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Funding public transportation
Public transportation is a public service funded by passenger-paid fares, income and sales taxes. In 2018, the region’s public transportation costs were over $2.9 billions. These include operating costs and related capital expenditures for maintaining infrastructures and developing services.
These expenses are funded by different sources, as defined by the funding policy adopted in September 2017 by the ARTM and approved by the Communauté métropolitaine de Montréal. The policy established a 31% funding goal for public transportation expenses from fare revenues; the remaining part is funded by municipal and government contributions.
Due to demographic growth and economic development in the region, residents’ mobility needs continue to grow. The major increase in public transit investments over the past few years will continue over the next five years, increasing pressure on available funding sources, especially municipalities. Given the limited financial resources, finding new sources of funding is a key challenge to ensuring that public transportation is both maintained and developed over the next few decades.
Major investments already planned for the region
Several major public transportation projects will be developed over the next few years, including the Réseau express métropolitain (REM), the extension of the metro’s blue line and the Bus Rapid Transit (BRT) service on Pie-IX Boulevard. Other projects, which are in the planning or implementation stages, will include developing more services for the population.
Developing new transit services must not be at the expense of operating and maintaining the existing system. Everyone agrees on the importance of consolidating what we have gained by ensuring asset maintenance in the planned timeframe, and adequately funding services so that they are reliable, safe and sustainable.
What do other cities do ?
Given the growing needs and limited financial resources, a study was conducted to identify sources of existing funding in other countries that could serve as a model for the metropolitan region. A review of their potential as well as their possible impacts will be conducted to find new solutions adapted to the greater Montréal area.
Examples of sources of funding used in other world cities:
- Development fees: Mechanism that involves a financial contribution from real estate developers whose projects benefit from their proximity to public transportation services.
- Joint development: Mechanism that involves collaboration between private and public sectors to develop workforces above public transit facilities. For example, a company could sell or rent air rights above a métro station to a private company.
- Parking tax: Funding mechanism that allocates a portion of inflows from paid parking to public transportation.
- Congestion charge: Funding mechanism that involves a financial contribution from highway network users, in a restricted zone or segment of a highway.
- Contribution from traffic fines: Mechanism that allocates a portion of money from traffic fines to public transportation.
- Sales tax: Mechanism that allocates a portion of sales taxes to funding public transportation.
- Payroll contribution: Mechanism that involves a financial contribution from companies within the territory serviced by public transit based on the number of employees.