I was involved in consultation at the provincial level with the Province of Ontario on the mechanisms for dividing up the provincial gas tax rebates, and my feeling and impression was that this exception that you describe was really a question of fairness--not giving up on the policy that the gas tax was intended to pay for transit, but just to say that if this rule were applied without exception, it would, as you say, be unfair to the smaller communities.
But we also feel smaller communities can do many things to provide transit because they too have aging populations. Some of the rural transit initiatives that we've been looking at involve combining school bus services, taxi services, and volunteer drivers, for example. Many volunteer networks are established by hospitals, and some coordination and sharing among these things can in fact start to provide some transit solutions even for very small municipalities.