Federal $30 billion fund may not be enough to save struggling transit services, critics warn

It's been called the federal government's largest investment in public transit ever but transit advocates say they fear the $30 billion infrastructure fund may not be enough to pull struggling agencies out of their death spirals.

The Canada Public Transit Fund will give transit services access to $3 billion per year, starting in 2026. The funding is aimed atcapital projects, such as replacing aging vehicles or expanding rail lines.

"It's a transit funding program that doesn't actually fund transit service. It helps cities buy more buses, but without any funding to actually put them into service," said Nate Wallace, clean transportation program manager at Environmental Defence.

"They're going to be kept in garages rather than picking up passengers."

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A transit fund that doesn't coverbasic operations is like a health care system that buildsnew hospitals without paying for doctors and nurses to staff them, he argued.

It's a strategy Wallace said could leadtransit agencies deeper into a "vicious" cycle ofcutting servicesand raising fares to deal with deficits, only to lose more and more riders.

Marco D'Angelo, president and CEO of the Canadian Urban Transit Association (CUTA), praised the Canada Public Transit Fund, calling it a "big step" toward building more reliable servicesand bringing back thecommuters who abandoned public transit during the pandemic.

But citiescan't afford to wait until 2026 to see the money, he said.

"Tomorrow would be great. Budget 2025 would be helpful as well," he said. "Truly, the sooner the better for Canada's commuters."

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It's a sentiment shared by experts and major transit operatorswho welcome the promise of sustained and predictable funding while demandinga speedier timeline.

"Consistent funding is really important. Consistent funding measured in the billions of dollars is really important," said Shoshanna Saxe, a civil and mineral engineering professor at the University of Toronto and Canada Research Chair in sustainable infrastructure.

"If they were really serious about it, they would do it before the next election."

WATCH:How to avoid a public transit 'death spiral'

How to avoid a public transit 'death spiral'

5 months ago

Duration 4:16

Ottawa's OC Transpo has painted a grim long-term financial picture. It's been a million dollars short of revenue projections every month this year. CBC Ottawa's municipal affairs reporter Elyse Skura breaks down the options for cash-strapped transit agencies.

Building where it counts

The Canada Public Transit Fund is also tied into the federal government's efforts to boost housing construction.

The federal government has imposed an eligibility requirement on the fund that ensures cities applying for funding first loosen restrictions on building heights and minimum parking requirements near transit hubs.

But by making cities wait until 2026 to see the money flow, Wallace said, the federal government may be missing its window to use transit funding to drive housing starts.

"The housing conditions on this program are crucial to actually addressing the housing crisis. And the housing crisis is happening now. It's not happening in 2026," he said.

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Saxe, meanwhile,said tying the transit fund to zoning was a smart move.

"They are being very thoughtful, effective and strategic in good ways about aligning the funding with housing development so that there will be both more housing served by transit and more people who want to use the transit," she said.

She said it's "not a screw-up" for the government to start with a focus on capital, rather than operational needs.

"This is the brilliance about tying transportation money to land use," she said."If you do that well, you need much less operating funding."

D'Angeloagreed there's room for both kinds of funding and saidCUTA will "continue to call on senior levels of governments" for funding to close the gap between fare revenue and operating costs.

Exploring other funding options

The City of Ottawa has been struggling to get its ridership numbers back up to pre-pandemic levels, while carrying the costs of operating an expanding light-rail transit system.

It's working on an updated long-term financial forecast thathas it rethinking the feasibility of offering LRT further into the suburbs and banking on an annual $75 million investment through the Canada Public Transit Fund.

"I think other cities are asking the same thing, and we're all trying to expand and invest in better transit. But along with that capital investment, we're also going to need the operational funding so we can actually run that service," said Coun. Glen Gower, who chairs the City of Ottawa's transit commission.

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But with so many cities asking for help for so long, he saidhe doesn't think his city can wait until governments start listening.

"We would like to have that, but I think we also have to have a Plan B," he said.

The City of Ottawa would not provide an interview. In a media statement, Deputy City Treasurer Isabelle Jasmin said that Ottawa is "pleased" with the federal funding announcement. When pressed about the need for operating funding, she said the citywill "continue to request financial contributions from other levels of government."