Canadian cities lobby Ottawa for increase in public transit funding

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Canada's municipalities are calling for the federal budget to include at least $1-billion a year in new cash for public transit, insisting the projects will boost economic growth and reduce commute times.

The specific request to be announced Monday by the Federation of Canadian Municipalities comes as urban transit issues are shaping up to be a key focus for the 2015 federal election.

The fact that the precise recommendations come on the heels of a series of private meetings with senior Conservative officials responsible for the 2015 budget suggests the government is interested in announcing new infrastructure spending.

The October election will feature 30 new ridings and many are in urban areas where transit is an important issue for voters. The opposition NDP and Liberals both say infrastructure and transit spending will be key planks of their election platforms.

The Conservative government and the FCM have worked closely together in previous budget cycles. Those exchanges produced the New Building Canada Fund in the 2013 budget, which the FCM endorsed.

That package included $14-billion in federal infrastructure spending over 10 years, in addition to the roughly $2-billion per year that is transferred to municipalities in connection to federal gas-tax revenues.

The FCM has been meeting frequently in recent weeks with senior Conservative officials responsible for the budget, including director of budget planning David van Hemmen.

Vancouver city councillor and FCM vice-president Raymond Louie, who attended a meeting with Finance Minister Joe Oliver earlier this month in Ottawa, said the government has neither accepted nor rejected the recommendations.

"Joe Oliver specifically did not say no," he said, noting that staff have since followed up with additional meetings. Mr. Louie said the FCM's message is that transit funding has several benefits.

"Economically, transit pays dividends to our business community because the movement of goods and services is much more efficient and everyone's quality of life goes up because they're not stuck in their vehicles commuting," he said.

The FCM notes that average commute times in the Greater Toronto Area and Metro Montreal are more than 75 minutes, which is longer than commutes in London, New York and Los Angeles. Average daily commute times in Vancouver are 67 minutes and 66 minutes in Calgary.

Canada's mayors and city councillors have often said over the past year that more federal infrastructure spending is needed, but have resisted until now to provide specific funding requests.

The FCM says municipalities and provincial governments should match any new federal spending.

In addition to the call for $1-billion a year in transit funding, the FCM is also recommending that Ottawa contribute $300-million a year toward municipal waste-water upgrades. A third and final request from the FCM is that Ottawa protect the nearly $2-billion currently spent on social housing that is scheduled to be gradually phased out over the coming years as previous arrangements expire.

The FCM's transit funding request says the cash should go to cities and towns based on their current and projected transit ridership, rather than by population. Such a formula would likely give larger cities a bigger share of the money than smaller communities.

Mr. Oliver does not have much fiscal room to work with. The Finance Minister announced in January that he was delaying the federal budget until at least April in response to the dramatic changes in the economy triggered by the global drop in the price of oil.

Mr. Oliver's November fiscal update had forecast a $2.9-billion deficit for the current 2014-15 fiscal year and then a surplus of $1.9-billion in the 2015-16 fiscal year that begins April 1.

However, that fiscal update was released at a time when Finance was assuming the price of North American crude would hold at around $81 (U.S.) per barrel. With oil trading at around $50, economists say most of this year's projected surplus has likely disappeared. That leaves Mr. Oliver with little room to announce new spending for 2015-16, although his fiscal update did forecast larger surpluses in future years.