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Permanent, intégré et adapté aux besoins locaux : De nouvelles bases pour le financement du transport en commun au Canada.

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© His Majesty the King in Right of Canada, as represented by the Minister of Intergovernmental Affairs, Infrastructure and Communities, 2022.

Cat. No. T94-48/2023E-PDF

ISBN 978-0-660-49073-1

New Permanent, Integrated, and Locally Responsive: New Foundations for Public Transit Funding in Canada (PDF Version)

Table of Contents

• Minister’s Foreword
• I. New Foundations for Public Transit Funding in Canada
  • Our Engagement
  • What We Heard – Key Stakeholder Messages
    1. Provide stable and predictable funding with flexible delivery
    2. Be responsive to local/regional priorities and realities
    3. Catalyze transit investments to address pressing social, environmental, and economic challenges
    4. Deliver improved governance and intergovernmental alignment
    5. Champion more transparent, evidence-based decision-making
  • Our Response – Principles to Guide Design and Implementation
• II. What’s Next – From Ideas to Program Design
• APPENDIX A: Participant Information

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Minister's Foreword

Following the Prime Minister's announcement of Canada's plan to permanently fund public transit, with an investment of $3 billion per year beginning in 2026-27, I looked forward to collaborating with our partners to design the future of public transit in Canada.

In July 2022, we launched an engagement paper detailing the Government of Canada's long-term vision for public transit and active transportation and requested feedback on the design of this new program. Since then, we received ideas and solutions from provinces, territories, municipalities, Indigenous peoples, transit agencies, policy experts, stakeholders, and Canadians that will help shape the future of public transit. This feedback builds on existing research studies, as well as the Government of Canada's research on transit, and will help ensure that permanent public transit funding delivers the greatest benefit to Canadians.

This Report outlines the key findings of our national engagement process and the principles that will help guide the design and implementation of permanent public transit funding as we work toward the program launch in 2026-27.

Permanent public transit funding is a transformative investment in the future of Canadian communities. It will help upgrade and expand public transit and active transportation networks to best meet local infrastructure needs across rural, urban, and Indigenous communities.

The Government of Canada continues to make historic investments in public transit, and combined with the permanent public transit fund, these investments will set up our communities for success in the decades to come.

With stable and predictable funding, we will work closely with provincial, territorial and municipal partners to ensure our investments in public transit also maximize key housing, social, environmental, and economic outcomes.

The thoughtful submissions received from Canadians will help ensure this long-term transit investment meets the needs of communities – large and small.

I look forward to working with our partners to bring this fund to life.

Thank you to all who participated.

 

The Honourable Dominic LeBlanc, P.C., K.C., M.P.
Minister of Intergovernmental Affairs, Infrastructure and Communities

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I. New Foundations for Public Transit Funding in Canada

Our Engagement

From July 29 to October 14, 2022, the Government of Canada set out to gather ideas, feedback, and solutions from Canadians on how we can work together to make the most out of the first national permanent public transit fund.

Through the engagement paper and in discussions with partners, we set out a vision and key objectives for public transit that enhance mobility options for all Canadians and deliver other important benefits. To help achieve these objectives, we outlined several potential policy tools for feedback, including leveraging our investments to support the creation of complete communities, working collaboratively and effectively with transit partners to drive more integrated planning, considering sustainable financing solutions to address transit needs, and using data and evidence to inform decision-making.

We held 75 multi-stakeholder roundtables and bilateral meetings with our transit partners and received 71 written submissions and 391 questionnaire responses.

Canadians shared their excitement about public transit and active transportation and how they could impact local communities while helping to address some of our most important local, regional, national and global challenges.

Through these conversations with provinces, territories, municipalities, Indigenous communities, transit agencies, industry partners, independent experts, and transit and active transportation advocates, we gathered a pan-Canadian perspective that was united on the importance of stable and predictable public transit funding. Stakeholders also shared that collaboration between governments and transit agencies will help ensure that public transit funding delivers concrete and tangible results for communities.

Individuals from the public transit sector indicated that their organizations are still recovering from ridership and revenue losses due to the COVID-19 pandemic. The Government of Canada responded to those challenges in the immediate term with support for municipalities and transit agencies through the Safe Restart Agreement in 2020 and Budget 2022.

Our transit partners are responding with remarkable resiliency as transit ridership continues to recover to pre-pandemic levels. From a low of 16 percent, ridership has now reached 75.5 percent of pre-pandemic levels as of April 2023^{Footnote 1} – demonstrating how essential transit is to Canadians and to building sustainable, inclusive and prosperous communities.

As we work together to develop long-term, evidence-based and regionally integrated approaches to public transit across the country, the government will continue to fund transit projects through existing programs, including the Zero Emissions Transit Fund, the Active Transportation Fund, the Rural Transit Solutions Fund, the Investing in Canada Infrastructure Program, and the Canada Community-Building Fund. The government will also aim for a timely launch of permanent funding programs to ensure that partners are well positioned to access funds in 2026-27.

What We Heard – Key Stakeholder Messages

Through the engagement events and written submissions, five key themes emerged that will help set the foundation for the design of permanent public transit funding in Canada:

1. Provide stable and predictable funding with flexible delivery
2. Be responsive to local/regional priorities and realities
3. Catalyze transit investments to address pressing social, environmental, and economic challenges
4. Deliver improved governance and intergovernmental alignment
5. Champion more transparent, evidence-based decision-making

The feedback received will guide the design and implementation of the fund.

1. Provide stable and predictable funding with flexible delivery

In these engagement sessions, we heard that the foundation for successful public transit systems is reliable funding. Participants indicated that it is critical to establish consistent and transparent transit funding commitments from all governments and transit partners to address planning, budgetary, and other implementation challenges that have been magnified by supply-chain issues and global inflation. Stakeholders emphasized that predictable funding will go a long way to ensure that projects are delivered in a coordinated, timely manner with effectively estimated and managed costs.

While reliable capital funding to build new transit infrastructure was viewed as crucial, there was recognition that stable funding to maintain existing transit systems and meet life-cycle costs is also vital to maintain safe and reliable systems (e.g., state of good repair, rehabilitation, modernization).

Our partners emphasized the need to provide a mix of flexible funding solutions to ensure equitable access for communities and projects of all sizes. Many provinces, territories and municipalities identified a preference for broad and flexible transfer-based funding programs to support local infrastructure priorities and investments, such as the Canada Community-Building Fund.

It was also made clear that the sector continues to face challenges. The COVID-19 pandemic demonstrated how vital public transit is for Canadians. It also highlighted a need for more resilient, sustainable, and future-proofed transit systems that are not reliant on traditional sources of revenue alone to be responsive to long-term, changing conditions.

At the same time, we heard that the immense need for, and the associated costs of, major public transit projects cannot be met by governments on their own. There was interest in exploring the role of alternative financing and public-private partnerships to leverage all sources of funding to maximize project investments for communities, including longer-term dependable funding for city-regions, the diversification of revenue models, and potential financing options (e.g., Canada Infrastructure Bank (CIB) and private capital).

The CIB complements government funding programs by attracting private sector and institutional investments in revenue generating infrastructure projects in the public interest (e.g., zero-emission buses and the Réseau express métropolitain).

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2. Be responsive to local/regional priorities and realities

While participants expressed a need and desire to work better together, provinces, territories, municipalities, transit agencies, and Indigenous communities – owners and operators of infrastructure – told us that they are best suited to identify their local needs, priorities, and solutions, and require funding that is responsive to this.

We heard that capital needs, housing affordability challenges, and growth pressures are most acute in major metropolitan centres, and that these needs may not be adequately supported through existing governance and funding arrangements.

In addition, smaller, rural, remote, and Indigenous communities highlighted the need for accessible and inclusive transit options to get people to nearby communities for work, school, appointments and family visits. They also stressed the importance of tailored programs designed to address their unique realities, including limited complexity and administrative burden, especially in the delivery of small, routine projects.

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3. Catalyze transit investments to address pressing social, environmental, and economic challenges

Across the country, we heard that there is a pressing need for transit investments to help address congestion, housing affordability, social inclusion, and climate change in addition to advancing key transit goals, such as increasing the modal share of transit ridership. Participants indicated that more work is required to leverage investments between all governments to deliver results and co-benefits.

Our stakeholders emphasized the following:

Catalyze complete communities: Effective public transit and active transportation provide clean and more affordable access to jobs, services, and recreation. Leveraging these investments is an effective way to build more sustainable, inclusive, and complete communities. Active transportation infrastructure is a foundational part of a connected, multimodal transport system in communities. Adequate, flexible and stable funding is also key to supporting active transportation initiatives on the ground.

Target density and mixed land use: Current investment and growth patterns do not result in sufficient population, job and service density near existing and new transit and transportation-rich areas, with too much low-density greenfield development. This is exacerbated by inconsistent integration of transit, active transportation, and land-use planning. Not only does this lead to long commute times, congestion, and lack of affordable housing options, it also has significant impacts on our efforts to reduce greenhouse gas emissions.

Support adequate housing supply: Affordable housing shortages of all types magnify equity impacts, particularly in large urban areas. The supply gap has exacerbated home rental price increases, with prices growing faster than incomes in many communities. The creation of dense, transit-oriented, complete communities could improve housing supply and affordability and address population growth pressures, while supporting Canada's immigration and refugee goals.

Address accessibility and equity: Equity-deserving groups, including women, racialized people, Indigenous peoples, persons with disabilities, newcomers, seniors, low-income individuals, and people experiencing homelessness, tend to rely more on public transit. Lack of attention to the equity impacts of transit policies, data collection, and investments can result in marginalization of equity-deserving groups and exacerbate structural barriers to their full participation in society.

Project development and construction may disrupt communities, including gentrification or displacement through land value increases. Transit operations are not always user-centred, which creates outsized impacts on those requiring barrier-free environments and can impact anyone travelling across jurisdictional boundaries that produce artificial barriers to regional mobility.

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4. Deliver improved governance and intergovernmental alignment

Throughout our engagement, we heard transit projects entail a complex ecosystem of needs, interests, governance, and decision-making that should be strengthened, including through the creation or improvement of formal structures to ensure collaborative planning and investments that maximize outcomes for residents.

We also heard that funding partners need to improve alignment on program criteria, budgeting and project prioritization in a way that reflects local needs.

Stakeholders highlighted that a lack of coordination within regions hinders the effectiveness of public transit investments and continues to lead to unrealized benefits. For example, transit planning may not sufficiently consider housing density or amenities (jobs, services, recreational facilities, water infrastructure), while zoning and development requirements can vary across jurisdictions, causing differentiated regional housing affordability and mobility access outcomes.

Finally, we heard that we could improve coordination within the federal government to enable partners to harness other federal programming (e.g., Canada Mortgage and Housing Corporation, Canada Infrastructure Bank) or federally owned lands (e.g., Public Services and Procurement Canada, Canada Lands Company).

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5. Champion more transparent, evidence-based decision-making

Partners shared the need for national, standardized data and indicators to support decision-making and project prioritization across the country.

Many respondents highlighted the benefits of using enhanced evidence-based decision-making to allow for the transparent evaluation of proposed public transit projects and operational results.

Smaller communities noted challenges in accessing data and supports for identifying, prioritizing, and planning transit projects. They also highlighted the need for data gathering, monitoring and reporting support due to capacity constraints.

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Our Response – Principles to Guide Design and Implementation

The feedback and ideas shared have helped to refine and shape guiding principles of the design and implementation of the permanent public transit fund. These principles will underpin our goal to support safe, modern, and efficient public transit systems, build complete and inclusive communities, and improve outcomes for Canadians.

Provide stable and predictable capital and planning funding in concert with investments by provincial, territorial, and municipal partners to enhance our collective ability to plan, maintain and deliver more accessible, resilient and sustainable transit systems. Permanent public transit funding will provide stable support for the capital investment needs of Canada's public transit systems, while relying on our provincial and municipal partners, who control operational decisions, to identify and meet the needs of their communities.

Support flexible delivery with a mix of funding mechanisms, including streamlined administrative approaches to better align program requirements with desired outcomes, and mutually reinforcing funding mechanisms to ensure that investments create positive short-term and long-term outcomes.

We will provide funding options to meet the unique needs of communities of all sizes and geographical realities, including larger cities as well as mid-sized, rural, remote, and Indigenous communities, including by:

• Providing communities of all sizes with access to a base of predictable funding for smaller and routine needs like state of good repair, rehabilitation, and minor expansions, with additional opportunities to apply and obtain funding for existing and emerging priorities (e.g., rural transit solutions, zero-emissions transit, and active transportation).
• Supporting long-term integrated regional plans in metropolitan regions with funding agreements that link to transit co-benefits such as housing and GHG reductions to go beyond a project-by-project approach and maximize the impact of other land-use policies or investments in transit and related outcomes.

These approaches will be complemented by the Canada Community-Building Fund, approximately a third of which is used for public transit. This additional source of permanent funding provided to municipalities through provinces and territories is up for renewal in 2023/2024.

Advance place-based approaches that respect the specific needs and priorities of our partners and provide opportunity for local and regional leadership while ensuring results for Canadians, including:

• Empowering local and regional leaders in metropolitan regions to identify the needs of their communities and harness innovative best-in-class approaches, while linking to effective outcomes and targets that produce results and provide accountability for investment decisions.
• Providing access to flexible program delivery, and enhanced outreach and planning supports to meet the needs of smaller, remote, rural, and Indigenous communities and reduce the administrative burden for all our partners. This could include transit solutions that support riders’ day-to-day activities and connections with nearby communities that offer vital services, from employment and education to healthcare.

Drive social, environmental, and economic outcomes by working with other levels of government and transit partners to leverage transit investments to reduce emissions and support complete communities. We will look to maximize the transit user experience, expand access to employment opportunities and housing, mitigate climate change, and improve equity and inclusion. This includes:

• Exploring policy options with our partners to encourage equity-focused planning, data collection, and building affordable housing and active transportation near transit and other amenities. We will consider ideas such as community benefit agreements, employment benefit frameworks, and local procurement opportunities.
• Examining how our investments can meaningfully reduce GHG emissions to help deliver on Canada’s 2030 Emissions Reduction Plan and reach net-zero by 2050 and support the government’s National Adaptation Strategy, which sets a vision and goals to increase Canada’s resiliency to the impacts of climate change.
• Considering ways to support made-in-Canada low-carbon construction materials and reciprocal procurement measures.

Improve governance and intergovernmental alignment by encouraging more long-term and coordinated decision-making among governments and other transit partners – especially in larger metropolitan regions. This includes the potential to support enhanced regional governance structures and integrated regional planning to improve the coordination of regional transit and other interrelated investments such as housing, resulting in better outcomes for all residents. The government will achieve these objectives by:

• Taking a long-term integrated approach that looks to leverage relationships and review processes among relevant federal departments and agencies to support our public transit partners more directly, particularly for housing and community amenity developments near transit.
• Seeking opportunities to coordinate investments from federal departments and agencies with relevant programming or real estate holdings.

Enhance evidence-based decision-making for funding programs in close collaboration with our partners, including through common indicators and metrics for similar projects, standardized methods for collecting data, and applying consistent approaches to determine whether project targets or outcomes are met. This includes:

• Working with our partners to explore how to expand the use of technical experts to support transparent decision-making processes, including through data and research, planning, as well as the identification of needs and establishment of targets for communities.
• Building upon our existing commitments to support additional evidence-based decision-making capacity for communities across the country.
• Creating an advisory body of experts from across the sector to undertake Canada’s first National Infrastructure Assessment (NIA), which will serve as a foundational tool to identify Canada's infrastructure needs and priorities, and will undertake evidence-based long-term planning into 2050.
• Supporting the next phase of infrastructure funding and decision-making. The NIA will provide governments with impartial, expert research and analysis – grounded in evidence and developed openly and transparently – to better inform infrastructure investments.

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II. What’s Next – From Ideas to Program Design

Permanent public transit funding offers an opportunity for all governments and transit partners to work together to enhance integrated planning and evidence-based decision-making and catalyze long-term investments in public transit that are responsive to local and regional needs.

The broad participation of partners and stakeholders in this public engagement process is encouraging and we want to thank everyone who contributed.

Over the next months, the government will work closely with our transit partners on the path forward, and Infrastructure Canada staff will play a crucial role in supporting enhanced engagement and integrated, place-based approaches that are attuned to the unique realities of Canada’s diverse communities. This work will be critical to ensuring that the government can reach its goal of launching key elements of the permanent transit funding program in the near future in order to flow funding in 2026/2027.

We look forward to continued discussions with our partners to ensure that we get the details right and strengthen our collective ability to deliver high-quality and accessible public transit and active transportation and improve the quality of life for Canadians.

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APPENDIX A: Participant Information

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