Question Period Note: Transit Operating Costs

As pandemic-linked ridership and revenue declines continue to impact transit systems’ finances, some stakeholders are calling for additional federal support, in addition to the funds made available through the Safe Restart Agreement (SRA), to cover transit operating costs.

• As public transit ridership levels recover from COVID-related declines, we want to ensure that public transit remains accessible in our communities over the long-term and continue to support our growing population, break up gridlock, and reduce Greenhouse Gas (GHG) emissions.

• Through the Safe Restart Agreement and programs like the Investing in Canada Infrastructure Program and the Canada Community-Building Fund, the Government of Canada is supporting transit systems so they will be ready to receive Canadians as our communities re-open fully.

• We look forward to engaging with stakeholders and the public in the coming months on how the new permanent transit funding announced in February 2021 can best achieve economic, environmental, and social benefits in communities across Canada.

• Transit agencies are gradually recovering from the initial COVID related shock on transit ridership and revenue. After an initial decline of 84% in 2020, revenues in October 2021 showed an increase of 37% from October 2020. While these revenues were the highest recorded since March 2020, they were still 48% lower than the operating revenues reported in October 2019.

o Public health measures taken since October 2021, including school closures and lockdowns linked to the Omicron variant, have likely undermined some of the ridership and revenue recovery reported in fall 2021.

• The decline in ridership has been most pronounced in large cities with many office workers able to work from home throughout the pandemic. Transit systems have also faced pressures to maintain service levels to ensure frontline workers and others who rely heavily on transit could continue to use the service.

• The Government of Canada initially responded to operational pressures through the $19 billion Safe Restart Agreement (SRA), which included $2 billion to municipalities for COVID operating costs, in addition to $2.3 billion to support transit for jurisdictions willing to cost-share.

o The federal government also announced capital funding through an additional $2.2 billion from the Canada Community-Building Fund (CCBF) (of which approximately 31% is historically directed to transit). In addition, in February 2021, the Prime Minister announced $5.9 billion over 5 years and $3 billion on-going starting 2026-27.

• Stakeholders like the Federation of Canadian Municipalities (FCM) and the Canadian Urban Transit Association (CUTA) are seeking to renew federal assistance for transit operating costs provided in the SRA, until they reach pre-pandemic levels.

o The FCM requests that the federal government commit “predictable, multi-year contributions” with provinces [redacted] to cover transit operating shortfalls based on needs – [redacted].

• As part of the announcement of the creation of permanent public funding in February 2021, the Government committed to work with provinces, territories, municipalities, local governments, Indigenous communities, transit agencies, policy experts and other stakeholders to develop programming for the $3 billion in permanent public transit funding that will begin in 2026-27 in a manner that offers the greatest benefits to Canadians.

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