Opportunities And Threats That Facing Go Transit Commerce Essay

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GO transit is Ontario's interregional public transit system. It aided the re-emergence of commuter rail. It has evolved from a single GO Train line along Lake Ontario's shoreline into an extensive network of train lines. For nearly 40 years, GO Transit has been providing safe, reliable, and convenient transportation to the communities it serves. We are credited as one of the successful transit systems in Ontario which provide transportation for students, seniors, and travelers. We from the research and development team want to discuss about the current situation of our company and help improve our standing in the near future by providing proper recommendations.

This report will address the various opportunities and threats that GO Transit may face in five to ten  years in terms of Technological, Business, Political, Environmental and Societal aspects. It is important that our company takes these aspects into consideration so that we can seize the opportunities and also provide solutions to any threats that may arise in the upcoming years. Hence, this will facilitate our company to enhance its ridership and provide wider and better services to the communities in the province of Ontario.

 The Government is the main contributor for the funding of any transit system. Funding is the key to an organization's progressive future. It is required for expansion projects, technological advancements and various other projects that is beneficial for the economy. Job-opportunities arise as an indirect yet effective factor of funding. The business and the political fields have to work together for the betterment of the society.

The technology that is used has a lot negative impacts on the environment, organization and the economy. A change in technology from diesel to electric locomotive can benefit the commuters in many ways.

Electrification of the rail network is the proposed environmental-friendly technology. 

Transportation is a resource to the community. The improvements in the commuting infrastructure will help reduce traffic congestion in the urban and rural areas of Ontario and these also have a direct relation to the values of real-estate.


GO Transit was first implemented in 1967 with funding provided from the provincial government. At that time, there were about 2.5 million passengers but by 2007, the ridership increased to about 740 million passengers. It is predicted to increase to 809 million passengers by 2012. The increase in ridership portrays that GO Transit has been fulfilling the commuter's need, however in order to continue GO Transit's commitment to customers, our company has to note certain opportunities and threats that might arise in the coming years.


One of the main reasons for increase in ridership is due to various expansion projects proposed and implemented by GO Transit. Due to our wide expansion plans, we have been able to serve throughout the province.Without proper funding provided from the government it would be merely impossible to put the expansion project in action. Currently there are seven major regions where GO Transit is located. There is a major multi-year expansion program which undergoes 3 major plans namely, Union Station Revitalization Project, West Toronto Diamond Grade Separation, and GO Transit Rail Improvement Program. The Federal, Provincial, and Municipal government approved to provide $1 billion for the funding of this expansion project. 

GO Transit's main source of funding is provided through taxes such as property tax, sales tax and gas tax. Mostly every state raises taxes to support transportation infrastructure through a state motor-vehicle fuel tax. In the past, GO Transit was allocated $5 billion dollars through gas tax funding for their expansion projects across the province. Other states like Oregon allocates 1% of state-gas tax revenue in their infrastructure improvement. California allocates 0.25% of sales tax for public transit and Ontario allocates 2 cents/litre of gas tax on infrastructure projects. A total of 89 Ontario transit systems, serving 111 municipalities receive provincial gas tax funding. Moreover, the government also provides GST taxes paid by the public to municipalities for their transit improvement projects.

Figure 1 portrays the amount of funding the government has allocated for each municipality from gas-tax funding. Toronto has gained funding of about $160,000,000 in the year 2008-2009 for transit improvement.


Many times in the past new improvements were announced but were not made as promised due to lack of funding from the government. Examples include all day service to Hamilton, Burlington, Oshawa, proposals for electrification of tracks, Airport service, etc. After getting some funding from the government, some projects like services to  Hamilton and Oshawa were able to be implemented. Canada has been going through a prevailing recession since 2008 . Due to this recession, government has not been able to provide much funding for the transit systems in the province. This also led the government to do budget cuts and delay current GTA transit projects. Transit agencies were forced to cut services, lay off employees, raise fares, slow down capital improvements and take many other actions to survive. Hence, without proper government funding it would be impossible for a transit company to improve their infrastructure. 


Expansion, repercussion of funding has a direct impact on the rise of our economy.GO Transit is a resource to the community and if it expands its services into developing regions, it will cause significant growth of the city in the future. In earlier period, certain regions in Ontario were not well developed and had less population. Few years later there was a dramatic rise in population in these areas but the employment rate was very low due to fewer transportation facilities. Implementation of transit system in certain regions has brought about an increase in the employment rate. For instance, 10 years ago regions like Waterloo were not well developed and had very less population. Currently the population is increasing significantly. Due to commuters demand for expansion, GO Train station was built near Waterloo region for students and employees travelling to and from the city. Based on GO's projections and job-related commuting statistics, in 2011 there could be as many as 2,600 people coming into Waterloo region to work and 2,450 going out of city. During this period the population growth has been expected to increase from 29% in 2011 to 74% by 2031.  It can be seen from Figure 2 that through the years 2001-2031 the population has been increasing linearly in both Waterloo and Toronto.



Due to population increase, there was a high demand for implementation of transit system in these regions. GO Transit has recently allocated a GO Train service to Waterloo.



After GO Train service implementation in the Waterloo region, there has been an increase in employment rates between June 2006 and February 2007 in major industries like Sun Life Financial, the University of Waterloo, Manulife Financial, Research in Motion and Wilfred Laurier University.From Figure 3 it can be seen that during the period of 2001-2031 the employment rate has been increasing linearly in region of Waterloo and Toronto .By 2011 the employment rate has been expected to increase from 21% to 76% by 2031. Due to this implementation, students and employees especially, who considered travel as a major hurdle, are not restricted to commute to Waterloo.  By 2031, there could be as many as 7,900 commuters taking GO Train into Waterloo region and 7,800 going out. The Waterloo, Guelph, and Toronto areas showed an increase in traffic which suggest that there is a strong employment and population relationship in these areas. Furthermore, increase in job opportunities will also help GO Transit increase its ridership. Eventually, increase in ridership will lead GO Transit to obtain more funding for the operating costs as 85%-90% of our operating costs are recovered from commuter revenue. In the year 2007-2008, GO Transit recovered $250,794,000 from commuter revenue and used $210,184,000 for operating expenditures. Furthermore, development in businesses, residential areas, and educational institutions leads the economy to expand into a metropolitan city.  This way, the government gains more revenue from the developing cities which can then be used to improve various infrastructure projects. Therefore, from the above examples and facts, we see that the survival of our company, growth of the economy and the achievement of good-will from our commuters come from the expansion of our services to new and developing areas.


GO Transit has improved its services not only through expansions but also through better technological upgrades. Innovation and Technology changes with time and in order to obtain success and compete with our competitors we have to be in pace with it. Currently, Go transit covers an area of 390 kilometers, operates 53 diesel-electric locomotives and runs 7 lines in all over southern Ontario fanning out from Union station, the central hub for all rails in Ontario. Figure 4 shows GO Train's current seven major locations.

Figure 4: - GO train's Existing Railway Network


The diesel-electric locomotive used by GO transit uses a diesel engine to drive an electric generator, which then supplies the current to traction motors that are geared directly to the locomotive's wheels. A combustible fuel like gasoline, kerosene and petroleum products are used to run the diesel engine in these locomotives.  One of the major drawbacks with these locomotives is the erratic price fluctuation of the combustible fuel. According to the federal and provincial government, the gas prices will fluctuate from 7.2 cents per litre to 20 cents per litre by 2015. As fuel costs make up a major portion of the operation costs, an increase in fuel prices will increase the operational costs of the GO transit immensely. Also, diesel-electric locomotives release fumes into the atmosphere which cause smog. This locomotive discharges contaminants into the air for every stop at a station, technical breakdown and as it moves along the rail line. The MP40 (diesel-electric) locomotive emits Nitrogen dioxide  and Carbon Monoxide into the atmosphere. There is 3.18lb of carbon dioxide emitted for every pound of diesel fuel consumed and the nitric oxide emitted from the engine causes climatic concerns. Moreover, it also reduces all the green house gas emissions that are emitted into our atmosphere by 132,000 tonnes, compared to the electric locomotive that reduces it by 170,000 tonnes. Diesel-electric locomotive produces noise level close to 51dB which would have an effect to the surrounding habitats. It also has a very short economic life as it requires engine maintenance on regular basis.The cost for maintaining all the locomotives of this type is estimated to be around $5 million dollars. For example, the diesel-electric locomotive disperses oil which adhere to the gears leaving behind oily residue and in order to remove these residue's, corrosive industrial cleaning agents are required. Factors like these reduce the efficiency of the locomotive and thereby hinder its economic life.Recently, in 2008, GO Transit conducted a Train Performance Calculation (TPC) to determine the efficiency of its locomotive. The TPC is a computerized program that accepts inputs of physical parameters and by utilizing a series of complex formulae, it computes acceleration rate, deceleration rate, energy consumption and minimum running time between all key points on the route.


Table 4 shows a comparison of MP-40 (Diesel locomotive) and ALP-46A (Electric locomotive) based on its minimum running time. The table shows that the electric locomotive that runs from Union station to Hamilton has 8 minutes and 54 seconds advantage over the diesel locomotive. This happens because the diesel locomotive takes more time to accelerate to a top speed. This time analysis report shows the inefficiency of our locomotive and calls for a change in order to better serve the commuters.  Hence, further research into more efficient technologies can eliminate the realibitly on combustible fuel and put more focus on going green.

Expansion of GO Transit brings benefits to the transportation system and to the accessibility of the population, employment, retail, and recreation activities. One of the most significant impacts of a rail transit project is the impact on property values. A study conducted in the Philadelphia area, examined the impact of commuter rail service on property values. Regional census tracts with rail services averaged 12% more of their residents working in downtown Philadelphia than surrounding census tracts. Census tracts in suburban Philadelphia near South-eastern Pennsylvania Transportation Authority commuter rail lines generally had a median home price 3.8% above the median home price of census tracts not near commuter rail.


Most of the tests of the impact of rail on property values showed that the positive effects of rail transit on property values were most prominently felt within a very limited distance from transit stations. Beyond this zone, the effect of the proximity to rail on property values is negligible. The added convenience of accessibility manifests itself to different types of properties.

Residential properties become more attractive because residents near rail more convenient access to regional employment, retail, and cultural opportunities. Properties holding employment uses such as offices and industrial sites experience higher property values because such properties have increased access to a larger labour market. In fact, office properties demonstrate a larger property value increase compared to industrial sites because office buildings tend

to cluster in more dense concentrations, allowing for the benefit of rail to be more acutely felt. Finally, retail properties often benefit from the fact that rail transit contributes to the concentration of activity and increases in pedestrian traffic in transit-accessible, pedestrian-oriented districts. Easier automobile access to stations, therefore, has limited appreciable effects on property values. This highlights the importance of creating more the pedestrian connections to rail transit stations and the enhancing the pedestrian environment around stations.


There are two primary ways that property values can increase due to a rail transit investment. First, Rail transit may make locations near transit more valuable as sites for potential development, thus increasing the value of property at those locations.

Second, rail transit can make a property a more attractive site for a higher level of development. Often, property owners decide they can develop their vacant parcels in order to capitalize on the proximity to transit. In other cases, an existing low density use can be converted to a higher density use or another type of use altogether. The conversion of properties from previously vacant sites to developed sites imparts additional value to the property.



Recommendation and Conclusion

GO Train strives to evolve its network of existing lines and technology to meet customers demands. In order to continue our success in the future, we must forecast the various impacts that might effect the stability of our company. One of the major factors that might hinder our company's growth is government funding.  The government uses money from gas tax to fund for transportaion. In Ontario, government allocates 2 cents/litre of gas-tax for public transit. But currently Canada is facing an economic crisis and due to that the governmernment is unable to provide funding. As a result, major infrastructure projects are delayed. Inorder to prepare for further unexpected castatrophies like these,the government of Canada along with GO Transit should take preventive measures. GO Transit has to ensure that funds are available to operate the system without the need for prohibitive fare increase and also invest in infrastructure to meet future demands. An agreement should be sought with the government to increase the amount of gas tax funding from 2 cents/liter to 4 cents/ liter. In this way, GO Transit achieves sufficient funding and can use it during national emergiencies against the implications that it might inflict upon us.

The current GO train technology (Diesel-electric) is nearing the end of its economic life. This technology has many implications, that it asks for a newer technology. The major drawbacks of this locomotive are its engine maintenance. The engine maintenance includes the expensive seasonal rust-proofing of engines and removal of oily residue which requires strong industrial cleaning agents. These engines release toxic fumes, produce loud noise and disperse oil in its course of travel. This has an adverse effect on the environment around it as it causes air and noise pollution. Its slow acceleration to top speed shows that its not time efficient and consumes a lot of energy. After analyzing these drawbacks, we are recommending the electrification technology. The electrification process uses clean sources of energy such as electricity obtained from hydro-electric dams, nuclear power cells, eliminating the use of combustible fuel. This technology eliminates the dispersion of oil, fumes and reduces the noise level by a greater amount. The implementation of this technology  is a way to attract motorists off highways to rail travel. This will not only save fuel on the rails but will also contribute to gasoline savings if motorists decide to travel by rail. On the whole, it can be said that this technology promotes a greener environment and has more benefits than drawbacks to neglect it.

-- GO Transit is one of the more critical components of the GTA transit systems. As such, it should be integrated with the TTC and propose a plan for fare integration, to increase the cohesivness of Toronto's transportation system as a whole.

-- GO Transit should continue to propose expansions and implement it in areas that are in demand based on population and trip statistics.In past various expansion plans has created higher job opportunities, development of a region into a metropolitan city,increase ridership and eventually generate more revene to the government. This is an excellent opportunity for GO Transit to use expansion as a major element to strive for future success because it would not only provide the postiive impacts mentioned above but also decrease traffic congestion on the roads by increasing ridership on underused rail lines. When GO Transit service is expanded, many people who want to commute to office or business related work take advantage of the cheaper and faster service. As a result, it would reduce the traffic congestion on roads, reduce air pollution and parking congestion. 


The above mentioned recommendations will help GO Transit to be competitive of all other transit systems in Ontario. Findings of this study hopefully can be useful in guiding some of the future direction of GO Transit. Howeever, in order for any intitatives to be implemented and administered effectively, one must examine the decision making process that GO Transit undertakes. This may be useful in providing a more comprehensive ananlysis of the management and organizational structure and how that relates to the sucess of GO Transit. The limitiations encountered in this report were, technologies such as(Maglev, Magnetic Monorail and high-speed rail transit) were not researched due to its very high implementation and operation costs. Also, evniormental analysis was used based on chart generated by United States enivormental agency whereas Canadian enviormental statistics were not available. Lastly, if any Transit system is implemented in Ontario then the impacts that will have on GO Transit. In conclusion, GO Transit has a high standing till date and in order to maintiain that position, we should make appropriate use of the opportutines and threats that may occur in the future.

Executive summary:

GO Transit was first implemented in 1967 by funding provided from the provincial government. Since 40 years, GO Transit has been providing wider services throughout Ontario. Currently we are stated as one of the number one transit companies in Ontario. In order to preserve that position, we have to forecast how GO Transit will be affected from various point of views in near future.

This report presents the research on GO Transit which was conducted to find out the measures GO Transit should take to continue to provide effective transportation to suburban communities.

At present, GO Transit is located in seven major areas and recently government has approved a multi-year expansion project which involves 3 major plans. The Federal government of Canada, Province of Ontario and local municipalities allocated $1 billion for this major expansion project. From the political point of view, recession has implied the govenrment to delay all the projects proposed by the transit companies. As a result, funding for future expansions or upgrades has become a threat for GO Transit.

On the other hand, the various expansions projects implemented by the government has a positive impact on the society and other businesses. Expanding in developing regions creates job opportutines, meets commuters demands, contributes to economic growth,and generates revenue to the GO Transit. Also, the expansion of GO Transit has positive effect on real estate business. Implementing rail transit in certain locations will encourgae people to buy houses in that area due to larger labour market. As a result, the land-value increase for residential, industrial and business properities.

From technological  point of view, the current diesel-electric locomotives are not environmentally friendly. This technology creates a threat to GO Transit because, rise in fuel prices increase the operating cost of the Transit system. High operation cost would obligate the government to allocate more funding in future.