Why Privatizing Transit Won’t Get Toronto Anywhere

“In recent weeks, calls to privatize all or parts of Toronto’s transit service have grown louder and more frequent,” write Matt and Myer Siemiatycki.

The debate over privatization was sparked earlier this month by a pair of articles published in the Toronto Star which mulled privatization as a solution to the seemingly endless dis-satisfaction with transit service and lagging expansion.

“But arguments in favour of transit privatization amount to wishful thinking that defies both basic economic reasoning and the experience with transit privatization to date.”

In response to the suggestion that the TTC could auction off bus routes, the authors argue that some peripheral bus routes, while critical to the mobility of their users, are in fact money-losing. Profit-seeking private entities would have no choice but to eliminate or reduce the service on these routes, resulting in a net loss for Torontonians.                 

The claim by privatization advocates that the private sector will build subways in exchange for development rights is an argument that simply doesn’t add up. Many billions of dollars are required to build and operate subways whereas the value of development rights associated with value-uplifted land can be pegged at, perhaps, hundreds of millions.

“There is no free ride for the public purse under private involvement in transit. And any service ‘efficiencies’ would overwhelmingly come from cuts to non-profitable but needed services or from lower worker wages.”