Item - 2025.TTS2.3

The Strategic Planning Committee:

1. Endorsed the state-of good-repair unfunded capital requirements as outlined in Attachment 2, as the first priority for investment utilizing new funding made available to the TTC by any order of government.

2. Forwarded this report to members of the TTC Board, City Council, Government of Canada, and Province of Ontario to provide insight into the immediate critical capital priorities for the TTC.

Effectively managing the accumulated state of good repair (SOGR) backlog is a critical strategic objective for the TTC to ensure that existing assets can support transit service delivery and achieve service outcomes. Attracting new riders and retaining customer’s confidence in the system requires sustained investment in the base network’s assets. This is foundational and a pre-requisite to plans to expand and increase network capacity to capture new ridership long-term.

Significant progress was made during the 2025 budget process where incremental investments effectively reduced the projected SOGR backlog by 50% over the years 2025 to 2034. However, the unfunded portion of the TTC’s 15 Year Capital Investment Plan (CIP) continues to be significant over the next 15 years, reflecting the constraints imposed by current funding availability and affordability.

TTC’s Unfunded State-of-Good-Repair – $11.9B over 15 Years ($791M Annual)

With updates made for 2025, the 2025-2039 Capital Investment Plan, has identified capital investment needs that now total $53.4 billion over the next 15 years, of which $37.0 billion is unfunded. Of the total unfunded need, approximately $11.9 billion is related to health & safety, legislative, and SOGR requirements.

Addressing state-of good-repair is essential for service reliability, which is why the TTC continues to place the highest priority on meeting health and safety, legislative and state-of-good-repair needs first. However, the scale of SOGR investment still required is crowding out opportunity to advance needed capacity enhancement investments to keep up with population growth and capture more ridership long term. This does not suggest that CIP requirements associated with growth and aspirational initiatives, such as Platform Edge Doors, are not important, but rather are dependent on the base system being maintained to achieve benefits of investment.

Immediate State-of-Good-Repair Priorities Requiring Funding in next 5 Years

Over the next 5 years, approximately $2.2 billion of Health, Safety, Legislative and SOGR needs are unfunded. As an integrated network, each mode has immediate SOGR priority needs included in this unfunded amount. These include, but are not limited to:

• $1.22 billion for conventional and Wheel-Trans bus fleet replacements, associated infrastructure and bus hoists to address immediate five-year needs at minimum;
• $208.7 million for critical subway systems (signals, electrical and communications) and equipment (escalators, elevators, ventilation and subway pumps/backflow preventers)
• $210.5 million for facility renewal programs including roofing rehabilitation, HVAC replacements, overhead doors, safety systems and infrastructure renewal projects; and;
• $84.6 million for streetcar track replacement in the first five years.

The 2026 Budget Process

The TTC’s CIP is a rolling plan reviewed annually to incorporate new requirements based on asset condition assessment, revised estimates based on project design maturity, and economic factors. The above are immediate examples identified within the currently approved CIP. The annual budget process is underway and information from recent asset condition assessments indicate additional SOGR needs in streetcar overhead, subway track, and integrating facility improvements to accomplish net zero requirements are likely to be introduced in the next iteration of the CIP.

Priority focus on state-of-good-repair will continue to dominate prioritization of new funding made available to the TTC. Timely investment in state-of-good-repair is essential to maintain asset reliability and avoid costly, inefficient extensions of asset life. The result, however, does mean that longer term capacity improvement programs continue to be partially funded or unfunded, in the context of the TTC’s current fiscal framework. Given the scale of capital needs over the next 15 years, sustained, predictable, and multi-level government funding is critical to closing the funding gap and ensuring long-term system sustainability that can keep pace with growth. The information in this report will be used to guide future recommendations to the Board on any additional funding made available to the TTC by the City or other orders of government as part of the 2026 budget process.