4 Takeaways from Ottawa's $180m Transit Funding Deal
This could work out to be a smart move from City Hall.
Earlier this week, the federal government announced it was providing $180 million over 10 years to the City of Ottawa for future transit capital projects and maintenance.
I’ve got four comments about the announcement.
1. Expect more announcements across the country
This is one of the first announcements from the Canada Public Transit Fund. Ottawa will be one of many Canadian cities to see new resources for transit capital projects. Brace for more announcements to come out of the $30 billion ten-year fund.
So far, I have seen six announced: $1.2 billion for Toronto, $664 million for Greater Vancouver, $180 million for Ottawa, $112 million for Mississauga, $14 million for Burlington, and $2.2 billion for 42 smaller municipalities in Ontario. All ten year deals for transit capital projects or maintenance.
2. Middle of the pack
For the City of Ottawa, $180 million sounds good. However, on a per capita basis, we might have hoped for more. When you divide the announcements by the number of residents, Toronto got more than double what Ottawa received.
3. Not a response to Fairness for Ottawa
I’ll give credit to the Mayor that during his remarks, he did not claim this as a response to his Fairness for Ottawa. That campaign was always about: payments in lieu of taxes (PILTs), transit operational funding, and the cost sharing of transit capital projects.
But as economists like me love to say, money is fungible. A cash injection into one budget line can effectively be used to support spending in another budget line.
The Mayor was explicit about this. “Cash is cash. We can apply it. It closes the [OC Transpo budget] gap.”
He’s not wrong. From the press release, this money is for transit infrastructure maintenance, but which, according to the Mayor, the City can apply to the operational budget.
There might be some creative accounting going on here, but clearly the federal government recognizes that cities need transit operational funding, and is finding a way to provide it while maintaining the fiction that federal funds only support transit capital projects.
4. 18 of 36
Interesting, the federal government has provided $18 million a year, which is equal to half of the OC Transpo $36 million 2025 budget shortfall.
The provincial government has always said it would come to the table with help for OC Transpo if the federal government stepped up.
Once the dust settles on the Ontario election, it will be interesting to see the provincial response.
Final thoughts
When I step back and look at Ottawa’s public transit funding announcement compared to those for Toronto and Vancouver, perhaps the Ottawa deal is not so bad.
$18 million a year from the federal government may force the provincial government to match with its own $18 million a year. And the City of Ottawa can always come back to the Canada Public Transit Fund for more money in the years to come (assuming the Fund survives the next government).
If this week’s announcement does result in matching money from the next provincial government, then this may prove to have been a shrewd move from the Sutcliffe city hall.
NB: a reader correctly pointed out that the original version of this article incorrectly calculated the allocation to Vancouver, when it should have been to Greater Vancouver. Text and the chart in this article has been updated accordingly.
It well be interesting decade or so. Every last problem we have now. Comes from two realities old 20th century horse & buggy silo vision leadership that $$ is the only thing of value & a 2% shift in the earth axis over the last two decades. Combine the 2 & it tell you. We either end up having the young create a 21st century sustainable vision. By applying a Star Trek (1968) federation vision. Were $$ no longer at the head of the table, but at the table getting ready to travel the stars & mature enough to handle the reality we are not alone in this universe or in this planet. Far more advanced than us & if I was them, I would not let us of this planet. Until we show we can work as a Global community federation. That require a UN that does what it designed to do & shown to work. Be the refer when conflict is driven by those that throughout try to live in the past, but always try to destroy anything that does not meet their vision of how it should work. Only history shows. The young attached to innovation & community collaboration. Always had the ability to out think the closed mines of the day. As history shows. When the
“ Tide of Change” show up. Its not is it going to happen, but how. Follow the young vision of innovation & collaboration to address tge problems that have no borders, but now limiting our sustainable future or repeat history. By understanding why every conflict we have seem to be attached to horse & buggy vision. Trying to retain the past,but then I am old.
Let's see if this comes up during the Provincial election...