Good afternoon, Mr. Chair and members of the committee.
I'm Kelly Paleczny, general manager of the London Transit Commission and chair of the Canadian Urban Transit Association. I am pleased to present our association's recommendations for the 2025 federal budget.
For those unfamiliar with our association, CUTA has been the voice of public transit in Canada for over 120 years. Our members include transit systems, public bodies, companies that supply the sector and experts in urban mobility. Every day millions of Canadians depend on public transit. It's not just a convenience; it's an essential service that connects our communities, drives our economies and enhances our well-being.
Now we find ourselves at a critical juncture. Public transit systems across Canada face unprecedented challenges, and our recommendations today offer suggestions to address them with a focus on affordability and prosperity for Canadian families.
Transit agencies across the country welcome the launch of the Canada public transit fund, which represents a stable and predictable source of funding for transit infrastructure. Unfortunately, the planned 2026 rollout of this fund creates a significant infrastructure gap due to the sunsetting of the investing in Canada infrastructure program in March 2023. That is why it's imperative that we accelerate the rollout of the Canada public transit fund's baseline stream to budget 2025, rather than waiting until April 2026.
Many systems are grappling with aging infrastructure that threatens service reliability. Large systems in Toronto and Montreal have estimated their unfunded state of good repair needs at $900 million and $500 million annually. Smaller systems are continuing to rely on buses that have travelled in excess of one million kilometres and are at an age that makes it difficult to procure parts.
Accelerating the baseline stream of the fund will help address these critical shortfalls and enable transit agencies to continue to provide service to Canada's rapidly growing communities. We need to ensure that our transit systems remain efficient, sustainable and capable of supporting Canada's future needs. Every day we delay, maintenance backlogs grow, making it harder to meet current and future demands.
In addition to accelerating the Canada public transit fund, we must also act to protect it by enshrining it in legislation. This act will provide long-term certainty and prevent potential cuts to transit funding that would only exacerbate our current challenges. It will also enable transit agencies to confidently plan for and implement long-term projects, ensuring the sustainability of our transit systems.
In addition to the infrastructure challenges I've mentioned, many transit agencies are also facing critical operating shortfalls since the pandemic. TransLink in the metro Vancouver area faces a structural deficit of $600 million in 2026. The Toronto Transit Commission faces operating pressures of $354 million in 2025, and the ARTM, which oversees the transit systems of the greater Montreal area, currently faces a total operating deficit of $561 million.
Again, these issues are not isolated to Canada's largest systems. Many medium and smaller systems are unable to respond to the unprecedented ridership demand resulting from the rapid population growth being experienced in their communities as people move away from larger centres in search of affordable housing.
Transit agencies have attempted to cover these shortfalls through the use of municipal reserves and other funding sources and, in many cases, the less desirable options of fare increases and service reductions. None of these options is sustainable, especially in the context of Canada's current affordability crisis. Further inaction on this front will lead to less frequent, reliable and affordable transit services, ultimately undermining the aims of federal funding programs and discouraging transit ridership, which in turn decreases fare box revenue and worsens our operational deficits.
Effective and affordable transit services are fundamental to the success of priorities for all levels of government. This is why we are calling on the Government of Canada to take a leadership role in establishing a national task force that brings together federal, provincial and local governments as well as transit agencies to develop a comprehensive national public transit strategy. This strategy should address operational shortfalls and create a new funding model that supports transit agencies' evolving needs.
Public transit is not a luxury; it's a lifeline. It connects Canadians to jobs, education and essential services. It reduces congestion, cuts emissions and fuels economic growth. For every dollar invested in transit, more than two dollars flow back to our economy.
We need to rethink how we fund transit in this country. As we've seen in other countries, operational funding from higher levels of government is crucial for maintaining high service standards. Canada cannot afford to fall behind. We need a funding model that builds new infrastructure while also maintaining and operating the transit systems we already have in place.
Thank you for your time, and I'll be happy to answer any questions.