More connected communities, flexible funding and lower greenhouse gas emissions – these are some of the topics that arise in a new report outlining what Canadians and sector experts are hoping to see as the government moves closer to fulfilling its promise to deliver permanent funding for public transit across the country.
In 2021, Prime Minister Justin Trudeau pledged that the federal government would invest $14.9 billion in public transit projects over the following eight years, including permanent funding of $3 billion per year for Canadian communities starting in 2026-27.
“When we invest in public transit infrastructure, we are supporting good middle-class jobs, creating better commutes, fighting climate change, and helping make life easier and more affordable for Canadians,” Trudeau said in a press release at the time. “We will continue to do what it takes to ensure our economic recovery from COVID-19 and build back a more resilient country for everyone.”
The government put out an engagement paper outlining its vision for the overarching project in July 2022, and opened it up to comment from the general public, as well as provinces, municipalities, Indigenous groups, transit agencies and other experts.
This new report is the result of that consultation process and aims to provide a guide for designing the implementation of permanent public transit funding that will launch in 2026-27.
The report was compiled following 75 engagement sessions, 71 written submissions, 391 questionnaire responses and 127 emails. Those behind it say they also had more than 40,000 social media impressions related to the transit project.
“The thoughtful submissions received from Canadians during this consultation process will help ensure permanent public transit funding meets the needs of communities – large and small,” Dominic LeBlanc, minister of intergovernmental affairs, infrastructure and communities, said in a press release Tuesday. “I look forward to working with our partners to bring this program to life.”
COVID-19 was a huge blow to the sector, as many stopped using public transit at the beginning of the pandemic.
“Individuals from the public transit sector indicated that their organizations are still recovering from ridership and revenue losses due to the COVID-19 pandemic,” the report stated.
However, gains in ridership are being made. According to the report, ridership has reached 75.5 per cent of pre-pandemic levels as of April, a big jump from the pandemic low of 16 per cent of pre-pandemic levels.
Canadians are hoping that investing in public transit will mean lower greenhouse gas emissions and more equity that might be able to address social issues such as housing and unemployment.
STABLE FUNDING
The report is structured around five main themes that emerged during the consultation process, the first being a desire for stable and predictable funding that provides some flexibility for transit organizations.
It’s not enough to just promise that there will be funding. There needs to be a clear plan for when funding is to arrive and how it will be applied, so that projects don’t wait in limbo, according to the report.
“Participants indicated that it is critical to establish consistent and transparent transit funding commitments from all governments and transit partners to address planning, budgetary, and other implementation challenges that have been magnified by supply-chain issues and global inflation,” the report stated.
Local governments said in the consultation process that they would like to have the ability to shift some funding to existing local infrastructure projects, such as the Canada Community-Building Fund.
Calling for flexibility in funding means transit organizations want to be able to decide where funding is applied in order to address costs non-experts won’t have thought of, instead of all of the funding being locked to specific areas already decided by the federal government.
“Many systems face the challenge of maintaining state of good repair for fleets, rail, and other supporting infrastructure. Funds should be allocated in a manner to ensure flexibility of use, as set out by transit systems, to ensure state of good repair for existing infrastructure or for capital expansion,” the Canadian Urban Transit Association stated in the report.
The Federation of Canadian Municipalities also stated in the report that funding should apply to all associated costs of a project, including “early planning and design, rehabilitation and renewal of existing assets, system expansion, the shift to zero-emissions transit, and active transportation.”
SOLUTIONS APPROPRIATE FOR DIFFERENT REGIONS
The second issue that Canadians identified in the consultation process was the need for transit funding to be properly applied for the needs of different regions around the country.
“One size does not fit all. Public transit is essential for large urban areas, small urban areas (like Fredericton or Moncton), and in rural areas; however, the challenges and needs to serve these areas are different,” the government of New Brunswick stated in the report.
The people best positioned to identify the needs of specific regions are those who live and operate in the regions themselves. According to the report, Canadians want to see governments working together with municipalities and owners and operators of infrastructure in affected regions to design the transit solutions that would best help them.
“Government must recognize that there cannot be a one-size-fits-all approach to the permanent funding for public transit. Government must be adapted to the needs to local communities,” the Canadian Chamber of Commerce stated in the report.
Those who participated in the consultation highlighted that urban centres are dealing with housing affordability and the pressures of cities growing, while smaller, more remote rural regions and many Indigenous communities are often dealing with a lack of accessible transit options to get community members to work, school and appointments.
ADDRESSING SOCIAL AND ENVIRONMENTAL CHALLENGES
The project of funding public transit across Canada needs to take into account the social and environmental challenges that communities are dealing with, according to the report.
“Across the country, we heard that there is a pressing need for transit investments to help address congestion, housing affordability, social inclusion, and climate change in addition to advancing key transit goals, such as increasing the modal share of transit ridership,” the report stated.
Effective public transit needs to provide more affordable access to housing and employment, and should ensure that underserved communities are not overlooked in the mapping out of new transit lines. As the climate crisis continues, Canadians are hoping more funding for public transit will also help to lower emissions, the report found.
“The permanent public transit fund is a historic opportunity to decarbonize the transport sector, while delivering a more inclusive economy and fostering greater social equity,” Environmental Defence Canada stated in the report.
IMPROVING GOVERNANCE
When different levels of government fail to communicate, effective public transit is near impossible to achieve, the report stated, and better communication and collaboration is something that needs to be a priority in order to ensure the plan to provide permanent funding for public transit starting in 2026-27 is a success.
A lack of communication can lead to unplanned delays such as developers needing to redraw the plans for a bus line because it was created without proper knowledge of the housing density or services in the area.
MORE TRANSPARENT DECISION-MAKING
The final thing that Canadians emphasized during the consultation process was the need for decision-making to be more transparent and evidence-based.
It’s important to ensure that Canadians are aware of the when and why of transit developments in their region, and to be able to access this data easily, the report stated.
The report noted that based on all of the recommendations garnered in the consultation process, those behind it will be aiming to provide a base of predictable funding for smaller jobs like routine mending, and then support long-term transit plans with funding agreements that have taken housing and greenhouse gas emissions reductions into account.
“These approaches will be complemented by the Canada Community-Building Fund, approximately a third of which is used for public transit,” the report stated. “This additional source of permanent funding provided to municipalities through provinces and territories is up for renewal in 2023/2024.”
Other specific steps the government will be taking in response to the consultations is creating an advisory body of experts “to undertake Canada’s first National Infrastructure Assessment (NIA), which will serve as a foundational tool to identify Canada’s infrastructure needs and priorities, and will undertake evidence-based long-term planning into 2050.”
“Permanent public transit funding will provide stable support for the capital investment needs of Canada’s public transit systems, while relying on our provincial and municipal partners, who control operational decisions, to identify and meet the needs of their communities,” the report stated.
Demands for government intervention in Air Canada labour talks could negatively affect airline competition in Canada, the CEO of travel company Transat AT Inc. said.
“The extension of such an extraordinary intervention to Air Canada would be an undeniable competitive advantage to the detriment of other Canadian airlines,” Annick Guérard told analysts on an earnings conference call on Thursday.
“The time and urgency is now. It is time to restore healthy competition in Canada,” she added.
Air Canada has asked the federal government to be ready to intervene and request arbitration as early as this weekend to avoid disruptions.
Comments on the potential Air Canada pilot strike or lock out came as Transat reported third-quarter financial results.
Guérard recalled Transat’s labour negotiations with its flight attendants earlier this year, which the company said it handled without asking for government intervention.
The airline’s 2,100 flight attendants voted 99 per cent in favour of a strike mandate and twice rejected tentative deals before approving a new collective agreement in late February.
As the collective agreement for Air Transat pilots ends in June next year, Guérard anticipates similar pressure to increase overall wages as seen in Air Canada’s negotiations, but reckons it will come out “as a win, win, win deal.”
“The pilots are preparing on their side, we are preparing on our side and we’re confident that we’re going to come up with a reasonable deal,” she told analysts when asked about the upcoming negotiations.
The parent company of Air Transat reported it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31. The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
It attributed reduced revenues to lower airline unit revenues, competition, industry-wide overcapacity and economic uncertainty.
Air Transat is also among the airlines facing challenges related to the recall of Pratt & Whitney turbofan jet engines for inspection and repair.
The recall has so far grounded six aircraft, Guérard said on the call.
“We have agreed to financial compensation for grounded aircraft during the 2023-2024 period,” she said. “Alongside this financial compensation, Pratt & Whitney will provide us with two additional spare engines, which we intend to monetize through a sell and lease back transaction.”
Looking ahead, the CEO said she expects consumer demand to remain somewhat uncertain amid high interest rates.
“We are currently seeing ongoing pricing pressure extending into the winter season,” she added. Air Transat is not planning on adding additional aircraft next year but anticipates stability.
“(2025) for us will be much more stable than 2024 in terms of fleet movements and operation, and this will definitely have a positive effect on cost and customer satisfaction as well,” the CEO told analysts.
“We are more and more moving away from all the disruption that we had to go through early in 2024,” she added.
This report by The Canadian Press was first published Sept. 12, 2024.
