Crystal ball department.

This could be the headline for the metro Vancouver Region is a few years hence.


February 16, 2015

York Region pulls back on infrastructure projects in effort to rein in debt

Torstar News Service VIVA Rapid Transit, launched in 2005 to carry residents across York Region.

York Region is starting to feel the burden of carrying the highest per capita debt load in the GTA, and is pulling back on infrastructure projects to rein in borrowing costs.

Yorkai??i??s debt has climbed to $2.54 billion and is expected to peak at $3.7 billion by 2020.

For years, the regionai??i??s debt repayment plan has been dependent on development charges from current and future construction of homes in booming cities such as Markham, Vaughan and Richmond Hill. (Levies collected help cover the cost of money borrowed to build infrastructure such as water and sewage pipes.)

Despite fast-tracking projects and a relatively strong housing market, development charges arenai??i??t keeping up with debt repayment. Almost 85 per cent of Yorkai??i??s debt is based on what it hopes to recover from development fees.

ai???We assumed higher growth in the early years, followed by slower growth in the later years,ai??? said Edward Hankins, director of the Treasury Office for York. ai???But because of the economic recession, some of that growth has not occurred as quickly as we

Officials admit the development charge collection plan is volatile and largely dependent on how the economy fares. Heavy reliance on such fees could leave York taxpayers facing two unfavourable options down the road to cover debt: higher taxes, or more sprawl to keep the development fees coming in.

According to a 2013 report, development levies collected over the past decade amounted to an average of $173 million a year. In 2014, the region reset the rates and collected $250 million, Hankins said. The region is anticipating $330 million annually in 2015 and 2016 ai??i?? even though such numbers have never been met.

But he is optimistic.

ai???York is going to grow. Itai??i??s one of the fastest growing municipalities in Canada. Itai??i??s just a question of how quickly it will grow,ai??? he said.

Yet there have already been consequences to the regionai??i??s aggressive build plan and high debt, according to the 2015 proposed budget document, which is up for discussion this month.

S&P recently downgraded the regionai??i??s credit rating from AAA to AA+, over concerns the region was spending too much and taking on too much debt. To slow down spending, York Region Council decided to delay certain projects, including the Upper York water reclamation centre and water and sewage projects in Vaughan.

The projects could be restarted if growth proves to be faster than expected, or development charge funds improve.

So, the regionai??i??s new focus is building up its reserve funds, Hankins said.

The $1.7 billion currently held in reserves, second in the region only to Torontoai??i??s, is being spent faster than the revenues coming in. By 2017, the depletion trend is expected to reverse, said Hankins.

Critics warn that Yorkai??i??s strategy will put it in much the same straits Peel Region now faces.

ai???Mississauga was able to collect development fees and use them to subsidize tax freezes,ai??? said Sony Rai, a member of the environmental group Sustainable Vaughan. ai???Fast-forward 30 years and now Peel Regionai??i??s infrastructure replacement and repair bill is causing tax

Paul Bottomley, York Regionai??i??s manager for growth management, believes the growth anticipated in the region by 2031 will surpass what is needed to pay off the debt.

According to a land assessment report from 2009, the region anticipates some 1.5 million people will move in over the next two decades. It also expects to add 229,300 housing units over that period, almost 40 per cent of those single-family homes ai??i?? the most lucrative type when it comes to development fees.

A single or semi-detached home brings in $37,720 in development charges. A condo of less than 700 square feet brings in almost $15,865.

But some environmentalists worry that Yorkai??i??s debt repayment policy is not sustainable and is a model destined to fuel sprawl.

ai???They are so far exposed in terms of debt and paying for that with development charges ai??i?? and the only way they can see forward is to keep doing more of it,ai??? said Tim Gray, executive director with the advocacy group Environmental Defence.

He believes that as the region builds out, there will eventually be pressure on the protected Greenbelt lands, where new development is forbidden.

Gray believes that with the provincial Greenbelt review taking place this year, the region could contemplate actively moving toward a high-density model, instead of ai???simply digging itself deeper into the

ai???They need to figure out how we can modify development charges so that revenue can be obtained from denser development,ai??? he said. ai???And if you arenai??i??t building new infrastructure that extends far into the countryside, then your costs are lower,ai??? he you can transition to a new funding model.

ai???But in the short term, and with so much debt on them, itai??i??s a hard


2 Responses to “Crystal ball department.”
  1. eric chris says:

    This is a little off topic, even though I’m not at all surprised that TT is broke: apparently the developers in Vancouver are so worried that the subway funding may not come through for them to make their zillions from condos (marketed in China) along the subway, that get this: their stooge mayor in Surrey is going to offer road improvements to entice drivers to vote for the sales tax.

    What are the road improvements? Unless they involve more bridges to debottleneck the massive disaster on the Alex Fraser Bridge for drivers heading west in the morning, she is wasting her time.

    Then, guess what? Our Pulitzer Prize winning Vancouver Sun reporter, Kelly Sinoski, has penning her latest “story” that taking s-train is faster than driving. How did she arrive at this incredible conclusion, contradicting professional engineers in Metro Vancouver and Statistics Canada showing that transit is twice as slow as driving?

    Easy, she compared someone living at the s-train station (homeless person, perhaps) in Surrey and commuting to the Waterfront s-train station in downtown Vancouver to one of her fellow reporters driving from Surrey to Vancouver: to conclude that taking s-train is 10 minutes faster than driving. She never mentioned whether the reporter driving took the slow lane on Highway 91 and 99 while driving.

    When I drive from UBC in Vancouver to Fraser Highway in Surrey to visit my friends and family, it takes me 40 minutes to travel 40 km, averaging 60 kph. Whereas, the s-train only averages 40 kph. But, you also have to factor in the bus ride or walk to the s-train, too, and Kelly forgot this minor detail. If you do, the average speed taking s-train is closer to 30 kph, just as predicted by Statistics Canada and professional engineer in Metro Vancouver. Hmm.

    This has made me think. Has TransLink ever produced a set of calculations to show that transit reduces carbon emissions? Not to my knowledge.

    Instead, TransLink “assumes” that everyone on transit would be driving a SUV from Surrey to Vancouver without transit. How plausible is this and how plausible is it that transit reduces carbon emissions when transit buses are empty at least 75% of the time? Not likely. Conclusion: not having transit reduces carbon emissions. Wait, I already knew that:

    Wouldn’t it be a lot easier for TransLink to admit the truth that transit degrades the air quality and is not faster than driving? Maybe, but TransLink is desperate and its stooge reporters trying to make TransLink into something more than what it is (a sham) keep making TransLink look and worse and worse. Thanks for helping us clean out the barn at TransLink, Kelly, bozo VS reporter. Ian Jarvis, departed CEO, took one to the head (zombie in the blue coveralls): well sort of but with full pay for another 18 months, who’s next?

  2. eric chris says:

    Enough. Why are the zombies at TransLink still coming (for more taxes)? Every time that you put 10 L of gas ($10) into your tank, TransLink gets $2.50. When your property taxes arrive in the mail, TransLink charges you about $420.

    When your utility bill arrives in the mail, TransLink charges you for that, too. Enough as Shane likes to eloquently put it, totally enough:

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