This article was published by The Energy Mix on July 18, 2024.
By Mitchell Beer
The federal government is drawing cheers from transit agencies and criticism from riders after announcing a Canada Public Transit Fund that pours C$30 billion over 10 years into new vehicles and infrastructure, but is silent on the yawning operating deficits facing local transit systems.
On a visit to the Toronto Transit Commission’s Greenwood Yard maintenance facility yesterday, Prime Minister Justin Trudeau described the new fund as the “largest public transit investment in Canadian history,” meant to “expand, improve, and modernize public transit” and link transit dollars to housing development.
The program consists of three funding streams, Housing, Infrastructures and Communities Canada explained in a release:
• A series of Metro-Region Agreements, averaging $2 billion per year over 10 years, to “offer predictable funding in regions with the highest demand for public transit and active transportation funding, and where travel patterns often cross municipal boundaries”;
• $500 million per year in baseline funding to support “routine capital and non-capital investment” in transit and active transportation infrastructure;
• $500 million per year in targeted funding, to be managed through specific calls for proposals in areas like active transportation, zero-emissions transit, and rural transit.
‘Set Up to Succeed’
“By investing in public transit, we’re creating communities that are connected, affordable, and set up to succeed,” Trudeau’s office said in a statement. “Funding will begin to flow in 2026, but we are opening the intakes for Metro-Region Agreements and Baseline Funding today, so that we can provide transit agencies and municipalities with the funding certainty they need to advance projects now.”
“We will be submitting our application for new subway trains ASAP (today if possible)!” the TTC said on social media, after hosting Trudeau and Finance Minister Chrystia Freeland at Greenwood Yard.
Funding under the new Metro-Region Agreements will depend on cities and transit agencies working with provincial governments to develop long-term capital investment plans for transit and active transportation infrastructure, the PMO release said. As well, “to access long-term, predictable funding through this program, municipalities will need to take actions that directly unlock housing supply” by eliminating mandatory minimum parking requirements within 800 metres of a high-frequency transit line, and allowing high-density housing at the same distance from high-frequency transit lines and post-secondary institutions.
The Canadian Urban Transit Association welcomed the announcement. “CUTA has long championed the need for permanent federal funding, and today’s announcement marks a significant milestone in our efforts to secure reliable funding for transit infrastructure across Canada,” President and CEO Marco D’Angelo said in a release. He praised the new fund as “a historic investment that will help transit agencies address critical infrastructure challenges and support Canada’s economic, housing, social, and environmental goals.”
‘Parallel Universe’
Transit riders and their supporters pointed to the absence of any news on funding for day-to-day transit operations, as well as the timing of a funding announcement that takes effect in 2026, after the next federal election.
“To transit riders, it feels like this funding announcement is taking place in a parallel universe,” said Denis Agar, executive director of Movement: Metro Vancouver Transit Riders, in a release coordinated by Environmental Defence Canada. “Capital funding to build transit will be crucial for future generations, but what about the people that are riding transit today? The ones that are constantly stuck in congested, overcrowded buses? When is our funding announcement?”
“We are concerned that Prime Minister Trudeau made an announcement at a facility that maintains aging Line 2 subway trains, but did not provide certainty that federal funding for new Line 2 subway trains will come through when it’s needed,” added TTC Riders Executive Director Shelagh Pizey-Allen. “The Permanent Public Transit Fund would be even better news if it began immediately and ensured that subway trains could run as frequently as possible.”
Environmental Defence Clean Transportation Program Manager Nate Wallace called the announcement “a public transit funding program that doesn’t actually fund transit service. A lack of public transit operating funding means buses don’t show up on time, riders spend more time waiting, and fares continue to climb faster than inflation. It will result in continued growth of transit vehicle fleets that cities can’t actually afford to put into service.”
Wallace told The Energy Mix that groups advocating for federal operating funds for transit agencies “were expecting to be disappointed” by this week’s announcement. In February, an analysis by Environmental Defence and Montreal-based Équiterre concluded that permanent transit funding could help double ridership on mass transit and reduce transport emission by 65 million tonnes by 2035. But only if it included key policies like “public transit operating funding, federal strings to encourage housing density near public transit, zero-emission bus procurement requirements, and incentives for cities to speed up public transit service with dedicated bus lanes.”
The announcement covered some but not all of those bases, leading Wallace to conclude that Ottawa missed the opportunity to “effectively double transit ridership” by 2035.
How to Fund Operating Costs
“That’s going to take federal and provincial involvement and operating funding,” he said. Without those key ingredients, “we’re not going to see significant improvements in ridership growth, in the share of people who take public transit as their main way of getting around, and that ultimately means we’re not going to be seeing significant greenhouse gas reductions, which is very disappointing for us.”
The root of the problem, Wallace added, is that municipalities in Canada don’t have the revenue or the revenue-generating authority to provide sufficient funding to transit operations. In jurisdictions where transit works really well, he said, it’s either because cities can assess their own income or payroll taxes, or because national transit funds are available to cover operating costs.
CUTA Communications and Public Affairs Director Jon MacMull acknowledged in an interview that “many transit agencies still are struggling to have adequate operating funding for the level of transit service they need.” But he stressed that the Canada Public Transit Fund was always meant to be about capital costs.
“Today’s announcement was about capital investments, and we’re very pleased to see that involvement from the federal government,” he said. “Today is quite the investment, and I don’t think it should be completely detracted from by the fact that they’re not funding something else.”
MacMull added that the Metro-Region Agreements envisioned in the federal announcement will encourage communities to invest in electrification, zero-emission buses, and charging infrastructure, though those decisions will be “encouraged”, not prescribed. A call for proposals for zero-emission buses under the targeted funding stream “would be another avenue for electrification for those transit agencies that get additional funding.”
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