Building the first phase of the rapid transit network will be expensive and require a big loan, but it is affordable, said city treasurer Marian Similuk.
In fact, according to Similuk’s financial modelling, of the required $2.1 billion to fund the project, only $38 million spread over the next 10 years would come from city taxes.
“When we applied all the funds that we had available... we were able to fund this with very minimal debt to be serviced from the citizens,” said Similuk.
When working out the funding models, Similuk said she didn’t just look at the affordability of the tunnel, but for all the Transitway improvements and life cycle costs that would take place while the tunnel is being built.
Assuming the province and the federal government would cover two-thirds of the cost for construction components, Similuk said that would account for $1.7 billion.
Cash from transit levies, development charges and provincial and federal gas tax would make up $1.46 billion.
The remaining $700 million would be covered by a loan, of which $38 million is paid by taxes, with the remainder paid down by future development charges and gas tax revenues.