6.0
INVESTMENT STRATEGY

6.3
INVESTMENT PROFILE

The RTP capital and operating program will be one of the largest of its kind in Canadian transportation history. The total cost of the 25-year transit plan capital expansion component alone is estimated at approximately $50 billion in today’s dollars. On a year-by-year basis, capital expenditures will increase to $2.5 billion by 2015 (see Figure 2). The capital expansion program will be completed by 2033.

The upfront capital expenditures of the RTP are assumed to be financed through long-term debt in order to spread the costs over the life of the assets. Debt to support Metrolinx investments is assumed to be arranged through the Ontario Financing Authority. The province could also consider assigning a dedicated revenue stream to Metrolinx, from existing revenues, to support debt service payments.

Asset rehabilitation is projected to start in 2020, five years after the completion of the first RTP expansion projects (see Figure 2). Rehabilitation costs will increase with the completion of more projects. Once the RTP capital program is completed, rehabilitation expenditures are estimated to continue at $1.8 billion per year, to ensure we are adequately reinvesting in these long-lasting assets to safeguard optimum operating efficiency and public safety.

Operating expenditures of the RTP projects are estimated at $18 million in 2009 for initial RTP policy and program costs. The operating cost impacts of the first completed major new transit projects are assumed to commence in 2015. Total operating expenditures are assumed to increase to approximately $1.5 billion in 2033 upon the completion of all RTP projects (see Figure 2).

For the purpose of developing the Investment Strategy, the current division of responsibility for transit operations in the GTHA is assumed to continue. The ongoing operating cost of new Regional Rail and Express Rail services is assumed to be mainly the responsibility of the province, while municipalities are assumed to be mainly responsible for subway, Automated Guided Transit (AGT), Light Rail Transit (LRT) and Bus Rapid Transit (BRT) operating costs.

Metrolinx proposes to develop options for long-term, sustainable GTHA transit operating funding, as part of the report back on potential dedicated revenue tools and instruments to fund the balance of the RTP projects to 2033, for the Province of Ontario’s review and consideration by 2013. The total expenditure profile to deliver the ultimate 25-year RTP vision is substantial (see Figure 2). Combined capital, rehabilitation, and operating expenditures on a cash basis (before debt financing) are approximately $3 billion per year for most years during the life of the 25-year RTP.

When considered on a per capita basis, the RTP investment is reasonable. The Province of Ontario's MoveOntario 2020 commitment, which will support the initial transit projects, is equivalent to less than $155 per year per person in the GTHA. In other words, for about 42 cents a day, or less than the cost of a daily newspaper, Metrolinx can begin to invest in projects that will help to prevent longer commute times, provide greater choice and flexibility in transportation options, and help stop the negative impacts that transportation congestion has on the GTHA’s economy, environment and quality of life.

This investment will grow over time as the system itself expands, and will reach $470 per year per person by 2033. In today’s terms, this means an investment of approximately $50 billion dollars, for the equivalent of no more than $1.30 per day – about the cost of a cup of coffee - a relatively small price to pay to secure a long-term, sustainable transportation future.

Figure 2: RTP Total Expenditure profile
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