10 Reasons to build Transit City now, not sometime later

Yeah I know, the source is Wikipedia. However the entire entry appears to be sourced and referenced very well. Besides, arguing against expansion of public transit for a city with a population of 2.5 million is perplexing to say the least.


Transit City will create 200,000 jobs, adds 2.1% GDP, and generates $1.7 billion per year in Ontario tax revenue

Transit City is a major project to extend rapid transit within the City of Toronto and into the Greater Toronto Area. [...]

Economic Impact

Transit City is expected to create approximately 200,000 new jobs in Ontario from $8.3 billion invested.[18] This includes operation, construction, and economic stimulus effect of spending. Unemployment reached 9% in 2010, the GTA's highest level since 1995.[19]

The Ontario government's promised funding for Transit City creates short-term economic growth of $12.4 billion per year,[20] adding in the near-term 2.1% to Ontario's GDP, according to the American Public Transportation Association.[21]

According to the Federation of Canadian Municipalities' research, Transit City produces a first-year GDP gain of $17.3 billion, were all the money to be spent in the first year. After 5 years the project levels off to add $8.0 billion per year to GDP, with each $1 billion spent on transit adding 0.06% to Canada's GDP annually. This compares closely to US Congressional testimony, which shows infrastructure investment to stimulate annual GDP at a multiplier of 1.69, or $14 billion per year for Transit City.[22] Both studies count direct impact of spending only.[23]

In addition to direct impacts above, long-term indirect effects on business costs, productivity, and consumer spending from reduced congestion and travel costs create an additional $14.1 billion of value annually to Ontario's economy.[18] Other indirect effects not measured are improved air quality and public health and reduced carbon emissions from extending rapid transit to 1.1 million more people.

Ontario taxes capture 12% of Ontario's GDP, meaning that Transit City's stimulus effect directly adds to Provincial tax revenue.[24][25] Transit City's direct economic impact of $12.4 billion per year nets the Ontario treasury $1.4 billion in annual tax revenue. Indirect effects on congestion and transportation costs produce an additional $1.7 billion per year in tax revenue. Government of Canada Bonds currently offer 4% interest for a 10 year term.[25] Transit City's $8.3 billion expansion funding, if amortized over 10 years at prevailing bond rates, cost the Province $1.2 billion per year.[26] With Provincial tax revenues expanded by $3.1 billion per year, Transit City easily makes up its financing cost. As typical with public transit spending, the Ontario treasury recovers the investment easily with no change to tax rates.


■18. ^ a b Economic Impact of Public Transportation Investment, American Public Transportation Association, October 2009, http://www.apta.com/resources/reportsandpublications/Documents/economic_impact_of_public_transportation_investment.pdf (pg. iii, Table within Summary)

■19. ^ Unemployment hits 15-year high in Ontario, Toronto Star, http://www.thestar.com/business/article/646541

■20. ^ Economic Impact of Public Transportation Investment, American Public Transportation Association, October 2009, http://www.apta.com/resources/reportsandpublications/Documents/economic_impact_of_public_transportation_investment.pdf (pg. ii, Table within Summary, Summary of the Short-term Economic Impact per Billion Dollars of National Investment in Public Transportation)

■21. ^ http://www.fin.gov.on.ca/en/budget/ontariobudgets/2010/ch2c.html Ontario Budget 2010

■22. ^ Mark Zandi, Chief Economist, Moody's Economy.com (January 21, 2009), Congressional Testimony for the 2009 US Stimulus Bill, http://www.economy.com/mark-zandi/documents/Economic_Stimulus_House_Plan_012109.pdf pg. 9, Table 2. Fiscal Stimulus Bang for the Buck

■23. ^ Macroeconomic Impacts of Spending and Level-of-Government Financing, Federation of Canadian Municipalities, May 31, 2008, http://www.fcm.ca/CMFiles/Final%20Informetrica1LUG-5312008-7682.pdf (pg. 6, Table 1. GDP Impacts of Additional Infrastructure Spending)

■24. ^ http://www.fin.gov.on.ca/en/budget/ontariobudgets/2010/ch2d.html Ontario Budget 2010 shows 09-10 tax revenue of $65.9 billion

■25. ^ a b http://www.fin.gov.on.ca/en/budget/ontariobudgets/2010/ch2b.html Ontario 2010 Budget shows Ontario Gross Domestic Product

■26. ^ http://en.wikipedia.org/wiki/Amortization_calculator