TRAN Committee Report

National Public Transit Strategy Study – Minority Report

NDP Members TRAN Committee, 2012-02-09

Preamble

Canada’s cities are growing – by 8% alone between 2006 and 2010. Already more than 81% of all Canadians live in urban areas. While the population is in on the rise, transit ridership is growing even faster at almost twice the rate. But sadly, our country is falling behind on transit infrastructure. With cities being squeezed between limited revenue sources and increasing, downloaded financial responsibilities, crucial investments are deferred. The funding gap for capital investments in urban transit alone amounts to more than $23 billion for the next five years.

In this perilous situation where Canada’s economic competitiveness and its citizens’ standard of living are at the risk, the federal government has to step up to the plate. While the current government’s efforts in infrastructure spending are appreciated, experts agree that it is too little, too random, too spread out. Without a clear federal focus, we will not get ahead of the curve but continue to fall behind in international comparisons. The Toronto area alone is losing $6 billion in economic damages a year from traffic gridlock.

The New Democrats believe that a National Public Transit Strategy is required to address Canada’s transit infrastructure needs in a comprehensive way. Only a federal government with a clear vision, a set of priorities and transparent criteria can work efficiently with the other levels of government to jointly tackle our nation’s mobility challenge.

Federal support for public transit is not a question of preference, but of math. If we want to keep our increasingly urbanized workforce internationally competitive, there is no way around expanded and better transit. We are supported in our call for federal action by a plethora of mayors, transit operators, experts and organizations, including:

• Canadian Urban Transit Association
• Federation of Canadian Municipalities
• Association of Municipalities of Ontario
• Alberta Urban Municipalities Association
• Mayors of large cities including Edmonton, Winnipeg, Regina, Mississauga
• Regional transit agencies including Metrolinx, BC Transit
• Municipal transit operators, incl. Société de Transport de l’Outaouais, OC Transpo
• Think-tanks and civic groups, incl. The Pembina Institute
• Amalgamated Transit Union - Canadian Council
• Canadian Auto Workers

Dedicated Funding

We agree with independent experts that a central part of any government action on transit has to be the establishment of a long-term funding stream that is dedicated for public transit.

The NDP therefore proposes the creation of a committed federal infrastructure fund in the form of a national public transit fund; long-term in nature, this fund has to be equipped with a stable, predictable amount of capital on an annual basis; the fund’s resources shall be used for upgrades and expansions as well as state-of-good-repair investments.

Without dedicated long-term funding, proper and predictable long-term planning by other levels of government and transit operators will be impossible. Other countries have had stable funding in place for decades with the result of coherent, uninterrupted and strategic planning and expanding of their transit infrastructure.

To ensure transparency, predictability and a level playing field, a clear funding mechanism that enables provinces and municipalities to apply for and receive federal funds in a predictable and timely manner is of utmost importance. The current practice of ad-hoc, unguided and unpredictable disbursement of funds by the federal government has to be stopped.

In order to increase ridership, the federal government should work with the provinces to give tax-exempt status to employer-provided transit benefits.

Federal Leadership

In order to ensure that federal funds are allocated in the best possible manner under a long-term investment plan, the federal government has to engage in a dialogue with the other orders of government to assess funding needs, priorities and risks. Those consultations are already taking place in related infrastructure investment areas. We recommend a similar approach based on the following suggestions:

We call on the federal government to set up an annual federal-provincial-territorial conference with all ministers responsible for public transit as well as representatives from municipalities and Aboriginal communities. This should be done in order to discuss mobility issues and plans and assess how the federal government can best support their initiatives; this forum will facilitate the exchange of best practices.

The federal government also has to take a leadership role by creating a federal investment plan for public transit across the country, updated and presented to the House of Commons annually, in part based on results from annual tri-partite conference.

Based on similar planning processes within the ministry, we deem the Policy Group within Infrastructure Canada to be a well-suited organizational unit to develop a national public transit policy framework, and to act as the coordinating unit. This will facilitate the collaboration with other federal departments.

To hold the government accountable, yearly reports to both House of Commons by the federal minister of transportation on the long-term investment plan, the consultations with the other levels of government and the progress made within the national policy framework for public transit will be helpful and necessary.

Clear application and performance criteria have to be put in place by the federal government to ensure that provinces and municipalities direct federal investment to public transit consistent with policy objectives. Under such a federal framework funding recipients have to ensure value-for-money by providing a reasonable and socially acceptable level of service cost effectiveness.

Encouraging and spreading best practices should be fostered through information sharing among all levels of government and transit operators in addition to tri-partite conferences.

Ensuring High Levels of Sourcing from Canadian Companies

We urge the federal government to strive for high level of sourcing from Canadian manufacturers and service providers in federally-funded projects. While continuing to honour Canada’s international obligations and keeping the door open to suppliers from abroad, the federal government should try to support our national economy through its transit funding.

This will ensure that federal investments in public transit not only benefit transit users but also secure Canadian jobs in manufacturing, construction and other areas.

Public-Private Partnerships

In theory, public-private partnerships (P3) infuse competitive forces into the building and operating of transit. In practice, the experience with P3’s is that they often lead to inflated overall costs, higher user fees, and increased complexity and time required to plan large projects. They experience a lack of accountability measures and are characterized by secretive contracts that dictate transit service levels, operational flexibility, while funding corporate profits with taxpayer dollars.

Divergent goals, methods and objectives of private actors can undermine the government’s responsibility to look beyond the narrow self-interest of corporations. In Toronto, Metrolinx entertained years of P3 discussions for a rail link to Pearson International Airport, eventually leading to the private company walking away from the project leaving taxpayers with the bag. In the case of the Vancouver-Richmond Airport Canada Line rail project, which is the largest transportation P3 in Canada, the RAV technology and corridor was selected behind closed doors to attract private investors, despite evidence and past government preferences for different routes and technologies that would have been more cost-effective.

Evidence from an accounting study of 21 transportation projects delivered through P3’s in the UK found serious breaches of accountability, particularly the ability of current accounting methods to provide adequate transparency of the use of scarce tax dollars (Edwards et al. 2004).

The decision to automatically prefer P3’s is politically and ideologically driven. This is especially true in light of past experiences where private sector leverage determined what technologies are used and where the service is to be provided, all under the threat that the project will collapse if the government does not give companies exactly what they request. The government should not give preference to projects that offer large returns for investors at the expense of projects that serve Canadians better.

The NDP supports a results-driven process where the public-interest and transparent analysis determine what a transit project looks like. The Government of Canada should support putting transit users and taxpayers before corporate interests and remove biases for P3’s in the selection of infrastructure investment projects.