Public Transit Financing in the Montréal Metropolitan Area By Mich i chel Beaulé Senior Polic licy Analyst l t Québec Deparrttment of Trranspor porta tation tion June 15, 2007 Public Transit Financing in the Montréal Metropolitan Area Presentation outline 1. Public transit organization 2. Public transit financing sources 3. Transit funds yield, performance Conclusion 2 1
Montréal within Canada Population Area (000 km 2 ) Canada 31 612 897 9 018 10 largest metropolitan areas Province of Québec 16 671 131 52.7% 7 546 131 24.2% 45.9 0.5% 1 356 Montréal Metropolitan area 3 635 571 4.26 City of Montréal 1 620 693 0.365 3 1. Public Transit Governance Public Transit Authorities Territory Authority Nature Montreal Longueuil Laval Suburban rings STM Société de transport de Montréal RTL Réseau de transport de Longueuil STL Société de transport de Laval CIT Conseils intermunicipaux de transport Corporation Corporation Corporation Municipal entity AMT Agence métropolitaine Metropolitan area de transport Government agency 4 2
1. Public Transit Governance Montréal s Metropolitan Context 14 transit authorities Laval Montréal Longueuil 5 1. Public Transit Governance Public Transit Authorities STM, STL, RTL STM CIT AMT Mode Bus Subway Bus Bus Trains All modes Responsibilities Plan and operate services, own equipment Plans and operates, owns equipment Plan services, contract out operations, evaluate results Provides common infrastructure terminals, reserved lanes, incentive parking lots Plans services, owns equipment (not rightsof-way), contracts out operations Coordinates integrated fares, transfer points Financial support to subway + bus services 6 3
1. Public Transit Governance Transit Authorities Basic Characteristics Authority Population Ridership Equipment STM 1 854 442 359 282 000 RTL 385 533 30 263 000 381 buses STL 368 709 19 361 000 230 buses CIT 1 317 057 15 978 000 327 buses 1575 buses / 4 subway lines, 68 stations, 759 cars AMT 3 635 571 15 557 000 5 train lines, 50 stations, 193 pass-cars, 20 locos. 58 parking lots, 25 000 spaces 26 reserved lanes, 83 km 7 2. Financing sources Directly-generated erated revenues / Passenger-revenues Maximizing passenger-revenues without jeopardizing ridership Yearly fare increases in line with CPI Type of fares Monthly pass = 60% of passenger-revenues & 70% of trips Reduced fares s (± 40% % rebate) for r seniors and students s under 18 Flat fares STM, RTL, STL Zone fares Commuter trains, suburban buses Integrated monthly pass gives access cess to all transit systems. s. Revenues s distributed according to number of passengers s and d passenger-kilometres 8 4
2. Financing sources Québec Transit Base Program Capital expenses Corporations and AMT 50% Bus purchase expenditure 75% Bus terminals s and garages, reserved lanes, incentive parking lots,, fixed d guideway rehabilitation and replacementent 100% Expansion projects of subway, trains, LRT Operating expenses CIT Subsidy originally based on passenger-revenues to provide incentive Subsidy not exceeding 75% % of deficit Subsidies have been frozen at 1996 levelsls 9 2. Financing sources Québec Transit Improvement Program Goal 8% ridership increase (16% service improvement) t) Period: 2007-2012 Amount: 100 M $CAD / year Subsidy allocation 50% of additional operating expenditures s to improve services 50% must be financed locally with increased passenger- er revenues and municipal contributionstions Additional programs 15 M $CAD / year Alternative transportation walking, cycling, cling, employerployer sponsored Energy efficiency cy in transportation tion hybrid vehicles 10 5
2. Financing sources Government of Canada Infrastructure e Programs Infrastructure e Canada Program Created in 2000 totalizing g 2 B $ $CAD Rehabilitation of STM subway system, communications, power distribution, tion, etc. 1033 M $ $CAD Canada Strategic Infrastructure Fund Created in 200202 totalizing g 4 B $CAN Large-scale projects Québec s share has s been en devoted to highways 11 2. Financing sources Government of Canada Infrastructure e Programs Gas Tax Fund Created in 200505 Proceeds s transferred d to local governments 1.5 to 5 / litre of gasoline sales (max. 2 B $ $CAD / year) Funds allocated between n provinces according to their population 25% of funds s are committed to public transit Transit Capital Expenses Trust 900 M $CAD trust t established in 200606 to be spent later Funds allocated between n provinces according to their population 12 6
2. Financing sources Canada-Québec Transit Financing Program Period: 2006-2010 Capital expenses s projects Allocation based on ridershiprship // Metropolitan olitan area = 86% Canada Québec Local 411 M $CAD 69% (Gas Tax Fund) 93 M $CAD 15,5% ( Gas-guzzler tax ) 93 M $CAD 15,5% Period: 2011-2014 (negotiations underway) Allocation based on ridershiprship Canada (Gas Tax Fund), Québec,, and local contributions to be determined 13 2. Financing sources Motorists Motorists are indirect beneficiaries of public transit Introduced d in partial compensation for r terminating subsidies for r operating expenses enses to corporations in 199292 and 1996 Car licensing fee 30 $CAD / year in 6 largest urban n areas Gasoline tax 1.5 / litre in Montréal metropolitan area 14 7
2. Financing sources Municipalities Municipalities s set service levels, fares, and bear the ultimate financial responsibility for transit Property tax is municipalities main revenue source Montreal area municipal l contributions through property tax are among the highest in North America Municipal l fiscal burden varies according to service level and transit revenue-generating potentialtial 15 2. Financing sources Municipalities 250 Municipal Share of Transit Financing Fiscal Burden in $ per capita, 1991 to 2005 200 $ per capita 150 100 50 STM RTL STL Northern Ring Southern Ring 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 16 8
2. Financing sources All sources medium term evolution 000 $CAD Public Transit Financing in the Montréal Metropolitan Area, 1991-2005 1 400 000 1 200 000 1 000 000 Govt. of Canada Municipalities 800 000 600 000 400 000 200 000 Québec Government Motorists Directly -generated 0 1991 1993 1995 1997 1999 2001 2003 2005 17 2. Financing sources - 2005 Public Transit Financing Contributions in the Montréal Metropolitan Area 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 33% Municipalities 7% Motorists 16% Quebec Government 41% Directly Generated Revenues Total 2% Govt of Canada 18 9
2. Financing sources Capital Expenses Challenge, 2007-2016 Transit t Capital Expenses Needs in the Montréal Area As seen by (M $CAD) Operators (2006) 7 580 City of Montréal (2007) 1 330 Total 8 910 Québec Dept. of Transport (2005) 4 025 Gap 4 885 19 3. Transit Funds Yield Services supplied and consumed Revenue Kilometers and Ridership in the Montréal Metropolitan Area, 1991-2005 Kilometres (in Millions) 200 180 All Modes 475 Ridership (in Millions) 450 160 Ridership 425 140 400 120 Bus Services 375 100 350 80 325 60 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 300 20 10
3. Transit Funds Yield Performance Indicators Total Kilometers / Bus Operated in Maximum Service 90 000 80 000 70 000 60 000 50 000 STL RTL STM 40 000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 21 3. Transit Funds Yield Performance Indicators Operating Expenses ($ 1993) / Bus Revenue Hour 125 $ 120 $ 115 $ 110 $ 105 $ 100 $ 95 $ 90 $ 85 $ 80 $ 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 STM RTL STL 22 11
3. Transit Funds Yield Performance Indicators Passengers (trips) / Bus Revenue Hour 90 80 STM 70 60 50 40 30 RTL STL 20 10 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 23 3. Transit Funds Yield Performance Indicators 65% Operating Revenues (directly generated)/ Operating Expenses 60% 55% 50% 45% 40% 35% STM - Total STM - Buses RTL STL 30% 25% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 24 12
Conclusion 1. Growing resources devoted by senior governments to rehab aging infrastructure and provide e new equipment, ent, still remain below operators needs 2. Revenues collecteded from road users s are more often intended as dedicated sources to: - finance roads s and transit (making g the transfer r more tenable) - include indirect beneficiaries of transit in its financingncing - implement transportation demand management, eventually 25 Conclusion 3. Government of Canada finances local infrastructure 4. Provincial and local governments use e companion strategies to make transit t play a greater role - transit improvements - curtailing new road supply - smart t growth 26 13
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29 4. Urban Transit Financing ng in Toronto Government Funding in Ontario Province of Ontario o Funding Province s share of motor r fuel tax earnings: 2 /liter Allocated according to ridership (70%)) and population (30% 0%) ) for local operations Transit t Vehicle Program, allocated according to ridership Share of major r capitalal expenses (1/3 of costs) Commuter trains : operating deficit t and state - of-good maintenance (100%), expansion projects (1/3 of costs) Government nt of Canada Funding Gas Tax Fund d and Public Transit t Capital Trust ± 1 125 M $ $CAD for r 2005-2010 Canada Strategictegic Infrastructure Fund Subway upgrading, commuter r trains improvement and expansion, bus rapid-transit infrastructure in Toronto s suburban n areas s (2005- (2005 2009) : 1 050 M $ $CAD 30 15
4. Urban Transit Financing ng in Toronto Ontario Government Strategies Regional planning New legislation n implemented for the Greater Toronto Area to : manage urban growth and d urban form more efficiently, ently, guide decisions in transportation and infrastructure e planning, outline landand use planning, housing, natural l heritage and resource preservation Goal: Supportport economic development while safeguarding the environment and enhancing ncing quality -of-life- Greater Toronto onto Transportation Authority Mandate: : Coordinate ordinate fares and service delivery offered by 9 transit authorities, implement t fare integration and overall transit planning, oversee transit-vehicle purchases, manage commuter trains and regional buses, define the investment strategy and assets planning Board: municipalities s and the Province 31 5. Urban Transit Financing ng in Vancouver Greater Vancouver Regional District Second-tier local government created in 1967 Mandate: deliver r essential utility services, plan and manage expansion and development Council of 35 members ers (local mayors and councillors) Metropolitan area : 21 cities / 2 877 km 2 Total population: 2 116 581 / City of Vancouver: : 578 041 Mandate : Regional planning, transportation planning, water treatment and distribution, drainage and sewer treatment, tment, garbage disposal sites s and strategies, low - income housing, economic development, regional parks 32 16
5. Urban Transit Financing ng in Vancouver Greater Vancouver Transportation Authority (GVTA) Created ed in 199898 - Board of 15 members mbers : 12 appointed by GVRD Council l from among its members + 3 by Govt.. of British Columbia (currently none appointed) GVRD approves GVTA strategic plan and tax increases GVTA mandate e : Public transit, arterial rial roads, motor vehicle inspection to enforce e air quality standards GVTA responsible for policy - making and d financing Operations are managed d b by subsidiaries providing transportation services, vehicle inspection, supervisinging major capital expense projects 33 5. Urban Transit Financing ng in Vancouver Government Funding in British Columbia British Columbia Funding Vancouver r metropolitan area Provincial motor fuel tax earnings transferred to GVTA Contributiontion to major capital expense projects Other urban areas: 46% of expenses Government nt of Canada Funding Gas Tax Fund d and Public Transit t Capital Trust Totalizing g ± 380 M $ $CAD for r 2005-2010 Canada Strategictegic Infrastructure Fund 450 M $ $CAD towards new LRT T line (Skytrain) connecting Business district to the e airport t (2005-2009) 34 17
4. Urban Transit Financing ng in Vancouver GVTA 2006 Budget Revenues M$ % Expenses M$ % Parking sales tax 11,5 1,4 Management 35,2 4,2 Parking site tax 20,0 2,4 Arterial roads 35,6 4,2 Hydro levy 16,8 2,0 Reserve fund 66,5 7,9 Property tax Fuel tax (13,5 /l) 235,3 257,5 27,8 30,5 Debt costs 139,2 16,5 Transit fares 302,8 35,9 Public transit 569,3 67,3 Total 844,0 100 Total 845,8 100 35 18