Deal averts cuts to Toronto's Bike Share and EV charging plans

The City of Toronto has struck a tentative revenue-sharing deal with the agency that runs its public parking lots, avoiding possible cuts to its popular Bike Share program and EV charging station rollout. 

The agreement comes after months of tense talks between the city and Toronto Parking Authority (TPA). At issue was a push by the city agency to keep more of the millions it generates from the public lots. The three-year deal will see the city take less revenue each year and contribute $48 million more in capital repair work.

The agency had threatened "material cuts" of $14 million to the Bike Share and EV programs this year if it didn't reach an agreement with the city this summer.

Budget chief Shelley Carroll said the talks may have looked tense, but it just took time to hammer out the right arrangement.

"It was a matter of sitting down and saying, "We're not trying to destroy you,'" she said. "We're very proud of the fact that we're one of the few cities that didn't sell off their parking authority, we want you to succeed. But let's be fair about the revenue piece."

The agreement was approved by the agency board Tuesday but must still come before Mayor Olivia Chow's executive committee and city council for endorsement. The city will now have access to 75 per cent of the agency's profits. That's down from the previous agreement, which saw Toronto access either $38 million a year or 85 per cent of the agency's profits — whichever was greater.

Earlier agreement didn't account for new duties: agency

Agency officials had called the previous agreement a "punitive tax" and said earlier this year that the agreement, which expired in 2019 but was still in effect, needed to be renegotiated immediately.

The parking authority said it has contributed $1.4 billion to the city through the dividend since 2002. That has been used to fund "other municipal services and programs, including public transit, housing and parks," according to a TPA report in March.

The agency said the profit sharing arrangement, which was reached in 2017, did not account for the expanded duties given to the parking authority by city council in the years since.

Those duties include operation of Toronto Bike Share and the expansion of its electric vehicle charging station program, programs that cost millions. The agency says it is grappling with a $300-million state of good repair backlog for its parking lots over the next decade. It also needs to replace over 3,000 pay and display machines reaching the end of their life.

In a report to the board, the authority said its cash reserves had "eroded" because of those expanded duties. The agency did not immediately provide specific numbers to illustrate that when asked by CBC Toronto. 

The parking authority's vice president of growth and strategy, Jeffrey Dea, said the agency is happy about the tentative deal.

"It gives us the short-term sustainability we need to continue to invest in our facilities and Bike Share Toronto and in our EV charging program," Dea said.

TPA asked for 'short' pause in dividend sharing

But Coun. Paula Fletcher, who sits on the agency board, said Tuesday that part of the challenge may have been in the TPA's opening bargaining position. It started the talks asking to halt payments of its dividend to the city.

"I think there was some thinking that perhaps a dividend wasn't required, or perhaps it's time to get out of the dividend," she said. "But this is an agency solely of the City of Toronto, no other shareholder, and a dividend has always been in there."

Dea said a "short" pause of the dividend was part of a broad range of options explored, but ultimately another agreement was struck with the city.

"We looked at different income share splits, we looked at potentially pausing the contribution that we make to the city on an annual basis," he said. "And in the end, we found the sweet spot, which is 75/25 and some direct capital funding on behalf of the city. So, we landed in a good spot."

Coun. Brad Bradford also sits on the TPA board and said the agency was frustrated with the city, but that this new deal will help address that. It will also ensure the expanded mandate city council has given it can be delivered, he added.

"The requirement to provide that dividend at 85 per cent, that's onerous," he said. "I think the city is recognizing that what the parking authority has really been saddled with for the past number of years isn't sustainable. And we need to change it going forward."

The strained talks had caught the attention of advocates at city hall.

CycleToronto's Alison Stewart said she's relieved to see a resolution. But she also expects transparency from the parking authority as it bolsters the Bike Share service, pushing it further into the suburbs.

"We are expecting, and we'll certainly be watching, to make sure that that shows in the expansion of the bike plan network," she said.