Raise the Hammer
The City cannot reasonably expect the province to pay 100 percent of the capital costs for light rail. Why is LRT important, and yet not important enough to warrant any City contribution?
By Nicholas Kevlahan
Published November 04, 2008
When I was in Copenhagen for a conference (a city that incidentally has excellent public transit, is pedestrian friendly and has lots of cycling routes), I saw the Hamilton Spectator's article on Metrolinx Chair Rob MacIsaac's comments, which I found quite disturbing.
It is possible that the Spec put a sensational spin on it, but to the extent that the report is correct, his comments run directly counter to Metrolinx's publicly stated position that the GTAH needs "transformational" change throughout the region, and that we can't wait to get started. Incremental improvement is not enough.
In fact, cities have been asked to think big and bold, and not just propose a better version of what they already have. This is what all the Metrolinx reports have said, and this is what senior Metrolinx employees told me in face to face discussions.
MacIsaac recently told the Hamilton Chamber of Commerce that Metrolinx would pay for the "lion's share" of the capital costs, and that the B-line was a good initial project.
If we take MacIsaac's comments to the Spec at face value, he has single-handedly changed the mandate and focus of Metrolinx. Instead of transformational change, he is simply helping cities with projects they would have built anyway. This is a radical departure from their publicly stated policy, and would definitely not fulfill the mandate given to Metrolinx by the provincial government.
It is quite possible that MacIsaac's message was simply that the City cannot reasonably expect the province to pay 100% of the capital costs. Perhaps he wanted to get this message through strongly to councillors who are insisting the City shouldn't pay a dime.
This is quite different from saying Hamilton doesn't 'deserve' a system, or that, despite their mandate, Metrolinx will just focus on Toronto.
Vaguely threatening statements like this only spook councillors just before they have to make an important decision on LRT, so I was relieved last week to learn that council voted unanimously to support the light rail bid.
Last Thursday, I dropped into the Metrolinx Open House for about 45 minutes. Although I wasn't there long, I spent most of the time chatting with John Howe, the Metrolinx general manager of investment strategy and projects, about the thinking of Metrolinx. This was extremely useful: we no longer have to guess about some aspects of Metrolinx's thinking:
If only transport were considered, then BRT might be the best choice, but by looking at the full benefits, Metroinx has a very good chance of choosing LRT. Development potential is a major consideration here. The City's (and HLR's) development potential argument is therefore the right strategy.
Finally, Howe (and Jason, another Metrolinx representative) implied that Hamilton Council's position of support for LRT "as long as the province pays for everything" is problematic. In fact, the caveat, if taken seriously, really weakens the City's case. Why is LRT important, and yet not important enough to warrant any City contribution?
The City pleads poverty, yet Metrolinx knows very well that they find money for roads, sewers, and all sorts of other infrastructure projects (not to mention major freeway projects in the past and the aerotropolis in the future).
In fact, I got the impression that Metrolinx may give Hamilton a BRT if it is not willing to put any money in itself (even if Metrolinx's own benefit analysis suggests an LRT is warranted).
The bottom line: the City's condition of zero City funding for LRT is a deal killer.
If this is simply the City's opening negotiating position, that's one thing. But then the City needs to communicate some flexibility. So far, that hasn't happened.
Everything I've heard suggests that Metrolinx is only looking for a minority contribution, something like 10 - 20%. This is still an excellent deal compared with what most cities around the world get from higher levels of government.
By Hammerhead (registered) | Posted November 05, 2008 at 16:51:26
Beleive me, I think LRT is a great idea and it will transform our city. While I agree that we are either in or out when it comes to LRT we also must face the cold, hard reality that at this point in time the money is not there. We are most likely headed for a recession and we must excercise restraint until things turn around - and they will.
To be honest, I'm not sure exactly how much we are supposed to ante up but should we not be looking at basic infrastructure maintenance right now if we have any extra cash to throw around?
When the family budget is being pressured, you don't go out and look at a new house, you make sure the one you are in is looked after until brighter days are here again.
By jason (registered) | Posted November 05, 2008 at 17:19:29
hammerhead, your family analogy is quite valid and accurate.
However, one major difference is the economic development spinoff that LRT brings.
Consider it an investment now that will yield several times more in development, new taxes, new assessment, job growth etc.....
That major difference between a city and family is quite important to distinguish. Not to mention, the costs of operating an LRT system are much less per passenger than a bus system. So we'd be making our transit system a little more efficient which also helps the bottom line.
By kevlahan (registered) | Posted November 05, 2008 at 17:32:10
Hammerhead,
The province is willing to put in the "lion's share" of the funding, which gives Hamilton's contribution strong leverage.
LRT would lead to very significant economic development and growth in our tax assessment base. This means that Hamilton would turn a large net profit over the medium and long term.
It is also a basic principle of economic theory that governments should make infrastructure investments during recessions, in order to keep people employed and companies in business. In 'bright' economic times government spending is not needed.
Finally, LRT is basic infrastructure! There is no reason to put LRT in a different category than other infrastructure investments (like the Linc/Redhill freeways, road re-surfacing and servicing business parks). In fact, the main difference is that investment in LRT has been shown over and over to provide a high return on investment to the city (something our investments in roads and business parks have not done).
By geoff's two cents (anonymous) | Posted November 06, 2008 at 03:20:23
Hmm. I like the alcohol idea. Can't say an extra twenty-five cents on a pint (or fifty on a six pack) would hurt too much. At least we'd know it was going to a good cause.
Couldn't agree more on the need to keep infrastructure investment going during hard times.
By Con Black (anonymous) | Posted November 06, 2008 at 11:16:54
Remember building infrastucture was core to the New Deal that helped us get out of the great depression.
As a return on investment, LRT will do well whether or not the economy is hot. If it's on fire, downtown development will take off, and if it smoulders, more people will switch from cars to public transit. It's recession proof.
Aerotropolis on the other hand, as an investment can only do well if oil stays cheap for the next few decades, and only then in strong economic growth periods. As growth and oil prices are now linked by peak oil, you won't get both factors in your favour, ever again.
By Dime (anonymous) | Posted November 06, 2008 at 11:55:51
MacIsaac's comments came out shortly after the last election. Metrolinx planning always left significant room for investment from the feds, who thus far have not climbed aboard. Now that they've been given another qualified mandate, will the Harperites suddenly begin investing in urban infrastructure, or go the ideological route, trumpeting the need for restraint?
Harper-buggies, anybody?
By Robert D (anonymous) | Posted November 06, 2008 at 17:09:51
Excusing the city's lack of monetary committment to this project on the basis that "there is a recession coming/going on" is really a short-sighted excuse. The city finds money for a variety of projects of questionable value. They also allow certain individuals to abuse the city's goodwill and financial resources. If they wanted to, they could find the money. The will just doens't seem there at this point in time.
As for the claim that a recession is coming, by the shovels need to get in the ground (3+ years is a conservative estimate) this recession will be long over.
By seancb (registered) - website | Posted November 11, 2008 at 13:33:08
"When the family budget is being pressured, you don't go out and look at a new house, you make sure the one you are in is looked after until brighter days are here again. "
Your analogy is inaccurate: are you calling LRT a "new house"? If so, then what is the old one? Or are you calling the city the "Old House"?
If you consider the citizens akin to a family, and the city akin to the family's home, then purchasing LRT would be more like adding a new roof, plus insulation to the existing house. It is an investment that protects the family from energy cost increases while increasing overall saleability.
LRT is an investment into the city. Building sprawl is more akin to "buying a new house instead of fixing the old" - if we are looking for places to cut, perhaps we should start there...
By A Smith (anonymous) | Posted November 15, 2008 at 22:28:59
Seancb, if LRT is a good investment, then why doesn't the city start building up capital reserves to build it?
Why does everything have to be dependent on whether other parties will give us handouts? It really speaks to the desperation of this former prosperous city.
By jason (registered) | Posted November 16, 2008 at 08:13:38
ASmith, you make a good point, and too am amazed at council's stance to not spend a dime on LRT.
Sadly, we seem to have a council that only gets excited about strips of ashpalt with yellow lines down the middle.
By highwater (registered) | Posted November 16, 2008 at 11:25:37
Sadly, we seem to have a council that only gets excited about strips of ashpalt with yellow lines down the middle.
I wish. Unfortunately they only seem enamored of asphalt with broken white lines down the middle.
By highwater (registered) | Posted November 16, 2008 at 11:25:46
Sadly, we seem to have a council that only gets excited about strips of ashpalt with yellow lines down the middle.
I wish. Unfortunately they only seem enamored of asphalt with broken white lines down the middle.
By A Smith (anonymous) | Posted November 16, 2008 at 20:43:47
Jason, what do you think about a privately run subway line from Eastgate to McMaster?
By seancb (registered) - website | Posted November 17, 2008 at 12:38:45
ASmith, I fully endorse the city investing in LRT and I wish they would commit some percentage of the estimated cost in order to prove to the province that we are serious.
I would personally invest in this project if I could. It would be interesting to sell some sort of municipal bonds in order to raise a bit of money for this project. I would also be interested to see the city explore more creative funding than straight property tax increases.
That being said, I would consider a property tax levy as a good investment. Much better than RHVX, that's for sure.
By adam1 (anonymous) | Posted November 24, 2008 at 21:44:29
An addedalcohol tax should absolutely be used to raise money for LRT. Think of drunk driving and how LRT can be marketed as a solution.
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