Agenda Item Y Pa e # FIG1

450 Highbuw Avenue N.. London, Ontario, N5W 5L2 Telephone: 519-451-1340 Fax: 519-451-4471

September 16, 201 1

His Worship Mayor Joe Fontana and

c/o Cathy Saunders, City Clerk City of London 300 Dufferin Avenue London ON N6A 4L9

Members of Council

Dear Mayor Fontana and Members of Council:

Re: Bill C-615 - A n Act to establish a National Public Transit Strateqy

At its August 31, 2011 meeting, the London Transit Commission reviewed the attached letter from Ms. Olivia Chow, MP, New Democrat Official Opposition Critic for Transport, Infrastructure and Communities regarding Bill C-615 calling on the Federal Government to establish a National Public Transit Strategy. The Commission fully supports the private member's bill and requests Municipal Council's support and communication of that support to Ms. Olivia Chow.

For your reference, also attached is a copy of the March 5, 2007 report from the Federation of Canadian Municipalities Big City Mayors' Caucus (BCMC) on the National Transit Strategy. The paper sewed as BCMC's proposal for such a strategy and commitment to this goal.

Effective, efficient public transit is widely regarded as a necessary element of a response to urban challenges. It is fundamental to growth, access to opportunity, economic development, environmental health, and a high quality of life. As such, the federal support for public transit is imperative in achieving strong and vibrant municipalities.

Yours truly,

' y f n ! P Chair

Enclosures

Agenda \tern Pa

Larry Ducharme General Manager

made it harder to get around in our cities, caused increased congestion and is hurting economic growth nationally. Our municipalities require and deserve stable, reliable, sustainable federal funding for public transit to help them meet this national challenge and to build more environmentally sustainable, prosperous and livable communities that will help Canada remain competitive in the future.

I am writing today to ask for your support for my private member's bill calling on the Federal Government to establish a National Public Transit Strategy. It will be debated in October and all MPs will have a chance to vote on it in this November. If it passes second reading this fall and third reading in the spring of 2012, there is a good chance Canada will finally have a national public transit strategy next year.

As Official Opposition Transport Critic, Ibave the support of the 102 member strong NDP caucus. As private members' bills transcend partisan politics, I am hoping all other Members of Parliament, acting on behalf of our municipalities and communities, will also vote in favour of finally establishing a national public strategy.

Having served as a Toronto City Councillor, as a member of the FCM Standing Committee on Municipal Infrastructure and Transportation Policy, and a member of the Toronto Transit Commission, I have firsthand knowledge of the need for federal support for public transit.

I am attaching a copy of the bill I tabled in the House of Commons during the previous session. It did not get debated because of the election. I plan to reintroduce it in September when the House of Commons resumes, when it will be debated and voted on as it will have the order of precedence.

Please express your support by joining for the bill by contacting your Member of Parliament.

London Transit Commission 450 Highbury Avenue North, London, ON, N5W 5L2

August 10,201 1

Communication #2 August 31, 2011 Page 1 of 8

TriW-Spadina Canada's cities and communities rely on public transit to drive our economy, enhance our b uality of life and protect our environment. Years of underinvestment in public transit has DCputhe de Trinity-Spadina

llttatrvr Room 362

West Block Ottawa. Ontario

K i A O A 6 Tel: (613) 992-2352 Fax: (613) 992-6301 ChowO@parl.gc.ca

CUl4titUenU# I 44 Augusta Avenue Toronto, Onrario

MST 2L5 Tel: (416) 533-2710 Fax: (416) 533-2236

Ottncrrcr Piice 362

h R c e de rOuert

K i A O A 6 T4.: (613) 991-2352

TCICc.:(613) 992-6301 ChowO@parl.gc.ca

orrawa (Ontario)

CincMdvription 144. avenue Augusta Toronto (Ontario)

M5T 2L5 TCI.:(416) 531-2710

TClGc.: (416) 531-2236

WW. oliviachowxa

Sincerely,

C-615

Third Session, Fortieth Parliament, 59 Elizabeth II,2010-2011

HOUSE OF COMMONS OF CANADA

BILL C-615

A n Act to establish a National Public Transit Strategy

Communication #2 August 31,201 1 Page 3 of8

C-615

Trois ihe sessipn, quarantihe l6gislature, 59 Elizabeth 11. 2010-201 I

CHAMBRE DES COMMUNES DU CANADA

PROJET DE LO1 C-615

Loi ttablissant une strategie nationale de lransport en commun

FIRST READING, FEBRUARY 3,201 I PREMIBRE LECTURE LE 3 FBVNER 201 I

MS. CHOW MMe CHOW

4 0 3 2 7 9

Agonda item # Pa e #

E lGI communication #2 August 31, 2.01 1 Page 4 of 8

SUMMARY SOMMAIRE

This enncmonf establishes B national strategy to pmmote and cnhansc the Le prevoit I'0tablisrcment d'une 8trBtOgic natiowlc dcstinCc A pmmouvair et B fivoriaor I*utiiisation de transports cn cornrnun rapidcs, abordblcs et accmibler BU Canada.

use of Fast, aFTordsbie and accessible public bnsif Tor Canadians.

Also nvaiiablo on L o Parliament of Canada Web Site at the following address: Aussi disponible sur le site Web du Parlement du Canada & i'adresso suivante: http:/lww.parl.gc.ca http://mvw.parl.ge.ca

Agenda Item W Pa e # Communication #2

rl G] P a g e 5 o f 8 August 31,201 1

3rd Session, 40th Parliament, 59 Elizabeth II, 2010-2011

3* session, 40’ legislature, 59 Elizabeth II. 2010-2011

HOUSE OF COMMONS OF CANADA CHAMBRe DES COMMUNES DU CANADA

BILL C-615 PROJET DE LO1 C-615

An Act to establish a National Public Transit Loi etablissant une strategie nationale de Strategy transport en commun

Presinblc Whereas Canada’s future sustainable devel- opment is dependent on public transit;

Whereas fast, affordable and accessible pub- lic transit is vital to the movement of people in cities and communities and has immeasurable social, environmental, economic and health benefits;

Whereas oublic transit olavs a central role in

5

. , urban and metropolitan regions by contributing to cleaner air, lowering greenhouse gas emis- 10 sions, lessening congestion and reducing the pressure for more roads;

Whereas investments in public transit infra- structure benefit the people o f Canada by creating thousands of new jobs and revitalizing 15 local economies;

And whereas better public transit results in cleaner and more productive cities and commu- nities in which people can access the jobs and services that are needed for economic growth; 20

Attendu : Prhmbulc

qu’au Canada, le dbveloppement durable de demain repose sur le transport en commun;

que des transports en cominun rapides, abordables et accessihles sont essentiels au 5 dbplacement des personnes dans les villes et les collectivitb et engendrent des bienfaits inestimables relativement B la societb, B l’environnement, tt I’dconomie et B la sant6;

que les transports en commun jouent un rble IO central dans les 6gions urbaines et mbtropo- litaines en favorisant l’assainissement de I’air et la reduction des Cmissions de gaz B effet de s e m et de la congestion routikre, et en diminuant I’urgence d’accroitre le rbseau 15 routier;

que I’investissement dans I’infrastructure du transport en commun profite la population canadienne, car il permet la ckation de milliers d‘emplois et la revitalisation des 20 6conomies regionales;

que I’amblioration du transport en commun se traduit par des villes et des collectivit6s plus propres et plus productives. o~ les gens ont accb aux emplois et aux services necessaires 25 B la croissance konomique,

Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Sa Majestb, sur I’avis et avec le consentement du Sbnat et de la Chambre des communes du Canada, Cdicte :

403279

2

August 31,2011 Page 6 of 8

59 ELIZ. 11

SHORT TITLE TITRE AB&G&

Slrurl title 1. This Act may be cited as the National 1. Loi sur la shalgie nationale de trarrsport ~ilrr nbr+

Public Transit Strategy Acl. en commuii.

GENERAL DISPOSITIONS G&N&RALES

PUWX 2. Tile purpose of this Act is lo establish a national strategy to provide public transit that is fast, affordable and accessible.

2. La prkente loi a pour objet d'ttablir une stratkgie nationale de transport en commun

5 destinke i garantir aux Canadiens l'accb i des 5 transports en commun rapides, abordables et accessibles.

3. Recognizing the unique nature of the 3. Compte tenu de la nature spkciale et jurisdiction of the Government of Quebec with unique de la compttence du gouvemement du regard to public transit, and despite any other Qukbec en matiBre de transport en commun, et 10 provision of this Act, the Government of par derogation aux autres dispositions de la Quebec may choose to be exempted from the 10 presente loi, le gouvernement du Qubbec peut application of this Act and must, if it chooses to choisir de se soustraire & l'application de la do so, receive an unconditional payment of the pksente loi et peut, s'il choisit de le faire, full federal funding that would otherwise be recevoir le financement intCgral, sans condition, 15 paid within its territory under section 4. auquel il aurait droit en vertll de l'article 4.

Objel

Exemption Exemplion

NATIONAL PUBLIC TRANSIT STRATEGY STRATBGIE NATIONALE DE TRANSPORT EN COMMUN

Noliunnl Public Trontil Slrolcgy

4. The Minister of Transport shall, in con- 15 4. Le ministre des Transports, en consulta- sultation with the provincial ministers respon- tion avec les ministres provinciaux responsables sible for public transit and with representatives du lransport en commun et avec des reprksen- of municipalities, transit authorities and Aborig- tants des municipalitks, des sociktks de transport 20 inal communilies, establish a national public et des collectivites autocbtones, Ctablit une transit strategy designed to 20 stratkgie nationale de transport en commun qui :

strategic

CommUn

(u) encompass the following goals: a ) d'une part, rtunit les objectifs suivants:

(i) increase access to and use of public (i) elle accrolt, au moyen de mesures transit through support for service and relatives au service et B la capacitk25 affordability measures, financi&re, I'utilisation des transports en

commun, (ii) improve the economic competitiveness 25 of Canadian cities and communities, (ii) e lk am6liore la competitivitt Ccono-

(iii) enhance the quality of life, and mique des villes et des collectivitbs canadiennes, 30

(iv) reduce greenhouse gas emissions and immove air aualitv; and (iii) elle rehausse la qualit6 de vie, . ..

(iv) elle rkduit les tmissions de gaz A eKet de serre et 'mtliore la qualit6 de l'air;

(b) accomplish the following measures: 30 (i) provide a permanent investment plan to support public transit that places it at the centre of all Canadian cities and commu- nities. ment vermanent visant i annuver le

b) d'autre part, pdvoit :

(i) IUlabomtion d'un plan d'investisse- 35 .. I

transport en commun et B en faire un pilier des villes et des collectivitbs canadiennes, (ii) establish federal funding mechanisms 35

to ensure the financial health of the operation of public transit systems and to

2010-20 1 1

Communication #Z August 31,201 1

Agenda item Y Page ## pJp1 Page 7 of 8

Strat6gie nationale de transport en commun

meet the capital needs of public transit systems, including the rehabilitation and renewal of existing infrastructure and the expanding capacity to respond to inmeas- ing public transit needs, 5

(iii) work together with provincial and municipal governments, as well as with transit authorities to provide sustainable, predictable and adequate funding,

(iv) provide a leadership role to align, on a 10 national basis, public transit visions, plan- ning goals, project justification, consttuc- tion time frames and budgets,

(v) direct research to identify innovation in sustainable public transit technologies, 15 to develop policy approaches to increase access to and use of public transit and to promote information sharing among public transit systems in Canada, and

(vi) establish accountability measures to 20 ensure that all governments work together to increase public transit use.

Coordinaad 5. (1) The Minister of Transoort. in con-

(ii) la mise en place de mecanismes de financement B 1’6chelle fedkale pour assurer la sante financikre des exploitants de r6seaux de transport en commun et combler les besoins en capital de ces dseaux, notamment en ce qui a trait B la remise en &tat et au renouvellement de I’infrasttucture existante et B I’augmenta- tion de la capacitk du rkseau afin qu’il

3

5

puisse &pond& aux besoins croissant; en 10 matiBre de transport en commun,

(iii) I’entretien d’une collaboration entre le gouvernernent f&d6ral, les gouvernernents provinciaux, les administrations municipa- les et les societb de transport dans le but 15 d‘assurer un financement durable, prkvi- sible et suffisant,

(iv) I’exercice d‘un r61e prkpond6rant en vue d’harmoniser, A l’bchelle nationale, les visions en matiere de transport en corn- 20 mun, les objectifs de planification, la justification des projets, les dklais de construction et les budgets,

(v) I’encadrement de travaux de recherche visant a reptrer des secteurs oh il est 25 possible d’innover dans les technologies durables de transport en commun, ii faciliter I’elaboration de d6marches strate- giques destinkes B accroitre I’utilisation des transports en commun et B favoriser 30 1’6change d‘information entre les reseaux de transport en commun au Canada,

(vi) la prise de mesures de responsabilisa- tion visant ti assurer la collaboration de tous les ordres de gouvemement en vue35 d’accrohre l‘utilisation des transports en commun.

5. ( 1 ) Le ministre des Transvorts. en consul- mmarchc . , . . . , ~. sPPmach sultation with the provincial ministers respon- tation avec les ministres provinciaux responsa- coordunnbc

sible for public h’ansit and with representatives 25 bles du transport en commun et avec des 40 of municipalities, transit authorities and Aborig- reprbentants des municipalitks, des sociCt& de inal communities, shall encourage and promote transport et des collectivitts autochtones, en- a coordinated approach to the implementation of courage l’adoption d’une demarche coordoniiie the national public transit strategy and may relativement B la mise en oeuvre de la strategie provide advice and assistance in the develop- 30 nationale de transport en commun. De plus, il45 ment and implementation of programs and peut foumir des avis et de I’assistance dans practices in support of that strategy. I’klaboration et la mise en oeuvre des program-

mes et des pratiques ti I’appui de cette strategie.

Ccrnmunication #2 August 31,201 1 Page 8 of 8

Nafional Public Pansit Straregv 59 ELIZ. I1

btenrurel rOi il"p1V"l~"ti"g

(2) The Minister of Transport, in cooperation with the provincial ministers responsible for public transit and with representatives of municipalities, transit authorities and Aboriginal communities, may take any measures that the 5 et des collectivites autochtones, peut prendre 5 Minister considers appropriate to implement the national public transit strategy as quickly as possible.

6. The Minister of Transport shall, within 180 days after the coming into force of this Act, IO I'entrie en vigueur de la pdsente loi, le ministre 10 convene a conference of the provincial ministers responsible for public transit and of representa- tives of municipalities, transit authorities and Aboriginal communities in order to

(2) Le ministre des Transports, en collabora- tion avec les ministres provinciawt responsables du transport en commun et avec des reprben- tants des municipalit6s, des SociCIC de transport

toute mesure qu'il juge indiqute pour m e w en oeuvre le plus rapidement possible la stratbgie nationale de transport en commun.

6. Dans les cent quatre-vingts jours suivant

des Transports convoque une conference rku- nissant les ministres provinciaux responsables du transport en commun et des reprtsentants des municipalit&, des sociktks de transport et des collectivit~s autochtones en vue de rbaliser les 15 objectifs suivants :

a) Blaborer des mkcanismes de financement

MCSUES C" OeUVrF de mise

Nrlusnl eunrerrnce

confhrcncc

(a) develop funding mechanisms for the 15 national public transit strategy and programs to cany it out;

pour la stratbgie nationale de transport en commun et les programmes connexes de mise en oeuvre;

6) ktablir des cibles pour le lancement des programmes mentionnes B l'alinta a);

(b) set targets for the commencement of the progranis referred to in paragraph (a); and

(c) develop the principles of an agreement20 between the federal and provincial govem- ments and revresentatives of the municbal-

20

ities and Aboriginal communities for the development and delivery of the programs referred to in paragraph (a).

c) dbgager les principes d'une entente entre le gouvemement fedkal, les gouvemements provinciaux, les municipalit& et les collecti- 25 vitbs autochtones B I'kgard de 1'6laboration et de la prestation des programmes mentionnbs B l'alin6a a).

25

REPORT TO PARLIAMENT RAPPORT AU PARLEMENT Report 7. The Minister of Transport shall cause a 7. Le ministre des Transports fait deposer un

report on the conference described in section 6, rapport sur la confkrence viske including the matters referred to in paragraphs traitant notamment des sujets 6numMs aux 6(a) to (c), to be laid before each House of alinCas a) 6 c) de cet article - devant chaque Parliament on any of the first five days that the 30 chambre du Parlement dans les cinq premiers House is sitting following the expiration of 180 jours de s6ance de celle-ci apr& I'expiration days after the end of the conference. d'un dtlai de cent qualre-vingts jours suivant la 35

fin de la confkrence.

~ a p p o d

I'atiicle 6 - 30

Published under authority of tho Spoakor of the House of Commons Availablc from: Publishing and Depository Services Public Works and Government Services Canada Oltaws, Onlnrio KIA OS5 Tclcphonc: 613-941-5995 or 1-800-635-7943 Fax: 611-954-5779 or 1-800-565-7757 puhlications@tpsgc-pwgsc.gc.Fa i,np:ilpublicstions.gc.ea

Publib B Y ~ E I'aulorisation du p+sident de Is Chambre des omm mu nee

Disponibls suprb de: Lca edition$ et Services de d$dt Travaux publies et Services gauvcmcmentaun Canada Ottawa (Ontario) KIA OS5 Telephone: 613-941-5995 ou 1-800-635-7943 Tblecopicw: 613-954-5779 ou 1-800-565-7757 p u b l i c a l i o n s @ l p J g o - p ~ ~ . ~ ~ . ~ ~ hnp:llpublicatians.gc.ca

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Agenda Item # Pa e #

Federation of Canadian Municipalities Big City Mayors' Caucus

National Transit Strategy

March 5, 2007

National Transit Strategy

TABLE OF CONTENTS

Executive Summary ...................... .................................. 3

Intmduction ..................... .............................................. 5

I The Nerd for a National Strategy ..................................... ..5

2 Ransit in Canada %day.. ............................................ 7

3 The Challenges &&g Ramit ........................................ ...I 2

4 Kq Elmmu of a National Tramit Strateu ...................... I 5

4.1.2 Proposed allocation

4.2 A lcgislated program ....

.......................................... 1G ....................................... 17

4.G Innovative research ...................... 4.7 Accountability ..........

Conclusion ........................................................................... 18

~ ~~ ~ ~ ~~

Federation of Canadian Municipalities 24 Clarence Street Ottawa, Ontario IKiN 5P3

For more information, please contact Michael Buda Senior Policy Analyst Tel.: (613) 9076271 E-mail: mbuda@fcm.ca

Executive Summary In June 2006, FCM's Big City Mayors' Caucus (BCMC) released a report entitled Our Cities, Our Future. One of the key recommendations o f the report was that the federal government establish a national transit strategy to improve the global competitiveness, quality of life and environmen- ta l sustainability of Canada's cities. This submission is BCMC's proposal for such a strategy, demonstrating the Caucus' commitment to this goal.

Safe, reliable and efficient public transit is vital to the move ment of people in urban economies, presenting undeniable economic, environmental and social benefits not just for cities and communities, but for the entire nation.

Canadian transit riders pay a higher percentage ofthe total costs required t o build, maintain and operate transit than do riders in almost all other Western countries. However, in spite ofthis (or perhaps because o f it), meeting public tram sit's needs remain difficult.

Almost every transit system in the world requires operating contributions to offset the shortfall between total costs o f operation and total revenue from fares, and Canada's sys- tems are no exception. Likewise, almost all transit systems worldwide also require capital contributions to cover all spending on capital projects - that is, to renew and expand our transit networks. The Canadian Urban Transit Association (CUTA) has estimated that transit systems across the country need $20.7 billion for infrastructure between 2006 and 2010, or about $4.2 billion annually, which covers rehabilitating and replacing existing systems, as well as expansion plans t o accommodate increasing numbers of riders.

Of the $20.7 billion required, 44 per cent i s needed t o reha- bilitate or renew existing infrastructure, while 56 per cent is needed to expand service capacity to serve more riders. These figures speak t o the need both to maintain infrastruc- ture and to respond to the growth potential for transit. We must both restore transit infrastructure and respond to the increasing mobility needs ofthe growing urban population.

Municipal shares o f both operating and capital subsidies derive primarily from property taxes, supplemented in some cases by special levies on gasoline sales, parking and hydro bills. Clearly, the property tax on its own is not sufi- cient to support public transit, given the estimated $60 bil- lion municipal infrastructure deficit, the l imited revenue sources, the growing responsibilities of municipal govern- ments and the already substantial municipal support for transit. Municipal governments need help t o deliver the transit services that the nation's economy, quality of life and environmental sustainability rely on.

.

Finding the necessary funds is a major issue facing munici- palities. CUTA estimates that the new investments required just to stay afloat, to say nothing o f meeting unmet and future demands, are almost as large as the entire sum cur. rently invested in all transit capital projects.

Clearly, much more needs to be done even just to maintain what we have. Recent federal government initiatives for municipal infrastructure funding are an important and wel- come start. But we need to replace short-term, ad hoc funding with longer term, more predictable commitments from all orders o f government that come closer to address- ing the outstanding needs.

Canada remains the only OECD country without a l ong term, predictable federal transit-investment policy, even though moving people efficiently in urban areas requires a partnership among all orders of government. As transit's share ofurban travel continues to grow, federal and provin- cial governments must provide long-term reliable funding, so that transit systems have the financial certainty they need t o meet the needs o f Canadians now and in the future.

Recommendations: Given the importance ofa national commitment to transit, the Caucus believes that this strategy should be made permanent through federal legislation. Following are the key elements we propose for a national transit strategy:

Investments We propose that an annual amount o f $2 billion be used for capital expenses, to maintain the transit system in good repair and to expand the system t o accommodate both population growth and a modal shift toward transit over private automobiles. This amount would be revisited over t ime t o see whether it is adequate, and the amount itself would be adjusted to keep pace with inflation.

Integrated land use and transportation planning Land use and transportation planning must be integrated t o ensure that development supports transit and is orient- ed toward it. There should be appropriate land use densi- ties and a balance ofmunicipal economic, social and envi- ronmental priorities. Cities will therefore only be eligible for funding ifthey have a council-approved land use and trans- portation plan that favours transit as the primary means for accommodating future growth in travel demand.

Nariond Transit Srraregy 3

Demand incentives For a transit strategy to be successful some people may need additional incentives to use transit. The federal gov- ernment can play a strong role in developing tax incentives that support transit.

Innovative research An important component of the strategy provides research to support greater transit use. Two kinds of research are needed-first, cooperative research that promotes informa- tion sharing and innovation among transit systems, and second, research that identifies policy approaches all gov. ernments can use to increase ridership and t o meet impor- tant economic, social and environmental priorities through increased transit use.

Accountability Given the proposed scope of the national transit strategy, it is important that all governments.work together to ensure that there are appropriate accountability measures in place.

4 Federrtian of Canadian Municipalities (FCM) Big City Mayors' Gucus

Agenda Item Y Page #

Fl5G-\

Introduction In June 2006, FCM’s Big City Mayors’ Caucus (BCMC) released a report entitled Our Cities, Our Future. One o f that report’s key recommendations was that the federal govern- ment should establish a national transit strategy t o improve the quality of life in cities and to further Canada’s economic competitiveness. This submission is a follow-up t o that rec- ommendation.

Through this submission, BCMC proposes what a national transit strategy should entail and demonstrates our com- mitment to pursue this goal. This submission i s organized to do the following:

outline the need for a national transit strategy; provide an overview oftransit in Canada today; identify the current challenges in delivering transit; and present BCMC‘s position on essential key elements of a strategy.

*

1 The need for a national strdtegt Canada’s cities are integral t o the success o f the whole nation. Cities are where the majority of Canada’s wealth is generated, where more than 80 per cent o f Canadians live and where we present Canada’s face to world. When cities succeed, al l o f Canada benefits. Unfortunately, l imited financial resources are affecting the economic, social and environmental sustainability o f cities. Limited resources affect the competitiveness ofcities and the quality of life of the people who live in them.

The good news is that while cities are faced with increasing challenges, they often lead the way, applying innovation and vision to the real problems that affect Canadians. One area where cities lead the way is public transit, in which they act on behalf o f all governments, for the benefit ofcitizens. businesses and the environment. Public transit plays a cen- tral role in urban and metropolitan regions since it con- tributes to cleaner air, lowers greenhouse gas emissions, lessens congestion and reduces pressure for more roads. Public transit contains urban sprawl and makes cities both more attractive and more competitive.

Despite the benefits oftransit, Canada remains the only C-8 country without a national transportation program. Canada has made some important steps i n recent years to address some of the cities’ transit challenges. Important building blocks to a national transit strategy include com- mitting to the Public Transit Capital Trust, sharing the fed- eral gas tax with municipalities and introducing a transit- user tax credit. But these elements are not enough to address the underlying lack ofa national transit strategy and o f a permanent investment plan to support transit.

There have been importont initiatives in the last three years but urbon transit policy andfunding is critically underdeveloped. Canada i s the only G8 country with- out an urban transit program properly funded by its federal government. -Toronto Board o f Trade, Strong City, Strong Nation,

January 2006

A permanent national transit strategy that is legislated to demonstrate commitment and provide predictability will not only greatly improve the quality o f life and competitive- ness in Canada’s cities, but can also go a long way to meet- ing federal objectives.

Support for National Transit Strategy “Public transit investment benefirs aU sectors of the economy and a cross section of Canadian communities. The federal gov- ernment needs to recognize that public transit is a key driver of economic competitiveness. A dedicated, long-term commitment to public transit should be a matter of national economic and environmental policy and receive the highest priority.” (Toronto Board of Trade, Strong City, Smng Nation U p a h - the &ruing Gap, January 2006, p. 14)

“Recognizing the importance of urban areas, the federal govern- ment should provide sustainable, predictable, long-term funding to support urban transportation investment.” (Council of the Federation, Looking fo h e Fufun: A Planfor Investing in Canaddr Transportation System, December 2005, p. 27)

‘With a dedicated ilational cmisit program, Gnada can move forward into the 21s century with funding to maintain the existing infrastructure and develop new uansit projects that are important to relieve congestion, improve mobility for all Canadians, and strengthen the economy.” (Canadian Chamber of Commerce, 2006, Smngthcning Cam&& Urban Public Transit Syrtmtr)

“There remains, however, a need for the federal government to develop a consistent, coherent approach to transit funding and a stable, long-term investment strategy to address tnnsit needs that would daw proactive planning for new routes and facili- ties.” National Round Table on the Environment md the Economy, 2003, Environmental Quality in Cmndinn Citirr: The Federal Role, p. 35)

“The federal government should create a new permanent pro- gmn of direct investment in transit expansion and renewal, as well as the creation of new transit systems.” (Cnnadian Urban Transithsociation. 2006 Issue Paper No.18: Investingin Fanrit: A Going Concern)

National Transit Strategy 5

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Meeting national priorities Thefunding challenge is greater stillfor large scale components ofthe transportation system that are not financially self-supporting, such as highways. urban and inter-regional transit, urban roads and border crossings and routes that lead to them. Signijicant and sustained investments must be made in these vital components of the transportation system ifthey are to fu,fff the economic, social and environmental expectations that Canadians ascribe to them.

-Council o f the Federation, 2005

Safe, reliable and efficient public transit is vital to the move- ment o f people in urban economies. presenting undeniable economic, environmental and social benefits not just for cities and communities, but for the entire nation. Below, we look at the contribution transit can make in three specific areas: economic competitiveness, quality o f life and the environment.

Economic competit iveness

Canada's quality of life and economic competitiveness depend in part on having reliable, eficient infrastruc- ture that is provided in large pari by the municipal, provincial, territorial andfederal governments.

Federal Budget 2006, Restoring Fiscal Balance in Canada - Focusing on Priorities.

As we have seen, Canada's cities help drive the national economy. They are incubators of innovation and magnets for attracting human talent. Canadian cities are increasingly competing with cities in Europe, Australia, Japan and, most vigorously, the United States. While the key factor in the old economy was cost efficiency, in the new economy competi- tive advantage has shifted t o those regions that can gener- ate, attract and retain the best talent and the most financial capital.

Canada's success therefore is strongly linked to the eco- nomic success o f its cities. Cities must ensure that their transportation infrastructure moves people efficiently; that their solid-waste management is sustainable and cost-effec- tive; that their water is safe to drink; and that their resi- dents have access to recreation and culture.

A recent Toronto Board ofTrade survey, for example, identi- fies gridlock as the top priority ofToronto's largest corpora- tions, suggesting that there is no single factor more influ- ential than transpottation in determining where businesses locate.' In fact, the Board has stated that congestion is quickly becoming Toronto's main competitive disadvan. tage. But this is not just a Toronto phenomenon. Conges- tion is affecting the competitiveness o f al l ofCanada's urban regions, a point reinforced by a 2006 federal study

that found "the total annual cost ofcongestion (in 2002

dollars) ranges from $2.3 billion t o $3.7 billion for the major urban areas in Canada."'

Congestion and consequent delay can also affect road capacity, public transit alternatives, the "friendliness" of the urban environment for cycling and walking, and the avail- ability and cost o f parking. While transit availability and lev- els are key drivers ofcongestion, they are also Ikey solutions to its mitigation. For example, i t is difficult to imagine such cities as Montreal, Ottawa and Toronto funaioning without their transit systems. During the morning peak period, 78 per cent oftrips entering Toronto's central business district are by transit. The existing road system could sim- ply not handle those volumes on i t s own.

A national transit strategy that provides permanent invest- ments will help tackle congestion i n our cities, which will influence not only the movement ofgoods, but o f people as well. It would put cities on a level playing field with their international counterparts, improving Canada's competi- tiveness.

O u a l i t v of l i f e

In addition to improvingcanada's competitiveness, a national transit strategy would also improve the quality o f life in our cities, as well as their "quality o f place," a con- cept that relates to economic, social and environmental attributes, such as access to employment, transit, afford- able housing and green space. The ability of people to enjoy daily life is clearly an appropriate measure ofquality o f life and public transit plays a key role in this area.

According to the Canadian Urban Transit Association (CUTA), transit helps improve quality of life by contributing to the following:

improving traveller choice; keeping downtowns healthy; containing urban sprawl; improving air quality and health; reducing greenhouse gas emissions; bringing opportunity to disadvantaged persons; improving business access t o the labour force; and improving municipal standby capability:

6 Federation of Cviadian Municipalities (FCM) Dig City Mayors' Caucus

Agenda Item # Pa e #

ElGI

Transit also plays an essential social role in cities o f all sizes. It is the only universally accessible form ofurban transport that provides access t o employment, education, health care and recreation, including t o those who do not have access to a car, as well as those with physical disabili- ties. This is emphasized by a study conducted by the Montreal Transit Corporation (Societe de transport de Montreal) that concluded that more than 40 per cent o f its transit users are from households with revenue less than $40,000 and more than 40 per cent of its transit users are from households without a car. Moreover, without public transit. many of our urban centers would be gridlocked, with ever more vehicles competing for ever scarcer road space.

Clean air and climate change

Establishing a national transit strategy is an important first step in developing a broader strategy t o address climate change and clean air. The Quebec government, for exam- ple, has successfully linked a comprehensive transit strate- gy with climate change as part of its appeal to the public.

Canada's public transit system is aging and renewal is going slowly. However, this also presents opportunities. Cities can provide environmental and health benefits by investing in additional light rail systems, replacing ineffi- cient modes with cleaner and more efficient technologies and fuels (such as biofuels), and improving the public understanding o f the links between public transit, quality of life and "urban form" (how and where development occurs). Doing so will also help make cities more competi- tive. Canada's cities need a clean, safe, reliable and efficient network of public transit systems ifthey are to compete in a global economy, and it is through strategic, targeted investments that this can occur.

In developing a national transit strategy and a broader strategy around climate change and clean air, Canada needs to look at other world leaders. In some o f the world's leading cities, the public transit system forms the baclcbone of an interconnected web o f roads, bridges, railways and ports, which collectively establishes the urban form. In these cities, public transit i s fast, efficient and preferred by daily commuters. However, in Canada, where the trans- portation sector as a whole is responsible for close to 30 per cent o f the country's total greenhouse gas emis- sions, passenger vehicles continue t o be the preferred method o f transportation. Indeed, passenger vehicles are the biggest source o f increases in greenhouse gas emis- sions within the transportation sector, now accounting for 70 per cent oftransportation emissions. Two-thirds o f these emissions are generated within urban areas:

The role o f the Passeneer vehicle in meetine the transDorta-

sions and air pollutants. A study ofenergy use and green. house gas emissions i n urban passenger transport systems from 84global cities reveals that energy consumed per pas- senger kilometre in public transport in all cities is between a fifth and a third that of private transport.

Given this, how do we encourage people to make greater use of public transit? This shift will require more than sim- ply investing in public transit infrastructure: i t will require managing and reducing the role ofthe automobile in urban transport systems, while recognizing that urban form is a critical factor in creating sustainable urban transportation systems.

When made in the context o f a broader transportation and sustainability strategy, investing in public transit also con- tributes fundamentally to cleaner air and action on climate change. This broader strategy must address our reliance on passenger vehicles and the inefficiencies of our urban form. New investments should take into account the full comple- ment of environmental, social and economic considera- tions. But building a stronger transit system is a critical first step on which further strategies will be built.

2 Transit in Canada toahy To properly develop a national transit strategy it is impor- tant to understand current transit practices and challenges. Providing transit service requires three main types o f tinan- cia1 commitments from all governments:

Direct revenues, predominantly from fares; Operating contributions, to cover the costs of opera- tion, including maintenance; and Capital investments, including renewing and rehabili- tating existing capital assets, and expanding to improve service or in response to population growth.'

*

*

To put these three components in perspective, let's com- pare the relative value o f operating costs, capital invest- ment and revenues to the cost of providing transit service. CUTA's 2005 Transit Fact Book reports that in 2005, it cost $4.2 billion to operate transit systems in Canada. By com- parison, $1.6 billion was invested in capital. Total revenues were $2.6 billion. The shortfall was made up by $1.67 bil- lion in operation contributions, almost all ofwhich came from municipal governments. One hundred per cent o f capital costs were covered by investments from all three orders o f government.

tion needs of Canadians must be reduced iFwe are t o ' investment where maintenance is invoiwd. At suine point, !he rrtmt of vehicle rehabilitation could be considcred as capital investment when compued to routine running maintenance. achieve substantive reductions in greenhouse gas emis-

National Transit Siratcgy 7

Agenda Item W Pa e # -A

Capital planning and investment There are two main categories o f transit capital investment:

state-of.good-repair (renewal and rehabilitation): * system expansion.

In both cases, vehicle purchases account for the majority of expenditures.

Figure 2.1 shows the distribution o f capital expenses by cat- egory, averaged over the period from 2002 to 2005 for large cities with populations greater than 400,000, as well as for smaller cities. As Figure 2.1 demonstrates, vehicle procure- ment is a sizeable component oftotal capital investment for al l transit systems whether they are acquired as a com- ponent of state o f good repair or as an element o f fleet expansion to provide new or additional service.

! I

I I i Transit vehicles a driving cost ! j Transit operations of all sizes have a sizeable and consis- ! ten t need for capital t o acquire vehicles. Their require- ! menu tend to vary as ridership rises. Studies have shown ! that improved service i s the single most important factor i in any ridership growth strategy. Improved service p e r - i ally means more Frequent service. This i s dictated, f irst i and foremost, by t h e size of t h e vehicle fleet.

!

! ! !

! !

I

I

.A

As would be expected, larger cities that have fixed rail sys- tems and protected transit rights-of-way spend less o f their capital in relative terms (about 45 per cent) on vehicles, whereas for smaller cities, vehicle procurement is the largest single capital expense (about 82 per cent)

Aside from vehicles, the other main capital components o f system expansion are property acquisition; construction; the procurement and installation of "fixed plant" (such as tracks, electrification, signals and maintenance facilities); and the costs o f studies.' Capital invested in system expan- sion increases total assets, with a corresponding increase in the needs for state o fgood repair.

Figure 2.1 -Average 2001-05 Annual Transit Capital Investment6

ROW Other I ROW Other

Plant

.and I and Plant 16%

82%

Cities less than 400, ooo

45%

Cities greater than 400, ooo

' Canadian Urban Transit Association, iooj k m i l Foct Book, Toronlo.

' The eligibility ofcastn for studies and design has been raised as an issue

October 2008.

in regad to federal infiumcrure pmgrams.

8 Federation of Canadian Municipalities (FCM) Big City Mayors' Caucus

Agenda item I Pa e #

FIG1

Paying for capital costs Over the las t five years, on average nationwide, annual cap. ita1 investment in urban transit has been roughly the same as net operating costs, or operating subsidies. In 2005, for example, the industry invested about $1.6 billion in capital improvements (state-of-good-repair and expansion com- bined) compared to operating subsidies of $1.67 billion.

As CUTA has reported, municipalities have been the princi- pal investors in Canada’s national transit infrastructure in recent years.’ Federal and provincial capital funding has compared poorly to that provided in the United States, where long-term federal and state transit investment pro- grams covered 53 per cent ofcapital costs in 2003 (see box on page 11, Federal support for public transit in the United States). However, the provincial share o f direct capital investments has grown in the last few years, reaching almost 38 per cent in 2004 compared to less than 15 per cent in 2000. In addition, several provinces also transfer fuel taxes or vehicle licensing revenues to cities, which the cities use for their infrastructure needs, including their tran- s i t needs.

Since 1993, federal infrastructure funding programs, such as the Canada Strategic Infrastructure Fund (CSIF), as well as the more recent gas tax transfer, have included eligible transit projects. CUTA reports that while, as recently as 2001, the federal government was not contributing to tran- s i t capital needs, more recent infrastructure investments have included transit infrastructure projects and, as such, the federal government has increased i ts contribution to eight per cent o f the national total by2004. This being said,

application-based funding programs such as CSIF are used primarily to expand systems. Due to the application process, these programs are not predictable sources o f revenues for transit authorities.

Transit-specific federal funding programs For the first t ime in decades, the federal government is providing funding specific to transit. In fiscal year 2005.06, the federal government provided $400 million through the PublicTransit Fund.*This accounts for as much as 25 per cent oftotal zoo5 capital spending. For the following three years, 2006.07 to 2008-09, a Public Transit Capital Trust will provide $300 mill ion annually via the provinces.

Operations Hong Kong and Singapore are rare examples ofjurisdic- tions in which publicly-operated transit services cover their total costs o f operation from fares.- Certainly, there are no such jurisdictions in North America.

Representative operating ratios (the percentage o f opera- t ing costs recovered from fares) are shown below in Figure 2.2 by population group and for selected cities.” As would be expected, economies o f scale generally lead to higher cost recovery for larger municipalities, depending of course, on local fare policies. Nationally, cost recovery aver- aged about 62 per cent in 2003, and has declined slightly to 60 per cent in 2005. This compares favourably with other OECD countries. See Figure 2.3 on page i o for more detail.

Figure 2.2 - Selected Cost Recovery Ratios”

Population > 400,000

Population i5o,ooo - 400,000

Population 50,000 - iso,ooo

Population < 50,000

Canada

I I

I

0 20 40 60 80 100

Cost Recovery (7’3)

b a d b Urban Transit Assodation. aoeG. Issue P a p r No. 18: Investing in Tronrir : A Going Concern.

Canadian Urban Transit Asrodation, Fcdrral. PiaviMol ond Tcwiroriai Funding of Urban lionril in Ciinarkr: A Compcndiiim, Toronto. October 2006.

Io in dewlaping countries where the marketr are largely uptivc and the quality of seMce (and safety) is usually poor, there are numerous unm- ples of privately owned and operated urban transit services that are prof. itable. October 2006.

These figures a x not shjctlytlycomparablc berausc, ih some cascs, agen. des indudr deb! sewice in operating casts. a component ttnt show up in other budge& as a capital expense.

Canadian Urban Transit Association, 2005 Trowit Fa1 Book, Toronto.

Nariod Trilmir Simcegy 9

Agenda item # Pa e #

DIG2

= Canada

cermany 70 iW Fiance . 8ol-

I Cost Recovery Ratio - Direct Operating Costs I

surpluses to contribute to capital require- ments. For this reason, all public transit services in North America rely both on out. side contributions to meet operating costs.

ing subsidies in 2005. The federal govern- ment does not contribute to operating costs. By way of comparison, in the United States, federal and state govern- ments contributed 30 per cent of operating costs of US transit systems in 2003.

CUTA’s report on provincial investment in transit’s

“Prmincial investment in transit has grown oyer the last foK yeus. Provincial operating funding of $47 million in 2001 rose steadily to $177 million in 2004, while provincial capi- tal funding of$146 million in 2001 grew to $331 million in 2004. tions and increase ridership.

“Ontario and Quebec have made substmtial commitments to improving transit investment in recent years. In Ontario, municipalities with uansit systems now receive a two-cenfk per-litx gas m transfer to impmve fnnsit assets or apera-

I ! “Provincial transit htnding mechanisms include fuel m ! ! transfers to improve local infrastructure that may be used for ! ! public transit (e.g. in British Columbia, Manitoba, Alberta ! ! and Quebec). Several communities receive provincial pas tax ! ! cevcnw intended spedically for m i s i t oc tansporntion ! I . I ’ improvements (e+ 12 cents per litre for roads and transit in .

I 1 Greater Vancouver, 2.5 cents per litre for transit in Victoria, i i and I .5 cents per litre for transit in Montreal). i

“In 2006, Quebec announced a comprehensive transit policy to boost ridership by 8% by 2012. New initiatives included a $130 million annual contribution for transit dwelopment from the province’s Green Fund to combat dimate change, x full refund on fuel tax paid by tansit systems, and more funding for existing infmvucture and operating prngmns. These steps complement the $30 annul motor vehicle regis- tration fee that Quebec h u collected for several yeus in nine

I communities to support transit investment.” I

*’ Canadian Urban Transit Asrociatlon

’‘ Canadian Urban TranritArso&tion. moG. Issue Paper No. 18: Investing

’I Canadian Urban Tiamit Association. 2006. Issue Paper No. r8: rnvcrting

in Transit : A Going Conam.

in Transit : A Going C a m .

10 Federation of Canadian Municipdiries (FCM) Big City Mayors’ Caucus

Federal support for public transit in the United States Through the US Departnient of Transportation, the Amerim Federal government became involved in municipal transit in the 1960s. Currently, the Sufi, Accounizbb, F k b k , Eficient Transportation Equiy Act-A Legacy for Users (SAFETEALU), signed in 2005, authorizes fund- ing for federal vansit and highway programs through 2009. This latest bill builds on two previous surface trans- portation authorization la-the Inrmodal Smfict Transportation Efflcimcy A n (ISTEA) and the Transportation Equity Act for die 21' Century (TEA 21). Under these bills, the federal government funds about

80% of capital projects and ensum consistency with federal program goals, objectives and polides.16

Capital funding for urban transit systems, now administered by the Federal Transit Administration, is currently consid- ered essential to the national interest in improving public transit and in meeting national standards for dean air. As shown in Figure 2.4, over two re;luthorintion cycles, federal public transporntion investment has more than doubled to an average annual total of about $9 billion.

Figure 2.4 - U.S. Federal Transit Funding

$52.6 11.0 A

$24.1

-

, , . , . , . , , , , , .. - 199a 2000 2002 2004 2006 200a

TEA21 SAFETEA-LU

'6 Sam Zirnrneman, Urban Tronrport inrfiturionul FrumnvoiLr, Presentation, Transpart and Urban Dwelopnient Drpt.. World Bank, 2606

Agenda Item Y pa 8 # mm

3 The Challenges Facing Transit Canadian transit riders pay a higher percentage o f the total costs required to build, maintain and operate transit than do riders in almost al l other Western countries. However, in spite ofthis (or perhaps because of it), meeting public tran- sit's capital costs remains difficult.

As articulated earlier, transit operations require operating contributions t o offset the shortfall between total costs o f operation and total revenue from fares. They also require capital contributions to cover all spending on capital pro- jects. These shortfalls are even more significant for larger cities with rail or bus rapid-transit systems, but so are the economic benefits, since moving the volumes o f people carried by rapid transit would otherwise require more roads.

CUTA has estimated that transit systems across the country need $20.7 billion for infrastructure between 2006 and 2010, or about $4.2 billion annually, which covers rehabili- tating and replacing existing systems, as well as expansion plans to accommodate increasing numbers of riders."This figure includes both currently financed plans and those plans contingent on external funding.

Of the $20.7 billion required, 4 per cent i s needed to reha. bilitate or renew existing infrastructure, while 56 per cent i s needed t o expand service capacity to serve more riders. These figures speak t o the need both t o maintain infra- structure and to respond t o the growth potential for transit. We must both restore transit infrastructure and respond to the increasing mobility needs o f the growing urban population.

Municipal shares o f both operating and capital subsidies derive primarily from property taxes, supplemented in some cases by special levies on gasoline sales, parking and hydro bills. Clearly, the property tax on its own is not suffi- cient to support public transit, given the estimated $60 bil- lion municipal infrastructure deficit, the l imited revenue sources, the growing responsibilities o f municipal govern- ments and the already substantial municipal support for transit. Municipal governments need help t o deliver the transit services that the nation's economy, quality o f life and environmental sustainability rely on.

But where are the needs greatest? Where should a National Transit Strategy start? How much support is needed?

Staying afloat: state of good'repair CUTA estimates that Canada's transit systems will need almost $9.1 billion between 2006 and 2010 just to maintain their equipment in a state of good repair.'' Rehabilitation and replacement projects totalling $7.3 billion are currently

planned, but not al l ofthese investments have been budgeted by municipalities and local authorities.

State of good repair is a key component o f the total esti- mated transit capital deficit because retaining even the existing ridership depends on offering reliable service. For example, the Montreal region needs $630 million per year t o maintain its public transit infrastructure for the peri- od of2006 to 2015. The Montreal subway alone represents 66 per cent ofthe total investment required. Yet, these funds will directly benefit 84 per cent of users o f the Greater Montreal transit system.

Service quality and reliability can deteriorate when new investment is channelled into expanding service rather than into maintaining the existing system. When this happens, more riders are likely to leave the transit system than are likely t o be attracted by the new services. Figure 3.1, on opposite page, shows how these factors affected ridership in Toronto.

'' Canadian Urban 'Ramit Association, liawii Infirostnrrturc Nudr/or t h P-d moG-ro,o. Toronto, April maG.

I' CUTXS estimates ofthe rtate.of.god.repair component ofthe total vm. sit deficit is likely quite precise since the economic service life oftransit vehicles. transit structur~, maintenance buildings and equipment, and '"fixed plant'' can be determined on the basis ofhistvncal data and infor- mation, as well as on best practices. In fact. CUlAs estimate may under. state there requirements k a u r e . in some case, operating agencies are asked to extend tlieir total capital budget envelope over an arbitrarjly longer petid to conform to a niunidpalitp budget bigeu and iimim- tions.

12 Fedcrztion alGnzdian Municipalities (FCM) Big Ciry Mayors' Caucus

Agenda Item # Pa e #

iXlQ

Figure 3.1 - Ridership and Capacity Growth 1970-2014

525 I I I

Retaining ridership becomes even more challenging when one considers average fleet age. In 2005, the average non- accessible standard bus, light rail vehicle and heavy rail vehicle are 16,24 and 31 years old, respectively. These ages represent the end ofthe vehicles' useful service lives. Thus, i f they hope to run efficient transit systems and keep riders, municipalities will have to face substantial replacement costs.

Meeting growth challenges The outstanding needs for transit service expansion are estimated by CUTA t o be $11.6 billion between 2006 and 2010, or, on average, $2.3 billion annually. This deficit is less easily defined than are the needs for state ofgood repair, because it represents al l proposed projects, even though only a portion ofthose costs may be actually includ- ed in municipal budgets. However, the fact that measuring this need is difficult does not make i t any less real or com- pelling. New transit will continue to be required as popula. tions keep growing, especially in larger cities, and as Canada continues t o urbanize. We will need either intensi- fied service along existing lines or new services to new developments. Canada's clean air and climate change objectives will also require a modal shift toward transit. This shift will put further pressure on transit systems.

Nntioiial Transit Strategy 13

I

I j The challenge of growth and planning i j ! ! CUTA reports.”

! “In Canada’s cities, land use and transportation have a celebrated ! but troublesome marriage. Their offspring-urban sprawl, automobile I dependence, congestion and smog-are delinquent children, determined i to avoid our plans for rehabilitation. Urban sprawl, in particular, i has wide-ranging impacts on our quality of life, and poses a distinct i challenge to public transit systems as they strive to offer a convenient i and affordable alternative to car travel.

Improving Canadis transit systems itquires more than money. Increa- sing transit ridership and increasing the proportion of commuters who use transit will require coordination of transit and land-use planning, as

!

! ! ! ! ! I marketing tactic.

I i i i j ! ! ! I I “ . I out of our transit investments, rypicdy by building ridership on transit i corridors within lower-density suburban areas. While the idea seems i straightfonnrard, the execution is anything but simple. TOD an i succeed only when decision-makers. developers, tenants and consumers i all believe that it will work. I j ‘X top-to-bottom planning approach is needed to make TOD a success. ! At higher levels, regional growth management strategies and major ! transit investments create the motivation and market for new develop- ! ments around transit nodes. Funher down, local planning and commu- ! nity-building processes nurture TOD plans, which may depart from ! conventional development norms, and shepherd them through the I i various approvals they need to become reality. And at the site planning i level, consultation, compromise and attention to detail are essential to j promote TOD.”

%ile intensification projects can increase densities and create a balanced mix of land uses, they can-without careful, sensitive planning-worsen problems oftxatXc congestion, pollution and noise. And unless there are meaningful destinations to walk to, the pedestrian- friendly design of infdl projects can amount to little more h i a

“Indeed, work by the Canada Mortgage and Housing Corporation has shown that residents of a suburban-style neighbourhood in a city’s cen- tral area are likely to have more sustainable transportation habits than residents of a neo-txaditional (or hew urbanist’) neighhourhood located in a distant suburb. This fmding reinforces the critical aspect of growth management, and highlights the importance of transit service when considering what kind of growth really is ‘smart.’

Transit-oriented development (TOD) isviewed as a way to get mote

~

‘ 9 Canadian Urban Transit Association. ma+ Issue Paper No. 9: Panril.

Io Federation of Canadian Municipalities, lmmcdble and Long-tam Fcdcral Oficntrd Dmlopmznt: Smart Growth in M i o n .

Fu‘unding Supportfor infrilrtructun, Ottawa, S September iooG.

14 Federation of Canadian Municipaliries (FCM) Big City Mayors’ Caucus

How to pay for it? Clearly, there is a substantial outstanding capital need, even allowing only for state-of- good-repair investment, that is not met by existing funding from any other order of gov- ernment. Buses, streetcars and rapid transit vehicles have to be replaced; we need to refurbish tracks, electrification and signal sys- tems, as well as yards, buildings a n d mainte- nance equipment: and growing populations require more, not less, service.

Finding the necessary funds is a major issue facing municipalities. In 2005, actual operat- ing and capital contributions were approxi- mately $1.6 billion each. CUTA estimates the average annual deficit to be $1.8 billion for state ofgood repair, in addition to the $2.3 billion it estimates will be needed every year for service expansion and growth. This is cer- tainly substantial, relative to the $1.6 billion that was actually invested in capital in 2005. That is, the estimated deficit just to stay afloat is almost as large as the entire sum invested i n all transit capital projects.

These estimates are also an order of magni- tude higher than the $300 million specifically earmarked annually under the Public Transit Capital Trust (aside from other infrastructure funding tha t can be used for transit).

Clearly, much more needs to be done even just to maintain what we have. Recent federal government initiatives for municipal infra. structure funding are an important start. Bu t we need to replace short-term, ad hoc fund- ing with longer term, more predictable com- mitments that come closer to addressing the outstanding needs.”

Agenda Item # Page #

FlFl

4 Key elements o f a national transit stratqp

To begin meeting transit's capital costs, we need commit- ments from all orders ofgovernment. In fact, Canada remains the only OECD country without a long-term. pre- dictable federal transit-investment policy, even though mov- ing people efficiently in urban areas requires a partnership among all orders o f government.

We have now realized the benefits ofearlier investments in transit, such as the federal gas tax to municipalities, the CSIF and the recently announced three-year $goo-million Public Transit Capital Trust. Recent trends shpw that total transit infrastructure needs are beginning to stabilize, after rising steadily since the late 1990s (from $8.5 billion in the five-year period 1999-zoo4 to $20.7 billion in the period 2006-2010).

Current funding programs and municipal budget envelopes help defray only a portion of the necessary investments. However, these investments are not sufficient, and are not scheduled to continue, and so do not represent a long-term national transit strategy. As transit's share o f urban travel continues t o grow, federal and provincial governments must provide long-term reliable funding, so that transit systems have the financial certainty they need t o meet the needs ofCanadians now and in the future. The outstanding needs are large and represent many years o f underinvest- ment. The first step is to halt the slide, and that means meeting the needs in state o fgood repair.

Toward a National Transit Strategy It is clear that the federal government needs to establish a national transit strategy not only for the benefit o f cities but for the whole nation. The strategy should encompass the following goals:

increase transit ridership and reduce automobile dependency;

improve the economic competitiveness of Canadian cities;

enhance the quality o f urban life; and reduce greenhouse gas reductions and improve air quality.

*

In order to meet these goals, the strategy needs to be based on several elements. First and foremost, long-term predictable investments will help cities renew, enhance and expand their transit systems. Second, the plan needs to be strategic, predictable and long-term so that transit systems can plan appropriately for growth management and for environmental and social planning objectives. Third, the plan needs to incorporate policies that encourage more

I I

I I I

I I I I

I

!

!

!

! ! I i

Canadians to use transit. Fourth, it needs to commit to research for policy development and innovation in transit technologies. Fifth, accountability mechanisms need to be in place.

A successful national transit strategy based on these five components-funding, planning, incentives, innovative research and accountability-will ensure that Canada is that much closer to meeting i ts objectives for competitive- ness, quality o f life, air quality and greenhouse gas emis- sion reductions.

4.1 I n v e s t m e n t

It is clear that cities cannot meet current and growing tran- sit needs with their current resources. While al l compo- nents o f the proposed strategy are important, the most pressing need is for long-term predictable funding. Based on the estimates for the transit funding gap by CUTA and others, the following funding amount and allocation model is proposed.

.. ?

Amount: ! ! !

tion; ! I

Allocation: I

Consideration of population and ridership, using a ! I I

formula revisited on five-year cycles;

I Eligible categories: ! Vehicle procurement costs (capital or debt service), ! capital for state.of-good-repair and/or system expan- ! sion infrastructure. I

I

$2 billion/year with periodic adjustments for infla-

4.1.1 Proposed&ndin~ amount

Setting aside the matter of long-term predictability, one o f the current key questions about federal transit funding is whether enough money has been earmarked under the Public Transit Capital Trust. At $300 million annually, the fund represents approximately 20 per cent o f actual capital expenditures made by the municipal transit agencies in 2005 and approximately seven per cent o f the transit infra- structure needs estimated by CUTA.

CUTA has estimated that transit systems require an injec- t ion ofapproximately $4.2 billion annually over the next four years to meet their funding needs. While transit sys- tems desperately require this Iknd of investment, BCMC recognizes that the federal government a t this time may not be able to commit $4.2 billion per year, having already dedicated $300 million per year. The Caucus therefore pro-

National 'liansit Strategy 15

poses annual funding of $2 billion as a first step, an amount to be revisited later. Given that $2.0 billion does not meet all ofthe needs oftransit systems, cities should be able to continue to use other federal infrastructure pro. grams (such as CSIF or the gas tax) to fund local transit priorities.

The proposed amount, assuming no changes in provincial funding, would place Canadian and US. transit financing on a more level playing field.

4.1.2 Proposed allocation

When making final decisions on the allocation ofthese new funds, ridership and population should be key considera- tions going forward.

4.1.3 Proposed eligible catexo fier

Funding needs vary among municipalities, given their dif- ferent transit service area populations and how they govern and finance their transportation systems, among other fac- tors. Funding needs fall into two basic categories: net oper- ating costs and capital investment:' Even though munici- palities spend slightly more on operating subsidies than on capital investment, by and large, capital remains the most challenging need for municipal transit systems. The pro- posed national transit strategy therefore advocates direct funding to municipalities for capital needs.

Capital funding covers both renewal and expansion. Capital is needed to buy replacement vehicles and to expand fleets, t o rebuild existing and build new physical infrastructure, and t o undertake studies.

Clearly, rolling stock investment is most straightforward. Vehicle funding i s a very significant capital requirement for all but some o f the smallest transit operators, whether they offer only bus services or some combination o f streetcars, light rail, subways, or ferries. Funding o f vehicles would also minimize administrative and eligibility requirements because the process requires nothing more than specific replacement guidelines based on accepted industry stan- dards. In addition, federal support for vehicle procurement can be identified very simply and visibly.

Though the assessment of need is not as straightforward, capital funding for other infrastructure is also an appropri- ate category for federal capital investment, both for state-of- good-repair and system expansion.

'I Ihere are some differences in definitions. Most mui"cipJitirs beat whi- de procurement as a capital eqenditore whcreas in British Columbia, Lmnsi: spterns indudes debt senice on vehicles as an operating expense.

Operating deficits can be adjusted through service and fare policies. Introducing federal funds to support operations could lead to smaller fare increases with relatively little impact on ridership. Operating subsidies are also more dif- ficult to administer because cost recovery potential varies with city size.

4.2 A legislated program

Introducing legislation that establishes a national transit strategy would demonstrate commitment and provide greater continuity and predictability than budget "announcements." Properly articulated, a National Transit Act could also greatly reduce the administrative burden associated with the effective transfer o f funds.

4.3 Funding agreements

Following the model o f the successful gas t a x agreements, federal transit investments should be transfers rather than application-based, and must be protected from claw back by other orders o f government.

4.4 Planninp

The national transit strategy would be an important lever to build greater economic, social and environmental sustain- ability. As such, any funding directed to cities should be used to achieve improvements in these areas. To do so. funding must only be available t o cities that have council- approved integrated land use and transportation plans that favour transit as the primary means for accommodating future growth in travel demand.

16 Federation of Canadian Municipdiries (FCM) Big City Mayors' Caucus

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Meeting the transit challenge in smaller communities Although Canada's larger cities host the nmjariv of t h e total trips taken on public transit each year, smaller communities s t i l l also need help meeting t h e needs of the i r citi.ans and businesses. A national transit strate- gy should establish the broad objectives and measures to

put transit on track for SUCCCSS. H o w e r , t h e diversity of wit senices in the hundreds o f smaller communi- ties across Canada wil l likely require more customiw- don and focus than can be provided by a national smt- egy alone. This national strategy must h e supplemented and enhanced by provinces and territories to ensure that the needs of all communities in each jurisdiction are considered.

Provinces and territories should develop separate and approptiately designed and targeted funding programs to fund and support smaller t rans i t systems. This approach wil l e n s u e tha t these smaller systems do not end up competing with larger systems for the same funding envelope. Such a situation would produce administrative processes and eligibiliry requirements designed primarily for larger communities and insensitive t o the dJlenges and capacities of these smaller systems.

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4.5 Incentives

While funding is a critical component of a national transit strategy, incentives are also needed that can directly or indi- rectly affect transportation demand, modal choice and emissions. Federal government taxation policies are likely the most influential factors."The new tax credit for the pur- chase oftransit passes is an important first step. Additional tax incentives need to be considered to encourage greater transit use.

Personal income tax regulation currently favours automo- bile use over transit use. The costs ofowning, operating and parking a car are directly deductible for many individu- als and for most firms that provide cars o r car allowances, whereas transit benefits for employees are not. Allowing employers t o deduct the costs oftransit assistance to their employees would generate additional transit revenues (and, at the same time, reduce parLing requirements and the cor- responding number of kilometers travelled by each vehicle.)

l fwe modernize tax regulations to better support national objectives for sustainable transportation, we should increase transit cost recovery, as well a s transit use. Doing

so would also encourage employers to provide transit for their employees, rather than parking and car expenses, and i t would make transit accessibility a more important factor in the location decisions made by firms.

4.6 Innovat ive research

While funding, planning and demand incentives are impor- tant components o f a national transit strategy, a strong case can also be made for providing investment for research. A carefully designed research component can lead to improved service and reduced costs. All orders of government also need t o explore research on policies to develop a transit plan that is economically, socially and environmentally sustainable. Other research could look into accessible transit, greening fleets, purchasing policies and so forth. Examples o f possible research include programs that no one transit agency could afford to undertake alone, such as disseminating information on best practices and international experience, o r developing systems for improved fare collection, vehicle monitoring and transit pri- ority.'' It would be critical that municipal planners and tran- s i t officials be involved in developing research priorities. Applications-oriented research can only be effective when those who have a stake in the outcomes are involved.

4.7 Accountability

With such a significant investment in transit, accountability measures are necessary to monitor and review how the funds are used. All governments should worh together to identify the best way to report the success o f the plan.

'' Although the recently announced tax Laedit for the Q U ~ C ~ W C of mansit passer has some degree ofsynlbolic appeal, its overall impact on "der. ship and rWenrleS iS less Certain since it applies Only 10 those able to rffuid a pass. Numerous rNdier have velified that, for most ~ ~ ( c r s , PCT- vice elasticity is higher tlm fare dasticity.

" i t is still too early to a m i n e the real benetits ofTnnspoii Canadis Urban Transportation Showcase Program.

National Transit Strategy 17

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Conclusion The link between healthy urban regions, competitiveness and national prosperity is well understood. Our cities are competing against the best in the world, but they are ill. equipped. l f they fail, Canada will fail, and our standard of living and quality o f life will suffer.

We must ensure that our cities are great places to live and work. Transit plays a key role in making cities great.

Meeting transit's capital costs will require commitments from all orders ofgovernment. In fact, Canada remains the only OECD country without a long-term, predictable federal transit-investment policy, even though moving people effi- ciently in urban areas requires a partnership among all orders of government.

As transit's share o f urban travel continues to grow, federal and provincial governments must provide long-term reli- able investments, so that transit systems have the financial certainty they need t o meet the needs of Canadians now and in the future.

We can debate how best to achieve this, but no one can deny it must be a key national goal. If we do not move quickly t o fix the problems hampering our cities, especially the ones for which transit is a key component, we may well lose our position in the front rank o f nations and never get it back.

The Big City Mayors' Caucus is ready to do its part to mobi- lize the resources o f the municipal sector to find solutions, to build partnerships and t o effect real change. But this is a national project. I t remains for the Government of Canada to take the lead and set Canada on a course that will stand as a model of how smart practical government, working in the service of people, can build cities that create prosperity while preserving quality o f life for everyone.

IS Fedemtion of Canadian Municipaliries (FCM) Big Cic). Mayors' Caucus