For decades, mass capital expenditures in Canada’s oil sands, pipelines, prospective liquefied natural gas and renewables made big headlines. But for the next generation, urban infrastructure development, both public transit and related "transit oriented development" (TOD), could well exceed — maybe even dwarf — energy spending.
Projects for urban rail alone could easily exceed $100 billion. And if past trends are any guide, the related investment in TOD could exceed $1 trillion.
These projects will change the faces of our cities — the way we live our daily lives, construct and finance urban infrastructure and govern our municipalities.
Ontario’s $50-billion "Big Move"
In 2010, Toronto Mayor at the time, David Miller, said the GTA had an excellent transit system — for a city of 1 million people. But with a population in the Greater Toronto and Hamilton Area
(GTHA) approaching 7 million in 2016 and potentially expanding to 8.6 million by 2031, transit infrastructure is far behind where it needs to be.
In 2008, Metrolinx, the GTHA regional transportation authority, rolled out a 25-year, $50-billion transportation plan called
“The Big Move” and the Government of Ontario committed over $8 billion to it including $1 billion to develop a light rail transit (LRT) network across Hamilton and $1.4 billion for the Hurontario LRT, connecting Mississauga and Brampton; and the Government of Canada committed $65 million to expand rapid transit infrastructure in Toronto including the Sheppard East LRT, the Finch West LRT, the Scarborough Subway Extension — and the Eglinton Crosstown LRT, the largest transit expansion project in Toronto and one of the largest in Canada, garnering over $5 billion in provincial funding.
Montréal’s twist on the PPP:
the $6-billion Réseau Electrique Métropolitain
In his May 29, 2017, editorial "What if we took transit out of the hands of politicians?", The Globe & Mail’s Tony Keller concluded that public transit in Ontario should respond to market, not political demands. This was Québec’s approach when it signed an agreement with Caisse de dépôt et de placement du Québec (Caisse) in January 2015, creating a Public-Public Partnership (PPP) — a twist on the better-known Public-Private Partnership — the province identifies the infrastructure needs and allows Caisse to propose solutions. Then, if Québec agrees, Caisse can plan, finance,execute and operate the infrastructure with little interference from the province. And while the Québec government may help finance the capital cost, it draws the line at funding ongoing operating expenses.
The first infrastructure project to use this model is the Réseau Electrique Métropolitain (REM), a $6-billion, 67-km-long LRT project, that links downtown Montréal, the airport, West Island,
North and South Shores, serves Montréal’s four universities and connects to the city’s 50-year-old subway system.
The PPP model allows the province to insulate itself, while Caisse ensures REM serves the needs of and creates value for Montréal’s citizens. This public-focused mission allows Caisse to resist outlandish demands and propose a project that is both innovative and compelling — and one that it hopes to export.
Vancouver drives dynamic transit-oriented development
Going hand in hand with major transit projects across Canada today are TOD — high-density mixed-use developments within walking distance of transit stations. It is easy to see why. TOD enhances the financial viability of transit projects by increasing ridership and helps government achieve related public policy goals, such as reducing infrastructure costs, greenhouse gas emissions and urban sprawl, and addressing the challenges of affordable housing.
Although TOD plays a role in Montréal and Toronto, the most dynamic market is Vancouver. The limited availability of land, a red hot real estate market, worsening traffic congestion and proactive municipalities make Vancouver fertile ground for TOD — and the number of projects has exploded.
In recent years, Surrey City Centre emerged as a new mixed-use downtown area (with $1.1 billion of private-sector and $1.2 billion of public-sector investment) across four Skytrain stops. And proactive city planning initiatives and construction of the Canada Line, linking downtown to the airport, triggered billions in TOD projects along the Cambie Corridor. These are just two examples of a boom in TOD projects in the region that will continue for the foreseeable future.
Plus, with the addition of Vancouver’s Canada and Millennium Lines (each costing about $1.9 billion), there will be multi-billions of dollars of TOD for each line, making the public transit piece significant, but the attached TOD simply eye-popping. And when you consider that not only is Vancouver investing billions in TOD, but Calgary and Edmonton are as well, the opportunities across Canada are too great to be missed.