When it comes to service delivery, the TransLink narrative goes like this:


    Delivered transit service hours have fallen behind the population growth since 2010 reaching levels last in 2008. That is leading to more crowding, more pass-ups and a worsening of the overall transit experience [1][18].

The graph presented to support this thesis is usually a truncated version of the below one:

TotalServiceSupply

A problem with this narrative using the total service hours delivered by the TransLink subsidiaries and contractors is that it magnifies the 2010 peak, by including service provided for the Olympic Games. A second issue is that it includes the technical services which could vary greatly without affecting the transit supply. Below is an example of such differences [2]:

route Revenue hour service Total hour service difference in %
All 3,841,860 4,950,000 29%
555 13,500 21,400 60%
96B 42,900 62,400 44%

.

Revenue service or service supply means service dedicated to move transit passengers (passenger can use the provided service).
Total service is the revenue service + technical service (deadhead run, layover…).
That is matching the APTA definitions. Translink’s reports tend to easily interchange the both terms.

The relatively important difference between the total service and the effective revenue service had already been noticed as an optimization avenue by the 2012 TransLink commissioner’s review [17]. The more fundamental issue is that the service/hour provided is not representative of the Transit supply:

  • The replacement of a 40 foot bus by a 60 foot bus wouldn’t increase the service hours per capita, but it could address overcrowding.
  • Faster bus routes infer less hours of service but are improving the service offer.
  • The replacement of a bus route by a rail one, offering much faster and higher capacity vehicles, can both address crowding while improving the offer, while resulting in a decrease in total service hours.

Seat.Kilometres Supply

The seat.km metric; which needs to be understood as (seat+standee).km in the transit world; is a much better way to evaluate the transit supply, and for this reason is widely used in the passenger transportation industry.

As an example: 1 hour of coach service on the express route 555 using the Hwy 1 HOV lane can provide ~3600 seat.km when one hour of C23 Shuttle bus in Vancouver’s Yaletown, provides only ~320 seat.km. Differences in average speed and vehicle capacity drastically affect the offered service which is reflected by the seat.km metric:

VancouverSeatkmSupplyEvolut

The effect of the introduction of the Canada line service in late 2009 is clear. Though service hours may have stayed stable since 2011, the seat.km supply has slightly increased thanks to a greater use of articulated buses. The advent of routes 96B and 555, having higher speed than average, also provides more seat.km at constant service hours. Is this enough to keep pace with the population growth?

VancouverSeatKmCapita

The point is moot. If a downtrend can be observed since 2011, we are nowhere near the 2008 level. The introduction of rapid transit lines tends to exhibit a positive long term trend.

Canadian and International Comparisons

To provide a larger perspective, the Vancouver transit supply is compared to other Canadian metropolitan areas, using numbers as provided by the Transportation Association of Canada [4]. The Vancouver numbers have been normalized to correlate with those provided by the association [5] . Vancouver tends to exhibit favorable trends when compared to its Canadian peers:

CanadaSeatSupply

Vancouver pales when compared to Megalopolises such as Paris, London or Hong Kong [6], but its Transit supply is much greater than in Portland and comparable to the ones of European metropolises of population size closer to Metro Vancouver, such as Lille or Lyon [7]. Nevertheless, this comes with one caveat: both Lille and Lyon are fed by an important suburban train network which has not been accounted for in the following figure:

TransitSupplyPerCapitaInter

The above international comparison is assuming 4 standees per m2 to estimate the vehicle capacity [9]:

system bus LRT Metro RER/MTR/Skytrain
Vancouver 76 386
Hong Kong 105 146 [10] 200 [10]
London [11] 79 252[12] 728 509
Paris [11] 83 230 586 1772
Portland 76 166 [13]

The Occupancy rate
Is the Transit supply good enough or not?

The occupancy rate [14] can be a good proxy to assess the relevance of the supply: the higher the occupancy rate is, the more likely crowding issues will arise. On the other hand, a low occupancy rate could suggest an excess of capacity.

Crowding experienced locally with a low occupancy rate could suggest that the transit supply deployment is not optimal, but some other issues could arise: A directional demand unbalance makes crowding difficult to address without deploying excess capacity on the underused direction.

OccupancyRatio

Possibly a transit world specific: even the busiest systems don’t achieve an occupancy rate greater than 30%. In that light, the TransLink system appears to be a heavily used one.

It is worthwhile to note that TransLink estimates the average transit trip length at ~8km [15] when TfL estimates the average bus trip length at 3.5km and the Underground trip length at 8km [16]. Similarly the average bus or tram trip length is 3.3km and the subway trip length 5km in Paris. The reliability of trip length data could be an issue but a consequence of longer trips in Vancouver is that TransLink needs to provide more seat.km per trip than London or Paris.

(*) This article has been first published in the December 2014 newsletter from Transport Action BC.


[1] Mayors’ council on regional transportation Regional Transportation Investments: a Vision for Metro Vancouver – June 12,2014

[2] Difference between the GTFS data (revenue hr) and the Translink 2013 Annual report (Total service hr). see more in this post

[3] Supply is computed on the first Friday following Labour Day (usually one of the busiest Transit days of the year) of each year from GTFS schedule and fleet deployment observations. The vehicles’ capacity used are the maximum as displayed on the concerned vehicles. see more in this post

[4] Transportation Association of Canada. Urban Transportation Indicators, Fourth Survey. Ottawa :2010

[5] Numbers otherwise differ, possibly due to different assumptions, such as on the vehicles’ capacity. The urban areas, used by the association [4], don’t match either the area covered by the transport agencies, so numbers are subject to caution.

[6] Numbers for Paris come from the Observatoire de la mobilité en Ile-de-France, London numbers from TfL [16] and Hong-Kong numbers from the 2013 MTR Annual report.

[7] Number for Portland, including population, comes from the APTA, and includes the scheduled services provided by Trimet, C-Tran, SMART and Portland city.

[8] Numbers from the Certu (“Annuaire statistique Transports Collectifs Urbains”, 2014) with bus capacity normalized at 83.

[9] Agencies could have different standards (e.g. 6 persons per sqm in Hong Kong). The vehicle capacity is per bus or consist (train) unless otherwise specified. When different vehicle types are used, a vehicle revenue.km weighted average is used.

[10] The capacity is per car. Hong Kong Tram capacity is 125, and Hong Kong Airport train capacity is 120 per car.

[11] Vehicle Capacity number from Report on mobility an transport #1 – Institut D’aménagement et d’urbanisme- November 2014”.

[12] Weighted average of a DLR train capacity (280) and a Tramlink train (200).

[13] The capacity is per vehicle, the Portland streetcar capacity is 200.

[14] Also called Load factor.

[15] Translink: 2014 Business Plan, Operating and Capital – Budget. New Westminster 2014.

[16] Transport for London. Travel in London: report 7. London 2014.

[17] Shirocca consulting Translink Efficiency review. 2012,

[18] A narrative largely echoed by Lower Mainland translink advocates as illustrated here.

Some graphs, with number coming from [2]:





All numbers for 2012 unless specified otherwise. 'Toronto++' includes Toronto TTC, Durham region, York region, Mississauga and Brampton.
Operating cost for Vancouver are separated as Transit operating cost only (computed without considering the Canada line, Translink overhead, and police). full total is including those ancilliaries cost usually not compounded for other agencies - see (5)

There is 2 conclusions we can draw.

save for Winnipeg
Translink has one of the cheapest operating cost per capita

…and the below graph, from [2], suggests there is a lot of room to increase funding from municipal source, which could have avoided the March 2015 plebiscite:

transit funding per source from [2]

transit funding per source from [2]


Translink has one of the most expensive operating cost per trip

Comaprison according to the 2012  Translink efficiency review

Comparison according to the 2012 Translink efficiency review

It is not as dramatic as the difference pointed by [1] using some selected peers (figure left). Since we don’t have access to the CUTA numbers, we can’t judge of it, but we notice a mismatch with numbers provided by Calgary transit [2] and [1]

Because Translink has also the highest average fare, the net cost/trip for the taxpayer is in line with the one seen in Calgary.

Operating cost per trip has increased in 2013, mainly due to a reduction of ridership induced by a fare increase. The result is overall positive: Translink achieves a greater cost recovery ratio. That said, it looks Translink has hard time to lower its operating costs

The reason, often given, is that the Translink jurisdiction covers a much greater area than its peers. The argument is valid but not sufficient to explain the higher cost:

  • The “Toronto++” area (in the top graphs) includes Mississauga, Brampton, York region and Durham region: while a very large region, the average operating cost per trip is still lower than in Metro Vancouver. The numbers could be heavily squeezzed by the TTC (90% of the trips of the Toronto++ area)
  • ~90% of the Translink revenue service is provided in an area not greater than Ottawa or Toronto (see our post here)

It could be some other issues at play, such as too costly labour contracts. Other issues we have previously mentioned in this blog:

Too little bus productivity

layover at Davie

We have already pointed, in a previous post, the relatively high discrepancy between the total service (including layover, deadheading,…) and the revenue service (when the bus pick up and carries passenger). This was also noticed by [1].

.
.
.
.

Too many buses

With more than 1500 buses, the Translink bus fleet is oversized. At peak hour, only ~1000 buses are in revenue service:

fleetutilization

Translink has a fleet of ~1530 buses, but the scheduled service requires only ~1000 buses in revenue at peak (computed on friday Septmebr 5th)

The oversizing of the bus fleet has also been pointed by the 2012 Translink efficiency review [1] as well as the Provinical audit [3] ( since that time, the bus service has stayed basically the same, but more buses have been added to the fleet). Below is an IBBG benchmarking suggesting it was already the case in 2008:

2008 fleet utilization in some major cities (anonymous data from IBBG) : Vancouver bus fleet utilization is guessed to be the purple triangle curve

Too many political interferences

The main issue Translink is facing is to move from a social service objective to a productivity one for many of its bus routes. “social service” is an important component of Transit but when ridership pick up on a route, diversions and other distractions, to achieve specific social goals, become increasingly expensive.

We have mentioned previous examples of it for this, the route 49 being a case in point:

bus diversion, are a burden for  efficient Transit operation

bus diversions are a burden for efficient Transit operations

The removing of the diversion could reduce the route operating cost by ~10%. We have noticed many other opportunities in this blog to dramatically reduce operating cost of specific bus routes. Those opportunities are usually well identified by Translink, but the main obstacle to those significant cost saving measures are usually the cities’ council themselves:

A conclusion also drawn by a previous Translink audit [3]:

    It is the committe’s observation that Translink’s decision on services and investments are sometimes based on community by community pressure or requests from individual local governments, rather than technical or financial merit.

[1] TransLink Efficiency Review, Shirocca Consulting, March 2012.

[2] Calgary Transit Funding and Fare Strategy Review, Calgary Transit, February 2014.

[3] Review of the South Coast British Columbia Transportation authority, BC Ministry of finance, October 2012.

[4] International Public Transport Benchmarking: Learning from othersBen Condry, Imperial College London, University of Sydney, December 10th, 2013.

[5] see our reference spreadsheet post for further explanation on operating cost computation. The total presented here is as given per [2].

CIT stands for the Congestion Improvement tax submitted to a plebiscite
According to the last Mayors plan iteration, it is now like below:

CIT-shares


Tourism share was originally quoted at 10% by the Mayors council, but this number has been proved erroneous. Credibility of other numbers have not been verified.

the CIT is expected to raise $250M/year

Is the CIT tax 0.34c a day or 258$/year per household?

In the Transit plebiscite campaign, people quote 2 different numbers:

  • 0.34c a day (that is 124$ a year) if one counts only the direct CIT paid by metro Vancouver households
  • $258 if one counts the CIT tax burden per household (direct and indirect)

The last number suggests people will support indirectly the businesses tax burden. Many on the “yes” side seem to argue that is wrong. For example, Brad Cavanagh at canspice.org, wants to believe that the gas price witnessed at the region border (Langley and Abbotsford) is proof of it:

Average gas price difference, between Langley and Abbotsford, is computed at 10.7c by Brad Cavanagh. The tax difference is 11c…

  • The total tax rate is 32.17c in Langley (including a 17c Translink tax).
  • The total tax rate is 21.17c in Abbotsford (no Translink tax but a higher provincial tax).

The 11c [1] tax difference is fully passed to the consumer ( The Brad Cavanagh’s error is to consider the Translink tax as the only difference between Langley and Abbotsford)

Do businesses pay taxes?

As economists know, businesses don’t pay taxes, people do. Businesses are an abstraction, people, be either the consumer, the shareholder, or the worker, are the ones paying the businesses’ taxes.
If that was not true, we would have transferred all of our tax burden on the businesses abstraction! In the meantime, studies tend to demonstrate more often than not, the workers support the businesses’ taxes burden (in the form of lower wages).

It is possible that the investments allowed by the CIT will allow productivity gains or a greater economic activity, making the real cost per household lower than assessed by the most pessimistic views. In the meantime a $258 CIT cost per household is no more wrong than 0.34c per household.

PS: We plan to write a post “debunking” the various claims done in the plebiscite campaign. As a primer, so far we can see, the CTF has provided mainly valid facts. I don’t discuss their significance and they could need to be replaced in a proper context (what Brad Cavanagh did in a previous post), but usually trying to dispute them is a losing proposition.


[1] BC motor fuel and Carbon tax

In a previous post, we have examined the general financing of the plan, and noticed that half of the Congestion improvement tax could go toward operating the system. In this post we focuse deeper on the Capital plan

Capital cost and Translink contribution to the plan

When looking at the plan, it is important to make a difference between the capital cost of a project with the effective contribution paid by Translink:

    If the Millenium line extension (Broadway subway) represents 30% of the capital investment over the first 10 yeras, it is expected to represents only 14% of the Translink financial contribution to the capital plan [1]. 77% of The broadway subway is expected to be financed by senior and municipal contributions.

CapitalInvestment

The inner “cheese” represents the partition of the $7.5B capital investments of the plan.
The outer “cheese” represents the partition of the $3.5B of Translink contributionto the plan (difference come from senior government contribution)
(*) Surrey LRT is only partially financed by the current 10 years mayors’ plan: the capital cost is $2.5 billion, from which the current plan finance $1.9 Billions

Congestion Improvement tax allocation

The above represents only the capital cost, so not all the new CIT tax revenues will go toward it, but only the portion not used to fund the Translink expanded service operations. The allocation of the CIT tax to finance the plan will look like it:

CIT revenue allocation per project: half of it will be allocated to the new expanded transit operation. the TRanslink contribution to the Pattullo bridge is expected to be fully financed by tolls, and so is not financed by the CIT

the broadway subway end up to be only 10% of the total Translink plan extension cost to the tax payer. At the difference of other Transit investment, it doesn’t cost taxpayer money to operate, and could be able to generate revenue [1]. More tax $ will fund the roads network (and that doesn’t include the Pattullo bridge) than the broadway subway.

Capital cash flow and project timing

A bit of “reverse accounting” suggests the following [4]:

(*) the Surrey LRT line 2, is only partially accounted in the 10 years plan, an additional $600 million will ne needed in 2025 and 2026

Debt

The CIT generating more revenues in the first 10 years than considered in the original Mayors’ plan, the debt in 2024 could be around ~4Billion instead of $6Billion as published in June 2014 [2].

debt

borrowing and debt repayment (assume a 4.5% interest rate)

As we have seen before, the transit operating costs are expected to increase at a much higher rate than the revenue sources (taxes + farebox revenues), revenues allocated to service the debt will be depleting over the years. ~2023, Translink will be unable to service its debt, it will be missing ~$50 Million to be able to service the debt interest only.

    In fact that was considered in the original plan, expecting ~$390 Million of new revenue by 2026: the current CIT will be actually $50 Million short of it.

At this time, it is unclear how the $50 Million gap will be closed [5][6], but it is fair to say that the plan or at least part of it- that is certainly the Fraser Hwy LRT (Surrey to Langley)- is not financed. Unless the financial forecast is significantly erring on the conservative side:

    The Fraser Hwy LRT would only go ahead if a new source of financing is agreed by 2022.

By this time, the technology choice could need to be reviewed, so one should not worry too much on this line [3]

Removing the Fraser Hwy LRT from the plan could not be enough to keep the Translink financial sheet on sound basis by 2024: scale back of some bus operations could be required. Though that a more cautious ramp up of bus services could be preferred, that is a normal and reasonnable risk. Otherwise, significant saving could be found in the Expo line upgrade program as we have suggested before.

As for the previous post on the Mayor’s plan financial, one will find my “sandbox” worksheet in Google doc


[1] Ideally one would like to consider the full life cycle cost of a project: the Operating cost of the Broadway subway is expected to be more than recovered by fare revenues, and it will allow saving on bus operations too. It is the only Transit project of the plan able to do so. Other transit projects are expected to have a fare recovery ratio of ~17%, involving reccuring costs for taxpayer. Concentrating on the sole cpaital cost is more often than not, misleading

[2] In 2014, the Translink assumption (Translink 2014 baseplan and outlook), was 6.8% interest rate for long term debt, and 5% for the short term debt. Translink has lately emitted bond at 4.5%: we use this last number accross the board but our number could be too optimistic

[3] It seems a bit silly to commit on a technology for a project not expecting to hit the ground in the next 8 years.

[4] Surrey LRT line 1 and line 2 are considered to have the same price per km. the ful cost of the LRT is $2.5Billions. The 10 years plan finance $1.9 Billions of it, ~$600 Million need to be provided in years 2025 and 2026. cash flow model come from the Surrey raid transit phase 2.

[5] The Mayors’ plan implictly suggests a mobility pricing tool to generate additional revenues.

[6] We didn’t have accounted an apparently “exceptional” “partnership” funding toward operation ($50M in 2023 and $35M in 2024) which could slightly delay the time when Translink could not generate enough revenue to service its debt.

Jordan Bateman, from The canadian tax payer federation has released an alternative funding plan to fund the Mayor’s plan, let’s have a look at it:

The CTF funding plan

The CTF notes that the aggregated local revenues (all municipalities and the regional district) growth at an average rate of 5.7% annually. It is well above the ~2.5% combined inflation and population growth rate in Metro Vancouver, and also significantly above the GDP growth rate (~3%). So, the CTF suggests that future local spending could be certainly restrained, to earnmark 0.5% of them toward Translink.

Below is the projected local revenues according different hypothesis.

historical and projected aggregated GVRD revenues. The CTF’s plan suggests to earnmark 0.5% of the revenues growth to Translink. if the growth is 4.7%, it could be enough to fund the 10 years Mayors’ plan.

The CTF report [5] assumes an aggregate regional revenues growth of 4.7% which seems reasonable and below the 5.7% historical trend. Given this assumption, earnmarking 0.5% of these revenues growth to Translink could generate $2Billion on the next 10 years. That is enough to finance the mayors’ plan [7].

What is kind of baffling, is that the mayors, especially the tax addicted ones, have not only implicitly endorsed the out of control taxation growth, but becomes apoplectic at the mere suggestion to put rein on it. The narrative is worded by Bill Tieleman like it:

    “To suggest that you can make savings out of growth when you need more schools, when you need more roads, when you need more sewer lines, when you need more garbage trucks — that doesn’t make any sense”

It is time to introduce Charles Marohn:

“No More Road”
“no more sewer line, and no more garbage truck…keep the school thought!”

A rarity in the field, Charles Marohn believes in fiscally responsible urban planning. The main theory developed in his blog is that municipalities are generally engaged in a Ponzi scheme:

  • Cities invest in new infrastructure disregarding of the return on investment, which generally tend to be bad: Capital cost can be paid by Development charge, but the generated property taxes are not enough to cover the maintenance cost of it.
  • Cities then invest in more new infrastructure, to increase their tax base. The new constituents’ taxes pay to maintain the older infrastructure in the city, but then again there is no revenue to maintain the newly built infrastructure…

Thought things here could not be as bad as in US, we still have a financially unsustainable development model as illustrates the graph above.

Charles Marohn solutions

  • A full accounting of all short and long-term financial obligations local governments have assumed for maintaining infrastructure.
  • A stop to infrastructure projects that expand a community’s long-term maintenance obligations.
  • The adoption of strategies to improve the public’s return on investment and improve the use of existing infrastructure.

Charles Marohn often reminds us: More ≠ Better :
Bus 430 lining up at Knight Bridge: more buses will not make the bus any faster than the bike

How much room we have to make better use of our existing infrastructures?

Most city’s “liabilities” can be correlated to its street network length:

  • basic road maintenance, including snow plowing and cleaning
  • lampposts and other urban furnitures
  • police presence, number of fire stations,…
  • sewer and water mains underneath
  • garbage truck running on it

The list obviously includes transit. The shorter the road network is, the more efficiently a city can be ran. The meters of road per capita is a good proxy to estimate how efficiently a city can be ran or not. Below some comparisons

meters of road per capita
transit rich cities are not road rich

As suggests the graph above: We have already more than enough roads! Growth without no new roads, and all the service liabilities they implies, is not only a very reasonnable proposition, but should even be a requirement.

How make that happens?

As witnessed by the cold reception of the CTF plan, many municipalities show no intention to take a more fiscally responsible route for future development. However, using the municipal revenue sources to finance Transit creates an impetuous to control spending (“there is so much water a faucet can deliver”).

Notice that financing transit by municipal revenue sources is also of nature to encourage municipalities to adopt development pattern enabling efficient transit, to effectively maximize revenue sources room for other municipal services [6].

For those reasons, the CTF plan has significant merits.

How good is the CTF plan?

Some have criticized the form of the message, Many other have critized the messenger [4]. some are eventually trying to spin misinformation, but we still have to see an argumented rebuttal of the plan content. It is that good!

However, it is not what we are asked to plebiscite or not. What we are asked to vote for is a tax, which contours are still not specified. This to finance a plan which so far has not been audited, and has still to allocate $700M of tax revenue [7]. Without Bill of law insight to clarify all that, it effectively sounds like we are asked a blank check. Strangely enough the proponents of the plan don’t seem much concerned about that… That is concerning.

What come somewhat as a surprise: The CTF plan doesn’t question the mayors’ plan, and accept all of it, so they are not framing the debate as a “yes or no to Transit” as “yes” advocate try to do. Do they will be succesfull ? time will tell.


[1] CTF unveils alternative to Metro Vancouver transit sales tax, Jen St. Denis, Business in Vancouver, Jan 15th 2014.

[2] Cities, TransLink should scrimp to avoid new transit tax: No campaigner, Jeff Nagel , Surrey North Delta Leader, Jan 15th 2014.

[3] Number for Hong Kong from “Hong Kong: The facts”, for Vancouver, from 2014 Capital and operating budget, from “Transportation Inventory” for surrey, from Bureau of street service for LA, Greater London authority for London and from wikipedia for Paris

[4] Jordan Bateman could have many defaults, but it is not an election to put Mr Bateman in an office. In a referendum, at the difference of an office election, the message trumps the messenger whoever he can be. We will have opportunity to explain more about that point in another post

[5] No Translink Tax: A better plan http://www.notranslinktax.ca, January 15th 2015.

[6] In that regard the current translink levy on property is a good thing, but because it is not directly correlated to the cost to serve a city, it is not good enough to encourage policies optimizing Transit efficiency: A more direct contribution from the city coffers tied to the Transit subsidies in it, could be an improvment.

[7] The mayor plan is originally based on $2B revenues of a “new tax” over 10 years, while the “Congestion Improvement tax” will bring ~$2.7B in the Translink coffers. See our December 22nd post for more detail. The hereby discussed CTF plan conclude basically the same.

Je suis Charlie

January 9, 2015

In reaction to the January 7th terrorist attack on CharlieHebdo in Paris, Transit electronic signs displayed their support


transit sign in a British train, Paris' velib (with a screen displaying a CharlieHebdo cartoon involving a bike), bus a Lyon Tram, a French commuter train, and a tram stop in Grenoble

Other less urban mode was also using their screen to pay tribute to the victims:

Nice airport

motorway and train station in Thionville


To better understand what bring the Mayors council plan (called “expansion plan” below), we ignore the spin and prefer to compare it with the Translink 2014 base plan (what is ensured to happen disregarding of the “plebisicite” result)

Congestion and gas tax

Fiat striking point: both plans estimate exactly same revenue for both the gas tax and parking tax. That is an implicit recognition that the Expansion plan will have no traffic impact, and per extension congestion impact (or if it does, it is mainly by the introduction of the Pattullo bridge toll): something we have already mentioned before.

Capital investment: $7 Billion above the $3Billion already included in the base plan

The $10 billion Capital funding is expected to be financed as below:

capitalfund

(*) The Pattulo bridge revenue is estimated from the 2024 operating budget ($50M/year) [3].
Notice that the figure doesn’t include debt service:

The “Congestion Improvement Tax” (CIT) finances ~22% of the capital funds needed.

Funded Operation (including debt servicing)

Revenue stream

FundedOperation20142024

Base numbers (e.g. “Transit revenue”) are presented for the the base plan, and increment numbers (e.g. “Inc. Transit revenue”) represent the additional revenu provided by the Expansion plan. the bump in 2017 is due to the sale of the Oakridge transit Center (planned in the base plan…but forgotten in the Expansion plan)

The original Expansion plan was targeting to raise $2 Billions over the next 10 years from a new tax to be triggered in several stage. The mayor having elected a 0.5% PST, will allow to raise ~2.7 Billions [1] over the next 10 years, creating lot of room for a more aggressive implementation that originally envisioned.

That said, at the end of the 10 years period, it looks like the PST revenue align with the original plan forecast.

Transit operation: $1.5B added on 10 years

In the next 10 years, the plan is apparently to put 400 more buses on the road, that is increasing the bus fleet size (actually ~1400) by ~30%…to increase service by 25% -it could be an issue here we will certainly revisit.

This, and other rail expansion services, will translate into an additional $1.5B of operating cost (including Transit police and Translink corporate overhead), generating $237M of additional transit revenue [2] as computed on 10 years : The new CIT tax, and additional senior government contribution (UPass) is expected to cover the $1.3B shortfall

Expanded Transit operation represents a relatively marginal increment on the base plan, but mainly funded by tax

Expanded Transit operation represents a relatively marginal increment on the base plan, but mainly funded by tax

The farebox recovery ratio of the added service is anemic [2]:

fare box recovery is expected to go up to 62% in the base plan. it will be 53% in the Expansion plan, thanks to an anemic 17% farebox recovery on the added transit services

Operation vs Capital Investment
In the first 10 years, nearly 50% of the expected CIT revenue will be devoted to operation (it could have been much more in the original plan). The partition look like below

nearly half of the CIT will be dedicated to operate the added service

In 2024, more than 70% of the CIT will be devoted to operate the added transit services, which will have a disastrous 17% fare-box recovery in 2024. That could even compromise the ability of Translink to pay back its debt, according too the CIT variation (inherently very sensitive to the economic climate).

It is possible that, some expanded service could pick-up steam in the years following 2024. If not, it looks those expanded transit are not sustainable in the long term, and will keep Translink on a train wreck course

That said, it is possible that our assumption on the PST growth rate is too conservative (the growth rate of the Metro Vancouver PST tax base is probably greater than 4%, but we have no solid number at this time)


[1] we assume a growth rate of 4% for the PST revenue. That is a conservative estimate, the PST growth rate province wide has been ~5% since 2008.

[2] we haven’t included the provincial contribution to the Students pass program

[3] the $1 billion figure represents the amount of debt which can be reasonably reliably financed by the Pattullo bridge toll. The Pattullo toll revenue forecasts are much more reliable than in the Golden Ears bridge, since it is an infrastructure upgrade

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