Of course we're always interested in anything related to infrastructure, so we really appreciate being invited here today.
I should say that our president, Berry Vrbanovic, a councillor from Kitchener, was not able to be here today. He has a council meeting about some important issues, and local democracy is really important to him and to our folks.
FCM has been the voice of municipal government since 1901. Our members represent 90% of the Canadian population. We have approximately 2,000 members across the country.
Public transit is key to a strong economy, and must be part of a new federal long-term infrastructure plan. To compete globally and protect our quality of life, Canada will need cities and communities with fast, efficient transportation networks that connect companies to customers, workers to jobs, and communities to markets.
In a country that needs to increase its economic productivity, traffic gridlock is choking the economy, slowing the movements of goods, services, and people to a standstill.
[Translation]
A recent Statistics Canada report indicates that Canadians spend approximately 32 days per year on the road, commuting to and from work. That amounts to an average of over 75 minutes per day in Canada's biggest cities. In Toronto, going to and from work takes an average of 81 minutes.
Every hour Canadians spend on the road is an hour not spent at home, at work or at school.
The Canadian Chamber of Commerce estimates that road congestion costs the greater Toronto area's economy $5 billion a year in lost productivity. Nationally, that number is much higher.
During these difficult economic times, lost productivity undermines investments made by all governments to help Canada emerge from the recession and improve our economic competitiveness. Gridlock is on the rise in our cities because of Canada's municipal infrastructure deficit. Repairs and construction on our communities' most fundamental asset are being pushed back.
[English]
For 25 years Canadians watched the symptoms of infrastructure deficit grow: rusting bridges, crumbling roads, crowded buses and subways, and health warnings to boil local drinking water. However, after decades of underinvestment, Canada has started to confront its municipal infrastructure deficit. Recent investments by federal, provincial-territorial, and municipal governments have helped Canada fight the global recession and rebuild thousands of aging roads, bridges, water systems, and other essential infrastructure.
Ottawa's growing collaboration with municipalities has produced policies and programs that deliver better value for Canadians. The Building Canada plan and the permanent gas tax fund are examples of long-term funding tools the country needs to properly maintain infrastructure over 30-year, 50-year, even 70-year lifespans.
We must protect and build on recent investments to build a country that can support families and businesses. The long-term infrastructure plan promised in the last federal budget is critical to repairing our aging infrastructure. It must include transit investment and solutions to fight gridlock, cut commute times, and connect communities to growing markets and new opportunities.
The permanent federal gas tax invests in public transit, but the high cost of building modern transportation systems requires dedicated funding. Canada's only national source of dedicated transit funding, the Public Transit Capital Trust, expired in 2010. Canadian cities do not have the tools to build and repair modern transit systems on their own while also building roads and bridges, providing policing and fire protection, and carrying out new responsibilities, including many downloaded by other governments.
Without a share of the income and the sales taxes generated by new growth, communities have been forced to raise property taxes, cut core services, and, most often, put off infrastructure repairs. The resulting infrastructure deficit is bad for families, business, and our economy.
A quick tour around the world--New York, London, Singapore--shows that cities with great transit systems aren't forced to rely on property taxes to build them.
[Translation]
All governments must work together, as well as with the private sector, to identify the challenges facing Canada's infrastructure. They must make investments immediately to build the quality roads, water systems, community facilities and public transit that Canada needs to support families, businesses and our future economic growth.
[English]
Moving people efficiently requires commonsense cooperation among all governments. In the end, ensuring that Canadians have the capacity and opportunity to move efficiently in our cities and communities will help us address all of our objectives in the service of Canadians.
We'd like to thank you again for taking the time to invite us and for listening to the comments I've just made. We're prepared, Mr. Chair, to answer any questions. I might add, just before doing that, that with me is Adam Thompson, who is a policy analyst in our shop and focused on these issues, so he's also here to help with any questions you may have.
:
The gas tax was always set up to be the funding envelope from the federal government that was long-term, predictable, and, importantly, flexible for the needs of local communities.
You've identified correctly that in smaller municipalities large public-transit-specific projects aren't required. In that case, through local democracy, the issues are chosen, like water systems, waste-water facilities, roads and bridges, and other municipal needs.
On the appropriateness of the gas tax, again it's a very significant portion of what is ideally a federal commitment around municipal infrastructure to provide long-term and predictable funding streams. So in that sense the gas tax, in the way it's administered and designed now, is appropriate for the various and diverse needs of municipalities. But as Brock indicated before, it is not indexed, so protecting its purchasing power in the years ahead is something FCM is looking for.
Welcome to our witnesses. It is not the first time that we have had the opportunity to discuss these issues.
This is all rather confusing. We are talking about a national public transit strategy, but infrastructure and funding are related realities. Do you favour a comprehensive approach rather than a strategy that is strictly limited to public transit? Should we not instead find a new way to manage the relationships between municipalities and the other levels of government? We are talking about the first approach here.
Regarding the second approach, I recognize that the needs are primarily in municipalities. We must think very seriously about an indexed gas tax fund. However, regarding the money that will come later, for example from the Government of Canada, do you favour a dedicated fund or a consolidated fund? If a dedicated fund is created, you will have to invest solely in an agreed area. If we opt for a consolidated fund, it will once again come down to the relationship between municipalities and the government, regarding the money paid by the government.
In everything we are discussing and will eventually discuss, I have the impression there is a problem of governance—the relationships between levels of government—and the way we ensure accountability.
I would first like to know what approach you prefer. Then I will have other more specific questions.
:
Obviously, without basic infrastructure, there can be no public transit.
As you mentioned and as we can see for ourselves—whether it be the Champlain Bridge or other bridges or highways—we have created a problem over time. We have neglected our infrastructure because we did not know how to secure adequate funding.
In Quebec, we took out the toll booths. At the time, the money was put directly into infrastructure in the various jurisdictions. Because of the relationship between the Federation of Canadian Municipalities and the Canadian government, we found a solution. It began when Prime Minister Paul Martin was in office. When the current government came into power, the charges became permanent. How should we deal with issue of funding?
You talked about relationships with the private sector. We have to think of new sources of financing. For instance, would you be in favour of seeking new ways to obtain funding, through toll booths, for instance?
Should we do as they do in the United States, when, in some cases, payment is made electronically, a bit like Highway 407 in Toronto? All of this requires a very clear relationship between the federal government and the municipalities. However, we must accept that, under the Constitution, you are a creature of the provinces. We do not like to say so, but it is the reality. How do you go about redefining the role of municipalities in order to have a national public transit strategy?
:
First of all, despite what is in the Constitution, the government has for several years decided to work with the municipalities and it is going very well. But it does not operate outside the relationship with the provinces and territories.
There is a link between the federal government and the municipalities. Municipalities are important for Canada and for our economic growth. We do not get into details like toll booths. We are saying that infrastructure is vitally important; it underpins our economy and our social and environmental well-being.
In terms of infrastructure, it is quite important that we target public transit issues. We should focus all of the discussions on long-term infrastructure planning. The municipalities and the federal government, along with the provinces and territories, must find a way to work together in order to meet the needs of Canadians.
We need a long term plan, a plan for resources, either an indexed gas tax, a program such as the Building Canada Fund, or something else. We have to find a way to put the resources on the table so that we can deal with long-term infrastructure issues. This is not a matter that can be dealt with in a few hours.
I apologize, because our latest data is a little out of date, based on 2008 data, but what we found was that from 1996 to 2006, through that 10-year period, the full suite of municipal revenues grew at about 17%, whereas federal revenues grew at about 29% and provincial and territorial revenues at about 34%, I believe. That shows a big increase, although at the same time economic expansion and inflation grew by about 30%.
What it shows is that as a total figure, municipal revenues grew during that time. But when you match it against the rate at which the economy was expanding and the population was growing, it actually grew less. We lost some spending power. And then, in addition, the services that were—
Figures were thrown out a little while ago of the dollars per capita municipalities spend. I just did a little bit of Internet research, and I apologize, because I don't have any actual numbers, but it would appear that the per capita amounts taken by municipalities are actually less than inflation over the 25-year period that was being talked about. It's only a little bit less, but it's less than inflation. At the same time, at least in Ontario--I'm not certain about other municipalities--the province was strapped, and it downloaded a whole lot of responsibilities onto municipalities and has not taken them back. So I can well understand how municipalities are crying uncle, because they can't actually continue to provide all the services they provided before.
We're now entering a period in which the rest of the world has moved dramatically forward with public transit. We have very, very little real public transit in this country, from my perspective. In terms of rail-based public transit, in particular, there is very, very little in this country.
Other countries are leaping ahead of us. In China, the building program for subways and for rapid rail and for inter-urban rail is moving at an astonishing pace. Spain has built in its major cities. France and England, we know, have had better public transit systems than most of Canada for a long time, partly because they were building post-war.
What I'm wrestling with is the notion that there is a federal responsibility here. That's really what we're debating. It's not just whether there is a strategy but whether there is a responsibility. We on this side of the table believe that there should be responsibility for a portion of it. I don't think the funding mechanisms that have happened so far are too far wrong. It's been about a third, a third, and a third. It has just not been regular. We get funding in Toronto for a subway, but not for light rail. We get some funding for some rail infrastructure for heavy rail, but not a lot of it.
I guess I'm asking if a national strategy would help, even if the amount of money isn't tremendous, in making it at least appear that we're moving forward into better public transit in the bigger municipalities.
:
Mr. Chair, members of the committee, my name is Patrick Leclerc and I am the Director of Public Affairs at the Canadian Urban Transit Association. Today I am accompanied by my colleague, Christopher Norris, who is the Director of Technical Services.
First of all, I would like to take this opportunity to thank you for inviting us to testify before your committee about a possible national policy on public transit. We would like to congratulate you for undertaking a study on public transit and on the role that the federal government plays in a key sector of the economy and community development.
The Canadian Urban Transit Association, or CUTA, represents the public transit sector in Canada. Our mission is to promote the contribution of public transit to the quality of life, the environment, health, mobility and, as well, the economic development of our Canadian communities.
The public transit sector in Canada is doing well. For example, just last year, ridership increased by 4.1% nationally compared to the previous year, which represents an unprecedented peak of 1.9 billion trips.
[English]
Public transport is also an important economic driver of our communities. Strategic investment in public transit boosts Canada's productivity and economic growth. Indeed, the economic impact of transit investment in Canada is worth over $11.5 billion annually, making the cost-benefit ratio of transit investment well in excess of two to one.
The transit industry directly employs nearly 50,000 Canadians and indirectly creates an additional 25,000 jobs. Investing in public transit also reduces vehicle upgrading costs for Canadian households by about $5 billion every year.
On the other hand, lack of investment in sustainable mobility options, such as public transit, also has an impact on the economy. With nearly 80% of the population living in urban centres, commute times and traffic congestion represent a real burden for Canadian workers and businesses.
Every year, gridlock costs Canada billions in lost productivity. At a time when employment growth is increasingly concentrated in knowledge-based sectors, creating dynamic urban environments is a central part of Canada's competitive advantage. This is why an increasing number of investors and boards of trade are urging governments to work together in developing a strong and comprehensive approach to public transit.
[Translation]
The challenges related to mobility affect communities as a whole. In smaller municipalities, public transit plays a significant socio-economic role by allowing people to travel cheaply and to have access to jobs, educational institutions and social services. In these smaller communities, public transit uses buses, bus taxis or organized carpooling more extensively.
It is important to note the progress that has been achieved over the past decade. Thanks to contributions by all levels of government and the hard work of decision-makers and parliamentarians from all political parties, investments in public transit have significantly increased since the turn of the millennium. We want to take this opportunity to note the exceptional contribution by the federal government over the past decade. Whereas the Government of Canada's participation in public transit was non-existent approximately 10 years ago, that participation is now approximately $1 billion annually.
If we are here today, it is thanks to you. All the parties represented in the House have helped to push public transit forward and we are very grateful for this. Now, the question we must ask ourselves is the following one: what does the future hold, what should we do today to meet the challenges of tomorrow? That is the question we have attempted to answer in developing Vision 2040, a vision that takes into consideration the contribution of public transit to quality of life, predictable changes in our communities between now and 2040, the impact those changes will have on urban transportation, and the strategic goals that can ensure maximum impact of public transit on quality of life.
Among the major and predictable changes that will affect our society and our economy, we can note, among others, economic growth, the aging of the population, increasing concentration of the population in urban centres. To meet those challenges, we must propose ambitious plans and policies to ensure the smooth movement of goods and individuals and provide quality public transit services.
:
One of the core elements of Transit Vision 2040, which is the very first strategic direction of the vision, is the development of an overarching and comprehensive Canadian transit policy framework. All orders of government should work together in developing a framework of national transit policies that are integrated and mutually supportive. Such a framework should clarify jurisdictional roles, responsibilities, and priorities. It should highlight goals for transit and identify synergies among the objectives of different stakeholders. It is essential to establish a collaborative process, with each involved jurisdiction taking responsibility for developing, approving, and implementing its own policies.
Some of you may wonder what the impact of such a framework would be. After all, the federal government already contributes nearly $1 billion in transit every year without any national strategy or policy framework. It may even look like the ideal situation: money with no guidelines, no directions, no goals, and no strings attached. Such an analysis would not reflect the nature of the transit industry and the complexity and necessity of long-term planning.
Let's take a look at a recent study by Statistics Canada entitled “Commuting to Work: Results of the 2010 General Social Survey” to try to better understand why a clear, ambitious, and long-term approach to public transit is needed. The report showed that the daily commute to work was on average longer by public transit than by car. Without going into the details of the study, the report points out, and I quote, that “many buses use the same road lanes as private cars”. The report goes on to say, “the use of bus lanes and underground rail lines can speed up public transit commutes and even make them shorter than automobile commutes”.
Without realizing it, the authors of the report touched on something that is well understood in our industry. The future of the sector lies in rapid transit and in better integration of public transit and urban design. Rapid transit, whether it is light-rail transit or bus rapid transit using dedicated corridors, takes years to plan and build. These modes of transportation are highly efficient, but they require major investment and close collaboration among all orders of government. In order to get the approval to launch rapid transit projects, local authorities need to have the assurance that all orders of government will be present and will be partners from the beginning until the end of the project.
[Translation]
For some, the question of developing such a policy framework is essentially tied to areas of jurisdiction. Is it the role of the federal government to undertake that initiative? On this point, we must consider the contribution of public transit in its entirety and not just as a conventional means of transportation.
For example, by reducing the number of cars on the roads in urban centres, we are reducing the number of problems related to road congestion and we are promoting the smoother flow of goods and services, which will have a positive impact on productivity and economic growth. Consequently, our communities will be more competitive within North America, which will attract greater investments and benefit the economy of the country as whole.
This is also part of the federal government's desire to make economic growth a priority. Furthermore, the goal of the Government of Canada to improve the gateways to promote international trade goes hand in hand with an urban transportation strategy. What is the point of improving gateways if goods remain stuck in traffic and cannot reach the nerve centres efficiently?
Public transit also has an impact on air quality and greenhouse gas emission. It goes without saying that air pollution crosses provincial borders. Reducing air pollution would improve air quality and have a beneficial effect on health, thereby cutting health care costs related to respiratory diseases.
Improving quality of life is not the responsibility of just one specific jurisdiction, but rather, it must be a central consideration for all levels of government.
[English]
For us, there is no doubt that the federal government should work with all provinces, territories, and municipalities to develop a comprehensive Canadian transit policy framework.
We will be pleased to answer any questions you may have.
Thank you, Mr. Chair.
:
That is a fairly interesting point. There are different ways. We know—we have already talked about the future of public transit and rapid transit systems—it takes years to develop and implement a rapid bus service or light rail service. A number of high quality jobs are then created.
As I was saying, the public transit sector represents approximately 50,000 direct jobs or 25,000 indirect jobs. There are also many in the area of network construction.
There is another aspect that is extremely important to consider. We see what is happening in the United States with the Buy America Act. This is one example. Jobs in the public transit manufacturing sector are very good jobs. At present, in the United States, there is a problem with job creation. There is already a minimum standard of 60% American content for public transit equipment, and there are discussions underway proposing to increase that to 100%.
We see the growth in the public transit sector. Last year, we talked about approximately 4.1% growth. Growth is occurring throughout Canada, the United States and the world. It is generating many jobs, and it is an industry of the future.
Manufacturing jobs are therefore extremely good jobs, and we know that this will continue to grow in the future.
:
Mr. Chair, I want to say that it would be important for committee members to have a copy of the document entitled Vision 2040 that they prepared. This document is somewhat similar to a strategy. There were a number of consultations, particularly with the Canadian Federation of Municipalities. We spoke to experts, we met with people from all regions.
This could give us an idea of what a strategic plan could look like, at the very least. In your document, you say that this vision is intended to strengthen public transit, revolutionize services, give priority to clients, guarantee a greener public transit system and ensure financial health. We are starting to see a strategic framework. This could therefore be a good way to help us develop a strategy. I think that it could be useful, in practice.
However, I must play devil's advocate. The problem is that we want a national strategy and our country is extremely vast. There is a rural reality and an urban reality. There is also an issue of flexibility that comes into play, if someone works at three in the morning, if they are self-employed or if they have to think about going to pick up their kids at the day care. There is a reality in this regard and an issue of accessibility.
First of all, how can we have a national strategy given what I would almost describe as the geographic nature of the country in which we live? Then, how can you tie that to a constitutional reality? There is no way out. said on August 22 that all three levels of government would need to work together. I agree with him.
How can we do that in concrete terms? Do you believe that we should hold a federal-provincial-territorial conference—involving the three levels of government? Since we have already spent $1 billion per year and we currently have no strategy, it is possible to wonder if we really need a strategy. Should we rethink the tax incentive and finally say that, perhaps, a targeted fund and incentive could be sufficient, and we will let the municipalities reach agreement amongst themselves? What is your opinion about all this?
Then, I will come back with other questions.
:
Thank you for your question.
It is due to, among other things, this country's diversity that we need to sit down around the table to clarify each participant's role and to find the goal.
For example, the Gas Tax Fund is determined on a per capita basis. The smaller communities will tell you that it is difficult for them. We are still talking about public transit—in English it is called transit. The first thing that we see are buses, subways and light rail. In smaller communities, there is still mobility and the population is aging. We see that workers and young people head to the major centres, but they come back to these smaller communities to retire. So, it is more difficult in terms of revenues.
How can we ensure mobility of individuals with functional limitations, for example? This need exists. How can we make sure that the transfers and the measures implemented by the federal and provincial governments will be able to respond to these mobility challenges so that we are where we need to be in 2030 and 2040? That is the first element.
The second element is to make sure that the different policies that already exist in this country fit together. Let me give you the following example. For years now, CUTA has been holding discussions with the federal government to get a tax exemption for transit passes provided by employers to their employees. This measure has existed in Quebec since 2007 and costs the Quebec nation very little—pardon me, the Province of Quebec.
:
Thank you for your question.
Going forward to 2040, the transit systems that are members of CUTA are already implementing many of these elements. For instance, one point of the vision is ensuring accessibility to as many Canadians as possible.
We know already that if you look at the transit system in Whitehorse, for instance, you will see Whitehorse has a fleet that is 100% accessible, which is phenomenal for a transit system of that size. They are already doing that.
People say we need more real-time information and we need to increase our customer service to really make it more attractive for users to use public transit. It was mentioned a bit earlier that now some buses or some systems have Wi-Fi and also real-time information. Intelligent transportation systems are already in place and they are in many cities in Canada, so action is happening. What we're seeing is that we've made huge progress.
There is a lot to be done, and what's described in “Transit Vision 2040”.... You are correct to say that there have been many visions, but when you look at them you will see they are pretty much the same, constat. They are looking at what will happen in the next 10, 20, or 30 years and what we need to do to improve our transit systems in Canada.
You have the same thing in the U.S. The UITP, which is the International Association of Public Transport, also has a long-term vision.
So we know what we need to do and we're already doing that, so action is taking place, it's not only reports. But we need to make sure we'll have the right mechanisms in place to implement all of these.
:
It depends how you define a national transit strategy and what you would include in it.
As I mentioned earlier, we're looking at about 30 components of what could constitute a policy framework, and we looked at all the G-8 countries. We also looked at New Zealand, Australia, and the Republic of Korea to see what's out there, what they're doing. If you include the 30 components, there is no such thing as a complete, overall, overarching national transit strategy, but some countries have many of these components. If you look at the U.S., for instance--this is a country we're really looking at, because our cities are competing against each other--they have a good, comprehensive approach to a public transit strategy.
It's right to say that in Canada you have elements in place, but we need to make sure that we complement these with other elements. Given the nature of the political system in Canada, it's really important to design a strategy that would be tailor-made, not to take just anything. We know that transit is a provincial jurisdiction. We respect that, and our aim is to see what elements we could put in place and adapt to fit our jurisdiction as well.
:
Yes. I think the strategy in the NDP proposal is based mainly on what was proposed in 2007 by the FCM and CUTA as well. That was also endorsed by the Conservative government at the time. Lawrence Cannon, the minister at the time, said it was an idea to investigate.
There were five elements: capital funding, R and D, accountability, land use, and tax incentives--the federal employer-provided tax benefit exempt from taxation. And we looked in a more in-depth fashion at what it would mean. That's why we're talking about a framework, because we know that the word “strategy” is used with pretty much anything now. You have energy strategy, you have a strategy for head injuries in hockey, things like that. So you have strategies everywhere, but what we're really looking at is the framework.
The framework guides what you want to do and what you want to include with the provinces and the mechanism to include within the framework to deal with policy integration, for instance. When you look at what is done in some provinces, and the fiscal policies you have, then you can look at how the federal government could match these policies. We're already in discussion as well with the federal finance minister on that. He was open to the idea. But you also need to look at policy integration in a policy framework. How does that fit with your environmental strategy, for instance? How does that fit with your gateway strategy? How does that fit with your innovation strategy? To have it as a framework, it's not that rigid. You give clear strategic directions, objectives and goals that you define as partnerships around the table, and then it's a bit different. Then you have many components. You make sure it fits the country where it is implemented.
:
Thank you very much for your presentation.
We got into a discussion a minute ago about strategy versus framework. They're very similar, in the sense that what we're saying in our strategy discussions and what I hear you saying in your framework discussion is that there's a role for the federal government to play in designing a system whereby funding would happen and whereby.... That's really the number one issue. How do you get money into this system to build it? Where is the money going to come from to build it? And once that happens, once there's leveraging in the private sector, the municipalities, and the provinces, then you triple or quadruple the amount of money that's available and you build the systems. I don't think we're very far apart in terms of what we're talking about. It's all about money.
I also liked what you were talking about when you suggested that people take their cars, really, because it's faster. It's really about time. If there's a public transit system that comes to my door every five minutes and gets me to where I want to go in a reasonable period of time, I'm going to use it. Once you've built something that is that effective, it also, in turn, becomes more efficient, which means it starts returning more of the investment back to the people who put it together. Am I right? The density, as you said with respect to Hong Kong, and the frequency of use and the ability of the system to be convenient and displace cars actually makes it more economically viable for municipalities and maybe the private sector, although it's difficult in Canada.
Is that correct?
You touched on the private sector. In Canada, the private sector is really involved in public transit. If you look at the suburbs of Calgary, for instance, you have private operators there. It's the same thing in Montreal avec les CIT. You have private operators there, as well. The private sector is already there.
I agree with you. But people will think, first thing, that we come to the table asking for money and that's pretty much it. This is really not what we want to do. That's why we talk about a policy framework. We want to look, as well, at the implications for the private sector. We want to look at the social inclusion of public transit and at the administrative support.
For instance, there was a policy theme within Transport Canada that has now moved to Infrastructure Canada. We want to know how they work with other departments, for instance, in administrative support and in the level of policy integration.
It's really to have a real overarching and comprehensive approach to public transit that goes beyond funding. But obviously the funding part is there, and it's an important one.