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Moving Arguments: The Geography of National Transit Investment

by Jeff Mackey

Moving Arguments is a new series that looks at common arguments for and against transit investment and explores what they say about Canada’s relationship with the urban mobility industry.

When investing in transit infrastructure at a national level, trends are bound to emerge regarding how this money is spent and, critically, where it’s spent. Should funds for transit be spread equitably across the country? Should they go where the need is greatest? Should they support small systems looking to grow, or large systems where demand is highest? How these decisions are made will go a long way in determining how effective these national investments in transit will be and shows where the government and public service’s priorities are.

A question that is often lobbed at governments is whether investment decisions about where billions of infrastructure dollars go is based on policy prerogatives or political interest. For example, President Trump’s recently announced infrastructure plan has come under criticism for focusing on ‘Red States’ instead of ‘Blue States’—though another way to look at it may be that the plan is prioritizing rural infrastructure over of municipal infrastructure.

The Canadian government’s transit infrastructure fund, the Public Transit Infrastructure Fund (PTIF) and its planned long-term transit infrastructure fund, are no exception. Recent episodes in the House of Commons and in the press, have questioned whether there’s been a trend of infrastructure dollars from the Liberal government ending up disproportionately in Liberal-held ridings across the country.

Bill Curry of the Globe and Mail found that 64% of the $14.4-billion already spent on the government’s cross-sectional infrastructure program (not just transit infrastructure) went to ridings held by Liberal MPs—even though the Liberals hold only 54% of the seats in the House of Commons. Meanwhile Conservative ridings received 21% of the funds despite representing 29% of the country.

"The Globe and Mail has uncovered a disturbing trend in the way that the Liberals – like the Conservatives before them – award infrastructure contracts. Contracts are granted in Liberal ministers' ridings, while once again, rural ridings get shafted," said NDP infrastructure critic Brigitte Sansoucy in the House of Commons during Question Period.

Sansoucy is referring to a previous analysis done by the Globe and Mail from 2015 that found 66% of the funds from the previous Conservative Government’s New Building Canada Plan went to ridings held by Conservatives, despite the party holding only 52% of the seats.

 

Source: http://www.elections.ca/res/cir/maps2/images/ERMap_42.pdf

“The Liberal government insists that the political stripe of a particular riding plays no role in whether specific projects are approved.

Policy experts say while that may be true, government decisions at the outset about how much funding each category of funding will receive – such as prioritizing public-transit projects – has the effect of directing more spending to urban ridings that are predominantly held by Liberal MPs,” writes Curry.

The Liberal government is a largely, though by no means exclusively, urban caucus and they have prioritized spending in urban centres. A cynic could view this as political interference, though it may be more accurate to view it as a policy decision. As the below graph from the Canadian Infrastructure Report Card shows, municipalities own the majority of this nation’s infrastructure.

Given this distribution of infrastructure, and the fact that Canadian municipalities have the fewest taxation powers, it would make sense from a policy perspective that a federal infrastructure program would focus on municipal projects like transit, wastewater and social infrastructure.

With regards to transit investment; needs vary greatly depending on the size of a municipality. As the below table from CUTA’s Infrastructure Needs Report shows, the distribution of transit needs skews heavily towards larger municipalities. This likely has to do with the fact that larger municipalities have larger populations, more demand for transit and plans to build larger transit projects than smaller communities.

In contrast, Trump’s infrastructure plan in the U.S, as it is currently understood, will likely de-emphasize investments in cities and infrastructure like transit, and will dedicate at least a quarter of all spending to rural areas—where less than 20% of Americans live.

While I don’t expect the Canadian government to be accused of over-prioritizing rural infrastructure, it’s important to note that there are some administrative factors about their transit funding with regards to transit in smaller communities.

Previous Canadian infrastructure programs from the federal government funded transit project by project and based on merit. This approach was widely believed to have favoured larger municipalities who are capable of building more compelling business cases and carry more political power. How could a small town compete on merit with a city like Toronto for transit investment? The argument went.

PTIF actually funds every transit system in the country based on system ridership—meaning that many transit systems in smaller communities that had never before received a dollar of federal funding began getting federal investment. The upcoming long-term transit fund is expected to transfer money based on a formula of 70% ridership and 30% population. According to CUTA analysis, this move to a ridership/population formula actually favours smaller communities over larger ones, meaning that the next phase of transit investment will be even more generous to small and medium-sized transit systems.

In conclusion, while the analysis by the Globe and Mail about political interference in infrastructure spending is a worthy exercise to track investments, there are many other factors at play that affect the geographic distribution of funds. It’s natural that a government will need to prioritize some types of investments over others, currently it would appear the Liberal government has made an evidence-based decision to support urban infrastructure, like transit. But even within the transit investment envelope, the government has established an administrative mechanism to ensure a fair distribution of funds across Canada, no matter a riding’s urban size or political affiliation.

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