Mayors press for permanent transit funding commitments from Ottawa

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Big-city mayors are pushing for assurances in legislation that a new transit fund from Ottawa will be permanent as they begin a series of negotiations on the details.

Finance Minister Joe Oliver referred to the program as permanent in his budget speech Tuesday, but municipalities noted the word was not used in the budget document to describe the new program.

While mayors are praising the idea of long-term funding specifically for transit, they are now zeroing in on key questions about required levels of private-sector funding and Ottawa's share of the project costs. The government acknowledged in the budget that further details would be announced later this year.

Finance officials will begin negotiations shortly with the Federation of Canadian Municipalities to work out these issues, with the goal of finalizing program rules within a few months.

"There remain some unknowns that are critical to ensuring a successful transit solution," said Brad Woodside, Mayor of Fredericton and president of the federation. "The government needs to ensure flexibility around the role of private-sector involvement … As well, any plan must commit the federal government to an equal one-third investment."

The federation wants Ottawa to confirm it will continue to fund one-third of all projects, with a province and a municipality covering the other two-thirds. Ottawa has not yet committed to funding one-third of all projects under the new fund. Questions also remain as to the level of private-sector involvement Ottawa will require, given that it plans to run the program through a Crown corporation called PPP Canada that promotes public-private infrastructure partnerships.

Tuesday's Conservative budget included a new program for major public-transit projects that starts with $250-million in 2017-18 and ramps up to a permanent fund worth $1-billion a year by 2019-2020. But unlike previous infrastructure programs that would deliver all of the federal contribution within a short time frame, Ottawa is proposing to spread out the money for each project over 20 or 30 years.

Big-city mayors hope the move to long-term transfers will allow them to borrow against the guaranteed federal cash and get more projects funded sooner.

Finance officials say it is possible that the federal government could fund its portion of almost every major transit project currently contemplated in Canada with the fund.

Mayors have welcomed the fund, but also say far more money will be needed to address the transit needs faced by cities and sooner would be better.

"In every big city, there's public-transit needs and they're urgent. That's the challenge with the delay in ramping up dollars," said Vancouver Mayor Gregor Robertson, who chairs the Big City Mayors Caucus and who is in the middle of a municipal referendum asking citizens to support a sales-tax hike to pay for transit expansion.

Calgary Mayor Naheed Nenshi said more money is still needed, but he praised the idea of permanent long-term funding.

"We were the only country in the G7 that did not have a national transit strategy, and now we've got one, which is terrific," he told reporters Tuesday after the budget was released.

Toronto Mayor John Tory – who was elected last year on a campaign focused on a transit plan called SmartTrack – repeated Wednesday that he considered the budget announcement "historic."

"Government after government after government has been asked by mayor after mayor after mayor and premier after premier to get involved in a permanent way to fund public transit in this country," he told reporters. "Yesterday it happened. Did it happen as quickly as we would have liked? Everything happens more slowly than you might like when you're trying to build transit."

Gaining the enthusiastic support of the mayor of Toronto should help federal Conservatives, who have been criticized by Ontario Liberal Premier Kathleen Wynne for not spending enough on infrastructure.

Both the federal NDP and the Liberals have been promising to spend more on public transit if elected this fall. On Wednesday, Liberal Leader Justin Trudeau said he is not opposed to new ways of delivering infrastructure money but criticized that spending will be delayed.

Andy Byford, the CEO of the Toronto Transit Commission, also welcomed the new funding, but said he would have liked to have seen funds specifically set aside for the city.

Toronto City Councillor Gord Perks expressed concerns that the funds would not roll out until 2017.

He also described the $1-billion – spread across the entire country – as "pennies" compared to what Toronto needs.

"Even if we got all the money – all of the money nationally, and we got it all at once – we couldn't afford to build a single [subway] line," he said. "This doesn't get SmartTrack built."