Canada’s plans for permanent transit funding could help double ridership on mass transit and reduce transport emission by 65 million tonnes by 2035—but only if the investment materializes, and comes with the right policies, finds a new report by Équiterre and Environmental Defence Canada.

The report urges [pdf] Ottawa to ensure that its forthcoming Permanent Public Transit Fund (PPTF) realizes its potential to deliver both climate and housing solutions by including key policies like “public transit operating funding, federal strings to encourage housing density near public transit, zero-emission bus procurement requirements, and incentives for cities to speed up public transit service with dedicated bus lanes.”

It arrives as the Canadian government inches towards creating the PPTF, a program first announced in February, 2021, which would see an annual C$3 billion being injected into public transit systems across Canada. The target date for launch is 2026, and Prime Minister Justin Trudeau told the Federation of Canadian Municipalities as recently as last May that a deal was just months away, the Globe and Mail reports.

But this week, mayors of 15 major cities led by Toronto’s Olivia Chow, Calgary’s Jyoti Gondek, Winnipeg’s Scott Gillingham, and the Federation of Canadian Municipalities were warning that the funding might not materialize.

“We were promised infrastructure funding, and to this day, we have not heard of a plan,” FCM President Scott Pearce told media. “So as the budget comes closer and closer, we’re getting more and more concerned that there’s no plan.”

The money is urgently needed, Équiterre and Environmental Defence say. “Canada is nearly 40% below the Organization for Economic Cooperation and Development (OECD) average for public transit utilization (ridership per capita) in urban areas with transit service,” the report authors write.

“Public transit service levels, measured in vehicle service kilometres per person, is now 7% lower than it was in 2016, the year that the federal government introduced the Investing in Canada Infrastructure Program (ICIP), which included $23.5 billion in public transit investments.”

The report describes the forthcoming PPTF as an “historic opportunity” to reverse this worrying trend. It cites modelling by Dunsky Energy + Climate Advisors that shows the program, with key policies included, driving a modal shift to double transit ridership and eliminate 65 million tonnes of emissions by 2035. These outcomes should be set as clear targets, the two organizations say, along with a target to reduce vehicle kilometres travelled 35% by the same year.

Current federal policy to provide solely capital funding leaves transit systems dependent on local government funds and passenger fares to operate, creating a “chronically unstable” situation that leaves them vulnerable to market forces and the vagaries of political cycles. The failure to provide operating funds also keeps Canada’s public transit systems trapped in “vicious cycles” of cutting service, leading to further losses in passenger revenues and more cuts.

“Canada’s current public transit strategy is like a bus without wheels,” Nate Wallace, clean transportation program manager at Environmental Defence, said in a release. “Funding capital projects but not operations is not working to actually improve day-to-day service for millions of Canadians who rely on public transit.”

Stable operating revenue will give transit systems the breathing space to pursue a revenue generator that remains untapped: riders using transit for non-commuting purposes like shopping, travelling for recreation and social services, and visiting family and friends. Expanding ridership beyond 9-to-5 commuters would also “better serve the travel patterns of equity-seeking groups.”

The new report urges Ottawa to formally link public transit investments to housing outcomes. “As Canada tackles both the housing and climate crises, public policies must be pulling in the same direction,” it states. “We cannot be building dense housing near transit stations while cutting how frequently the service is running, and we cannot be building public transit infrastructure in a sea of low-density, single-detached homes.”

On that basis, the report says transit funding agreements with major cities should mandate pre-zoned housing density minimums near public transit, elimination of minimum parking requirements in new developments, and support for first and last mile connections to transit stations using sustainable travel modes like walking and biking.

To address equity concerns, the agreements must also “require anti-displacement strategies to ensure that those most likely to take public transit can actually afford to live near it.”

The report also recommends procurement requirements for zero-emission buses and rolling stock. Rather than funding one-off electrification projects, Ottawa must make “zero-emissions public transit a core feature and requirement of ongoing, permanent capital funding,” by specifying phased-in procurement protocols for zero-emission public transit vehicles as a condition for funding.

“Putting the wheels on the bus,” as the report recommends, will require total public transit service levels to increase 109% by 2035, write the authors. The increase is doable provided that the feds commit to $35.4 billion in new funding over the next 12 years, on top of the annual $3 billion promised in the forthcoming PPTF, and start funding the program in 2024 rather than 2026.

That investment “could be paid for entirely by increasing the general federal tax rate on corporate profits by a single percentage point,” the authors add. “It would comprise approximately 0.5% of total projected federal expenditures in 2024.”

The policy prescriptions in this week’s report echo the call issued by the Canadian Urban Transit Association (CUTA) last November, which warned that the planned 2026 rollout of the PPTF would leave municipalities across Canada facing an “infrastructure funding gap” and lead to “critical capacity problems and mounting state of good repair backlogs.”

CUTA said delayed delivery of the PPTF funds was particularly ill-judged given federal plans to welcome about 500,000 new Canadians per year. “By the mid-2040s, Canada will have a population of 45 to 50 million people with transit systems built for 25 million people,” CUTA said.

“Communities must be equipped to expand transit networks to meet rising demand and to ensure new housing developments are properly integrated with public transit infrastructure,” said CUTA President Marco D’Angelo. “The alternative is more road congestion, commuter dissatisfaction, and higher emissions.”