PM Trudeau Pledges Billions in Permanent Funding for Public Transit

Prime Minister Justin Trudeau announced plans today for the federal government to spend an additional $14.9 billion over the next eight years on public transportation projects across the country.

The funding includes $5.9 billion in short-term funding that will be disbursed on a project-by-project basis, starting this year.

The remainder aims to establish a permanent transit fund of $3 billion per year starting in 2026. Money from that fund will be earmarked following consultations with provinces, territories, municipalities and Indigenous communities.

Trudeau said the permanent transit fund is meant to provide stable funding so municipalities can build and expand their public transit systems.

He made the announcement together with the federal environment and infrastructure ministers, the President of the Canadian Infrastructure Bank, Tamara Vrooman and the Mayor of Edmonton, Don Iveson.

This grant can be used for everything from subway extensions and electrified transit fleets to walkways, cycling pathways and projects to improve rural mobility.

The federal government has invested over $13 billion in more than 1,300 public transit projects across Canada since 2015. Another $10 billion or so is set aside for transit through the Investing in Canada Plan, the government’s larger infrastructure strategy. But that funding is set to expire in fiscal year 2027-2028.

Wednesday’s announcement means cities can expect a predictable amount of funding indefinitely.

Iveson, who chairs the big city mayors’ caucus of the Federation of Canadian Municipalities, said the announcement satisfies a key demand the country’s mayors have been pushing for years.

Toronto Mayor John Tory and Vancouver Mayor Kennedy Stewart also praised the federal announcement.

The number of people taking public transport in urban areas has decreased sharply since many workers started working from home because of the COVID-19 pandemic. The latest data from Statistics Canada for November 2020 shows that the number of ridership is down 64% from the same period last year.

Lower passenger numbers have also resulted in many carriers declining revenues, putting additional pressure on provincial and city budgets, already pressured by declining revenues and increased spending on priorities related to pandemic.

Infrastructure Minister Catherine McKenna’s spokesperson Chantalle Aubertin said that, unlike previous infrastructure commitments, the new money will not be divided up between provinces but will instead put into a pot that can be accessed whenever a project is ready.

Marco D’Angelo, president of the Canadian Urban Transit Association (CUTA), an industry association, said the permanent transit fund will help expand public transit systems and ease traffic congestion in cities.

But CUTA said more operational funding is needed to keep transit systems operating during a time of lower ridership. The federal government has provided several billion dollars to municipalities since last summer for operational funding — including for transit — through the Safe Restart Agreement. That funding is set to expire in the coming months, the group warned.

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