Canada Public Transit Fund begins accepting applications but won’t cover operating costs

By Transport Action | National News

Jul 21
A Calgary Transit bus crosses the LRT tracks at Saddletowne station.

The opening of applications for the Canada Public Transit Fund, $3 billion annually for ten years, was announced by the federal government on July 17, 2024 at the TTC’s Greenwood Yard. This funding, which should provide steady investment and long-term planning to continue addressing the mobility deficits that more than a third of Canadians face as non-drivers, and to give everybody more sustainable and less costly travel choices, is tremendously welcome.

Transport Action was involved in the development of this fund, including the formal consultations in September 2022 and our 2024 federal budget submission.  Our recommendations highlighted the need to broaden the program to include rural, northern, and Indigenous communities; to consider intercommunity bus and rail services; and to provide operating funding. Some of those recommendations appear to have been incorporated, but Transport Action Canada shares the concerns of many local transit advocacy groups across the country about the design of the program excluding operating costs, and that funding is still not set to begin flowing before 2026.

The announcement was led by Prime Minister Justin Trudeau, a sign of the importance the federal government currently attaches to both transit and housing. Cities will be required to eliminate space-wasting mandatory parking minimums and allow increased residential density near high-frequency transit routes.

“We’re making the largest public transit investment in Canadian history. Our government’s new Canada Public Transit Fund will invest $30 billion in community infrastructure to expand, improve, and modernize public transit – giving Canadians affordable options to get around, and making sure housing development is linked to that funding. Let’s make public transit better, faster, and easier to use.”

Justin Trudeau, Prime Minister of Canada

The incoming government made infrastructure and transit one of its key policy areas in 2015, recognizing that Canada has suffered from multi-decade malaise of underinvestment that left both our major cities and our hinterland ill-prepared to support growth in population and passenger numbers, and with citizens in many parts of the country without access to any public transport whatsoever. The Investing in Canada Infrastructure Program launched in 2016, the Zero-Emission Transit Fund, and the Rural Transit Solutions Fund have all directed federal resources at tackling this problem, with $30 billion invested over the last decade. The new fund will follow on from those programs, and is intended to be permanent, rather than ad-hoc.

Tangible results from such funding announcements are what matters, so Transport Action continues to urge all levels of government to work together to improve both project delivery and day-to-day operations, ensuring that public investment creates and effective, integrated, accessible and efficient network of public transport services. That requires dependable operating funding as well, and this fund will only be for capital.

Allowing municipalities to start applying to the fund early is a positive development, because it should then allow funding to flow quickly in 2026, and $20M in funding has been made available immediately to large metro regions for the development of long-term “Integrated Regional Plans” to prioritize capital projects.

However, the announcement doesn’t address the concerns about the deferred launch of this fund, first mooted in 2021 as the Permanent Public Transit Fund, creating a vacuum in funding for major capital projects like subways and light rail between the end of the Investing in Canada Infrastructure Program in 2023 and the start date of the new funding. Such a hiatus for shovel-ready and urgently needed projects like Calgary’s Green Line LRT only causes cost escalations while citizens and communities wait longer for results.

Three Funding Streams

The new funding program has been structured with three streams:

Metro-Region Agreements will support partnerships between the provinces and large urban areas with the largest and most complex public transit systems. This could include the Greater Toronto Area, Vancouver and the lower mainland, Winnipeg, Calgary, Montréal, and Halifax. Funding will be merit-based, with the highest amounts of funding going to the most ambitious partnerships, including those that demonstrate how investing in transit will help build more homes.

Baseline Funding will deliver predictable funding to existing transit systems based on their population and ridership. This stream is intended to upgrade, replace, or modernize transit infrastructure, including system expansion, lifecycle extension, performance improvements, and investments in the state of good repair of transit fleets.

Targeted Funding will support active transportation, rural and remote transit, transit investments in Indigenous communities, and the electrification of public transit and school buses. This stream will operate on a project basis through periodic calls for applications.

Toronto Mayor Olivia Chow attended the announcement and reaction from municipalities across the country has been broadly positive:

“This is the type of stable, and predictable funding Mayors have long been calling for, allowing municipalities to better plan large scale transportation projects.”

Josh Morgan, Mayor of London

The federal government asserts that this structure will allow the funding to cover communities of all sizes and types, and Transport Action welcomes the inclusion of rural, northern, and Indigenous communities under both the “Baseline” and “Targeted” streams. However, previous application-based programs have tended to have variable results, especially in smaller communities. With fewer staff to prepare grant applications and limited ability to match the grant with local funding for ongoing operations, under-served communities often continue to miss out. The wider societal benefits of ending mobility poverty, including savings to other levels of government in healthcare and unemployment costs, should be recognized through the provision of operating funds.

State of Good Repair requires operating funding

While the new funding streams will allow municipalities and transit systems to apply for grants to address deferred maintenance and return existing infrastructure a state of good repair, it does not appear to address the fundamental problem of inadequate operating funding, which is how many of those assets ended up being becoming degraded in the first place.

Adequate operating budgets are vital, both to ensure that the public receives the full value in terms of service level provided with the infrastructure and assets purchased, and to enable transit managers to plan for the maintenance and renewal of high-value assets that have multi-decade lifecycles.

Capacity building requires steady investment

One of the most serious problems caused by past decades of under-investment has been the decay in Canada’s industrial capacity in the transit sector, which is manifest as delays and cost escalations for projects like Toronto’s Eglinton Crosstown LRT, which complex outsourcing contracts fail to address because the private sector partners face the same skills shortage.

If the new Canada Public Transit Fund, or any other investment program, is to be a success that offers taxpayers and passengers fair value for money, Canada’s capacity gap must be closed. Universities, colleges, industry and people considering their career choices need long-term assurances in order to invest in training and education, so funding must also be backed by a political consensus to sustain a steady capital investment stream over the longer term, through multiple changes of government, to keep pace with Canada’s transit needs. This federal program is a step in that direction and Transport Action invites all parties to support making it truly permanent. That would allow Canada to rebuild its workforce in technical trades, engineering, and project management and thus to deliver transit projects on time and with a realistic budget.

Links:

https://housing-infrastructure.canada.ca/cptf-ftcc/index-eng.html

https://cutaactu.ca/cuta-welcomes-the-launch-of-the-canada-public-transit-fund

Photo: Calgary Transit bus crossing LRT tracks at Saddletowne station. © Terry Johnson/Transport Action Canada 2024 CC-BY 4.0