The business case for Kenaston project

Opinion

Hey there, time traveller!
This article was published 13/06/2024 (480 days ago), so information in it may no longer be current.

When Scott Gillingham ran for mayor in 2022, one of his signature pledges was to widen Kenaston between Taylor Avenue and Ness Avenue, if a business case supported it.

Now that the city has released a cost-benefit analysis for the project, we have a chance to see for ourselves.

We should note that the cost-benefit analysis doesn’t measure the Kenaston widening’s financial impact to the city. That would require an economic impact analysis, which no one has done. But more on that later.

The total cost of the project is estimated at $586.1 million, plus an additional $150.6 million in construction period interest, for a grand total of nearly $737 million. But that includes costs for road repair on the existing lanes, as well as sewer upgrade work, in addition to widening.

No one is arguing the road repair and sewer work shouldn’t happen (although we could debate whether that particular work should be prioritized over other work in the city). But the optional portion for the widening only, according to the report, is 36 per cent of that cost.

The report therefore calculates whether the $163.8-million cost for the widening portion alone will provide at least that many benefits to the public over the next 30 years. And it concludes that the benefits exceed the costs by $20.5 million.

The alert reader will notice that 36 per cent of $737 million is $265.2 million, not $163.8 million like they’re using. That’s because interest costs are excluded from their calculation.

But wait, isn’t that still much less than 36 per cent of $586.1 million? Yes, because they’ve also stripped out admin and contingency costs from the calculation.

If you’re starting to think, like Coun. Brian Mayes has said, that this seems like “an exercise in coming up with a positive number,” it gets worse.

The $12.6 million in environmental benefits due to reduced fuel consumption doesn’t consider the greenhouse gas emissions caused by its construction, which the report itself estimates to be 28,067 tonnes. Including the cost of those front-end emissions means the environmental benefits of the fuel savings are completely erased by the environmental costs of constructing the widening.

The report also claims $4.4 million in safety benefits, since the “proposed design includes several interventions expected to impact safety performance” compared to the existing two-lane layout. But we don’t need to rebuild using the existing layout. We could also include safety interventions in a new two-lane design during street renewal (which, by the way, should be standard practice).

Even worse, $57.8 million, or 41 per cent, of the total benefits of the widening are attributed to the fact that building to three lanes allows traffic to be maintained in two lanes per direction during construction, instead of one. The report points out that this is only a temporary benefit, and if excluded, the “long-term benefits are below total costs.”

For a quarter of a billion dollars, drivers can temporarily save time for two seasons. And then, the city is on the hook for maintenance and replacement of that infrastructure forever.

If trading short-term benefits for long-term liabilities sounds like a recipe for financial ruin, it’s because it is.

Which leads us back to the actual financial impacts for the city. Proponents argue the widening is needed for the economic benefits of alleviating congestion delays, not only for personal trips, but also for commercial traffic, emergency vehicles and transit, in addition to the new traffic expected from Naawi-Oodena.

But the report estimates that widening Kenaston will only reduce average travel times by 13 seconds in 2030, decreasing to 11 seconds by 2050. It took you longer than that just to read this paragraph.

Using the report’s value of the average driver’s time of $14.01/hour, that’s about four cents per trip. We’d save millions if we just gave each of the 79,000 daily weekday drivers over the St. James Bridge a nickel every time they crossed for the next 30 years to compensate them for their lost time.

But wait, wouldn’t paying people to drive here incentivize them to drive more? Yes, that’s induced demand.

And by that same logic, wouldn’t charging people to drive here incentivize them to drive less? Also yes, that’s demand management.

Congestion pricing in other cities has been shown to reduce traffic often by as much as half. That would not only solve the capacity issue, it would also generate real revenue for the city, which could be used to fund other projects, like transit or pools. Since we have no issues charging user fees for city services like pools and riding the bus, surely a bridge toll shouldn’t be controversial, right?

Instead, the city is still planning a widening that will require expropriating all or part of 78 private properties, properties that currently pay taxes. And in their place, despite the claim of widening to three lanes per direction, the design drawings show that at some intersections, we’ll be making Kenaston as wide as 10 lanes! That’s a lot of extra pavement to maintain.

In Toronto, they’ve recently pegged their 10-year infrastructure deficit at $26 billion. That’s over 1.5 times the size of their annual operating budget, and six per cent of their city’s 2020 GDP.

Toronto Mayor Olivia Chow said the numbers are so staggering that the city needs to think twice about building anything new, and that “we’re going to really fix what we have first.”

But here in Winnipeg, with our $8 billion infrastructure deficit, at over 3.6 times the size of our annual operating budget, and nearly 18 per cent of the city’s 2020 GDP, we’re still planning to spend a quarter of a billion dollars to expand a road that will provide far fewer benefits than it will cost. All while closing pools and bridges we already can’t afford to maintain.

This is how you bankrupt a city.

When we elected Mayor Gillingham, he promised us a “steady hand at the financial wheel”. It’s unfortunate that it now seems to be aimed straight at the ditch. Luckily, it’s still not too late to tell council to change course.

Michel Durand-Wood lives in Elmwood and has been writing about municipal issues at DearWinnipeg.com since 2018.