FILLING TRANSIT FUNDING GAPS
Fee hikes will help pay for expanded service
Hikes to transit fares, property taxes, parking taxes and development cost charges will help pay for the regional portion of the second phase of a $7-billion transit and transportation plan for Metro Vancouver.
The Mayors’ 10-Year Vision for Metro Vancouver Transportation includes some major transit projects, such as at-grade light rail for Surrey, a subway underneath Broadway in Vancouver and more train cars and station upgrades for SkyTrain. There will also be expanded bus and HandyDart service, and road, pedestrian and bike network improvements.
“This is a huge win for transit users, for drivers, for cyclists and for pedestrians,” said Mayors’ Council chairman and Burnaby Mayor Derek Corrigan. “In fact, this is the largest transit funding announcement in B.C. history and one of the largest ever across this nation.”
The federal government has committed to paying up to 40 per cent of the capital costs for major projects, and the province has agreed to pay for 40 per cent of all projects. In the recent provincial budget, almost $1.2 billion was set aside over the next three years.
TransLink is responsible for the rest, plus all of the operating costs, and has funded $160 million from existing revenue sources, such as fare revenues, property sales and internal savings. That left a $70-million annual funding gap that TransLink, the Mayors’ Council and the province have been negotiating for months to fill.
The agreement that was struck covers the gap with five different sources.
“The Mayors’ Council has approved a balanced approach to increasing taxes and fees paid by transit users, drivers, property owners and developers,” said Corrigan. “Each and every one of us have had to make compromises to get where we are today.”
They’re proposing a two-percent increase to all transit fares over two years beginning in 2020. This amounts to an increase to adult and concession transit fares of five to 15 cents and $1 to $3 increase to adult and concession monthly passes to pay for more bus improvements.
TransLink now administers a 21-per-cent sales tax on all off-street parking within Metro Vancouver, and that rate will be increased to 24 per cent, which translates to a 15-cent-per-hour increase to $5-per-hour parking. Legislative amendments will be required for this to take place.
In the past, mayors have voted against using property taxes to pay for transit improvements, but the funding plan includes a $5.50 increase in property taxes per average household each year or about 46 cents a month, beginning in 2019.
A new development cost charge that was introduced to fund Phase 1 of the plan will be increased by $300 to $600 per unit on new residential developments depending on type of dwelling. The charge has not yet been implemented, and legislative changes are required to enable the Mayors’ Council to levy the charge.
TransLink is also looking to raise $2.5 million in revenue from “a variety of transit-related commercial opportunities.”
Corrigan said every mayor around the table had issues accepting some elements of the plan — whether it was development cost charges, parking taxes or property taxes — but it was necessary to take advantage of the federal and provincial money on the table.
“This is a massive plan that is going to do so much for the Lower Mainland, it justifies all of us sucking it up a bit and taking something we might not have liked,” he said.
These funding sources combined will bring in about $40 million per year, leaving a $30 million shortfall. Minister of Municipal Affairs Selina Robinson was vague about how that would be made up.
“We’ve also committed to reducing TransLink’s fiscal pressures by $30 million, which will help the region get vital transportation projects underway as soon as possible,” she said. “Discussions with TransLink as the best way to do this are ongoing.”
It’s expected that the draft investment plan for Phase 2 will be approved in April. That approval would be followed by public consultation. The final investment plan would then be approved in June or July and implementation would begin in July.
The provincial and federal governments must also finalize a bilateral agreement so federal funding can flow for the transit plan.
David Suzuki Foundation science and policy director Ian Bruce called the agreement “a huge political breakthrough on solving a problem that’s been plaguing our region for more than a decade.”
Kris Sims, spokesperson for the Canadian Taxpayers Federation, said she was disappointed TransLink was unable to fund the plan within the existing budget, but it was not as bad as she expected.
She did express concern that the new development cost charge would make housing more unaffordable for Metro Vancouver residents.
“If they’re tacking on extra fees per unit, we’re worried that it could really cool things down when it comes to building more housing supply,” she said.