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This is the End of the Line

RECONSTRUCTING TRANSIT OPERATING FUNDING IN CANADA

 
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Cover graphic by Daniel Downey Illustration

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About the Report

This is the End of the Line: Reconstructing Transit Operating Funding in Canada is the first national comprehensive report on transit operating funding. The report by Leading Mobility Consulting takes a deep dive on the issues facing transit agencies related to operating funding with an aim to identify options to address transit operating funding shortfalls across the country. The status quo for how we pay for transit service needs to change. Transit agencies across the country are facing a fiscal cliff that is affecting their ability to maintain existing - let alone expand - service for the millions of Canadians that rely on public transit every single day.

This report delivers nine broad policy recommendations as they relate to transit operating funding across the country. It also explores three new revenue tools per city that could be used to fund transit operations, and how they could impact mode share, equity, municipal or regional objectives, as well as relative risk and considerations for implementation in the unique contexts of eight major Canadian cities. The role and need for operating funding support from Provincial and Federal governments is also discussed.

To develop these recommendations, in-person interviews were conducted with transit agency and municipality staff from eight of the largest transit agencies across Canada, specifically Metro Vancouver, Edmonton, Calgary, Winnipeg, Toronto, Ottawa, Montreal and Halifax in order to understand the challenges facing these urban regions. Further engagement was also conducted with the Canadian Urban Transit Association, the Federation of Canadian Municipalities and other industry experts including previous transit agency board members. In addition, transit operating funding models in three other G7 countries were explored along with best practices identified in academic studies to help inform policy recommendations for different levels of government.

 

Study Recommendations

Roles for Federal and Provincial governments to support transit agencies with operating funding

as they help deliver on their respective mandates such as economic growth, immigration, housing, healthcare, affordability and climate change

Encouraging transit agencies to daylight the costs of existing service provision and eventual service expansion

by hiring dedicated staff for prioritizing new expansion projects and communicating the collective impacts and implications for not securing funding and/or implementing new operating revenue tools

Dedicating revenue from local or regional transit funding tools to transit operations

to ensure that the connection between charges and fees is clearly distinguished from general revenue, so that taxpayers see the visibility

 

Policy Recommendations

  • The Federal Government should:

    1. Establish a tripartite national commission tasked with developing a new model for transit operating funding that includes commitments from the Federal Government. Unlike some other G7 countries, Canada does not dedicate operating funding or give options to use capital funding for operations.

    2. Provide subsidies for operating costs of new transit capital projects funded by the new Permanent Transit Fund. Public transit responds to and helps to fulfill Federal mandates such as affordability, immigration, economic growth through employment mobility, and action on climate change when Canadians take transit every single day.

  • The Provinces and Territories of Canada should:

    1. Work with transit agencies to identify solutions to operating funding shortfalls and adopt necessary legislation that allows them to use alternative revenue tools.

    2. Provide ongoing operating funding support to transit agencies as they take an increasing role in fulfilling provincial mandates. Public transit responds to and helps fulfill Provincial mandates such as housing and healthcare when Canadians take transit every single day.

    3. Advocate on behalf of transit systems and municipalities to the Federal Government to establish a tripartite national commission tasked with developing a new model for transit operating funding.

  • Municipalities and Transit Agencies should:

    1. Investigate the operating costs of new transit expansion, and increase public transparency.

    2. Hire or assign staff that are tasked with prioritizing new expansion projects, and advocate for operating funding and legislation for new revenue tools from senior government partners. This also would enable to build collaborative relationships with senior government officials as well as highlight the cases for investment.

    3. Explore alternative revenue tools and build the business case for using them to fund transit operations using a defined set of objectives. This report had six particular objectives, but they could vary from jurisdiction to jurisdiction.

    4. Dedicate revenue generated from new funding tools to public transit operations. The level of local government funding support and investment in public transit varies from coast to coast when compared against other expenses.