Mayor 'optimistic' SmartTrack will only cost city $1.2B, but staff flag risks in funding plan

City staff have released new details about how to pay forand maintainSmartTrack, Mayor John Tory's signature transit plan, but note the mega-project doesn't come without risks.

• What will SmartTrack look like? City launches public consultations on rail line

• Toronto city council approves 6 SmartTrack stations

SmartTrack involves the creation of six new stations along the Kitchener and Stouffville/Lakeshore East GO corridor, and it will use eight existing stations.

"I sought this office on a pledge to build SmartTrack because I knew it was the right thing to do," Tory said from a Tuesday morning news conference in Liberty Village.

"The city had allowed development to take place, where whole new wonderful, vibrant, dynamic communities had been created, but without the kind of transportation to make for a complete community."

Tory said the city will spend $1.2 billion on SmartTrack's capital costs, and the cost will be capped at that number. Thecity has also dedicated $268 million for any station improvements needed.

Thefederal government isexpected to cover 40 per cent of eligible costs.

• John Tory's "tax increment financing": can it work?

How will the city pay?

A new city staff report suggests Toronto pay for its share by relying ondevelopment charges andtax increment financing (TIF), which is anticipated increased tax revenue comingas a result of new development.

The report notes there are several "funding risks" when depending on development charges and TIF.

Development chargerevenue, for example, will dependon what actually gets built. Meanwhile, the funds accumulated through tax incrementfinancing, estimatedat $292 million over 25 years, could change over the long term.

Coun.Josh Matlowagreed with assessment, sayingthe city canproject what it might get, but it may not materialize.

"It's pie in the sky. We don't know what will happen in the future," he said.

Matlowaddedcommitting uncertain money now mighthave a negative impact on other projectsdown the road.

"What happens in several years when the city needs that property tax revenue? Will the property taxes go up exponentially, or will we have a dearth of revenue to support thingslike libraries and recreation, fixing roads, transit projects?" he said.

The report recommends using a property tax increase to provide the additional funds needed for the SmartTrack bill, however that could come from the existing City Building Fund, established in January of 2017 a 0.5 per cent fee tacked on to property tax bills.

"What I said about SmartTrack was that it would be built without a tax increase being imposed on the people of Toronto, a property tax increase, and that is the case," Tory said.

Metrolinx will operate SmartTrack

The report also notes Metrolinx will take full responsibility of operating and maintenance costs associated with SmartTrack once it's completed.

"This simplified funding relationship will ensure that there is no long-term financial impact on the city once SmartTrack is built," Tory said.

Tory referenced a Metrolinx study released earlier this year, which notes the future SmartTrack stations are expected generate $4.58 billion dollars in social and economic benefits.

• Metrolinx pushing ahead with new stations,despite controversy over some

The report will be debated at Executive Committee on April 17 before heading to full city council later this month.

Torysaidhe's confident in the city's growth.

"It will produce the additional tax revenues that will benefit the city in many respects, including paying for a portion ofSmartTrack," he said.

If the planmoves forward, the city will begin to solicit bids to begin theconstruction phase of the project.

"My optimism is as high as it's ever been," Tory said. "We need this transit."