Tuesday, November 24, 2015

Fossil Fuel Divestment Ramping Up

Green energy continues to grow by leaps and bounds, as we begin the massive undertaking of decarbonizng the global economy.  It’s been thought that making the shift from fossil fuels to clean energy would take generations, but reports released this week suggest that the writing really is on the wall for fossil energy.

The Canadian Centre for Policy Alternatives released a report that shows how major Canadian public pension fund managers are losing money by backing fossil fuel industries (see:“Pension Funds and Fossil Fuels: the Economic Case for Divestment,” Canadian Centre for Policy Alternatives, November 2015).  Clean capitalism research company Corporate Knights also released a report which concluded that by betting on fossil fuels, some of the world’s largest pension funds have collectively lost out on $22 billion since 2012 – the year the divestment movement began (see: “What kind of world do you want to invest in?” Corporate Knights, November 16, 2015).

Back in 2012, 350.org founder Bill McKibben wrote a now famous piece for Rolling Stone magazine calling on University endowments, pension trusts and other fund managers to divest their holdings in fossil fuel companies (see: “Global warming’s terrifying new math,” Bill McKibben, Rolling Stone Magazine, July 19, 2012).  McKibben suggested  the aims of fossil fuel companies to derive profit from their resource holdings were incompatible with limiting warming to just 2 degrees Celsius – the international target established in the 2009 Copenhagen Protocol.

McKibben drew the parallel with the 1980’s divestment movement aimed at South Africa’s apartheid government, linking fossil fuel divestment with a moral imperative to stop harming the planet. This moral imperative was loudly echoed earlier this year by Pope Francis, who alerted all global citizens and our leaders to the need to be better stewards of the planet and the global economy.

Many have doubted that a moral case alone would be enough to motivate financiers to move away from profitable fossil fuel holdings.  In the world of high finance, return on investment often trumps just about every other consideration.  But It’s because ‘money talks’ that optimism is growing for green investment initiatives, due to their high rate of return.  For example, last year’s government of Ontario $500 million Green Bond option for transit quickly became oversubscribed with bids totalling $2.5 billion. 

As for fossil fuels, investors have numerous reasons to abandon ship, as green energy infrastructure becomes more competitive with fossil sources. The latest slump in oil prices has meant that new production from expensive tar sands projects will be delayed.  If the world decides to take real action to hold warming below 2 degrees Celsius, those delays could become permanent, as the best available science says as much as 80% of Canada’s proven oil resources will need to remain safely sequestered in the ground (see: “Canada’s Carbon Liabilities: The Implications for Stranded Fossil Fuel Assets for Financial Markets and Pension Funds,” Canadian Centre for Policy Alternatives, March 2013).

Those proven reserves represent real value to shareholders.  If reserves can’t be exploited due to market pricing condition or climate initiatives (or both), whomever is left holding the fossil fuel hot potato when the carbon bubble bursts is going to get burned.  And that’s why public pension fund managers need to make sure their members are safely insulated from the coming shock by passing on risky, money-losing fossil holdings.

Climate liability is another factor investors are starting to consider.  Will our children hold the world’s fossil energy companies legally culpable for the damages done to the planet, in the same way that we’ve made tobacco companies pay for some of the public health costs attributable to their products? While that may seem an abstract question right now, pension fund managers who take a longer view of investment risks should take note.

Divesting from fossil holdings is consistent with the fiduciary responsibility of investment fund managers.  As financial backers increasingly flee bad investment choices in the fossil energy sector and embrace green economic initiatives, a decarbonized economy will likely be upon us sooner than we think.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the Green Parties of Ontario and Canada)

Originally published in the Sudbury Star as "SudburyColumn: Fossil fuel becoming bad investment," on November 21, 2015 - without hyperlinks.

Monday, November 16, 2015

Letter to Greater Sudbury Council Regarding the Maley Drive Extension and Widening Project

To: Mayor Brian Bigger and Members of Council,

I am writing to you today with regards to the Maley Drive Widening and Extension project.  As you may know, I have written about this matter publicly through different media, including my blog (available at www.sudburysteve.ca – see below).   

I have reviewed publicly-available information pertaining to this project, and I have noted how this project has changed in scope and scale over time. Based on the information recently provided to Council at its meeting of November 3, 2015, it appears that the changes made to the Maley Drive Widening and Extension project (“the project”) have never been approved by Council through by-law or Resolution.  As a result, the current version of the Maley project which is now proceeding should be discussed at the Council table and Council should make a decision whether to proceed with the revised project or not.

History of the Project – Scope & Scale

According to the 1995 Environmental Assessment, the Maley Drive project was originally proposed as:  a two-lane upgrade to the existing portion of Maley Drive between Barrydowne and Old Falconbridge Road, and a 4-lane upgraded road from Old Falconbridge to Road to Flaconbridge Road; the creation of a new two-lane road between Barrydowne and Lasalle Blvd; and an upgraded to Lasalle Blvd. rom approximately College Boreal to Frood Road (see page87, “Maley Drive Extension/Lasalle Blvd. Widening Municipal Class EA Addendum,” Earth Tech Canada, May 15, 2008).

Further to the City’s review of its transportation system through the 2005 Transportation Study Report, in 2008, the scope and scale of the project was expanded to include that section of Lasalle Blvd. between Frood Road and MR 35 (Elm Street), with that section between Falconbridge Road and Lasalle Blvd. at College Boreal going to 4 lanes in its entirety.

A brief history of the Maley Drive project before Council is summarized here:
  •  May 2006: Council adopts resolution #2006-644 identifying Maley Drive as a priority for federal and/or provincial infrastructure funding.
  • April 2009: Council adopts a resolution that, “Council supports and will fund the Maley Drive Extension project, and direst staff to submit the Maley Drive Extension Project Proposal to the Building Canada Fund”.
  • May 2009: application to the Building Canada Fund submitted.
  • January 2011: via Council Resolution #2011-23, Council resolves, “that Council confirms that the Maley Drive Extension Project be identified as the No. 1 priority for Provincial and/or Federal infrastructure funding as part of the Build Canada program.
  • August 2012: 3-part phasing of Maley Drive project proposed.
  • August 2012: Through resolution CC2012-289, Council resolves that, “Mayor and staff continue to pursue senior levels of government for funding to support the entire project and staff prepare additional applications for phased funding.”

The Project Before Council

Since August, 2012, the Maley Drive project appears not to have returned to Council, despite significant changes proposed to scope, scale and costs.  Specifically, the project in 2012, according to the Report prepared jointly by the City of Greater Sudbury and AECOM, identified a 3-part phased approach to project completion, totalling $93 million in construction costs along with an additional $36 million in Associated Costs, for total project costs of $129 million.  Timelines for the completion of each phase were provided to Council in the August 8, 2012 Report prepared by David Shelsted, Director of Roads and Transportation Services. Timelines for completion of all 3 phases were estimated to be between spring 2013 and fall 2016.

The scope and scale of the Maley Drive project, the phasing of the project, and the project’s anticipated costs have all changed since the August 2012 phasing presentation and its endorsement by Council.  According to the series of documents submitted to Council on November 3, 2015, phasing for Maley Drive is now being considered in two parts, rather than three; and costs appear to have risen to over $150 million (up from $129 million in 2012).

With regards to phasing, Phase 1 of Maley Drive is now identified as being that section of Maley between approximately College Boreal on Lasalle Blvd. to Barrydowne Road, with the existing section of Maley to be “rehabilitated” between Barrydowne Road and Falconbridge.  It is unclear exactly what “rehabilitation” is to occur, but this “rehabilitation” will not include upgrading this stretch of Maley to 4 lanes as contemplated in the 2008 Environmental Assessment Addendum to the 1995 Assessment.

Significant Changes to the Project - Costs

Phase 1 of the Maley project is estimated to cost $80.1 million, and is intended to be funded by the federal, provincial and municipal governments at one-third of the costs each, or $26.7 million each.  At this time, only the provincial government has committed the entirety of its 1/3 funding share, contingent upon the municipality and the federal government providing their one third shares.  It is widely rumoured that the federal government may be about to make a decision regarding its one-third funding of Maley.

That leaves the City of Greater Sudbury to find its one-third share of funding.  According to documentation available on the City’s website, the City currently has $12.2 million set aside for our one-third funding, and that options for financing will be presented to Council with regards to the remainder of the City’s one-third share ($14.5 million).

Phase 2 of the Maley project will consist of: widening Lasalle Blvd. between College Boreal and MR 35 (Elm Street); upgrading the recently rehabilitated section of Maley between Barrydowne and Falconbridge to 4 lanes, along with reconstructing a railway crossing in this area; and, installing roundabouts on Maley at Lansing, and on the newly built section of Maley Drive at Montrose.  Currently, costs estimated for Phase 2 total $70 million.  At present, there are no funding commitments from any level of government for Phase 2.

Revised Maley Drive Project Needs Council’s Direction

Given that the scope, scale, phasing and costs of the Maley Drive Extension and Road Widening project have changed significantly since August 2012 – the last time our Municipal Council affirmed its support for this project – it appears to me that the current version of the Maley project has not been one which has received Council’s explicit endorsement.

These changes to scale, scope, and phasing have led to a much different Maley project than what was originally contemplated by Council in 2009 at the time of initial requests for funding under Building Canada, and in 2011 when Council first identified Maley as it’s “No. 1 priority” project.  The phasing of the completion of the Maley project does not correspond to what was presented to Council in August, 2012.  And the costs of the current 2-Phase project have increased by approximately $30 million since 2012.

Not only has Council not authorized the phasing approach to the Maley project, it has not yet identified a means of funding for the entirety for our 1/3 share of funding for Phase 1 of the project, or how Phase 2 will be funded, if at all.

It is also entirely clear to me that the public at large have not been informed of what, exactly, the City will be getting for $80.1 million dollars – especially given the fact that at the time of the August 2012 resolution of Council, the Maley project in its entirety (from MR 35 to Falconbridge Road) was on the table and endorsed for completion by Council (albeit in 3 phases).

Does Maley Drive Project Still Make Sense?

Given this information, I believe it is incumbent upon our Municipal Council to revisit its support for a significantly revised Maley Drive project – one now consisting of two phases (only one of which has funding committed).  Council should review new assumptions with regards to whether this phased approach to funding makes sense, especially given the fact that some of the work scheduled to occur in Phase 2 will be on that part of the roadway intended to be built at the time of Phase 1. 

Council should ask whether or not it would make more sense to build the road right the first time, rather than returning to re-do the road at some point in the future.  Council should also determine whether Phase 1 continues to make sense given that 4-laning of the existing Maley Drive between Barrydowne and Falconbridge, along with grade-separation to the existing railway crossing, will only occur at some point in the future, presuming that funding should be available for the estimated $70 million in costs.

Council may also wish to consider the need for this project in its entirety, given much of the criticism which has been made in the public realm with regards to the project, along with the lack of benefits to the City of Greater Sudbury identified in the recently completed “Cost-Benefit Report” by AECOM (while monetized benefits for Maley Drive were identified by AECOM, they almost entirely will accrue only to owners of motorized vehicles, with the lion’s share going to the trucking industry – no monetized benefits to the municipality were identified in this report).

Council may also wish to consider whether proceeding with a road project of this scale based on an Environmental Assessment report prepared in 1995 and updated in 2008 continues to make sense, as it is probable that many of the assumptions related to growth and development at these times will have changed over the past 20 years.

Moving Forward

What is clear is that our municipal Council has never authorized the Maley Drive Extension and Widening project as it is presently contemplated.  As elected officials I believe that it is incumbent upon Council to provide – or not provide – a social license for this project through a further resolution of Council.  Indeed, this matter should have returned to Council some time ago, prior to changes being made to the project’s phasing.  Why Council was not requested to endorse this revised project is unclear, especially given the resolutions of Council from 2009, 2011 and 2012.

I sincerely hope that Council brings this revised project forward for discussion and decision in the very near future – and that the City keeps the public informed with regards to what, exactly, the Building Canada funding application for a portion of the Maley Drive project is expected to cover.

Steve May, Val Caron


Taking a Closer Look at Maley Drive, Part 1: Costs,” Steve May, April 21, 2015.

Maley Drive: How Not To Do A Cost-Benefit Analysis,” Dr. David Robinson, Economics for Northern Ontario, November 6, 2015.

(opinions expressed in this blog are my own and should not be considered consistent with the policies or positions of the Green Parties of Ontario and/or Canada)

Friday, November 13, 2015

Taking a Closer Look at Maley Drive, Part 4: Time to End the Subsidies

Growth and congestion go hand in hand.  The more roads we build, the more congested they become.   But for decades, traffic engineers have told elected officials and the public that we need bigger, wider and more abundant roads to ease congestion.  After decades of experimentation, it’s now become quite clear that the more roads we build to accommodate growth, the more congested our roads become (see: “California’s DOTadmits more roads means more traffic,” the Atlantic CityLab, November 11, 2015).

Building new roads doesn’t come cheap – but you might be able to justify the initial expense if there is a strong case that the benefit of having a new road will outweigh the costs.  As with any new infrastructure project, taxpayers will need to derive a good bang for the buck, usually in multiple ways. A new road can connect two or more previously unconnected areas to increase their economic interaction.  The presence of a new road could open up additional lands for development – important in areas of high growth.  And of course, a new road might help alleviate congestion, even if just for a little while.  New roads are also often touted as providing an additional level of safety for road users, although this last claim is almost always dubious, given that most new roads are built to standards which facilitate a higher level of speed – and that almost always leads to conditions which are less safe than other alternatives.

Here in Greater Sudbury, the talk of the town is the Maley Drive Extension.  This new road - running between Municipal Road 35 (Elm Street) in the west and Falconbridge Road in the east -  is to be developed in two phases, and will come with a price tag of about $130 million.  Right now, the City is seeking funding for Phase 1 of the project, and the Province has promised to chip in 1/3 of Phase 1’s $80.1 million in costs.  The federal government may very well follow suit with a 1/3 share under the Build Canada fund in the very near future.  That will leave the City to come up with about $16 million more to add to its $10+ million already in the bank to fund our 1/3 share for Phase 1.  Phase 2 is estimated to cost about another $50 million, and it remains unfunded.

For this $130 million, Greater Sudbury will get a road which will not connect currently unconnected areas to increase economic interaction (except perhaps for saving ore trucks a couple of minutes of time); will not open up any new areas to development (see: “Taking a Closer Look at MaleyDrive, Part 3: Expectations for Growth,” Sudbury Steve May, November 12, 2015); will not alleviate congestion in the long term; and will not increase safety in any measurable way.

Fighting Congestion

Regarding congestion, we might get lucky with Maley for a little while because it will essentially be a highway on the fringe of our City – similar to the under-utilized southeast and southwest by-passes are today.  But if you really want to fight congestion, there’s just one tried and true method for doing it: don’t grow.  Better yet, contract.  But that scenario doesn’t appear to be in the books for Greater Sudbury – we are expected to grow by 10,500 people over the next 20 years.

If growth is in you’re future, you’re going to have to take congestion along with it.  There are things you can do to alleviate that congestion, but studies have shown time and again that despite what the traffic engineers tell us about building bigger, wider, more numerous roads, that’s not the answer (see: “Building roads to curecongestion is an exercise in futility,” Tanya Snyder, Property and Environment Research Centre, undated).  If you want to mitigate against the impacts of congestion, especially while growing (but not only when growing), you’ve got to get people out of their cars and put them on buses, on bikes or on their own two feet.

Right now, transit, cycling and walking options are more akin to a sick joke in Greater Sudbury than they are a viable alternative to vehicular transportation for most of us.  And yet – the 2010 Sustainable Mobility Plan identified that up to 1/3 of Greater Sudburians do not have access to a car (see: “Sustainable MobilityPlan for the City of Greater Sudbury,” Rainbow Routes Association, June 2010).  Although the report’s economic analysis did not pinpoint who exactly, on an income scale, these car-less people were, I think it’s fair to suggest that largely these are people who are existing on lower incomes than the City’s median, and who may be living in poverty.

Who Benefits, Who Pays?

That’s important for a number of reason, but let me just point out one thing regarding Maley Drive here: the Cost-Benefit report which identified $11.1 million worth of benefit also says that people who don’t drive won’t receive more than a few cents of that benefit, period (see page 4 of this document, “Cost-Benefit Analysis of Maley Drive Extension,” AECOM, October 29, 2015).  The lion’s share of that benefits identified by AECOM come from a reduction in vehicular travel time – and if you don’t own a vehicle, you won’t get the benefit.  And yet people who don’t own car will see their tax money going to pay for the costs of the project.  This certainly raises some questions about the vertical equity of the Maley project in my mind – and I hope it does in yours.

The "benefit" of reduced travel time and maintenance costs for vehicle owners/operators described by AECOM can also be called a "subsidy". 

Alternative Transportation the Key to Reducing Congestion

Getting back to transit, cycling and walking – what we’re calling “alternative transportation” (which is funny if you think about it, because the very first form of transportation was walking – shouldn’t driving a motorized vehicle be the alternative?  But I digress).  We know that if we’re going to reduce congestion, the best way to do it is to get people engaged in “alternative transportation”.  And yet we have consistently failed to invest much in the way of time or treasure in facilitating these forms of transport. 

Since we don’t see people in our communities walking, we presume that there’s no need for sidewalks.  Ditto for bike lanes.  And buses, for that matter.  And it’s true: we have fairly low incidences of alternative transport use in our City.  So the perception becomes the reality. Especially when you factor in the fact that building and maintaining pedestrian and cycling infrastructure costs money – as does running buses. 

Truth is, as recently  as the 1970s, are streets were filled with people walking, especially in the
vibrant downtown part of the City.  What happened?  Well, suburbia happened – and decision-makers made driving a government-subsidized activity.  Yes, our governments actually paid people to drive their cars, and gave hand-outs to rich land developers to build subdivisions which provided people with a disincentive to walk, ride their bikes or take transit.  Folly, you say?  Well, we’re still doing it today.

Subsidized Roads

Who pays for roads like Maley Drive?  For the most part, taxpayers do.  At the municipal level of government, the revenues which pay for our roads come largely from property taxes and provincial revenue transfers.  Yes, it’s true – user fees also make up some of those revenues, including taxes collected on gasoline.  But when it comes to roads, road users are nowhere near paying the full costs of use.  Throw free parking into the mix, and it quite quickly it becomes apparent that society subsidizes road use.

We like to think that government subsidies are going towards things which make society better for most people.  Good roads make life better for everybody, no?  For the drivers who use the roads, for people who take the bus, for anyone who shops at a grocery store where goods are trucked in.  Clearly, there’s a public good inherent in roads.

But at the same time, the proliferation of roads has led to a more sedentary society with contingent higher health-related costs.  More roads has led to congestion in our communities which takes time away from our families, leading to unhappiness.  Roads have led to building cost-ineffective low density suburban communities where the provision of services by governments isn’t sustainable. And of course roads have led to a transportation system comprised almost entirely of fossil-fuel burning motorized vehicles that contribute more to Canada’s greenhouse gas emissions than any other sector.  With this in mind, it’s difficult to make the case that roads are actually a net good to the public.

Net Public Good

That’s not to suggest that we shouldn’t build roads.  It is, however, to suggest that perhaps its time we, as a society, began evaluating whether it’s in our public interests to continue to subsidize the users of our roads to the extent that we’ve been doing for quite some time now.  If a net public good can’t be demonstrated, why are we continuing to throw tax dollars at the project?  Maybe it’s time for users to pay more for what they’re using, and to give the rest of us a break.

As taxpayers will be on the hook for the capital and operating costs of Maley (in other words, all of the costs), whether those costs are just the $80 million identified in AECOM’s Cost Benefit Report, or whether they are the approximately $130 million needed to actually complete Maley from MR 35 to Falconbridge Road, the fact is that all of the beneficiaries that AECOM has identified will be receiving their benefits in the form of a subsidy from the government – except those who will benefit from lower greenhouse gas emissions (which, frankly, is a complete joke.  See what Laurentian University Professor of Economics, Dr. David Robinson, has to say about Maley’s benefits on emissions: “Maley Drive: How Not to do a Cost / Benefit Analysis,” Economics for Northern Ontario, November 6, 2015).

Cost Sharing

With Maley Drive, AECOM’s biggest beneficiaries are going to be the trucking industry.  While motorists will receive a slightly larger share of those costed benefits ($8,464,000 in travel time and vehicle operating cost savings – about 51%), that share will be distributed among a much larger pool of participants.  Truckers will receive about $4,168,000 in savings, or 49% of the benefit, - but those savings will be split among a much smaller group – only about 1,000 to 1,500 users a day (and likely much fewer at peak times – maybe only 100 or so during rush hour).  Those are individual trucks, of course.  Many of these trucks are owned by just a small number of operators – so that’s where the benefit will accrue.

Given that the local trucking industry will be receiving about half of the monetized benefit of the public’s subsidy of Maley Drive, and given that the remaining benefits are of questionable utility to the public, perhaps it’s time that the public turned to the beneficiaries to help pay for some of these costs.

Preposterous, right?  We can’t ask the trucking companies to pay for the Maley Drive Extension.  We can’t ask users of our roads to pay for their use.  Who would ever think of such a thing?  They may do that in Europe or the United States, or maybe even in Southern Ontario with the 407, but this is Sudbury – we’re different.

Well, actually, we’re not that different after all.  As for who would ever think about asking users to pay for new infrastructure from which they will primarily benefit – guess what?  Greater Sudbury contemplates doing just that with specific regard to Maley Drive.  Or at least we did at one time.  The September 2005 City of Greater Sudbury Transportation Study Report, item #12 on page 112, indicated that funding will be provided through negotiated cost-sharing agreements with major industries when those industries benefit from the transportation improvement being proposed.  Right now, it’s the 2005 Transportation Study which is in effect in our City, as the more recent Transportation Master Plan has yet to be accepted by Council.

Maley - Those Who Benefit Should Pay

So, AECOM produced a Cost-Benefit report which showed that the trucking industry will receive a significant monetized benefit from the construction of the Maley Drive Extension.  Given that the City has since 2005 contemplated entering into cost sharing agreements with major industries where those industries receive a benefit from a transportation improvement, one can’t help but wonder what the status of those negotiations might be.  How much are the beneficiaries of Maley chipping in for the costs? They’re going to receive a benefit – what are they going to pay for that benefit?

Or, despite what’s written in the 2005 Transportation Study Report, does our City expect that taxpayers alone will be on the hook for this major infrastructure project which will provide limited benefit to taxpayers, and a more significant benefit to a narrow set of business users, namely the trucking industry?  Why should taxpayers subsidize this road when the identified benefits to the community will be marginal compared to costs - and probably non-existent when you factor in opportunity costs (what we'll be missing out on doing because we're paying for the Maley folly).

Greater Sudbury - Future Development

Some believe that Maley Drive may be the lynchpin for other new roads, such as widening MR 35 to Chelmsford and building the Barrydowne Expressway from New Sudbury to Hanmer.  In these grand visions, a multitude of new lane kilometers will open up the Valley (East and West) to new residential, commercial and industrial development.

Unfortunately, that development just isn’t going to come.  With enough lands already set aside to
meet our development needs for half a century, we don’t need to build more roads to facilitate new development.  Yes, the outlying areas of the City will grow – in fact, the Hemson Consulting report forecasts that those areas will continue to grow through to 2036 at the same rate that they’ve been growing, and approximately two thirds of new residents will reside outside of the former City of Sudbury.  But in terms of real numbers, we are talking about just 10,500 people – and only several thousand new households.  These aren’t big numbers, and they can easily be accommodated on lands already set aside for development in both the former City of Sudbury and in the outlying areas.  The presence or lack of presence of Maley Drive will not change a thing.

However, should we really expect two thirds of new residential growth to 2036 to occur outside of the former City of Sudbury? This assumption may need to be tested, although I understand why Hemson has included it in their report.  If the future was going to be like the past, then the trend seems a logical one.  But the future isn’t going to be like the past – we know that.   As we become even more concerned about the costs of development, are we going to continue to subsidize a suburban built form? 

Prosperity: Getting Prices Right

We would be wise to take a closer look at where the lion’s share of anticipated growth in our City should be occurring – with an eye to making our City more livable while simultaneously keeping our collective costs down.  Right now, there’s a prevalent misunderstand at large in our community in which citizens believe that property taxes from the outlying areas are subsidizing the former City.  This misunderstanding, arising from an extremely limited discussion around area rating back at the time of amalgamation, has led to considerable resentment from those living in the outlying areas.
At the time of amalgamation, it was decided that property taxes would be area rated depending upon the level of service that parts of the new City would be receiving for fire protection and transit.  At the time, it was recognized that it would be prohibitively expensive to extend the level of service enjoyed by the former City of Sudbury to the outlying areas for these two services, and as a result, a formula was developed whereby outlying area property taxes were – and remain to this day – lower than those of inner city taxpayers.

Some – mainly those in the outlying areas – have always believed that this area rating didn’t go far enough, given the perceived lower level of services that they continue to receive from the City. 
Others recognize that the chances are the opposite is happening: that inner city ratepayers are subsidizing those living in the outlying areas.  This observation is not based on any specific study of the City of Greater Sudbury, but rather based on studies from a multitude of areas which compare the costs of suburban and exurban living to those of urban areas, and which show on per capita basis, the servicing costs of suburban and exurban living are much higher for municipalities.  So unless Greater Sudbury is different from just about everywhere else, our reality is that our municipality experiences higher costs servicing the outlying areas than the inner city – but taxpayers in the inner city are paying a higher share of taxes than those in the outlying areas!

This is an example of perverse pricing.  And it is examples like this which we can expect to see turned on their heads going forward into the 21st Century.  Getting the price right is going to become extremely important to decision-makers.

For Whom The Road is Tolled

For Greater Sudbury, that means that we will likely see a shift away from the desirability of developing in the outlying areas in preference to areas within the former City.  With new policies promoting second suites, and smaller, denser and (in theory) more affordable built form in locations which are transit supportive and include cycling and pedestrian infrastructure, we can expect the former City’s predicted share of development will be more than the 1/3 forecast by Hemson.  And this will especially be true if we end the subsidies for suburbia and move to a user-pay system for servicing – particularly for roads.

While municipalities in Ontario do not currently have the authority to institute road tolls (only the province can do this), you can bet at some point in the not-too-distant future, as part of a larger suite of municipal revenue-generating powers, cities will get these powers.  We often think of tolls as being collected in person or electronically at a booth or gate of a highway, but there are many ways in which users of road infrastructure can be made to pay for the actual costs of their use (see: "We Can't Get There From Here: Why Pricing Congestion is Critical to Beating it," Canada's Ecofiscal Commission, November 2015).  New technologies finding their way into vehicles right now will be able to facilitate the collection of fees for each lane kilometre driven, and raise and lower those fees depending on the time of use.

We’re already smart-metering our energy use – one day soon it may very well be that we’ll have smart meters in our cars as well.

Turning the Future on Its Head

Let’s be clear: this approach to paying for our roads will turn the current situation on its head, because it will end the subsidy which road users have enjoyed.  By having users pay for their use, we’ll actually likely decrease congestion, as our roads are currently experiencing excess demand thanks to the subsidy.

When you pay people to drive, that’s what they’re going to do.  And that’s what we’ve been doing. We can’t afford to keep doing this – not only is it not equitable, but the “net public good” which we derive from subsidization is questionable at best, and likely non-existent (see: “The True Costs of Driving,” the Atlantic, October 25, 2015).

Those looking at Maley being the first in a series of new roads in our City, ostensibly to fuel suburban growth in the outlying areas, need to consider what the future is going to be like.  The pursuit of a 1950s-style dream of high-speed roads that open up vast tracts of new land for low-density single-family homes isn’t in the cards for the future we’re going to have.  That’s not to say it couldn’t happen – if our decision-makers want to make foolish and fiscally ruinous decisions to build more roads and maintain them over time when none are demonstrably needed, than it very well could happen.

But if we really want to get our financial house in order, and maximize our opportunities for prosperity going forward, we have to change the way that we spend public money.  If we choose to subsidize a project, program or activity, we have to be certain that we receive a net public benefit from our subsidy.  Making the case for new roads, particularly in a low-growth environment, is one which will fail time and again the test of net public benefit.

Getting Our House in Order

We here in Greater Sudbury are already going to be facing numerous, difficult challenges going forward, many as a result of past land use decisions which created our sprawling City.  As much as we might like, we can’t go back and change time – or wipe the map clean like you can in Sim City.  We’ve got to live with what we’ve got, and retrofit suburbia as best as we can.  But there are a number of things which we know we must not do – and perpetuating an unsustainable, fiscally unsound built form has to be at the top of that list.  One of the ways of accomplishing this is to stop new roads that we don’t need.

Maley Drive, like many of the road projects City engineers have talked about for decades, has no future – or rather, our future should not have Maley Drive in it.  If there actually is a benefit to be derived from Maley, it’s one which will accrue almost entirely to as specific industry.  Taxpayers should not be asked to foot the bill – upwards of $130 million – for a road that we don’t need and can’t afford, and is in the wrong place for development which isn’t going to happen anyway.  If the beneficiaries of the road believe that there is value in its construction, let’s figure out a way to make sure that they are the ones on the hook for the lion’s share of the costs – either through cost-sharing agreements as contemplated by the City through the 2005 Transportation Study Report – or through user fees.

(Opinions expressed in this blog are my own and should not be considered consistent with the views and policies of the Green Parties of Ontario and Canada)

Thursday, November 12, 2015

Taking a Closer Look at Maley Drive, Part 3: Expectations for Growth

If you’ve read a few of my blogposts in the past, you may have the idea that I’m not particularly enamoured with the idea that growth = prosperity.  I have been critical of the growth paradigm for quite some time, and recently expounded on why I believe that development which is sustainable is better for prosperity in our communities than pursuing a growth-based agenda (see: "Sudbury column: Sustainability must be focus of development," the Sudbury Star, February 7, 2015).

But that doesn’t mean that I believe growth shouldn’t happen.  It just means that we have to do a much better job of managing it than we’ve done in the past, especially with regards to how we build our communities.  We often hear that all new development is good, because it will increase municipal assessment.  And sure, that’s a benefit – but we often choose to ignore the costs of new development – particularly those costs related to hard and soft services, like sewer, water, roads, libraries, social services, etc.. 

For too long, we’ve got the price of development wrong, and as a result, we’ve ended up with one of the most expensive forms of development to sustain: suburbia.  I've written a fair bit about about suburbia recently, (see: "Taking a Closer Look at Maley Drive, Part 2: Project Suburbia," Sudbury Steve May, July 22, 2015), so I won't go on about it much more here. Suffice it to say that Greater Sudbury was not alone in pursuing suburban dreams in the 20th Century.  But we now know that the true costs of suburban built form just aren’t sustainable.  With this knowledge, it’s incumbent upon decision makers who choose to pursue growth to do so carefully – and to try to minimize public expenditures over time.

Greater Sudbury and Growth

I believe that Greater Sudbury will grow.  The City produced a Growth and Development report in 2013 as part of our 5-year Official Plan update (see: "Growth Outlook to 2036, City of Greater Sudbury," Hemson Consulting Ltd., May 2013).  This report included two scenarios – one of which was based on a legitimate model (that would be the "Reference Scenario").  That forecast indicated that the City would likely grow by 10,500 persons over the next 20 years.  That’s very modest growth for a City of Greater Sudbury’s size – but it is still growth.

Beyond 20 years, who really knows?  Those who analyze demographics suggest that our global population should peak at around 9 billion people by mid-century, and slowly start to decline thereafter.  Others suggest that we’ll likely never reach 9 billion due to a lack of resources (like food and water) needed to sustain that level of population.  Others believe that with new technological breakthroughs, the planet can sustain a much larger population.

What’s likely for Greater Sudbury, however, is that we will continue to experience modest growth, thanks to a relative abundance of mineral resources.  However, the mines of the future certainly won’t employ the same number of people as they do today, due to automation (yes, we’re being taken over by robots!  Well, at least our jobs are!).  Nevertheless, given a number of other economic development opportunities (like our mining & supply cluster, our northern health hub initiative), coupled with the fact that we find ourselves situated in a relatively stable geography (which will be an important benefit, I think, the deeper we get into the 21st Century), I believe that our City willl likely continue to grow.

And that’s why the decisions we make today about the shape of our City are even more important than they would be in a stable population scenario.  We know we’ve made a lot of costly errors in the past. It’s time that we learn from our errors – and those made elsewhere – and start creating the City that we’ll need to achieve personal and economic prosperity in the 21st Century.

Maley Drive – No Role in Future Prosperity

So, let’s start with Maley Drive.  Or rather, let’s start by tossing out the idea that Maley Drive has any significant role to play in our future prosperity.  The idea to build Maley started with the mining companies back in the 1980s at a time when they were looking to maximize their economies of scale.  Maley was originally conceived as a private road, but when INCO and Falconbridge ultimately refused to step up, they turned to the municipality and made a persuasive case that there would be mutual benefit in Maley.  The story went as follows: If the City built the road, the City would benefit by attracting new jobs, reducing vehicular congestion, and opening up new areas for development.  Unfortunately, that story is largely proving to be a work of fiction.

Maybe Maley made sense back in the 1980s and 1990s, at a time when decisions were made with more of a carefree attitude – one that didn’t assess long-term costs, and instead embraced unfounded assumptions and fact-free analyses.  Am I being too critical?  Consider the costs associated with the suburban built-form, and I’ll suggest that I’m likely not being critical enough of past decisions.  These costs were simply not a part of any assessment on which decisions were made.

20+ years ago, when the price of gasoline was 60 cents a litre, expectations for future growth in what became Greater Sudbury were boundless, largely because nobody apparently ever did a proper regional growth study.  This was at a time when the former Town of Valley East was setting aside a massive area for subdivisions – enough to accommodate twice as many people or more than currently live in the Valley today.  Planning in Rayside Balfour, Sudbury, Walden and Nickel Centre doesn’t appear to be much better, as large tracts of land were set aside at that time for development which just didn’t come.  Rather than planning for what was realistically like to happen, municipalities tried to be “development ready” by maximizing areas set aside for growth, on the off chance that something might happen – kind of like playing the lottery with land.

On the day of its creation in 2001, the amalgamated City of Greater Sudbury inherited an abundance of land set aside for development, largely on the fringes of existing urban areas.  There were also numerous subdivisions which had been given the nod by local councils, but which to this day haven’t yet been built out.  Greater Sudbury also inherited a number of far-flung undeveloped rural lots – almost enough on their own to accommodate all anticipated growth for the 20 year horizon of the amalgamated City’s first Official Plan, produced in 2005.

No New Lands Needed to Accommodate Projected Development Beyond 2036

Fast forward to 2015.  The recently prepared growth and development report identified a number of interesting things about Greater Sudbury’s land supply.  Even with projected growth in the unrealistic “High” growth scenario (22,000 people over 20 years), the City currently has a 43 year supply of lands set aside for residential development.  Further, the City has a 54 year supply of employment lands (see: "Growth and Settlement Policy Discussion Paper," City of Greater Sudbury, June 24, 2013).

What this means is that the City does not need to set aside any additional lands for anticipated development – not for about half a century at least (likely more, given that these figures pertain to the unrealistic High growth scenario).  That means that unless lands today are already designated for residential development in the City’s Official Plan, you can pretty much forget about seeing much in the way of development occur on other lands, beyond the odd lot being created.

Most of these designated lands are located within settlement area boundaries.  These boundary lines on Official Plan schedules actually have a lot of real-world power.  They define where growth will occur – and where it won’t.  If you want to build a new subdivision but you discover that your property is on the wrong side of the settlement line, good luck to you – because your subdivision isn’t going to happen.  In the past, it may have been somewhat easy to move those lines, especially in areas of high growth.  Today, with an ever-tightening planning regime based on mounting evidence that the “flexible” urban planning of the past isn’t economically sustainable, those lines have real power.

Maley Drive - On the Fringe

Where is the proposed Maley Drive extension located in relation to these settlement area boundary lines?  Interestingly enough, most of Maley Drive – existing and planned – runs along one of these lines – the northern growth boundary of the former City of Sudbury.  To the south of Maley, lands have been designated for urban development for decades.  Indeed, lands have been slowly developed in these locations, and subdivisions like the Villages of Montrose which were approved back in the 1990s are now just starting to be built.

To the north of Maley, however, lands are not designated for development.  They are intended by the City’s Official Plan to remain rural.

Given the current abundance of land that the City of Greater Sudbury already has set aside for development, what are the chances that the presence of a new 4-lane Maley Drive running between MR 35 in the west to Falconbridge Road in the east will open up these northerly lands for development?  Usually the presence of new transportation infrastructure puts pressure on adjacent lands for development. We’ve seen that time and time again when we drive south into the Greater Toronto Area.  In some cases, it’s taken years – decades, even – for development to occur.  Think of how long it’s taken for development to migrate north from Highway 7 in Vaughan to where it is today, up past Major MacKenzie.  Canada’s Wonderland, when it was built, was located in the middle of nowhere.  Now it’s in the heart of the City.

Of course, the Greater Toronto Area has been the fastest growing area in Canada these past 30 or 40 years.  What’s going on there can’t be compared to what’s happening in Greater Sudbury – at least not in terms of scale. 

Protecting Important Resources from Incompatible Development

But even should growth continue to occur in Greater Toronto – as it is planned to do – will we ever see subdivisions being built on top of the Holland Marsh?  Will development creep up through the Greenbelt – another serious set of lines laid out on a land use schedule – and obliterate an area of national agricultural importance?  Highway 400 plows right through the Holland Marsh and the Greenbelt – why hasn’t its presence led to development there?

I think if you were a betting person, you’d place your wager on Holland Marsh (unless it dries up and blows away, that is  - which remains within the realm of possibility, thanks to resource depletion, mechanized agricultural practices and climate change – but let’s not go there today, ok?).  Places like Holland Marsh have certain levels of protection due to their economic importance.  The Greenbelt in its entirety is another one of those places.  Although we often think of the Greenbelt as a natural area, the fact is that it’s one of the richest areas of agricultural activities in the nation – maybe not as rich as the Holland Marsh acre for acre, but still very important.

I realize that you’re probably thinking that’s all well and fine for southern Ontario.  Maybe Holland Marsh would have been swallowed up by now if it were just a little further south.  But Greater Sudbury doesn’t have anything like Holland Marsh, much less in the path of Maley Drive.

Or do we?

The Mining and Mineral Reserve

What are those lands north of Maley Drive (those ones with the hatched lines through them in the Official Plan's land use schedule)?  Just undeveloped lands filled with beaver ponds, right?  Certainly when you travel along Municipal Road 80 between Sudbury  and McCrea Heights, you may have been left with the impression that filling in those lands along MR 80 might make good sense – the road is already there, why not build a few more things like that lonely Kubota dealership?

Well, development hasn’t happened there because those lands are Greater Sudbury’s Holland Marsh.  Not because of their marshy nature (although there are Conservations lands north of Maley that are set aside for flood control), but because those lands form an area of economic significance in the City. 

Visualize that meteorite (or is it an asteroid now?) striking the Sudbury Basin those billions of years ago – think of where those lands north of Maley are in relation to the impact crater left behind.  The Valley is in the middle of the crater. Sudbury, for the most part, is located along the southern boundary of the crater’s lip.  That means that Maley runs along the southern boundary of the crater.

And I think most of us here in Greater Sudbury know what one finds when they start to dig down a little ways along the crater’s rim, right?  I think it’s fair to say that Sudbury, as we know it, wouldn’t be here today if the crater’s rim didn’t contain some of the wealthiest deposits of minerals in the world.

Mining in the Sudbury Basin actually started not too far from where Maley Drive is expected to be built.  If you look at the City’s Official Plan - Hazard Land Schedule, you can see the numerous mining hazards that line up east to west in lands north of Maley and south of McCrae Heights.  Some of these hazards are from exploration, while others are actually past-producing mines.  Those lands north of Maley represent potential wealth and prosperity for our community.

It’s with this in mind that the provincial Ministry of Northern Development and Mines, along with the City, have recognized that these lands need to be preserved for their future development potential as mineral sources.  As a result, Greater Sudbury has established the Mining and Mineral Reserve land use designation in its Official Plan, and constructed policies which essentially tell interested non-mining developers to go fly a kite. 

Pure Fiction: Maley Drive = Growth

Building Maley along the boundary line between urban development to the south and the Mineral Reserve to the north won’t actually have much of an impact on either area.  The amount of land potentially taken out of production from the Reserve will be minimal.  As for the lands to the south, there might be some additional pressures to speed up development there, with more road access provided, but the fact is that these lands have already been set aside for development – that’s not going to change.

All of this is important to keep in mind when it comes to Maley Drive because the public is being told that building Maley will lead to certain favourable outcomes.  A recent Cost-Benefit report prepared by AECOM (starting at page 4 of this document, "Cost-Benefit Analysis of Maley Drive Extension - Phase 1," AECOM, October 29, 2015) looked at some of the expected benefits, and even monetized those benefits so that they could be compared to the costs of the roads project.  What AECOM revealed is that building Maley will lead to a reduction of vehicle hours travelled at peak times of the day, and that there will be expected savings in terms of time (which they’ve monetized) and wear and tear on vehicles.  AECOM also looked at how carbon pollution could be curbed and costed.  But they didn’t look at Maley’s potential impacts on economic development – which was unusual for a new road project which, the public has been told, is being considered in part because it will facilitate growth.

How many in our community have trotted out the “growth” argument as a reason to build Maley?  The Chamber of Commerce certainly hopped on that bandwagon (see: “Letter: Chamber supports Maley Dr. extension,” the Northern Life, March 5, 2015), as has my Ward Councillor.  But the reality of the situation is quite different.

Let me be clear: Building Maley Drive will not open up any areas for new development.  It will not happen, due to the presence of the Mineral Reserve, and the abundance of lands already set aside in our communities for growth which hasn’t happened yet and may never happen.

Simply put, if you want to build a road to facilitate growth, Maley Drive is in the wrong location.  If you want to spend $80 million (or is it up to $130 million now with Phase 1/Phase 2 - see: "Maley project feasible: Report," the Sudbury Star, November 5, 2015) on a transportation project that will help facilitate new development in our communities, Maley Drive isn’t it.  Better to widen MR 80 to 6 lanes or develop the Barrydowne Expressway if you want to facilitate growth in the Valley – but honestly, if you’re concerned about the costs of growth as I am, it would clearly be better to invest our scarce resources in projects which will make our City more livable for people rather than those which just shave a few seconds of time off of travel for cars.

If Growth is the Goal, Maley Makes No Sense

Maley Drive may make it faster for cars to get to their destinations – but it certainly won’t do anything to make our City more livable.  In fact, it will do the opposite – because by “investing” that money in a project for cars and trucks, we won’t have that money available to invest in livability.  I do believe the traffic studies which show a reduction in time for the travelling public of a few dozen seconds a day.  I understand that if you add up all of those seconds to make a number of hours throughout the year, and then put a price of $16 on each of those hours, multiply that by the 30 year lifetime of the road and multiply that by the number of cars travelling on the road, you may end up with a figure of $11.1 million and like the AECOM Cost-Benefit report does, you can pretend that those numbers have real value – but at what cost that value?  The cost of not investing in other, more worthy and appropriate infrastructure projects, that’s what.

Unlike me, you may want the City to grow faster than we’re prepared for it to grow.  Maybe you’ve got an aspirational number in mind – say it starts with 10,000 jobs in the next 10 years (see: "City sets job target for Sudbury," the Sudbury Star, November 4, 2015) – which means that we’ll need to add about 30,000 people to our population over the next 20 years – 10,000 more than the unrealistic Hemson  “High” growth scenario contemplates, but still a number which we can accommodate on lands which are already set aside for development.  Say that’s your goal – and you believe that it’s achievable despite all of the evidence to the contrary.

Well, if that’s your goal, you should be shocked and appalled that we are about to “invest” $80 million ($130 million? Maybe more?) in Maley Drive given that building this road will do nothing to facilitate development.  It won’t open up any new lands.


Oh, but what about those $11.1 million worth of benefits?  That’s not peanuts.  If we add 30,000 new people, than they’ll save even more travel time which equals more money, right?

Wrong. The benefits identified above are based on the realistic growth scenario of adding just 10,000 persons to Greater Sudbury’s population over the next 20 years.  The problem is that those benefits will decrease if there are more people, because that means more people driving more cars – that’s called congestion – and fighting it is one of those reasons that the City is so hot to trot to build Maley in the first place. 

If you’re concerned about congestion as many in our City appear to be, keeping new cars off the road should be a priority, rather than building new roads.  While that may appear impossible if we’re going to grow our community by 10,000 people or 30,000 people, it isn’t.  Fact is, the more roads we build, the more congested our transportation system ultimately becomes, as induced demand builds up over time.  In the past, before we had facts and figures to show how induced demand works, it may have seemed counter-intuitive to suggest that building new roads leads to more congestion, but really there’s no argument about it now: we know that it works that way.  So if you really want to fight congestion, it’s important that you pick the right ground for your fight – and road building isn’t it. 

One last thing about Maley and congestion.  If fighting congestion is your thing, Maley is in a decent location, because of the presence of the Mineral Reserve.  If lands to the north can’t be developed, there will be less congestion over time than if those lands were developed.  Those 10,000 people or 30,000 people won’t be living as close to Maley as they might be, thanks to the Mineral Reserve.  And while it is true that there will be growth in the Valley (east and west) and Garson, there will still be alternative routes like Lasalle for drivers to take.  Yes, Valley people will add to congestion on Maley, and yes, induced demand for vehicular travel will lead to congestion, but congestion may not be as significant if lands immediately adjacent to Maley were made available for more development.  That’s not an argument in favour of Maley, however – it’s just one that acknowledges that Maley will likely act more as an expressway for people living in Garson and the Valley than it will as an economic development opportunity for growth.

Sustainable Development Needed Going Forward

Greater Sudbury will likely experience very modest growth over the next 20 years – adding just an additional 10,000 persons to our population.  Going forward into the 21st Century, it’s becoming increasingly apparent that cities like Greater Sudbury need to start doing a better job of planning for their expected circumstances, rather than using “wishful thinking” as a starting point.  Greater Sudbury already has significantly more land set aside for development than will be needed in the next half century.  If we are going to spend upwards of $80 million on infrastructure, we ought to make sure that the project we’re funding is one which will meet our needs over the long term.

Maley Drive isn’t that project.  Building Maley Drive will not make our City more livable for current and future inhabitants.  It will not spur economic development.  It will not facilitate growth. It will not make our roads safer.  It may initially save motorists some time on their daily travels, and as a result, there may be some sort of minor economic advantage, unless that’s offset by rising property taxes to pay for the Maley folly.

We know that if we want to attract new businesses to our community that we have to do a better job of making our City a desirable location for both businesses and for their employees.  Maley Drive won’t help in any tangible way – except maybe for the trucking industry.  New mines are not going to come into being dependent upon whether or not Maley is built.  The decision to locate or not to locate a new business in Greater Sudbury is not going to be contingent upon whether or not the existence of Maley Drive will shave a minute’s travel time off of one’s journey around the City at peak hours.

The Opportunity Costs of Maley Drive

What will influence the decisions of businesses to locate within our community is the business environment (property taxes, users fees, and the availability of municipal services), and the presence of an adequate workforce.  Maley Drive will not lower our taxes – if anything, by building Maley Drive, we will almost certainly guarantee that there will be higher taxes, for a number of reasons. First off, there will be no new development as a result of this project from which the City can generate additional revenue.  Second, the municipal infrastructure deficit has continued to grow as a result of the City stashing away millions of dollars in development fees to fund Maley Drive.  These development charges should be going towards paying for the infrastructure we need to make our community more livable.  Instead, the City has been collecting these charges from developers and setting them aside to help fund Maley Drive.  How then will we pay for the upgrades to infrastructure that we have been ignoring?

By focusing our fiscal efforts on Maley, our real infrastructure needs are being left unattended. And I don’t just mean repairs to bridges, stormwater systems, sewer and water, or upgrading other roads.  I mean that we know that the world is changing – we’re moving away from a fossil fuel-powered economy and towards a decarbonized economy.  In that sustainable, decarbonized economy, the way in which cities operate will be much different from how they did 20 years ago.  We’re already in the transition away from fossil energy, albeit at the beginning.  To remain competitive and prosperous, our cities will have to reduce our reliance on fossil energy for transportation and heating.  With an economy slowing down due to a number of global factors, we can expect that the  fiscal resources of governments will remain scarce – and that governments will go looking for revenues by ending subsidies to fossil fuels and other sectors where “public benefit” is dubious. 

Our cities will become denser and more walkable.  Transit will take on a much more significant role than it currently does.  The motoring public will be expected to pay more for the services which they use at the expense of the rest of us – perhaps in the form of tolls, higher vehicle registration costs, taxes on gasoline, congestion charges or through some other means.

With this in mind, even those small benefits predicted by AECOM related to congestion will have little to no impact in terms of being actual, tangible benefits – even for the trucking industry.  The only long-term impact that Maley will have on Greater Sudbury’s prosperity will be fiscal: servicing the debt accrued by the City to fund its share of the Maley project, coupled with operating costs for a road from which no benefit is derived.

If that sounds like ‘fiscal suicide’ to you, you’re not alone (see: "Sudbury letter: Maley Drive fiscal suicide," the Sudbury Star, March 4, 2015). Our Council needs to get the message that we're not prepared to sink the City's scarce financial resources into a road that we don't need and can't afford, built in the wrong place to facilitate growth that isn't going to happen.  Please share your thoughts on Maley with your Councilor today.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the views and policies of the Green Parties of Ontario and/or Canada)

Friday, November 6, 2015

Trudeau's Liberals Behaving Badly On the Day Obama Kills Keystone

On the day that U.S. President Obama nixes the Keystone XL pipeline because of concerns related to climate change, Canada's new Liberal government is falling all over itself to tell Canadians that we'll still be pursuing new pipelines. Prime Minister Trudeau is "disappointed" with the U.S. decision (see: "Justin Trudeau 'disappointed' with U.S. Keystone rejection," CBC, November 6, 2015). Foreign Affairs Minister Stephane Dion insists that Canada "has no choice" but to develop the tarsands (see: "Keystone XL rejection proves need for sustainable oilsands development: Dion," the Canadian Press, November 6, 2015).
What should be coming increasingly clear now is that the Liberals reallyhave no plan or credibility when it comes to climate change. This talk of "sustainability" is clearly greenwashing - they don't understand the meaning of the word. Stephane Dion of all people should know very well that the tarsands cannot be developed sustainably.
Environmental groups praised Obama's decision today.  Of course it was the right one to make, but some of those very same environmental groups urged Canadians to vote for the Liberals in the recent election - or embraced strategic voting initiatives which accomplished the same result.  These environmental groups need to take a look at themselves today and ask whether their focus on getting rid of Harper was worth installing a Liberal majority government in his place.  
Canada will now waste more time, money and energy pursuing fossil infrastructure thanks to Trudeau and his kinder, gentler Liberal government.  Environmental groups that helped elect Trudeau will find themselves on the frontlines opposing his policies. And those pipelines? They're not going to get built - which is the good news - but we are all going to waste our energy, our own scarce personal resources, opposing our new Liberal's government bid to get dirty oil to tidewater and expand the tarsands enterprise.
I had hopes that maybe Mr. Dion would bring some sanity to a Trudeau-led cabinet.  I have those hopes no more - that sure didn't take long.  To insist that Canada doesn't have a choice as to whether we expand the tarsands is just so offside and unrealistic - I'm not sure what more there is to say about it.
Mr. Dion, Canada does have a choice - and it's one that we must make, and I'd argue we'd be better off making it sooner rather than later. It's time to begin phasing out fossil infrastructure. Building new pipelines to facilitate the growth of the tarsands isn't the answer. We have a choice - we can stop making stupid, wasteful choices, and start making smart ones.
Maybe we'll have to wait four more years for real action on climate change.  How long can this go on?
(opinions expressed in this blog are my own and should not be interpreted as being consistent with those of the Green Parties of Ontario or Canada)

Thursday, November 5, 2015

The Incredible Shrinking Road: Staff Pulls a Fast One on Council with Shorter Maley Drive

It’s been a big week in Greater Sudbury for Maley Drive watchers like me.  Back in September, our municipal Council asked staff if it could review certain documentation which had previously been brought forward to past Councils which those Councils then used to support prioritizing the Maley Extension as the #1 roads project in the City.  Council also asked for a Cost / Benefit analysis of the project.

On Tuesday night, a 57-page documents package was tabled for Council’s review.  This 57-page included a new (October 29 2015) Cost/Benefit Report prepared by economists working for the Engineering/Design firm AECOM (see: “Request for Recommendation – Maley Drive Extension and Widening Project,” City of Greater Sudbury, November 3, 2015). Along with concluding that the monetized benefits of Maley would outweigh the capital costs based on AECOM’s analysis (which I provided some initial thoughts on here – see: “Some Initial Observations on the New Cost / Benefit Analysis for the Maley Drive Extension,” Sudbury Steve May, November 3, 2015), there were a few unexpected alligators wading around in the weeds – including a further phasing of the project.

Today, the Sudbury Star is reporting that Mayor Brian Bigger was “not aware of phase two” and that “he admitted ‘there may be completion to a different length of road construction that would add up to more dollars’" as well as supplemental elements that could drive up the price tag.” (see: "Maley project feasible: Report," the Sudbury Star, November 5, 2015).

In other words, City engineers have cut back on the scale of the project while nobody was looking.

A Brief History of Maley Drive - Scope and Funding

In a blog of mine from earlier this year (see: “Taking a Closer Look at Maley Drive, Part 1: Costs,” Sudbury Steve May, April  21, 2015), one of the things I looked at was how the scale of this project has shrunk in size over time, as costs have risen.

Maley Drive - the 2009 Version

Back in 2009, the City uploaded a pretty cool video of the Maley Ring Road project to YouTube.   At that time, a four-laned Maley Drive was planned to link MR 35 (Elm Street) in the west to the intersection of the Kingsway / Highway 17 in the east.  However, it was understood that the eastern portion of the ring road – that part from Falconbridge road looping southeast to the Highway 17 by-pass – just wasn’t feasible at present.  Instead, funding applications were applied for to senior levels of government only for that portion of Maley between MR 35 and Falconbridge.

Also in 2009, in a report dated April 23 2009, prepared by Greg Clausen, General Manager of Infrastructure Services, Council was urged to submit the Maley Drive Extension project to the federal Building Canada Fund.  Successful applications under Building Canada would see costs shared between federal/provincial/municipal governments at a rate of 1/3 each.  Total project costs weren’t identified in this report, but the report indicated that the City would be on the hook for $41 million in total – which includes the City’s 1/3 share along with other “ineligible” costs.

Maley in 2011 - Starting to Bloat

On January 12, 2011, Council reconfirmed its commitment to Maley Drive after reviewing a report dated January 6, 2011, prepared by Robert Falcioni, Director of Roads and Transportation Services.  In that report, we discover that the total 2009 costs for Maley Drive were estimated to be $115.  What’s not clear is whether this amount also included “ineligible costs”.  There is no reference to the amount the City applied for through Building Canada.

Maley in 2012 - 3-Part Construction

Fast forward to August 2012.  In a resolution of Council numbered CC2012-289, our previous Council reaffirmed its commitment to Maley, and resolved “THAT the Mayor and staff continue to pursue senior levels of government for funding to support the entire project and staff prepare additional applications for phased funding.”

What was the “entire” project in August 2012?  Resolution CC2012-289 refers to a report (also included in the previously linked 57-page documents package) dated August 8, 2012, prepared by David Shelsted, Director of Roads and Transportation Services.  This August 8th report outlined a project costing $129 million, whose scale consisted of a 4-lane road from MR 35 in the west to Falconbridge Road in the east.  That report also identified that the City had been committing funding for the Maley project from the Capital Roads budget since 2008 for its anticipated 1/3 municipal share.  At this time, the project was broken down into 3 parts.  Part 1 – between MR 35 and Lasalle - $13 million.  Part 2 – between Lasalle and Barrydowne - $54 million. Part 3 – from Barrydowne to Falconbridge - $26 million.  Together, these 3 parts totalled $93 million.  An additional $36 million was set aside for property acquisitions, utility modification/relocation and engineering & design.  Total price tag: $129 million.

The report indicated that costs had increased by $15 million since 2009 – but it doesn’t say anything about “ineligible costs”.

Figuring Out What Building Canada Will Fund

The 57-page document bundle tabled to our current Council earlier this week doesn’t include a copy of the application made to Building Canada back in 2009 – but we might be able to deduce that total eligible costs were $80.1 million, based on the provincial commitment to fund its 1/3 share - $26.7 million (see: “Province vows to ‘fulfil’ Maley funding promise,” the Northern Life, December 2, 2014).

Let’s do some quick math.  If total eligible costs were $80.1 million in 2009, and the total project costs were $115, that means that “ineligible costs” would have been $34.9 million – call it $40 million.  In 2009.  What might have those “ineligible costs” have been?  Initially, I thought maybe they would have been those additional costs identified in the 2012 report – the $36 million for property acquisitions, utility modification/relocation and engineering & design.  The numbers are close – so maybe that’s what they were for.

A lot of those costs would have to do with challenges related to existing infrastructure along Maley between Lansing and Falconbridge, where a rail crossing would need to be upgraded, and where electrical transmission lines and other utilities may need to be relocated.  Interestingly, that’s one of the areas now that is being left out of the current Phase 1 project.

$50 Million in Unfunded Costs

It’s reported in the Sudbury Star today that Phase 2 (from MR 35 to College Boreal, and from Lansing to Falconbridge), “is expected to cost at least $50 million, but David Shelsted, the city's roads director, said earlier this year completion of the project could cost millions more.”

Whoa.  Hold on a second there.  I think it’s fair to say that Greater Sudburians, including our Councils – current and past going back to the one headed by former Mayor John Rodriguez – have been under the impression that the City would be on the hook for just slightly more than our 1/3 share of the funding.  Back in 2009 at the time of the Building Canada application, total costs to the City were estimated to be just $41 million – or about $14.3 million more than our 1/3 costs.  And that was for a project which ran between MR 35 and Falconbridge.

Maley Drive Dismembered

And now?  Well, for the same project between MR 35 and Falconbridge, now split into 2 phases, it looks like the City will be on the hook for our 1/3 share of the Building Canada funding - $26.7 million for Phase 1– PLUS an additional $50 million (or more) for Phase 2.

This doesn’t look to me like what the City has signed up for – or what our previous Councils signed on to.  What we’re going to get out of Building Canada is a much smaller project – one which will see Maley extended between Lasalle at College Boreal to Barrydowne, and widened between Barrydowne and somewhere just east of Lansing.  At the east and west ends, traffic will merge into one-lane roads.  That wasn’t a part of the original plan.  At no time in the past has such a stunted plan been considered by Council.

No recommendation has yet been prepared for our current Council’s consideration regarding this stunted Maley Drive project, but certainly the AECOM Cost / Benefit report includes a recommendation that Greater Sudbury pursue the Phase 1 initiative.  I expect that Council will be asked in the near future to endorse this scaled-back roads project.

The Environmental Assessment - Still Relevant to a Stunted Project?

Council should be very careful how it proceeds.  The Sudbury Star also reports today that the approval of the 2006 Environmental Assessment (EA) for the Maley project runs out in 2016, so construction has to begin within the next year.  Here’s the problem with that: no doubt the 2006 EA contemplated a more, shall we say, “robust” vision for Maley – and not the stunted stub that we’ll be getting for our money now.  Given that the scale of the project has been significantly altered, does that 2006 EA still have any relevance?  The assumptions under which it was prepared are not the same as those of the current project.  Council ought to take a very close look at the EA and assure itself that the approval remains a good fit.

It’s not just that the ends are being cut off of the project, but certain transportation infrastructure – including roundabouts at Montrose, Barrydowne and Lansing, are being removed from Phase 1.  In the currently unfunded Phase 2, the City will go back to those three intersections, tear up what they had previously laid down, and re-engineer them with roundabouts.  I understand that if this never happened, it would please a large part of the community – but keep in mind that those roundabouts were being considered for environmental reasons, and to relieve congestion.  If you take them out of the project (as is being done), you’ve changed the underlying EA assumptions.

Council: Proceed With Caution - Or Don't Proceed

Ultimately, what is clear is that our Council is going to now be asked to endorse a Maley Drive extension project which was not the same as that which went through the environmental assessment process, the Building Canada application process, and which received support from two previous Councils.  Council is going to be asked to approve something new – something smaller and less robust than what has been contemplated at least since 2006.  It’s something which will not meet the current expectations of Greater Sudburians, and may not meet the expectations of senior levels of government who were asked to foot the bill for a more complete project.  It may not meet the regulatory tests of the Environmental Assessment Act under which a larger project received approval.

Even those in favour of building Maley Drive (of which I do not count myself) ought to urging our Council to proceed here with caution given all of the above.  Council could easily find itself in legal hot water with regulators, and in a political mess with project funders and voters.

All for a roads project which – in my opinion – we don’t need and can’t afford, for development which isn’t expected.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the views and/or policies of the Green Parties of Ontario and Canada)