Major Deal Funds Transit and Housing

Summary#

Toronto City Council approved a “New Deal” with the Province of Ontario to improve the City’s long‑term finances and speed up housing, transit, and infrastructure projects. The deal sets out provincial funding and the City’s commitments, plus a joint ask to the federal government. A major piece is the planned provincial “upload” (takeover) of the Gardiner Expressway and Don Valley Parkway, subject to a third‑party review.

Key changes:

• Province to provide about $1.23 billion in operating support over three years and at least $3.04 billion in capital support and cost relief over ten years (some items are conditional).
• Province plans to take over the Gardiner and DVP; the Province will not explore tolling as part of its review. Toronto must direct the savings to housing and growth‑supporting infrastructure.
• One‑time $300 million fund for TTC subway/transit safety and recovery, tied to a new Transit Rider Safety Commitment (more safety presence, full cellular service, better emergency reporting).
• Up to $758 million from the Province (over 10 years) for 55 new Line 2 subway trains, conditional on federal and City matching (the City’s share is already budgeted).
• City commits to speed housing approvals, use surplus public lands for housing, meet/exceed annual housing targets, advance transit‑oriented communities at East Harbour and Woodbine, and implement efficiency measures.

What it means for you#

• TTC riders

  • You could see more safety staff on vehicles and in stations, better emergency reporting options, and expanded cellular/data service across the TTC, tied to the new safety commitment.
  • The Province will reimburse the City for lost fare revenue from the One Fare program. This could mean simpler, cheaper transfers between the TTC and regional transit, though exact rider impacts are not detailed here.
  • If federal matching funds come through, 55 new Line 2 trains can be procured to replace aging trains, which would likely improve reliability over time.

• Drivers using the Gardiner and DVP

  • Day‑to‑day driving should not change now. The Province will not explore tolling as part of its due‑diligence review.
  • Over time, ownership, maintenance, and capital work would shift to the Province, which could change how projects on these roads are planned and delivered.

• People who use or work in the shelter system

  • The Province has committed $200 million per year for three years for non‑refugee shelter operations, but this is conditional on the federal government funding supports for refugee claimants. This means more operating stability is possible if the federal contribution is confirmed.

• Residents near East Harbour and Broadview

  • The City will lead and fund its share of East Harbour flood protection (about one‑third of an estimated $200 million total) and will fund and build the Broadview Extension north of the rail corridor (about $140 million). This could mean more construction activity and, later, improved flood resilience and transit access in that area.

• People seeking housing and builders

  • The City and Province will identify and fast‑track surplus public lands for housing, including modular demonstration sites starting in 2024–2025.
  • The City commits to meet or exceed housing targets (20,900 in 2023; 23,750 in 2024; 28,500 in 2025) and to streamline approvals, which could speed up projects.

• Taxpayers

  • Uploading the Gardiner and DVP and other provincial supports could reduce City costs. The City must put savings into housing and infrastructure that supports growth (such as transit, water/wastewater, local roads).
  • The City will pursue efficiency measures (shared services, procurement changes, digitized services, program reviews), which could change how some City services are delivered.

• General

  • A targeted review of Toronto’s long‑term financial sustainability will be completed by 2026, which could lead to further changes.

Expenses#

Estimated public impact: The Province will provide about $1.23 billion in operating support over three years and at least $3.04 billion in capital support and cost relief over ten years (potentially much higher if expressway costs are confirmed). The City also takes on some specific costs.

• Provincial operating support:
  • About $110 million per year for three years to help operate the Finch West (Line 6) and Eglinton Crosstown (Line 5) LRTs (provincially owned).
  • One‑time $300 million for TTC subway/transit safety, recovery, and sustainable operations (tied to a new safety commitment).
  • $200 million per year for three years for non‑refugee shelter operations (conditional on federal support for refugee claimant costs).
• Provincial capital support and cost relief:
  • Upload of the Gardiner and DVP, with a minimum estimated City benefit of about $1.94 billion over 10 years; a third‑party review may show a higher benefit (possibly up to about $6.5 billion in capital relief, plus operating savings).
  • Province will cover the City’s budgeted 2024 Gardiner/DVP amounts during the review ($197.5 million capital and $6.9 million operating; similar capital support in 2025 if the review isn’t finished).
  • $758 million over 10 years for 55 new Line 2 subway trains (conditional on federal and City matching; the City’s $758 million share is already budgeted).
  • Potential up to $342 million from the provincial Building Faster Fund over three years if Toronto exceeds housing targets by 125% each year.
• City costs and commitments:
  • About $200 million (City share) for East Harbour flood protection.
  • About $140 million for the Broadview Extension (construction and property).
  • Use immediate and future expressway‑upload savings for housing and growth‑supporting infrastructure (reallocates City funds).
  • Efficiency measures may have implementation costs; not detailed.
• Federal funding requested (not yet committed): $2.72 billion for shelters for refugee claimants, shelter infrastructure, East Harbour flood protection share, 2022 COVID‑19 operating gap (City portion), and subway trains.

Proponents' View#

• The deal appears intended to stabilize Toronto’s finances and address a persistent budget gap, while avoiding service cuts or large tax increases by shifting major road costs to the Province.
• Provincial support for the TTC could help restore ridership, improve safety and reliability, and bring new LRT lines into service.
• Using savings from the expressway upload to fund housing and growth‑enabling infrastructure could speed homebuilding and keep up with population growth.
• Fast‑tracking surplus public lands and transit‑oriented communities could add mixed‑income housing near transit sooner.
• A joint review by 2026 could improve accountability and ensure supports match actual needs over time.
• The Province’s commitment not to explore tolling the Gardiner or DVP during due diligence could be seen as protecting drivers from new fees.

Opponents' View#

• Some supports are conditional. Notably, the $200 million per year for non‑refugee shelters depends on federal funding for refugee claimant supports. If federal funds are delayed or lower than expected, planned City service levels may be hard to sustain.
• The true financial value of the Gardiner/DVP upload is uncertain until the third‑party review is done. This creates short‑term uncertainty in planning and timing.
• The City commits to fund significant East Harbour and Broadview Extension costs. One concern is that environmental or project risks (not yet fully resolved) could lead to higher costs.
• The City agrees to zero‑dollar right‑of‑way easements for priority subway projects, which forgoes potential City revenue in exchange for faster delivery.
• Efficiency measures (such as reviewing grants or free programs) could lead to changes in some City services; details and impacts are not yet clear.
• The City acknowledges the Province’s authority to advance Ontario Place and to acquire certain City‑owned lands needed for that project (with compensation). This may raise questions about the City’s ability to influence aspects of that redevelopment.