Issue
As several key regions in Ontario expand and an increasingly large constituency of the public turns to public transit as a means of reducing their environmental impact, the provincial transit funding formula as it is currently subsidized, limits Ontario municipalities from developing and growing their systems to match and meet the demand of their populations.
Furthermore, since the principal funding source for most municipal transit authorities is
obtained through ridership fares considerable deterioration has occurred among many transit systems. In certain jurisdictions, vehicle fleets have surpassed or are nearing the end of their lifespan, roadways are woefully structured, fuel costs are rising and the growing service area have compounded to strain the system.
Background
Traffic congestion negatively impacts economic activity and our quality of life. On a typical
workday, it is estimated that drivers spend a total of 300,000 hours stuck in gridlock, while traffic congestion contributes about 30 per cent of Ontario’s greenhouse gas emissions. This level of congestion affects Ontario’s ability to attract new investment, as access to efficient transportation infrastructure is a key factor in business location and expansion decisions.
Shifting commuters from car travel to transit will have the single greatest impact on the
economy and environmental quality in congested areas. Achieving this transition will require making transit competitive with the automobile in terms of convenience, cost and comfort. Strengthening municipal transit systems through increased provincial investment would increase transit services and result in a jump in ridership.
In 2009, the Ontario government intends to share $321 million in gas tax revenue with 111
municipalities (89 transit authorities). The province expects this money to assist in expanding routes, extending operating hours and upgrading infrastructure.
While this is a positive step, the formula by which transit funding is distributed to
municipalities is unsound. At present, municipalities receive transit money by way of the
70/30 rule. This funding formula is based on a ratio of 70 per cent ridership and 30 per cent population. For many rural, older, mid-sized and sparsely populated municipalities like Greater Sudbury, this formula simply places too much burden on the municipality to be the majority subsidizer.
Additionally, public transit is crucial to improving the economic base of these communities
because they assist individuals in obtaining and retaining employment. For those who have no access to a vehicle and must travel long distances to get to their place of employment,
affordable and well founded transit is a necessity.
Consequently, the provincial government needs to recognize that public transit is central to
enhancing the economic competitiveness of these communities and must rededicate itself to contributing funding that reflects the individual characteristics and shared challenges of
municipalities across the province.
RECOMMENDATIONS:
The Ontario Chamber of Commerce urges the Government of Ontario to:
1. Speed up the transfer of funding from the Move Ontario Fund with a priority for
communities who are confronted with unique operational conditions.
2. Provide long-term scheduled funding for municipal and regional transit systems
through a funding formula that acknowledges the realities of annual inflationary
pressures and accepts that there are unique challenges facing many rural, sparsely
populated municipalities.
3. Reexamine and engage Ontario municipalities on the effectiveness and fairness of the
current funding formula. For example, perhaps funding could be distributed based on
50 percent of the annual ridership and 50 percent of a community’s population.
Ridership would be based on a 12 month total of the previous calendar year, while the
population figure would adjust according to the federal census.