The Province and LRT: An alternative news story.

With permission, I am giving you the points that the MTO (Ministry of Transportation)  gave to Jeff Outhitt as he was working on his story concerning the cost/benefits of LRT in Waterloo Region.

  •  The Region is the proponent of the Waterloo Region rapid transit project, and has worked to provide the Province with all necessary material. required for our due diligence – including the Region’s Business Case and multiple accounts evaluation (MAE)
  •  The MAE analysis quantified costs and benefits related to the project such as capital costs, time savings, and health, social and environmental benefits
  •  Spreadsheets containing net present value analysis and benefit-cost ratios were prepared as part of the Ministry’s review and are included in the package you received through the FOI request.
  •  The benefit-cost ratio for the Waterloo Region rapid transit project is comparable to other rapid transit projects in Ontario
  •  Ministry staff have completed their review of the Region’s draft Business Case and MAE, and concluded it appears to be sound and reasonable
  •   Additionally, the rapid transit project is essential for the Region to achieve the objectives of its Regional Growth Management Strategy (RGMS) and the Province’s Growth Plan for the Greater Golden Horseshoe Region.  In the Business Case, the Region outlines that the project will result in a wide range of economic, social and environmental benefits, including: 
  • o    Enabling the Region to promote urban revitalization and intensified land use along the central urban corridor connecting the cities of Cambridge, Kitchener and Waterloo.
  • o    Increasing transit ridership and reducing congestion by shifting a substantial amount of future auto travel to transit.
  • o    Reducing the amount of road construction required to accommodate future travel demand.
  • o    Supporting jobs by creating direct and indirect employment during and after construction.
  • o    Reducing the emissions of greenhouse gases and other pollutants. 
  •  o    Connecting key commercial, academic, cultural and housing nodes in the Region, and providing a link to the GO Rail service for travel to and from the GTHA. 

Here also is the memo from Mike Murray to Regional Councillors concerning this issue.

I thought it would be helpful to provide you with some background information:
–        You will recall that the Region evaluated various Rapid transit options using a “Multiple Account Evaluation” (MAE) approach.  This considered various costs and benefits associated with each option.  It was considered a more complete evaluation of the options than a more typical Cost-Benefit analysis, because it included benefits that were difficult to quantify and difficult or impossible to express in monetary terms  (particularly land use and economic benefits, and social and community benefits).
–        Regional staff provided the MAE information to Provincial staff as part of a “business case”in 2009 and updated this for the MTO in late 2011.  At a recent meeting with senior provincial staff they advised us that they have all the information they need from the region to satisfy their internal processes, and to recommend an “approval in principle” of the project.  All indications are that the province remains totally committed to funding their $300 million contribution to the project.
–        Based on the information we provided, MTO staff completed a “Benefit – Cost Analysis” using their own methodology.  Their approach considers only some (not all) of the project benefits, primarily related to the transportation benefits of the project (e.g value of travel time savings, vehicle operating costs, accident avoidance and emission reductions).  Based on this, none of our rapid transit options has a positive benefit / cost ratio, but our preferred option has the highest benefit-cost ratio of all the options considered.  As noted above, Provincial staff have confirmed that the information we’ve provided is satisfactory, and they don’t need further information
–        It is worth emphasizing that the MTO staff analysis does NOT include land use and economic benefits (e.g. value of development around stations, employment and taxes generated etc), and does NOT include social and community benefits (e.g public health benefits associated with improved air quality and more active transportation, community “liveability etc).  These benefits associated with the “urban intensification” (“shaping urban form”) goals of the project were (and remain) important considerations in recommending the staged implementation of LRT as our preferred rapid transit option.


2 responses to “The Province and LRT: An alternative news story.

  1. So the MTO found ‘none of our rapid transit options has a positive benefit / cost ratio’ but once factors that are ‘difficult to quantify and difficult or impossible to express in monetary terms’ were included they agreed to gift the Region taxes they’ve taken from our other pocket. Adding provincial loose spending habits to the Region’s ‘visionary’ spending certainly doesn’t appease me Jane!

    • Did you see the part where the MTO’s analysis considers some, but not all project benefits? The Region’s methodology was more comprehensive and showed many benefits that are not directly accounted for in the provinces models.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s