August 2017

Backgrounder

Transit plays an important role in a modern and growing economy. Efficient transportation networks, including public transit, help move people quickly and affordably between home, work and other activities.

Municipal governments operate a wide variety of public transit systems. These include conventional transit systems that serve the general public with fixed routes and schedules, as well as specialized systems that provide door-to-door services to people with disabilities. All in all, municipalities operate 61 conventional and 82 specialized systems, often in the same communities.1

Municipal transit systems vary widely in breadth and complexity. Larger municipalities may operate dedicated rights of way, have different local and regional systems and run buses, light rail, or in Toronto, a subway. In other municipalities, a few buses run along a handful of core routes to serve residents’ needs.

Transit systems are a substantial municipal expense. Across Ontario, local governments spent approximately $5.4 billion on transit in 2013, with about $1.5 billion of that going to capital costs.

Expanding transit is a priority for our economy, and more investment is needed. Estimates from 2008 suggested that Ontario’s transit systems needed an additional $1 billion per year to fund lifecycle investment needs and growth demands.

Local governments appreciate provincial and federal programs that support transit services for residents in their communities. Examples include the Ontario Gas Tax for Transit, which provides the equivalent of 2 cents per litre of gas to municipalities to support transit. This program transferred $321 million in much needed funding to 99 municipal transit systems in 2017. In 2017, the province announced that this fund would be doubled starting through an increase in 2019, to $642 million each year in support to municipal transit systems by 2021.

The federal government committed $750 million each year in 2016-17 through the Public Transit Infrastructure Fund and recently confirmed that it will provide $8.3 billion to Ontario to support transit through Phase 2 of the Public Transit Infrastructure Fund starting in 2018. This funding is allocated based on formula. The federal Gas Tax Fun can also be used for transit, with over $3 billion committed since 2006.

Continued investment in these critical local services is needed to ensure our transportation systems meet the needs of our residents and can contribute to our economy.

Provincial Transit Funding
  • Ontario Budget 2015: $2.6 billion increase in dedicated funds, to $31.5 billion over 10 years for public transit, transportation and other priority infrastructure projects across Ontario.
  • $16 billion for transit projects in the Greater Toronto and Hamilton Area:
    • Creation of a Regional Express Rail (RER) – electrification and service improvements.
    • $1 billion to build a new light rail transit (LRT) line in Hamilton.
    • Hamilton GO Extension.
    • $1.6 billion to build a new light rail in Mississauga and Brampton.
  • $15 billion for transportation and other projects outside the GTHA.
    • Consultations presently ongoing to identify major projects.
Federal Transit Funding
  • New Public Transit Fund (PTF): a fund introduced in the 2015 Federal budget to support significant transit projects and upgrades to roads, bridges, and mass transit lines:
    • Includes $750 million over two years (2017-2018), followed by $1 billion a year through a mix of public and private investment.

1 Municipal Transit Systems in Ontario, Ministry of Transportation