Posted: Monday, 3 October 2011

Executive Summary

The transportation sector in Canada is responsible for 27% of Canada’s Greenhouse Gas (GHG) emissions. Just over half of the energy used in this sector is specifically dedicated to transporting people. If Canada is to make the much-needed shift to a green economy, major investments will be needed to enhance our public transit and intercity rail capacity:

• $53.5 billion are required by Canadian public transit systems over a five-year investment period (2010-2014), specifically for capital costs.
  • Of this figure, 33% ($17.6 billion) does not fit within existing funding plans, and thus will require funding from federal and provincial governments.
• $25.7 billion are required to build three key High Speed Rail (HSR) projects.
  • Of this figure, roughly 78% ($20 billion) would go toward building the Quebec City–Windsor High Speed Rail Corridor;
  • 14% ($3.7 billion) would go toward a high speed rail link between Calgary and Edmonton; and
  • 8% ($2 billion) would go toward a high speed link between Vancouver and Seattle.

These investments will meet the expected short-term needs of public transit systems across the country, and enable efficient low impact rail travel between the nation’s most populous urban areas and along its busiest routes. However, a long-term, predictable investment plan, preferably falling under the auspices of a National Public Transportation Strategy, is ultimately required to ensure that intercity and intracity transportation services adequately meet the future needs of Canada’s growing population in a sustainable, just, and equitable manner. A 2008 study by HDR Decision Economics,i for example, noted that $71.3 billion (earmarked specifically for capital expenditures) was needed to bring Canada’s transit systems up to an “optimal level” of supply and demand. While figures are yet unavailable for 2009 and 2010, it is unlikely that any more than 13% of this sum was invested.ii This means that more than $61.4 billion are likely still needed to optimize transit supply and demand in Canada.

Public transit systems can play a leading role in greening Canada’s economy and facilitating the transition to equitable and sustainable communities in areas as diverse as improving public health, creating “green” jobs, lowering household expenses, and decreasing environmental footprints. As explained in this report:

• The use of transit systems reduces Canadian GHG emissions by more than 2.4 million tonnes from a “business-as-usual” approach each year.
• Every $1 billion invested in public transportation infrastructure in Canada creates between 11,500 and 14,000 jobs.
• In 2007 alone, investments in urban transit saved Canadians $115 million in related respiratory health costs, $2.5 billion in traffic collision costs, and $5 billion in household vehicle operating costs.
• Transit systems contribute some $10 billion to Canada’s economy each year.

Clearly, investments in public transit and intercity rail, especially when paired with good government policies on renewable energy production and domestic supply procurement plans, would continue to offer these benefits to Canadians. In fact, the HDR Decision Economics study mentioned above also notes that by investing enough funds to create an optimal supply of transit over a five-year period, Canada could acquire an economic benefit of $238.6 billion over the ensuing 25 years (in the areas of affordable mobility, regional and commercial development, and congestion management). An investment of this sort would also generate nearly one million jobs across the country.

While the federal and provincial governments help municipalities pay for capital projects in public transportation, the current level of funding is not enough. Municipalities have borne the brunt of the combined operations and capital costs, despite the fact that all Canadians benefit from improved transit and intercity rail:

• Currently, most operations costs of municipal transit systems in Canada are covered at the municipal level. An average 60% of operating costs are covered through ridership fees; the rest is mostly covered by municipal property taxes.
• In recent years, municipalities have also covered an average of 23% of transit capital costs; provinces have covered an average of 46% of capital costs, and the federal government contributed an average of 26.5%.
• Aside from paying for repeated studies demonstrating the feasibility and practicality of implementing High Speed Rail (HSR) lines in major corridors, “zero” dollars have thus far been spent by the provinces and the federal government for this important initiative.

By initiating a National Public Transportation Strategy that allocates major funds for these two important transportation initiatives, the federal government — in concert with the provinces and territories — could easily acquire the level of funding required to keep transit and rail public. In addition, tens of billions of dollars could be raised and channelled to public transit and intercity rail projects if the transportation strategy was paired with innovative green capitalization policies, such as a Carbon Pricing Initiative. As noted in a study commissioned by the Pembina Institute and the David Suzuki Foundation, prepared by M.K. Jaccard and Associates Inc., Canada is capable of meeting a 2°C reduction target by 2020 (in line with the Kyoto Protocol) by implementing a carbon pricing plan similar to other industrialized nations. Under their proposed model, carbon would start at $50 per tonne in 2010, and increase to $200 per tonne by 2020. New capitalization programs, such as a Carbon Pricing Initiative, would raise much needed funds that could be channelled to important projects that will help Canada build a green economy. In particular, the M.K. Jaccard and Associates Inc. study found that up to $77 billion could be raised specifically for public transit and intercity rail between the years 2010 and 2020.

Canada is at a crossroads in history; the time to move toward a green economy is now. As this research paper suggests, the shift toward sustainability must include a commitment by the federal and provincial governments to invest tens of billions of dollars, as part of a long-term National Public Transportation Strategy, for urban transit and intercity rail. To optimize the benefits to Canadian communities, such a strategy would be best paired with a Domestic Procurement Plan, a Renewable Energy Generation Policy, and green capitalization policies, such as a Carbon Pricing Initiative.

Download the full publication here.