A new analysis warns that Canada's major cities are struggling to keep their transit systems running, and says public transit is heading for a 'downward spiral' unless major new streams of operating revenue open up.
A new analysis warns that Canada's major cities are struggling to keep their transit systems running, and says public transit is heading for a "downward spiral" unless major new streams of operating revenue open up.
Halifax expects it will be up to $22 million short in 2026 — more than 15 per cent of its total transit budget — while Vancouver warns of a structural deficit of $600 million by the same year. The provinces and federal government are only offering limited operating funding to go with the growth, and even that is temporary. For example, Ontario has agreed to provide $1.2 billion to help Toronto run two new LRT lines for a three-year period.
The report makes clear that COVID-19 hastened some of the structural funding problems plaguing transit systems, when work-from-home policies took a massive bite out of ridership. Leading Mobility said before COVID-19, passenger fares covered an average of 59 per cent of the costs of transit in Canada, far higher than the 38 per cent in the United States.
Halifax has a benefit area tax, a surtax on properties located within a certain distance of transit, which in 2023 accounted for almost half its total revenues, or $58.6 million. Vehicle levies and benefit taxes are among the suggestions the Leading Mobility report makes for cities. It also suggests considering a tax on electric vehicle charging, or adding congestion pricing that taxes vehicles in the busiest parts of cities, similar to what's in place in London and New York City.
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