Transport Committee on Sept. 28th, 2011

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

What about the variation in the actual costs they're willing to bear? You used a figure of 50%. In the projects you've been involved in, what is the variation in what municipalities are willing to bear? Are we talking about a range of 25% to 75%? What are the differences? Could you cite some examples for us?

[Taki Sarantakis]

With Toronto, as I mentioned, its cost recovery tends to be in the high 80s, I believe. So when Toronto builds the Toronto-York Spadina subway extension, if that follows the pattern of the rest of its system, Toronto will be subsidizing about 15% of the cost of that operating service. Over time, I'm not sure exactly what the operating costs would be of that line, but they are relatively significant, in that a subway line carries a lot of people. So the annual appropriation that will have to go from the City of Toronto to the TTC will increase as a result of that project.

I can get you the figure afterwards. I'm sorry, but I don't have it off the top of my head. But again, the larger ones tend to be above 50%. So the Torontos, Vancouvers, and Montreals tend to cost-recover more than 50%.

[The Chair, Conservative, Merv Tweed]

Thank you. If you have any documents, if you send them to me through the clerk we'll certainly see that they get distributed.

Ms. Morin.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

I heard you talk about major urban centres like Montreal. You feel that they are the most profitable municipalities. I am wondering about that. In fact, two weeks ago, we found out that the Société de transport de Montréal had changed its zones so that constituencies like mine—in suburban Montreal—would have to pay more, since the STM is low on money.

On a different note, many projects will affect a number of municipalities. You say that municipalities must put up about a third of the total amount, and that the federal and provincial governments must each provide a third as well.

How would the cost be divided for a project affecting some 40 municipalities? Would it be proportional to the number of people living in those municipalities?

[Francis Bilodeau]

Usually, in terms of allocating costs for a municipal project, the federal government pays a third of the cost. The province would also be expected to pay a third, as would the municipality. That's how it works when the infrastructure in question belongs to the municipalities themselves.

Ordinarily, for a provincial infrastructure project, the costs are split 50/50 with the province. All the partners really must be gathered around the table, so that the costs may be shared equally.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

My question is more about the municipalities. If 40 municipalities have a joint project, how do they divide a third of the cost amongst themselves?

[Taki Sarantakis]

Municipalities have to provide one third of the money, and the Government of Canada is not at all interested in meddling in municipal matters.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Let's use an example of a project whose usefulness the municipalities and the province have agreed on.

At what stage would the federal government reject the project? You said earlier that extravagances are not very common and that, usually, when a project is approved by both the municipalities and the province.... What can stand in the way of your carrying out the project at that point?

[Francis Bilodeau]

We proceed on a program-by-program basis, to an extent. So there is no answer that goes.... Regarding the Gas Tax Fund, for instance, municipalities would normally have a lot of freedom to move forward. We do ask that they submit a report afterwards.

As for programs like the Major Infrastructure Component of the Building Canada Fund, our main stakeholder is usually the province. Therefore, we ask the province to outline its priorities. The federal and provincial governments then discuss those priorities.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

On another topic, in answering my Liberal colleague, you said Transport Canada was a bit slow, especially when it comes to funding. But it doesn't necessarily impose approaches and gives municipalities a lot of freedom.

You also said that a national partnership was more complicated. Could you tell us a bit about public transit development strategies abroad? Why are other countries able to have simple approaches?

[Francis Bilodeau]

That's a broad question. There isn't necessarily a country whose national public transit strategy is comprehensive. On that topic, CUTA basically reports that the other G8 countries have a number of components of what CUTA considers to be a national strategy, rather than a comprehensive national strategy. Therefore, some components discussed in that report exist in Canada, such as subsidies for public transit passes and a funding element.

It is difficult to compare countries. First, the way the country works varies by province. Second, studies on that topic do not show that the other countries we have looked at necessarily have a national public transit strategy.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

I have here a research document from the Library of Parliament—which appears to be a valuable research tool—saying that Canada and the U.S. are the only G8 countries without a public transit strategy.

Could you tell us about the public transit development strategies of other countries?

[Taki Sarantakis]

That depends on your definition of “strategy”. I think you might be better off asking CUTA that question, since they studied the matter in detail.

Personally, I did look somewhat into the public transit approaches taken by the G8 countries. Actually, Canada has many of the elements that make up a strategy. I don't think it is fair to say that Canada is the only G8 country without such a strategy.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Since we are so close to having a strategy, what is stopping us from developing a real public transit strategy?

As you suggested, some parts of the country are more in need in certain circumstances. Why can't we come up with a real public transit strategy?

[Taki Sarantakis]

CUTA has put together a national policy framework that sets outs the components of a strategy, and Canada already has a number of those components.

Through the chair, I can give you the document indicating that Canada has components of a national strategy, basically putting it on par with the rest of the G8 countries.

[The Chair, Conservative, Merv Tweed]

Thank you.

I wish to advise the committee that we have invited CUTA, the Canadian Urban Transit Association. We're hoping they'll be here on Monday.

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for appearing here today.

I'm finding the latest rounds of questioning to be very informative. Of course I'm sitting here thinking to myself, what are the components of a national public transit strategy? We're called on to do a study, and nobody has really laid out any for us yet. We now find out there are no international examples of national transit policies. The opposition, who primarily wanted this study, haven't laid out, at least in the initial meeting here, what they think a national public transit strategy should include. Maybe we're trying to do a study to find out what could be in that.

Let me see if I summarize your position clearly. It sounds to me as if in some respects you think the status quo is the only possible way forward in dealing with this issue. That is, that the federal government be involved in the capital investments through omnibus-type infrastructure programs that broadly address flexibility for infrastructure, including for public transit; that we address the issue of proportionality, if you will, through the division of a major infrastructure component versus a communities component; and this was within BCF's seven-year funding window.

Am I understanding your position to be that, or that a different model is possible here?

[Taki Sarantakis]

I don't have a position per se--

[Jeff Watson, Conservative, Essex, ON]

In the Canadian context.

[Taki Sarantakis]

Yes. I've been explaining what the government has been doing in public transit over the last decade. I think it's very important to note that the government in the last budget, as I talked about briefly in my opening remarks, has announced this process to undertake a long-term consultation with respect to infrastructure. Obviously transit will be a very big part of that. We know that transit is a very large consumer, if you will, of our program dollars. It is a very important issue for the larger cities in Canada. These issues will have an opportunity to be addressed again in the context of whatever the government brings forward at the conclusion of Building Canada in 2014.

That being said, what Canada is doing right now is a lot more than what it's done in the past in terms of transit. The quantum has gone from virtually nothing to, as I said, $5 billion. The municipal sector is largely, I think, on the whole appreciative of the efforts of the Government of Canada in this area. There isn't another substantive policy area that you could point to where federal funding has grown as quickly in the last decade as infrastructure as a whole, and public transit in general. If you're a mayor or a premier, I think you'd like to see the federal government continue to be that type of constructive partner.

[Jeff Watson, Conservative, Essex, ON]

Are there, for lack of a better term, potential “land mines” we should consider with respect to delving into this area of creating a national strategy? What types of things should we be looking for or considering that could be troublesome?

Population density obviously has to be a consideration. The question of whether the federal government jumps into the ongoing operational costs of transit systems may raise fairness questions, I would suspect, in regions where public transit isn't an issue.

With regard to land use planning, I don't know our specific federal-provincial structure and who has responsibility for what. This is why flying blind without any international examples becomes a bit of a problem, too. What can we compare to that has a similar political structure, comparable population densities, and whether or not they do operational costs?

Can you give us some guidance?

[Taki Sarantakis]

I wouldn't necessarily call them “land mines”, but I would call your attention to some things that will come up as issues and things that this committee and others will need to explore in the context of the study of public transit.

I think, for me, the first would be the question of dedicated versus omnibus funding. There are pluses and minuses to each model, but if you have dedicated funding, that tends to be less beneficial to communities that don't necessarily have transit as a salience.

I think the question of capital versus operating funding is something to be examined. Historically the Government of Canada has largely limited itself to capital. If it goes into operating, again, there are pluses and minuses of that.

Cost-sharing is also, I think, an important issue going forward. Historically, with the exception of the gas tax, our infrastructure programs have tended to require a significant financial contribution from other partners. I think if the federal government were to assume a larger cost-sharing role, that would have implications for the type of infrastructure projects that you could afford.

I think another issue is incrementality. Historically the Government of Canada has tended to insist that for its infrastructure funding the project be new, be something that wouldn't have otherwise happened without the involvement of the Government of Canada. Again, if you move away from that model, there are pluses and minuses.

For me, I think those would be the four big things to look at.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Wallace will finish out the first round. Then what I'm going to do for the committee is allow one or two people on each side to finish up.

Go ahead.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I want to thank my colleagues for allowing me to speak. I'm happy to replace Mark as a GTA member. Transit is an issue for our caucus in the greater Toronto area, and we appreciate your discussion.

I have a couple of questions. I've done a paper that only my caucus has seen. It was a few years ago, and I will have to get it out again and shake the dust off it. Tell me if I am wrong or not, but I'm under the impression that since 1963 in the United States there has been a capital fund for transit. Maybe it doesn't exist any more, but it did exist for a while. States and municipalities could apply to the federal government for it--for capital purposes only; there was a little bit for operating.

I agree with you, sir, that not only is it a land mine, but I don't foresee the federal government getting into the operating side of transit systems. The capital side is one thing, but I'm not in favour of being a partial operator.

Could you tell me if that fund still exists? Do you know about it? I have seen it in writing, so it did exist at one time, but I don't know if it still exists. Or is this something you don't know about?

[Taki Sarantakis]

I'm sorry, but I'm not aware if that specific fund is still in operation. I can tell you that in the last stimulus round, when President Obama announced his stimulus package, transit was a major component.