Toronto Secures Streetcar Contract — After Exaggerated Fight With Ottawa

New Bombardier trains will be delivered beginning in 2012.

At an emergency meeting last week, Toronto’s city council approved a major new financial commitment to an April contract designed to replace the city’s fleet of aging streetcars. The deal, which comes after the federal government announced that it wouldn’t help pay for the vehicles, requires Toronto to delay several planned capital improvements.

Unlike the United States, which has standard formulas established by the FTA to ensure transit systems nationwide adequate funds for capital maintenance and replacement, Canada’s municipalities must negotiate with Ottawa whenever they need major aid to improve public transportation. Toronto has recently benefited from a major infusion of national and province-level funds for new light rail and subway lines. These projects will make the city one of the most transit-oriented in North America.

But when Toronto Mayor David Miller agreed in April to a C$1.2 billion deal with Bombardier to buy 200 new streetcars, he had no such assurance from the federal government, even though he assured the city that Ottawa would be willing to commit to a third of the cost. Ontario Province is providing one third of the cost.

When applying for Canada’s national stimulus funds, Mr. Miller asked for C$416 million for the vehicles — and nothing else. The problem is that the stimulus was designed for projects that will be largely completed by 2011; the streetcars are scheduled for staged delivery between 2012 and 2018. Mr. Miller hoped that intense dislike of the ruling conservatives in Toronto, the nation’s largest city, would force Premier Stephen Harper to make a concession. Mr. Harper didn’t bite, to the dismay of New Democrat (left) MPs in the Canadian parliament. On the other hand, the national government did say C$300 million of aid to projects such as sidewalk construction would likely be forthcoming.

Mr. Miller’s attempt to use the stimulus for streetcar funds clearly wasn’t reasonable, and he probably should have waited for Mr. Harper to simply agree to fund the vehicles from a general source, something that would have likely occurred considering the government’s recent attempts to placate Toronto by throwing transit money at the city at high speeds. Now the city council has reluctantly approved doubling the city’s previous commitment to the vehicle replacement by a vote of 36 to 6. Some other major transit projects in the city will now be delayed, including the replacement of several hundred buses.

The failure to get federal government stimulus funds for the streetcars could be framed as a loss for Mr. Miller, but it further isolates Ottawa’s ruling conservatives from Toronto, whose greater metro area represents 25% of the nation’s population. Mr. Harper’s recent efforts in support of new transit lines in the city now seem less prominent, as the conservatives have once again been framed as the enemy in the fight for a better commute.

The New Democrats, who Mr. Miller supports, can claim that they did what they had to do to get the new trains, even though the municipal opposition claims that Mr. Miller’s April decision to order the streetcars was an attempt to buy something without the money to back it up. To many, the mayor will look like a savior, and when the trains start arriving in 2012, the left will be thanked, not the conservatives. In the long-run, the transit-supportive left will do better among the Toronto electorate and conservatives will have to attempt to buy their votes once again with more funds for public transportation.

From the U.S. perspective, the conflict between Toronto and Ottawa seems hard to believe because American mayors rarely demand funds directly from the federal government as a sort of political punishment; conflicts generally arise in the Congress, where senators and representatives fight over earmarks and formula provisions. In Canada, though, full-bore conflict between competing political ideologies at several levels of the federal system has become an acceptable way to promote and fund better mass transit. Perhaps American mayors should attempt to emulate this game — carefully.

5 Comments | Leave a Reply »
  • Misanthrope

    Unfortunately, no American city has anywhere near the political power that Toronto has relative to Canada with so much of the electorate being in one place. If you piss off Miami, or San Francisco, you can always make up for it by throwing a few dollars to Atlanta or Boston, or whoever’s scratching your back this week. You piss off Toronto, you’re done.

  • Sean

    Yes, Misanthrope is right. Toronto is an immensely important, and thus powerful, city in Canada. Like you said, almost 1/4 of Canada’s population lives in or around Toronto.

    New York City, with nearly 20 million in the metro area, accounts for just about 6.5% of the U.S. population, and the suburbs are often at often at odds with the city regarding many transportation issues.

  • Greg

    “Mr. Miller’s attempt to use the stimulus for streetcar funds clearly wasn’t reasonable, and he probably should have waited for Mr. Harper to simply agree to fund the vehicles from a general source, something that would have likely occurred considering the government’s recent attempts to placate Toronto by throwing transit money at the city at high speeds.”

    The real crux of the issue is that there was an expiry date set on the contract proposed by Bombardier, and it would have run out the night that Miller passed the purchase at an emergency meeting. If he’d waited for the Feds for a commitment, the contract would have expired and have to have been renegotiated, likely adding hundreds of millions to the cost.

    We, in Toronto, are very fortunate to have such a committed mayor, we haven’t had someone with this degree of vision in a very long time — nor one who has been able to circumvent the thick bureaucratic web that Canada has spun to govern such a relatively sparse population.

    The question of whether Miller’s request was reasonable or not is moot, for the province had the same guidelines as the federal government, and yet the premier of Ontario managed to provide $400M for the deal.

    I think politics really got in the way of this one, as Misanthrope and Sean have posited, Toronto is relatively powerful in Canada — and it lead federal politicians to comment to the press, “Who does [Miller] think he is, the Prime Minister?”

    I think we’re seeing a shift toward city-state politics in Canada, and the Mayor is and will be holding more power than the Feds realize is necessary to keep such an economic centre running and growing.

  • The Tories already win elections without Toronto. They make up for it by taking votes in the Toronto suburbs.

  • planningpolitics

    @Alon Levy, merely a short term reaction to national political matters, plus they aren’t winning majorities, so their strategy remains weak at best.

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