Metrolinx using Presto fees to gouge 905, councillors say
Negotiations are ongoing, but Durham Region councillor says they have no choice because acceptance of the Presto system is linked to getting a share of provincial gas tax money.

thestar.com
By BEN SPURR
March 14, 2017

Some councillors in the 905 region are fuming about a potential new deal for the Presto fare card system and are accusing the provincial transit agency of gouging smaller municipalities while giving Toronto a sweetheart deal.

For the past year 905 municipalities have been in negotiations with Metrolinx over a new operating agreement for Presto, the provincially owned fare card system used by transit systems across the region.

A deal has yet to be reached, but a report that went before the regional council of Durham Region last Wednesday revealed tentative terms of a potential 10-year deal.

According to the report, by 2021 the seven transit agencies in the 905 could have to pay a commission to Metrolinx equal to up to 9 per cent of fare revenue they collect through Presto. The municipalities currently pay a commission of 2 per cent, which Metrolinx uses to pay the operating costs of the fare card regime.

Under the terms of a deal the TTC inked with Metrolinx in 2012, the Toronto agency pays a commission of 4.65 per cent.

Durham regional council member Colleen Jordan of Ajax said municipalities outside of Toronto are getting a raw deal.

“Toronto seems to get the loaf of bread, and we get the crumbs,” she said.

Durham regional councillor Amy McQuaid-England agreed. She said she’s worried that Durham will be forced to recoup the higher costs by increasing transit fares.

“We basically were sold a bill of goods to transit users. We told them to use Presto because they would be able to save money,” said McQuaid-England, who is also a city councillor for Oshawa.

Durham regional council voted to refer the report back to staff in the hope of getting a better deal, but Jordan and McQuaid-England said the 905 municipalities have little leverage. Queen’s Park has made accepting the Presto system a prerequisite for receiving provincial gas tax payments, which Jordan said means “we have a gun to our head.”

Durham currently receives $8.3 million a year in gas tax proceeds, but under a new formula the province announced in January, that figure is set to rise to $15.8 million by 2022.

Asked whether she believed Premier Kathleen Wynne’s Liberals, who are riding low in the polls with an election looming next June, would risk the wrath of 905 voters by cutting off gas tax revenue, Jordan said Durham couldn’t afford to call the province’s bluff.

“Would we want to gamble on that? It’s a huge amount of money,’ she said.

A spokesperson for Metrolinx, the provincially owned transit agency for the GTHA, wouldn’t comment on the councillors’characterizations of the proposed deal, citing the ongoing negotiations. But Anne Marie Aikins said 905 transit agencies have been using Presto for longer than the TTC, and have so far been paying a smaller commission than Toronto.

TTC spokesperson Brad Ross also declined to weigh in on negotiations between Metrolinx and the other municipalities. In an email he said the transit agency “is satisfied that the agreement (the TTC) reached is fair.”

According to the Durham Region report, under the tentative deal the municipalities would start paying a commission of 3 per cent in 2018, which would be ramped up by 1 per cent a year until 2021, when it would reach 6 per cent.

On top of that, starting in 2019 the 905 agencies would start paying for upgrades to the Presto system referred to as “905 common core services.”

By 2019 the cost of the upgrades would reach the equivalent of a 3 per cent commission on Presto revenue, a number Durham staff warned could rise further if the program ended up costing more than anticipated. The TTC is not paying a share of the 905 common core costs.

Between 2018 and 2027, the report estimated Durham would end up paying Metrolinx $20.8 million. Figures weren’t immediately available for the other 905 agencies.

The estimate assumes a ridership growth on Durham Region Transit of 1 per cent a year from current levels of about 10 million passengers annually.

That ridership number is dwarfed by the annual trips logged by the TTC, which is by far the largest transit agency in the GTHA. Last year Toronto’s transit system carried 538 millionpassengers.

The disparity in ridership means that even at the lower commission rate of 4.65 per cent (or 5.25 per cent including HST), the TTC will pay a much larger share of Presto costs than any of its neighbours in the 905. Once the fare card system is fully implemented, the TTC expects to pay $60 million a year.