Transport Committee on Nov. 30th, 2022

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

You mentioned that there should be a subsidy on the routes. I think you referenced a United States program to subsidize small regional carriers.

In the Canadian context, do you believe that the federal government, for all modes of transportation, should be subsidizing all routes that carry passengers to ensure that they are profitable?

[Kasper Wabinski]

I believe that program would work because it would allow us to transform non-profitable routes into sustainable routes, or non-sustainable routes into sustainable. Not all routes need subsidy. I like the idea of this program because it would allow us to build up routes that could become sustainable over time.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Do you have any idea of what the cost for that initiative would be? What would any level of government need to invest or spend in order to ensure that all routes that need to be made profitable are made profitable?

[Kasper Wabinski]

Thank you for that question. It depends on how far we go and how fast we can move. There's limited equipment available, and it takes time to put infrastructure in place. You don't want to go too hard, too fast, right off the bat. It could cost as little as $30 million a year, from my estimates. It could go up to $85 million, depending on how many remote communities or smaller communities we want to connect.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Is that for your company or for the province?

[Kasper Wabinski]

It's for the entire country.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

We heard, though, that it was $85 million for STC to operate on its own. How could the entire country's routes be subsidized for $30 million to $85 million?

[Kasper Wabinski]

Based on Dr. Alhassan's comment, it wasn't $85 million to operate the company. It was only a $14.9 million subsidy from the province. The total cost was $85 million. They recovered that through ticket sales.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

So for double the amount of their operating budget, we could subsidize every route in the country?

[Kasper Wabinski]

Yes. I believe that would be possible. The Greyhound network connected something like 200 communities. Now, it depends how far you want to go—

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Wabinski, and thank you very much, Mr. Strahl.

Next we have Mr. Badawey.

Mr. Badawey, the floor is yours. You have five minutes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chair.

I'll preface my comments by saying this. This is all about leveraging and ensuring that the federal government takes into consideration our contributions. For example, the most recent contribution we put forward in the 2021 budget, which was the rural transit solutions fund, was $250 million over five years for planning and design grants, capital procurement and construction for a wide range of transit modes that meet rural community needs. The provincial government in my home province of Ontario puts together mechanisms or levers to allow municipalities to then, again, leverage federal funding. Some provinces are generous. Saskatchewan, for example, is not. They don't put anything forward. Ontario puts a bit. More importantly, there's the leveraging that comes from municipalities to their transit systems.

This is directed to the FCM.

Currently the Conservatives in Ontario are now planning a clawback for the ability for municipalities to collect development charges from developers who create growth-related capital or operational costs within those individual municipalities throughout the province of Ontario. Those growth-related costs, both operational and capital, include intermunicipal transit. With that inability now, municipalities are handcuffed. By default, they will be relying on property taxpayers to then foot the bill for those growth-related costs versus the developers who are creating those growth-related costs, such as inter-municipal transit.

With that said, the bottom line is that the Conservatives in Ontario are raising property taxes as well as other operational and capital growth-related costs, such as water bills, etc., etc., etc.

Alongside AMO, who I wish was here today too, what advocating are you currently doing with the Province of Ontario, for example, to ensure that these costs don't fall onto property taxpayers and that they in fact are leveraged between the partners that they once were—for example, the federal, provincial and municipal levels of government as well as the private sector, which does create some of those growth-related costs?

[Matt Gemmel]

Thank you for the question, Mr. Badawey.

I'll start by saying that FCM's mandate is federal; we don't advocate to individual provincial governments. My colleagues at the Association of Municipalities Ontario, as you mentioned, are active on Bill 23 on that question. As you probably know, they've estimated that the impact of Bill 23, in terms of limiting the ability of municipalities to collect development charges, could cost as much as a billion dollars a year in municipal revenue for the 19 largest municipalities in Ontario. It's significant, and it's something our colleagues in Ontario are very concerned about and are looking closely at.

I think it speaks to a bigger issue around how we fund municipal governments in this country. Last week, Statistics Canada data came out that showed that municipalities collect less than nine cents on every tax dollar collected in the country, yet the responsibilities for municipalities are only increasing, and we own and manage more than 60% of public infrastructure in the country. It's part of a bigger discussion.

As it relates to transit, whether it's in an urban context or an intercommunity context, I think we need to look at partnership between orders of governments, including indigenous governments, as I mentioned in my opening, in how we fund a system that, in FCM's view, would be a mixture of public, private and non-profit carriers. We have that model in an urban context, and there are ways to expand it. Municipalities are expanding it. In an intercommunity context, there is a role for municipalities, but given just the nature of the routes, there's less direct municipal responsibility or involvement, though there are models in which municipalities are contributing on an operating-subsidy basis for services that pass through or serve their community.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Gemmel. I have only got 30 seconds left and I have one more question for you.

With respect to the $250 million that the federal government gave you over five years from the 2021 budget, do you have any examples of how your members are using this funding to develop new and local solutions?

[Matt Gemmel]

As I mentioned, there's a lot of interest from municipalities in either expanding existing fixed-route transit services that they have in their communities or, in many communities and small towns that didn't previously have a fixed-route schedule system, looking to develop that for the first time as a result of this funding.

As well, there is increased interest in on-demand services, meaning more of a shuttle bus service or more of an Uber type of model, but delivered publicly by the municipality to provide on-demand services within a rural region. There are a number of examples in all regions of the country of rural municipalities using that funding.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gemmel.

Thank you, Mr. Badawey.

Mr. Barsalou-Duval, you now have the floor for two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you very much, Mr. Chair.

My question is for the director of the Federation of Canadian Municipalities.

As Mr. Bachrach said earlier, the Minister of Transport mentioned that bus transportation was a provincial jurisdiction. However, when it comes to public transit and infrastructure funding, there are agreements between the federal government and the provinces, particularly Quebec. Moreover, the investing in Canada plan, a bilateral infrastructure agreement between Canada and Quebec, was signed in 2018 by the federal government. This agreement provides for money to be made available to the Government of Quebec, particularly for public transit projects. So we're not just talking about infrastructure, but also infrastructure for public transit. This includes several phases.

During the testimony of Minister LeBlanc, the committee learned that the first phase of the agreement provided $350 million, but that it had not been invested. According to the agreement, this money could be used for subsequent phases. Unfortunately, Mr. LeBlanc told us that he would simply not respect the agreement and that the $350 million would go back into the consolidated fund. The reason I mention this is because $290 million of the $350 million was for public transit.

The Union des municipalités du Québec campaigned to demand that these funds be given to Quebec, as agreed to in the agreement that was signed.

Currently, there is an additional $2.7 billion in infrastructure, including infrastructure for public transit, that is at risk.

Does the Federation of Canadian Municipalities support the Union des municipalités du Québec in its fight to ensure Quebec gets the money it was promised?

[Matt Gemmel]

Thank you for your question, Mr. Barsalou‑Duval.

I will answer it in English.

Certainly it's an issue that we're following closely and in consultation with the Quebec municipal association, UMQ, which you mentioned, as well as the FQM.

There's a shared objective here among the federal government, the Province of Quebec and municipalities to invest in public infrastructure, including in public transit, and that remains FCM's priority.

There is a timeline in place to identify transit projects for that remaining money you mentioned, and it's certainly our hope that the Province of Quebec will identify projects within that timeline and ensure that funding is invested in Quebec and benefits Quebeckers.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gemmel.

Thank you very much, Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

The floor is yours, Mr. Bachrach. You have two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair. My question is for Mr. Cassidy.

I understand that your company has tried to integrate its schedules with passenger rail, and I'm wondering to what extent we should be talking about integrating bus and rail transportation as part of this overall conversation about passenger transportation in the country.

[Michael Cassidy]

It is very important when we talk about intermodal transport. When we started 10 years ago, we made sure that we were in the same terminal as Via Rail in Moncton, New Brunswick, and in Halifax, Nova Scotia.

On the surface it sounds great—ground transportation, bus, rail—but unfortunately we used to have interlining from Ontario through to the Maritime provinces train with our bus system. I think you made mention of this last week. The train schedule doesn't live up to the times, and our buses depart after the trains arrive late, normally over 60%, 70%, 80% of the time. If we do have intermodal service, whether it's air, train or bus, there has to be a working relationship with schedules, with reliability and consistency, because it's the passenger we have to think about here. It has to be seamless ticket travel to allow them to get from point A to point B, and right now we do not have that.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

This is my last question.

It's been four years since Greyhound left western Canada. It's been a year and a half since Greyhound left Canada altogether. Based on this study so far, it doesn't feel like we're particularly close to even replacing what Greyhound offered, which people loved to complain about. They did offer a one-ticket ride from coast to coast connecting hundreds and hundreds of communities across Canada.

I think almost any of the witnesses could take a stab at this, but perhaps I'll ask Mr. Gemmel.

What's the single ingredient that we're missing at this juncture? Why is progress so slow, and why are we lacking progress toward that goal of a truly interconnected single national system for bus transportation?

[The Chair, Liberal, Peter Schiefke]

You have 20 seconds for a response, please.

[Matt Gemmel]

Thank you.

It's understandable that the context of this committee study is Greyhound pulling out of Canada, but as you quite readily noted, it's not as if we had a great passenger bus service system for all regions of the country before Greyhound. This was a concern that had been raised through FCM, through our rural forum, for many years before Greyhound left Canada.

I really think it does require being made a political priority at the provincial level and at the federal level, and that there be a concerted effort to coordinate regional services, as Mr. Cassidy mentioned, and to commit long term to funding—

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gemmel, and thank you, Mr. Bachrach.

Next we have Mr. Strahl once again.

Mr. Strahl, the floor is yours. You have five minutes.