Keeping Toronto Moving with Greg Percy, Interim TTC CEO

The TTC’s interim CEO, Greg Percy, joins our President and CEO Giles Gherson to talk about how we restore public confidence, build a stronger customer experience, and rethink the financial model that powers our city’s transit. This episode was recorded during the Board's 10th Annual Transportation Symposium: From Gridlock to Growth.

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From the Toronto Region Board of Trade, this is Toronto Talks. Toronto, let's talk transit. In Toronto, subway riders face delays again today as signal issues led to slowdowns on Line 1. Only 10 bus and streetcar routes are meeting the goal for on-time service during rush hour periods in the city. Vehicles bumper to bumper on Lakeshore isn't unusual lately. Same for buses that have to force a way into the Union Station bus terminal since there isn't dedicated access. With an average commute time of over 90 minutes, fixing how people and goods move across the Toronto region isn't just about tweaking a few projects. It's about transforming the whole system. That was the focus of the board's 10th annual transportation symposium. From gridlock to growth. We heard from leader after leader that all levels of government, all modes of transport, and all communities need to work together to turn a congested region into a connected one. The Toronto Transit Commission has a large role to play in this transformation. The Commission's interim CEO, Greg Percy, was kind enough to sit down with our CEO and President, Giles Gerson, to talk about how the better way needs to get even better. Here's that conversation. let's talk about you you know you sit in the ttc in the ceo chair you've been in a railway production company right and which is interesting you've been in transit you've got metrolinks yeah uh so you've you really see the whole gamut but really you know what's interesting is as you said you've been in the industry for 40 odd years and 42 years um what drew you to this industry in the first place? Yeah, fair question. What it means? That's right. I never woke up one morning to say I want to be in transportation. Actually, I was charting out a course of a career in marketing. Did you do that in commerce though? MBA. MBA, okay. And so a lot of companies came to the campus recruiting. I went to all the product packaging companies and the crafts and general foods and Procter & Gamble. Procter & Gamble was always the big one. Yeah, they're all there. And I'm listening. I said, I had this epiphany. I can't do this. I can't sit in front of someone. It's really important to me to be authentic. Even before that word was even coined. Yeah, I think I called it something else. But that was the same intent. And I said, I can't sit in front of someone and say, my chocolate bar tastes better than yours, or my detergent won't get your shirt whiter than that one. I can't do that. Yeah. And then CP came on the campus, and they were looking. It was a Canadian Pacific Railway, and they were looking to start a marketing department. Now, they were already 100 years old, never had a marketing department. So they recruited 12 kids, I guess I was a kid, right out of university from across Canada. And they said, we need to come to the head office in Montreal, Winter Station, and start a marketing department. So I said, I like that idea. And I said, you can always improve a service. You can never sit back, but it can always get better. And I said, I can do that. So that's... This I can understand. Yeah. That's how I started. It was not anything to do about transportation. It was about what I can't do as opposed to what I could. Well, I got to tell you, when I was at university, my summer job for two years was working at CP Rail. as a waiter on the transcontinental. Yeah, yeah. And I will tell you that a marketing would have been good to have had a marketing department at that time because that was when it was all starting to kind of come undone a little bit at the Canadian. But anyway, we share something. We both worked for Canadian Pacific in those early days. Now, before you joined the TTC, you were focused on regional transportation and railway lines. Quite different when you think about regional mobility and a TTC, which is more of a tightly focused urban and city transit system. How does it compare? When you were in Go Transit or Metrolinx, the regional system, how does running those kinds of systems, those regional commuter systems, how does that compare to running a TTC? Yeah, well, you won't be surprised that there's some similarities and differences as well. So at a provincial level, it was less hands-on. by MTO, by the Premier's office. And so we were... You had more scope of latitude with our... Very much. We were called an operational enterprise. So we were the most arm's length of an agency to the province. And I lucked out that when I joined in, I think it was January 2000, the province woke up to say transit is better than building more roads. We're running out of space. But if we grow transit, that's going to de-stress roads. So they made that connection. I mean, it was the Ontario government that created GO in 1967. Right. And so to that extent, they had strategic involvement, but not day-to-day operations. And they wanted to focus on commuter transit. Yeah. Yeah. So we went through a rapid growth phase at GO, and I was part of that. And it was really exciting. And we took a lot of time to build a lot of stuff, build our fleets, build our organization. And it was really fun. And I was there pretty close to 18 years, I think, and ended up as the, when there's a coming together of Metrolinks, which was a planning, I remember that was created. I was in the provincial government and cabinet office where Metrolink was created. Okay, which was under the McGinty government. And he said, well, we have this planning group that's kind of finished what we tasked them to do. We have Go, that's an operational entity. What happens if we merge them? I think that was visionary. We took the name of Metrolinks, whatever. It was a brand. And it took a while to sort out the brand because Go had a recognized and good brand. But got through all that and off we went. And we became a massive entity of building construction, expanding service. The capex of Metrolinks today is incredible. Yeah. And I don't know if it is now, but at one point, if you add it together, and this is important, when you add CN and CP together, it still didn't get as big as Metrolink's annual capital spend. In Canada, because CP and CN are obviously huge across North America now. Yep, the whole bet. Wow. That flags how big the growth plan is, and it's still on. I think it's probably peaked now and starting to come down a bit, but for the next four years, maybe five, it's going to be right up there. And then it'll come back to what normal is at the time. Well, it's one of those things, I mean, I mentioned it, you know, I think one of my remarks, but it's been really remarkable to see the huge expansion in transit build over the last probably seven or eight years now. I think a lot of us think, and probably a lot of the people in Toronto think, it should have happened, you know, 20 or 30 years ago. We were slow off the mark, and now it's a frenzy. We see all these projects coming, being planned and being built and coming into this issue. But now we're going to see even some of them actually cut the ribbon on them, which is really terrific. And we'll probably be transformative as they come to fruition. One of the things, though, that when you think about, and it was mentioned a little bit in the panel you were on just now with Don Bonds from Chicago, So Transit Authority talking about the importance of money, the importance of funding, you can't do much without it. Transit systems everywhere are somewhat strapped for cash. I mean, it seems to be an eternal issue. But when we think about the TTC, it's also an issue, right? And in fact, when you talk about the capital expansions, the new, whether it's the Ontario Line, the Edmonton Crosstown, they're all going to require significant operating funding. And often people forget about that. Oh, we're going to have this new capital expansion. Okay, but how are we going to fund, you know, the operation of these new lines and the existing structure, which is already strained? So talk a little bit about that. You know, how are we going to get the funds, do you think, over time to ensure that we can operate the system, this expanded system properly? I think it starts with two things, communication and education. We have to make sure that the stakeholder groups, the shareholders, understand the business. And it's not as easy as here's a two-page report. You've got to get them out, touch and feel the system. This is what you're investing in. And it's not simple and it's not cheap. There's nothing to do with transportation, whether it's transit or freight, that's cheap and inexpensive. It's just a very heavy, unwielding beast. But it is what it is. So you've got to educate and sell the value. And I mentioned on the stage there, you better make sure you have a good product. There's nothing worse than going to someone who is looking to invest and you have a flawed product. That's your marketing thought, right? That's true. And so that's super important. And it has to be real and it has to be perceived both. Like right now, we are perceived not to be reliable. uh we have to fix that and and we owe that to the customer base to to be reliable and just be like clockwork and and we have to do what we say we're going to do um so the team needs to understand that i think they they are getting there um and they want to put a good product on the street whether it's whatever mode we're into and we're into a bunch and uh so so that helps a lot you know that's to me i'm borderline common sense you you you've got to have something sellable if you want to sell it. And so, so fair enough. And, and, and then it's about, uh, state, we have a team that, that, uh, uh, that works with different levels of government to tell them what we're doing, um, to understand how they work, what they're looking for, what are their, their triggers for investment. Uh, so you, you've got to walk in their shoes too, you know, and, and let's face it, every level of government, you know, 10 ways to spend $1. No, no, no, no question about it. And so, So you've got to leverage what you can to be that $1. And sometimes you win and sometimes you won't. But there's table stakes. I mean, I would invest in state of good repair before I invest in growth. You've got to be safe. Table stakes. The product is about being safe. No, if you're not safe, you're in real trouble. Yeah. But, you know, when you think about then, you know, the state of good repair part, because, again, it kind of goes to the heart of my question. You've got a lot of expansion coming. And that's where a lot of attention is. out, it's going to be, you know, it's going to be, you know, these new lines, you know, the Youngstreet extension and so on. But then people think about the state of good repair and they think about reliability. They think about safety issues as well. Some of the stations are aging out, you know, if you're at the King Street station, very narrow escalator, you know, on and off. So massive crowds at, you know, at five or six o'clock stretching out. TTC, you know, employees say, stay in a straight line, single file, it feels a little bit, it all feels kind of antiquated. And so the real question, I guess, is looking forward, and this is going to be because you're at a really pivotal moment here, you know, is incremental change an option? When you think about how we finance and how we structure the TTC, given the fact that you've got this big expansion happening, huge pressure on state of good repair, some significant change that's required, and I think you've alluded to that, do we need a new, do we need to rethink the operating system? Do we need to rethink the financial structure? What do you think about that? Yeah, absolutely. And we should always be stepping back and looking, can we do a better mousetrap? So I really, really am emphasizing within the team. We've got to get the reliability up. Part of that is state of good repair. So it's a bit of a catch-22. You need to get the state of good repair to look good, to be sellable. But need funds for that. Right. Hence, it's a mousetrap. But it starts with... my belief is everything starts with a conversation. Okay. And so, yeah, you sit down and say, what are your expectations? If, if we get our product to look like this, what does that mean to you? What are the triggers to, to make you interested in us? There's no, those conversations is no downside, right? No, because people have the conversation about capital and then they have the conversation about operations and they, and you look at your operating budget and you get some of them from Fairbox and some of it from the province. Um, but none from the federal government. interestingly, which is a bit of a contrast. Operating. Yeah. Operating, I'm saying. So you're constrained on the operating side. But when you think about all the things, and you're savvy because you've been around, you know probably what you need. And without even giving me a number, but when you think in your mind about what kind of funding will we need on operations to get to where I need to go, to make that step change, to get the confidence back of the public and of potential investors. How do I do that? I mean, you need a lot more than is on the table right now, right? Absolutely. And a big win for us was when the three levels of government collaborated and we're going to find a complete new fleet for line two. Right. It's the east-west line. Terrific. And the city of Toronto concurrently stepped up for the new signal system because you really need both. And we'll manage the track condition and so forth. So rail service is not about just trains. It's about the integrated everything. and you've got to get it all right. If you fix two pieces, then you've still got, it's still service failure risk high. Well, that was a crosstown delay, right? I mean, it's obviously all about that. It's part of that. And I was involved at Metrolinx for the genesis of that. And it was quite a project. But it'll get there this year. Yep. Mark my words. I've heard that from a few people now. And me twice today. So I don't say what I don't believe will happen. But it's about transparency. Here's what we do. Here's where we plan to go. This is what it's going to cost. And if I'm talking to an investor, I'd walk in their shoes. What are they looking for? Why would they want to invest in us? Why did he say TTC? And so on the property, but the property is owned by the city, not by TTC. Right. But is there a way of figuring that out? Yeah. There is until there isn't. Yeah. Yeah, no, exactly. I'm very much a half glass, half full personality. So it's possible is what I guess we're saying. Yeah. You start the conversation because there's a long gestation period to that kind of conversation. But it is looking at a different model. And we've got to do that because we're at the point where the old model is limping along. And you have to move to a different track almost. You use that language. But on funding, right? If you're going to have this expanded system, you're going to fix the state of grid repair, you're going to get that back in shape, and you're going to have these expansions that you have to operate. That's a different level of funding. It is. And the operating cost will be like a hockey stick, and you've got to see it coming. Nobody wants to be surprised. No. So get ahead of it and say, I mean, we can do that now. Yeah. We can model it, obviously. Absolutely. And so you've got to position yourself as, am I investor worthy? And why? What do I need to do to change or to make it more so? All that's fair conversation. But right now, the team is pretty laser focused in terms of getting reliability up, consistent, indifferent to season. Right. And we've got to make our customers come back and want to stay. and it includes the other conversations we had about the more challenging, you know, what do you do on the social issues that impact every transit agency in North America. I didn't see any of that in Taipei, by the way, which is interesting. Okay. As well as no fare evasion. No what? No fare evasion. So there's a cultural piece. Yeah. Well, that's a huge issue. You need that fare. And it's not like it's a massive amount of money, right? I think it's one of the best deals in town. Oh, to drive transit, absolutely. I take it every day. But the fare vision is crazy and it's cultural based. We've got to fix that. We have actually started making some good strides to get that back because that's a huge number. Well, I know that, for example, at Union Station, like Odetta Union Station, I go on the streetcar here at Queens Quay, I go up on the streetcar. And now they've got not every day, but enough. You've got officers, TTC, there's a check. Did you pay your fare in the streetcar? And so I think that's, I think, you know, I think it's starting to change people's mindset. I've been on there when they started that, there were quite a few people kind of like, what do I do now? I didn't pay my fare. And now people are kind of getting out their, their, their, their Presto card or their smartphone to say, okay, I paid my fare. So I think there's, there's a cultural aspect to that. Big time. And it's a generational difference as well. And I was quoted recently that that doesn't matter to me because paying a transit fare is a legal obligation. If you're going to catch a ride, you got to pay. Otherwise it's called fraud. That's not good. And time to shift gears on the customer side. But we're working on that. How big, but just quickly, I mean, fare evasion is, I mean, how much revenue do you lose from fare evasion?$140 million a year. Massive. Make a 10% win on that. Numbers are pretty quick, right? So a share of passengers, I mean, you know, you can probably estimate then, you know, 10% of our passengers aren't paying fares. Or what would the money be? It's different by mode. We have all those stats. What's the number one? Right. Well, everyone thinks street garbage actually is not. It's actually bus. but, and the challenge, and it's not a unique TDC thing either. No, no, no. So anything you, any asset where you have two doors, you're at risk, so you have to manage that. And what are you going to do differently? What we've chosen to do is, and this is a great support from the city of Toronto and Mayor Chow specifically, we have the green light in this fiscal year to hire on another 50 fire inspectors and another 10 special constables. You got to have visibility of uniforms. they mean something and and it's been I took the streetcar down from Union to sit here this morning and I nobody knows who I am which is absolutely perfect I I observe and and listen and and I'm I I tapped on uh but most did not one of these I've noticed a number of the stations you come in and you see someone just sitting there um and they're not really doing much at all they're just sitting there looking looking sort of in the winter you know kind of pain um and i contrast that with you know you go to london you can be at any of the of the underground stations and if you're a tourist for example and you're not sure you're kind of even spending a minute or not sure what to do someone leaps out of their thing is how can i help you which station you're like i found that to be really quick astonishing about the about the underground system but here it's fairly passive and it gives the impression not of urgency but actually the reverse and so i don't know whether you know that's something that's occurred to you but i mean it's also a bit of an image to issue too it's absolutely all that it's uh and they're on the radar um and i have to figure out with the team what the solution looks like but uh the station has to be uh welcoming has to be aesthetically satisfying uh and it's the first place that most customers get onto the system and so there's a lot of things we need to do to get better at stations and those conversations are happening. We've already got a pilot this year on six of the worst stations to give them a facelift and make them better. Yeah, it's aging infrastructure, but I'm quoted to say just because you have old infrastructure doesn't mean it has to not be clean. It has to be clean. I think that's critical. And I'm all over from day one in this role. I was very dissatisfied with the cleanliness and the level of rehab of the actual stations. I said it looked like you had bad contractors who didn't finish a job and left and nobody did anything about it and felt it was okay. Well, it's not okay. Right. You know, it has to look better. It has to look welcoming and it takes effort and someone has to follow it up. So with the six stations, not only are we giving them a facelift from a rehab point of view, we've stepped up cleanliness, hired more janitors, and we've put in group station managers to one or two stations, they own it. We're putting their face in the station. We're putting a QR code. You need to, if you have a voice, here's the email, here's the phone number. And that's, and whoever steps into those roles and they'll be in place in the next weeks, literally, they're going in knowing that they are, they own that station. If you want to change a widget, here's your date you're going to do it. Here's the date you're going to leave the property. And here's the LD if you don't. So you got to treat it like it's your house, you know, and none of us want contractors to. And I've gone through that. We have major rentals and contractors not showing up, showing up on time or squeaky wheel because someone yelled louder than you. No, we're not doing that. And the washrooms have to be cleaned. You're going to see the Disney approach on washrooms where date of last checked is on the outside of the door before you go in. You can see. And the group station manager owns that list and he or she checks it every day and says, we're higher or lower than the baseline is. We've got to change it. So the station master really, or manager, is like running a franchise almost, right? You have more responsibility now. Is that what you're saying? You own it. Okay. You don't want to change, obviously. Big talk. Okay. Good for you. So it has to happen. And we think this pilot will be, it's already showing really good signs of an uplifting. When does it run? Like what's the pilot runs from wind to wind? So it's already started. So some of the stations, for example, Lansdowne, Spadina, they're already looking different. So by the end of this year, all of those six have to look different because we're leveraging, and to the credit of the city, they're holding us to account as they should. Right. And they said, if you do the pop on those six, we're going to fund you to do another six or another 12. They're going to keep growing. So there's your point about, you know, you can make some progress. You build some confidence. Yeah. You can move. And the square came up this morning. You got to have the trust. And the trust isn't just with customers, although it's important. It's with employees and stakeholders. Right. The cities. These big stakeholders. That's all around. Yeah. You just came back from Taipei, I think you said. I did. What did you learn there? Because we talked a little bit about Hong Kong. Very different structure. Yeah. As other cities have. I mean, different ways of running their transit system. But you went to Taipei for a reason. What did you find out? So what I want to do is pick one station. I haven't picked one yet. The team will decide. And I want to create that station to be the station of tomorrow. What's that going to look like? It's going to have a lot of AI. Yeah. Yeah. It'll have the right people doing the right things, but they're not going to be sitting in booths. But we want technology. We want, and this is a very reasonable ask. We want elevators to lift people up and down, escalators to keep going. Yeah. monitors to work and the list goes on. Very reasonable asks, but we need to use technology to get us to a better place. We went to a conference that a Type A hosts every year called Smart City. Okay. And it was all about AI. When I'm going there, I could barely spell AI. But you're seeing obviously AI being in other systems starting to be, what you heard at the conference was only being infused into the transit operations. Right? And so my appetite was tweaked when I went to a meeting in Washington before Christmas and Singapore Transit was there. And they already do AI in their stations. Now they're a newer system. But I don't want to hide behind the fact we have aging infrastructure. I don't think that should be used as an excuse. It's a reality, but not an excuse for not doing stuff. And I said to them, my recollection is you have a consulting arm. And they said, yeah. I said, would you come to Toronto and take a look at our stations and give us some guidance as to what improvements we can make that they already have implemented? Now, it's easier if you put technology in from day one. We've got, you know, capacity issues just in how much power goes to each station. Oh, exactly. You plug the wrong thing in and everything goes dark. I'm exaggerating. But that's kind of, so how do you deal with that? So with that in mind, I said to them, so you've got, you know, bots floating around the station. Do you plug them in? That's in my safety world. That's called trip hazard. So you wouldn't. But no, they said batteries. I said, please tell me they're not, you know, batteries that are a fire hazard. And they said, no, but we put smoke detectors into the bots just to make sure. So there's things you can do. Yeah. So you don't get hung up on what you can't do. You solution what you can't. Maybe one last thing is from your perspective, if there's something you would like to sort of leave us with, you know, if you think about our business audience or essentially, you know, our stakeholders of the Board of Trade, is there something you want to just leave with them? You know, the business community of Toronto about what you're trying to accomplish or maybe just what you've said, but maybe there's something I haven't asked that you'd like to talk to. So unfortunately, we didn't get to it at the conversation we had on the podium there. Yeah. My personal view, this is not a TDC view. This is a Greg view. There's a real lack of leadership in the industry and more broadly in business. I think COVID took a bunch of leaders out who were sitting on the bubble and they decided I've had enough and they're out. So now there's a void that we've got to catch up. Where do you see it though? What are you referring to? Well, my philosophy is leaders don't have to be CEOs. Leaders can be from a receptionist to the CEO. Take a leadership. In your space. Yeah. Yeah. And, and, and do stuff and solution stuff and don't wait to be told what to do. I, I don't want an organization of good soldiers. I want an organization of people who want to do things and preferably with a decent entrepreneurial spirit that drives them to do something and make it better. Um, so, so that's one of my concerns. Um. In general, it sounds like across the- Yeah, it's more cultural within the company. And can they do it? Yes. I have full faith they can do it. They just need to be encouraged to do it and set the expectations. So I spend a lot of time out meeting teams when you have a big organization, anywhere from 50 to 350 people at a time talking about expectations. And they're listening. Good. And getting good eye contact with them. And as long as you are clear in your expectation, then they know where they stand. We are 80, 85% unionized. I don't see why, and I've done this from day one of being part of TDC, we need to be one. I don't get this tension. I don't see the need. That's called disrespect. And it works both ways. I'm not pointing at anybody. I'm pointing at everybody saying, if there's a business issue involving frontline, put them at the table. Yeah. You know, I've actually turned down or put conditional approval on some requests. Because I said, did you discuss it? It was a frontline issue or a bunch of them, actually. And I said, did you discuss it with the union? No. I said, why not? Well, we don't typically do that. I said, well, you are now. Yeah. So I'm giving you a conditional approval to, with evidence that I know you've talked to the frontline. because they're your reality check. Yeah. So don't lose that. You're wasting an opportunity. Yeah, yeah. Talk to them. It's okay to them. Yeah. Obviously, yeah. Yeah, and so setting the tone, and you have to keep reinforcing, and I think people are getting that now. I still ask the same questions, but I just want to feel that urgency. I want to feel that, how can I make the best decision possible with urgency? And it's starting to work. I believe it will. I think that's a great phrase, actually, for the TTC. I mean, if people kind of had a sense that it was an urgent organization in everything that it does, I think that would actually transform the image of it. Yeah. And how far is urgent from entrepreneurial? Yeah. They're in the same family. Yeah. Right? So it's setting a tone, setting an example. You know, I think the team would say that that's part of my DNA, And I hope they see it that way because it is. And I think they'll get there. You got to get the right leaders. You got to make some tough decisions. You've got to make sure everyone's pulling in the same way. And so we're doing that. But we've made some tough decisions. If the leadership can't do that, then you change the leadership. So we'll do that. But you want people to drink the Kool-Aid. Yeah. You know, and guess what? It doesn't hurt. No. It actually tastes good. Yeah, it's fun. And it's fun. The reason why they say it. Actually, we have our senior management. Two weeks in, someone on the senior management team said, we were just laughing. What's wrong with that? Yeah. Yeah. I said, I want to see lots of that because why wouldn't we? Yeah. Getting annoyed with stuff done. Yeah. You know, so we've just got to lighten up a bit and just get stuff done. And it's not painful. Well, it's a great way to end. Yeah. It's having fun. Thank you. Great. All the best. Pleasure. That's all for this episode of Toronto Talks. If you like what you hear, don't forget to tell a friend. It's still the best way to spread our message. And don't forget to keep talking, Toronto. Our voice drives meaningful change.