Recommendations for Budget 2005
back to Table of Contents

Transit Renewal and Sustainable Cities Strategy

Summary
Establish a National Public Transit Renewal Program by allocating an annual $1.5 billion fund from revenue generated from the excise tax on gasoline, and subject all urban infrastructure grants to strong criteria to ensure transit investments enhance human health and the environment.

Investment
$1.5 billion annual investment in public transit which would come from the federal excise tax on gasoline.

Benefits for Canadians

• support the development of world-class cities
• strengthen the competitiveness of the economy and improve Canadian living standards
• reduce per capita transportation costs by shifting investments to more cost-effective modes
• foster sustainability in Canadian cities, notably, reducing air pollution and human health costs from reduced fossil fuel combustion, and curbing urban sprawl
• create employment in construction, engineering, design and operation
• contribute to Canada’s international commitment under the Kyoto Protocol
• reduce travel times and congestions for Canadians

Background and Rationale
Now, more than ever, Canada’s city regions are central to the country’s economic, social, cultural and environmental development. They play a pivotal role in economic growth. The largest 22 cities generate nearly 60 per cent of Canada’s GDP and two-thirds of the population lives, works and plays in these cities.¹⁸

At the same time Canadian cities confront immense funding, planning and capacity inadequacies which result in economic underperformance and immense social and environmental costs. The Ontario Medical Association estimates that air pollution alone is responsible for in excess of $1 billion provincially in direct costs such as hospital room admissions and absenteeism and another $9 billion in indirect costs, such as mortality, in Ontario alone.

Urban sprawl, a function of poor urban planning and inadequate public transit investment, is the major driver of air pollution and greenhouse gas emission growth in most urban areas of Canada. Public transit is the most urgent infrastructure crisis facing our cities with a $9 billion shortfall in revenue over the next five years.

Sustainable development is considered a central pillar of the New Deal for communities.¹⁹ To safeguard this commitment, it is essential to ensure the urgent priority of public transit renewal is fully addressed and that the “new deal” infrastructure investment does not entrench old problems such as congestion, air pollution, greenhouse gas emissions, urban sprawl, compromised water quality, etc.

Strong public transit ridership closely correlates to strong economic performance and high living standards.²⁰ Transportation — most of which is road-based — accounts for one-quarter of Canada’s greenhouse gas emissions and is a major contributor to urban smog. Urban transit in Canada is facing major infrastructure needs totaling $21 billion over the next five years.²¹ Public investment in transit is proportionally higher in virtually every other industrial country.²²

About 70 per cent of greenhouse gas emissions in transportation are road-based, and two-thirds of these emissions are generated in urban areas. Congestion is a significant and growing cost to businesses, particularly in Ontario and Quebec – this has significant economic implications at a time when competition south of the border is benefiting from new investments in public transit.²³ Without additional transit investment, commuting times in the Greater Toronto area are forecast to grow 50 per cent by 2021, adding $7 billion annually to congestion costs.²⁴

Despite the social, environmental and economic benefits of public transit, the average number of transit trips per person declined 25 per cent between 1989 and 1996.²⁵ There are many reasons for this including failure to invest in public transit and the proliferation of land-use patterns that do not support cost-effective urban transit.

The federal government has begun to reinvest in public transit on an ad hoc basis through its infrastructure programs. However, to effectively address this crisis, a long-term, coherent strategy is essential. A study for Transport Canada concluded that $1.4 billion per year in capital funding and $300 million per year in operating funding is required to significantly increase ridership.²⁶

The Canadian Urban Transit Association’s recently released survey of infrastructure needs suggests a $9 billion shortfall in funding for the period 2004-2008. Just to keep existing equipment in good repair, $6.9 billion during this period — this alone is approximately $1.7 billion per year.

Recommendations

• establish a National Public Transit Renewal Program by allocating an annual $1.5 billion fund from revenue generated from the excise tax on gasoline and subject grants to a strong criteria to ensure transit investments enhance human health and the environment
• ensure all municipal infrastructure initiatives funded by the federal government are consistently subjected to strong criteria to ensure they meet the government’s goals of environmentally sustainability

Alternative and Complementary Policies
There are numerous policy instruments that can support urban sustainability and strengthened public transit.

The federal government encourages the use of the private automobile by treating employer-provided parking spaces for employees as a non-taxable benefit. However, employer provided transit passes are treated as
taxable benefits.

• The Income Tax Act should be amended to make employer-provided transit passes a non-taxable benefit.

Many municipalities, particularly smaller ones, would benefit from new tools and training to move toward more cost-effective and environmentally sustainable infrastructure decisions and long-term integrated planning.

• Invest in the Capacity Building for Sustainable Community Planning program recommended by the Federation of Canadian Municipalities.

The Federal House in Order initiative and the Sustainable Development in Government Operations initiative are solid foundations for strengthening sustainability in cities, particularly in transportation. There are a number of opportunities to make these good programs even better, for example:

• federal government could strengthen its transportation demand management programs for employees and adopt a more ambitious, targeted approach to greening the federal fleet
• adopt sustainability guidelines governing site and location of federal facilities, specifically including reduced travel for workers and suppliers

Contact
Alex Boston
David Suzuki Foundation
604-732-4228

top of page