In July 2011 the City Treasurer reported that the transit component of the City’s Transportation Master Plan, including the Confederation Line, is affordable and that the City has sufficient capacity to take on a project of this size.
These conclusions stem from the City Treasurer’s Transit Long Range Financial Plan IV report which looked at all the capital and operating costs for delivering transit services for the next 37 years to ensure the resources are in place to construct, operate and maintain the system. The affordability of the Confederation Line project was considered within the context of all transit projects and operating costs, as they are all funded from the same revenue sources. These include an annual amount raised from taxation, transit fares, development charges and gas tax revenues.
Stress tests were also conducted to ensure the plan was affordable without increasing taxes beyond the inflationary target and without affecting the other critical capital envelopes. The analysis showed that the plan is affordable with the continued contributions from senior levels of government and with transit taxes and fares increasing at the rate of transit’s inflation. Transit Long Range Financial Plan IV further demonstrated that the plan would remain affordable even in the unlikely event that the City lost access to provincial and federal funding or if development revenues did not meet forecasts.
The other critical factor in affordability is operating costs. Here Confederation Line is a clear winner. Because the operating costs for Light Rail Transit are much lower per passenger than buses, Confederation Line will begin saving the City $16 million a year in its first year of service. This number will only increase as the City grows and as more residents begin to enjoy the comfort and convenience of Light Rail Transit.
- Rail Implementation Office