silent prayers to resolve the congestion problems, and decided to approve of a TTC subway extension. This extension would essentially revitalize Scarborough’s whole public transit system. I was ecstatic at first, but upon further research, my joy turned into disappointment with the city. Let’s find out why.

For more information on the TTC extension in general, please click here. Shown below, in figure two, is the current Scarborough transit configuration.

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Figure 2: The current Scarborough Subway. Source.


What’s happening right now?

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Figure 3: The proposed Scarborough Subway Extension. Source.

What exactly is the Scarborough subway extension? Stated by the project website, the TTC will deliver a “fast, efficient, and reliable” subway system that extends the Bloor-Danforth line to Scarborough Center that should finish in 2025 – 2026 (shown in figure 3), effectively replacing the current RT line (shown in figure 2).

As of 2017, the vehicles that run on the blue line are now over 30 years old. With that age, citizens think it’s time for an upgrade to the Scarborough transit system. However, a simple “upgrade” isn’t possible. The Scarborough line has been operating extensively over capacity for over the past three decades, and maintenance / repairs for the current line of trains are obsolete because Bombardier discontinued the product line.

Furthermore, in 2013, the Toronto City Council voted 24-20 in favor of constructing the subway extension and scrapping the existing rail. This current project, as of February 28, 2017, now costs $3.35 billion to construct.

That’s one hefty sum for a one-stop extension.

 

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Hold on a second. $3.35 Billion?

You heard me. As the citizens of Toronto, you’re probably wondering how can we possibly pay for this? The answer boils down to the city’s financial budgeting.

From all three levels of government, the Toronto Star reports that the TTC is given an allocation of $3.56 billion dollars to spend on transit. But even with the current cost estimate, it’s not factoring in a staggering $600 million in additional expenses. After doing the math, the grand total is now around $3.95 billion, which is about $390 million over budget.

In the week of  March 2, Mayor Tory mentioned that the city had an additional $200 million to spend in cash reserves, but still with these numbers the final sum isn’t looking very pretty.

Shown below is a detailed breakdown of the extension costs, courtesy of the Toronto Star.

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Figure 4: Detailed Breakdown of Subway Extension Costs. Source.

Well, at $370 million short of funding for the subway, any sane person would say “cut the project.” I hope you do, at least. Unfortunately, Global News Toronto reported that for the 2017 municipal budget, city council voted 27-16 in favor of the proposed plan. The city launched a 2% residential property tax increase as well as cutting programs for the homeless, seniors, and raising fares on the TTC. Some argue that this is the real cost of constructing this one-stop extension line, on the backs of Toronto taxpayers and individuals in need.

 

Is this project worth it?

Well, we can answer that question using two key economic theories: efficiency and equality.

  1. Efficiency

Efficiency is defined by Investopedia as the economic state in which individuals are able to become better off without making others worse off. The resources in the economy are allocated to serve each individual with minimal waste. By analyzing the proposed extension, it appears that the subway extension is somewhat inefficient.

It would make the residents of Scarborough better off, at a sizable cost to residents in Etobicoke, Downtown, North York, and other regions in Toronto. All this inefficiency would be traced back to the initial cost of the project, $3.35 billion. As noted previously, the city introduced a 2% property tax hike which affects all residents in Toronto, not just the citizens of Scarborough. Why should an adult, living in Etobicoke, struggling to make ends meet pay additional tax in order to assist the Scarborough transportation problem? In the next few years, this course of action isn’t fair at all, as just demonstrated. Every person suffers the consequences of higher taxation, but only the people living in Scarborough receive the benefits.

2) Equity

An equitable economy is defined by Macnomics as a system where every individual receives according to their “fair share”, or enough resources are distributed to them to ensure that everyone is brought to the same economic standing. The underlying goal of the Scarborough extension project was to modernize the transit network there. With that being said, it’s the most needy region out of Toronto’s six large neighborhoods that gets this deserved transit revitalization. In essence, the Scarborough extension is equitable.

 

So, the project isn’t too effective. Is there a better way to revitalize the Scarborough transit system?

Right now, we’re locked into the extension project by city council. They made a choice to proceed with the project, but they could’ve voted no and went ahead with another project instead. This scenario can be defined as opportunity cost – “the value of the benefits of the foregone alternative, of the next best alternative that could have been chosen, but was not.” The main opportunity cost with building the Scarborough subway extension is the cost or expense of foregoing other transit development opportunities across the city, such as the proposed Scarborough SRT/LRT line. This is the next best option. Here, the city is able to save money by constructing a SRT/LRT system instead.

City council seems to have put the project on pause, although it still remains one of the very best, if only, economically feasible solutions to replacing the current project while addressing the needs of the citizens of Scarborough. A seven stop SRT extension line would be constructed over and past the current RT (blue) line, and ending at Sheppard Avenue. The 18-stop LRT would be running along Eglinton and onto Kingston, ending at UTSC. Please see figure 4 below for an illustration.

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Figure 5: The Alternative Proposed LRT Solution. Source.

Let’s discuss why the SRT/LRT extension is one of the best options for Scarborough, instead of one subway stop and scrapping the current RT line.

First and foremost, it is cheaper. Contrasting the $3.95 billion dollar price tag of the extension with the $3.08 billion cost of the SRT/LRT System, we subtract $3.08 billion from $3.56 billion in available funding. This solution presents an additional $480 million left over in savings. 

This amount can be used for quality-of-life upgrades at existing stations (such as furniture, fences etc.), better track maintenance, as well as increased bus service or construction of bus shelters across Scarborough. By proceeding with the current extension proposal, the opportunity cost is money. $480 million in leftover sums is no small amount to forego easily.

Secondly, the transit network in Scarborough will become more established. Let’s take a second look at Figure 5. We can see that a majority of the shaded areas, the neighborhoods in development, would be better connected. With the SRT/LRT System, the transit system would be able to reach six neighborhoods, while the current extension reaches one.

Right now, we’re on track to pairing the scrapped RT line with an increased dependency on bus routes. In January 2017, 99 000, or 48% of transit trips starting in Scarborough also ended in Scarborough. After construction, thousands of people would now need to depend on buses in order to get to either STC or Kennedy Station, where before they would’ve went to a station in the middle of those two (ex. Ellesmere). This scenario presents fundamental inefficiency, as a majority of the commuters using the TTC in Scarborough is now worse off and close to no one has a better experience.

Lastly, from the project website itself, the current expansion estimates that at rush hour, or the peak point, there would be 7 400 riders on the subway. Approximately 632 098 people live in Scarborough. 7 400 commuters would be approximately 1.12% of the total population of Scarborough. But what is most appalling is the net new rider statistic, which projects that in 2031, the extension would bring in 2 300 new riders. 

The SRT/LRT solution would prove to be more efficient, as more people have access to TTC stations and the transit network while no one suffers an economic loss. The SRT/LRT system would also be fair and equitable, as now the citizens of Scarborough now have a transit system that is on par with the rest of Toronto, and no region gets left behind. Scarborough, in this case, gets their “fair share” of the transportation solution.

 

But what about SmartTrack?

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Figure 6: The SmartTrack System. Source.

One may argue that SmartTrack, another municipal transportation project, would be a wonderful compliment to the proposed subway line. At the same time, it might even be a better alternative when pitched against the SRT/LRT line. A network that now connects Agincourt, Scarborough with Etobicoke via Downtown would be extremely efficient, and much-needed for Downtown-headed commuters coming from the surrounding regions. 

This new plan, at a glance, seems efficient and equitable to all Torontonians. People from all over the city could now take buses to their local SmartTrack station and commute Downtown or to any other station much quicker than if they took the TTC. The financing, however, is waiting on federal funding still, as well as the 2% property tax raise mentioned earlier. Everyone pays the same price here, but everyone will also benefit from better accessibility to quicker transport, not just the Scarborough region. The SmartTrack, when paired with the current project, would make the subway extension inefficient. Less commuters are now using the Scarborough line, all for the same price tag.

But, let’s back up a second. If someone argues in favor of the complementary nature of the current two plans, we must first acknowledge the fact that SmartTrack is fully approved and will be completed in the future. On June 28, 2016, both the SmartTrack project as well as the current subway extension were signed into action by city council. However, according to the project website, the reason that only 2 300 new riders will come is because of the newly constructed SmartTrack railway. If that is the case, wouldn’t it make more sense to scrap this project, avoid the 2 300 minimal new riders, save $3.35 billion dollars, and further develop the transportation network in Scarborough? If all of the benefits that I presented in the previous paragraphs hold true, then SmartTrack would truly compliment the SRT/LRT system once in place. It would make transport more efficient by allowing commuters to reach their destination at a quicker time, by allowing commuters diversity of transportation paths, and Toronto saves money if we choose the SRT/LRT.

 


The Verdict

In conclusion, I believe that the city should place a stop to the expansion project immediately and start focusing more on the SRT/LRT project. Mayor Tory stepped into office promising change for the Scarborough transit system, and change he bought. As for how good the change is, it’s not looking too great.

The SRT/LRT system is simply more efficient, provides more access to the citizens of Scarborough, it could be completed for less than the $3.56 billion in government funding, and reaches six times more people than the current proposal. 

The opportunity cost of building the subway extention is the loss of new riders, the loss of a developed Scarborough transit system, and even simply money. However, according to the Toronto Star, they state that for the SRT/LRT proposals, “the delay has been exclusively related to staff reports not being ready on time, additional review of subway options recommended by staff and regular processes involved with billion-dollar infrastructure projects.”

Only time will tell if Mayor Tory changes heart and acts in the best interest of the people, or if he completes the project eager to put an “accomplishment” on his track record. For his political reputation’s sake and my future vote, I sure hope he chooses the former.