Subway vs LRT: You Do the Math on Scarborough Transit

John Tory and Doug Ford are committed to a subway; Olivia Chow wants to stick with the original LRT. We've got some interactive charts, to help you figure out how much each one costs.

By David Hains, and Hamutal Dotan

Photo by bradley.obrien from the Torontoist Flickr Pool.

Subways are once again on the city’s agenda. Council has gone back and forth on the issue numerous times. As things stand the signed agreement with the province is to build an LRT, but all three levels of government have since then agreed to construct a subway instead. Council has passed a dedicated property tax increase to pay for the subway, and studies for it are underway, but it will need to come back to City Hall for several more ratification votes before the plan is set in stone.

And now it’s become a key issue in the municipal election: Olivia Chow is advocating a return to the original LRT plan (and using the tax money for other TTC needs), while John Tory and Doug Ford staunchly defend the subway.

Based on baseline projections, the subway will cost approximately $1.5 billion more than the LRT. But those assume that interest rates will stay low and there won’t be any cost overruns. If interest rates go up, or the project goes over budget, the impact on the City’s budget could be much greater.

We’ve built some interactive charts, so you can see how the numbers stack up…

Construction costs
How much it will take just to build the routes, before we pay for drivers, maintenance, and day-to-day operations:

Cost Overruns and Operating Costs
Here is your chance to really test the math. Using the drop-down menus in the chart here, you can adjust the interest rate if you think borrowing costs might go up, or you can factor in a project overrun if you’re worried about construction costs. You can also add in the operating costs: the drivers and maintenance and day-to-day management that haven’t yet been accounted for. Each time you change an assumption, our calculator will give you new numbers—you can see those changes in the project totals up above.

Property Taxes
Toronto’s top civil servant is recommending a 1.6% property tax increase over the next three years; at that rate it would take 30 years to pay for the subway—and that’s just for construction costs. Add in any overruns or interest rate increases, and also operating costs (which we pay only if we build a subway, since the province has agreed to pick up the operating costs for an LRT) and property taxes would need to go up more. Based on the choices you made above, here is the property tax impact:

Debt Levels
How would a subway affect our credit rating? In order to stay in good standing the City has established a debt ceiling of 15%, which means that the City’s debt servicing cost in any given year should never amount to more than 15% of its property tax revenue in that same year. Here is how the debt ratio would be affected by the Scarborough subway:

What Could We Build Instead?
Finally, there’s the question of opportunity cost: what we could build instead of a subway for the same amount of money? Here are some other ways we could spend the funds. The total at the very bottom shows the amount the subway would cost, based on all the choices you made above. Click on the alternative projects you’re interested in to see how much you could accomplish with the subway money if you put it to other uses.

Keep in mind: if we skipped the subway all of these alternative projects could be in addition to the LRT, since that would be fully funded by the province.

If you have any questions on how to use the calculator or how the numbers work, feel free to leave them in the comments and we’ll answer as soon as we can.

Our thanks to Senning Luk and Dmitry Beniaminov for help with the table coding.