Ontario eyes private investment in Scarborough subway extension project

Open this photo in gallery:

The Ontario government is hoping the private sector will pay for any extra stations it adds to the Scarborough subway extension, a way of defraying the additional cost, the province’s transport minister says.

The idea is one aspect of the province’s broader attempt to involve developers in building transit: trading public land or the right to build on top of a station for investment in new infrastructure. “The developer would pick up the cost of those stations [in Scarborough] as we go forward, and it will not be a cost to the taxpayer,” Transportation Minister Jeff Yurek said in an interview.

In a bid to see whether the private sector is willing to participate, the regional transit agency Metrolinx halted the procurement for several planned GO stations late last year.

Procurement for the GO stations that Toronto Mayor John Tory has deemed part of his Smart Track transit proposal was halted at the same time.

Mr. Tory’s spokesman, Don Peat, said in an e-mail on Friday that staff will be “reviewing the implications” of the new approach the province has directed Metrolinx to adopt.

“This could potentially allow us to move more quickly, more cost-effectively and be more nimble in many cases when it comes to station construction,” he wrote. “This could also help achieve our other objectives like intensification on those sites and building more affordable housing.”

However, a Metrolinx statement on Friday about the changed approach made no mention of Smart Track. A spokesperson for the agency referred questions about the omission to Mr. Yurek’s office.

“While Smart Track falls under the city of Toronto, their transit responsibilities and priorities continue to inform our discussions with the city on the subway upload and our common goal to get the people of Ontario moving,” said Mike Winterburn, Mr. Yurek’s director of communications.

He would not elaborate on where that left the stations. However, he said in a later e-mail: “We are committed to building transit to get Toronto moving and we understand the city is also committed to building transit, including SmartTrack.”

Getting the private sector to build transit has worked in some cities. The MTR in Hong Kong is effectively a development company that also runs trains. But cities with lower densities can struggle to attract private-sector participation.

Such dreams have traditionally foundered in Toronto. The subway stations in the parts of the city where land is most valuable tend already to be built on, while air rights in other, less-dense areas are not as attractive to developers. When running for mayor, the late Rob Ford, brother of Premier Doug Ford, promised that developers would pay to extend the Sheppard subway. That funding did not materialize.

The proposal to extend the Bloor-Danforth subway farther into Scarborough, which is currently budgeted at $3.35-billion, was cut from three stations to one as an attempt to rein in costs. The price continued to rise, though, and transit-watchers are expecting it to have ballooned even more when the TTC issues its next report on the project.

Adding the two stops back in would increase the cost even farther, likely by hundreds of millions of dollars. But Mr. Yurek said he is hopeful the private sector will be willing to absorb that tab.

Metrolinx chief executive officer Phil Verster has embraced those private-sector ambitions and says he wants to make “maximum use” of the market, going beyond just the construction of stations.

“Another area of where we’ll think of what is the role of the private sector [is] to help fund car-parks,” Mr. Verster, who is currently travelling, told reporters after the most recent board meeting.

“Stations need to be more than just a gateway in and out of a transit network,” he added. “We need to provide other services going forward. More retail facilities, more opportunities for people to just have, while they wait, ... access to services that are appropriate.”