Up to $1B in transit funding looms

The federal government is set to promise up to $1 billion a year to Canada’s biggest cities for transit projects in this year’s federal budget, municipal sources suggest.

The budget is likely to be short of new spending commitments, as Finance Minister Joe Oliver attempts to balance the books, but he is set to announce transit funding for such cities as Ottawa, Vancouver and Toronto.

The Federation of Canadian Municipalities called for new federal investments of at least $1 billion annually for big city transit projects, to be matched by provincial and municipal governments, for a total program value of $3 billion a year.

It also called for a funding commitment of 15 to 20 years, based on five-year planning cycles, with the allocation based on transit ridership, which would see most of the money going to the biggest cities.

Sources suggested the commitment would not amount to $1 billion in the first year but would build to reach that amount.

The FCM budget submission pointed out that every dollar invested in transit generates $3 worth of economic growth, and that the $2 billion invested in transit projects across Canada in 2007 generated 22,570 full-time equivalent jobs. Aside from direct employment in construction projects, the FCM also looked at the impact of congestion on Canadians.

The average commuter spends the equivalent of 32 working days a year travelling to and from work. The average daily commute in the Greater Toronto Area and Metro Montreal is 75 minutes longer than London, New York and Los Angeles. A recent C.D. Howe Institute study estimated traffic congestion cost the Toronto region up to $11 billion in lost productivity a year.

The political attraction for the federal government is that it may get credit for spending most of the money in places where it needs to win votes — the suburban areas around the big cities, particularly Toronto and Vancouver.

FCM research suggests 64 per cent of Canadians believe improved public transit will make life better in their communities.

This month, James Moore, the industry minister, said the federal government has delivered on infrastructure and will continue to.

“I think you’re going to see some very large-scale announcements in every part of the country to the benefit of productivity, to the benefit of infrastructure and to the benefit of quality of life for everyday Canadians,” he told CTV News.

He said the government would balance the budget, while still providing tax relief and “focused spending measures that will boost the Canadian economy in certain parts of the country.”