Cost of REM fares depends on numbers of riders
The province’s pension fund’s payout for operating the new Réseau express métropolitain will depend on how popular the service is with riders.
Construction of the REM — a driverless electric train spanning 67 kilometres — is expected to begin in April with operations to begin in 2021. The Caisse de dépôt et placement du Québec, which will own the majority of the new train service, will charge the regional public transit authority for each passenger who rides on it.
“The Caisse is taking the gamble on ridership,” said Macky Tall, the president of CDPQ Infra, a Caisse subsidiary.
With 26 stations linking the West Island, South Shore and Deux-Montagnes train line to both the airport and Central Station downtown, the Caisse will charge the regional transit authority up to 72 cents per kilometre per passenger.
Passengers taking the 30-kilometre trip from Deux-Montagnes to the downtown core will pay roughly the same amount they do now, but the regional transit authority will pay the Caisse $21.60 for that passenger.
Fanie St-Pierre, a spokesperson for the Autorité régionale de transport métropolitain (ARTM), said the rate of 72 cents is a good one when compared with the current price of running the train network.
She said it costs the ARTM, a public body funded by municipal and provincial contributions as well as fares, 66 cents per passenger per kilometre to run six commuter train lines, and that doesn’t include the cost of building the infrastructure, or maintaining it.
But the more people who ride the train, the lower the cost per passenger, St-Pierre said. If the REM attracts 15 per cent more riders than anticipated, the charge will drop to between 55 and 58 cents per kilometre travelled.
The REM will be funded by the provincial and federal governments at $1.283 billion each.
Another $100 million will come from the city of Montreal.
Hydro- Québec has committed $295 million, and the ARTM has pledged $512 million.
The Caisse has said it will receive a nine per cent annual return on its investment, which will benefit future retirees. Both the provincial and federal governments will also receive returns for their initial investments.
Matti Siemiatycki, an associate professor at University of Toronto’s Geography and Planning department, said it will be interesting to observe the project, because it is a unique model in Canada.
“This project is actually a form of long-term savings being carried out through the investment in a transit project,” he said. “If the Caisse can bring its international experience and the expertise they have in-house to deliver this project, that can be very favourable, and has the potential to be very successful for the region.”
Siemiatycki pointed out that all of this is at risk, however, if there are major cost overruns, or if ridership targets — which the Caisse has not revealed — are not met.
The ARTM is also undertaking a review of the way all fares are charged for transit in the region.
More than 700 different types of fares are charged to transit users, depending on the mode of transportation, the distance travelled or the location of the trip.
For example, it costs more to ride the métro in Laval than it does in Montreal, and there’s a different fare for Longueuil.
The ARTM has been mandated to present a plan for harmonized fares this year, and for that fare structure to be implemented starting next year. ARTM director general Paul Côté told the Montreal Gazette last year he envisions one website to list and explain all the transportation offerings for the region, including the REM, and one way to pay for all of them.
“The system will provide you with the opportunity to tailor it to your specific needs, whatever they are,” Côté said. “It can be car sharing, bus, métro, Bixi, taxi or whatever. You can sign up for daily, weekly, monthly and annual rates, and it will work with all the modes.”
The fare harmonization issue has been studied since 2014.
Siemiatycki said harmonizing a fare structure is not as simple as it sounds, because adopting a system based on people paying more for how far they travel may seem to be a good way to recuperate the cost of the system, but it may penalize those who live furthest from the city core and have lower incomes.
“If you go with that sort of costrecovery approach, you may be pricing people out of the system who have both the least comfortable trip, and who are making the longest trips to reach their jobs.”