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Ontario’s Auditor General Thinks the Union-Pearson Rail Link May Be a Money Loser

The forthcoming Union Pearson Express might need to charge almost $30 per ticket, just to cover its costs.

Rendering of a UP Express train. Image courtesy of Metrolinx.

A planned railway between Union Station and Pearson airport has little hope of breaking even on its expenses unless it charges almost $30 per one-way ride. This according to a section of an annual report from the office of the auditor general of Ontario, which was released earlier today.

(The report also covers a number of other provincial projects and agencies. You can read it in full here.)

The Union Pearson Express—until recently known as the Union-Pearson Air-Rail Link—is a project that’s being spearheaded by Metrolinx. A slick new promotional website for the forthcoming rail line promises all sorts of tantalizing conveniences: trains every 15 minutes! A 25-minute ride!

If this sounds a whole lot better than the typical hour-long TTC ride to Pearson from downtown, well, it certainly should be. Metrolinx is aiming to have the whole thing open in spring 2015, in time for Toronto’s Pan American games.

But it won’t be as cheap as that TTC ride. The UP Express was always conceived of as a premium service. Over the years, transportation officials have hinted that tickets would be in the $20 range. But this latest auditor general’s report raises the possibility that even a relatively hefty fee like that may not be enough to prevent the line from losing money. Metrolinx has yet to finalize the line’s ticket prices.

The report points out that Metrolinx is expecting to hit three million riders after three years of operation. Based on those numbers, the auditor general thinks the agency would have to charge $28 for a one-way ticket, just to break even in the first year.

Suddenly, paying the cost of a token for an hour-long TTC ride to Pearson doesn’t seem like such a bad deal, does it? Unless the UP Express can somehow manage to be 10 times as good as public transit, its whole value proposition becomes questionable.

And it gets even more worrisome. The auditor general also points out that Metrolinx’s ridership numbers could be overly optimistic. That’s because there’s reason to expect that Torontonians might be turned off by the line’s high ticket prices.

In fact, according to the report, a market assessment conducted by Metrolinx in 2011 supports this notion. Seventy-five per cent of GTA residents who participated in the assessment said they wouldn’t be willing to pay more than $22.50 to ride the train. Fewer riders could mean higher ticket prices, assuming Metrolinx were determined to break even.

Granted, the trains are expected to be cushy, with executive perks like Wi-Fi. But we already have privately run shuttle buses that offer that type of service for less than $40, round-trip.

Torontonians have wanted a faster, more reliable link to Pearson for decades, but a break-even rail line with an exorbitant admission price probably isn’t exactly what most had in mind.

The auditor general’s report notes that Metrolinx hasn’t said, outright, that cost-recovery is its goal. The agency could decide to lower the ticket prices and operate the UP Express at a loss. It seems worth pointing out that the entire TTC operates at a loss, and we consider that to be normal—the cost of civilization, so to speak. Maybe some of that kind of thinking could be useful here.

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