FR

Which of the following points do you agree with the most?

83.3%
16.7%
0%
Cancel

What do you think is the most important source of public transit funding for the future?

0%
33.3%
66.7%
0%
Cancel

Under Section 72 of the law, the ARTM must develop and adopt a funding policy that acts as a framework for funding of all public transportation services within the territory. The policy takes into account all public transit revenues and financial expenses for the metropolitan region, and outlines the terms and conditions of how revenue sources are allocated to financial expenses. It will determine the contribution of municipalities and users according to public transit services and specialized transit, which are 30 and 31%, respectively. Consult the funding policy. Learn more about the funding policy (French only)

Autorité régionale
de transport métropolitain

Reading time
5 minutes

Let us know what you think
2 questions

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.

Ever-growing needs

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.

The increased need for investments will be accompanied by a spike in operating costs as these projects are rolled out.

These new projects will include asset maintenance management and upgrading facilities, such as building metro and bus garages to make the system universally accessible, and more.

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.

Rethinking the Funding model

To ensure our public transportation infrastructures are maintained while new projects are being developed to meet the region’s growing mobility needs, we will need to study public transit funding while elaborating the strategic development plan. This study must seek to :

  • Propose funding sources adapted to the realities of the metropolitan region
  • Ensure sustainable funding of existing services and the development of new services
  • Focus on predictable and reliable funding sources while the strategic development plan is being laid out

It is crucial that sufficient financing is secured to meet the needs identified within the strategic development plan, ensure asset maintenance management and provide a quality level of services to citizens. The balance established between different stakeholders that contribute to funding public transit must take into account their financial capabilities. Funding for public transportation must also be :

  • Simple and coherent
  • Shared region-wide to ensure equity between municipalities
  • Be based on a user-payer model to maintain balance between contributors

Sources of funding already secured in the metropolitan region:

Fare revenues: 30% of the public transportation budget is funded by users.

Revenues associated with ticket sales contribute to public transit funding for the region. These tickets will generate $862M in revenues from fares in 2018.

Municipal contributions: 29% of the public transportation budget is funded by municipalities on a user-pay principle.

The law provides for a municipal contribution to public transportation services based on the user-pay principle, and the funding policy determines how this is applied. The policy stipulates that the overall share of municipal contributions must not exceed 30% of the region’s expenses. Municipalities in the region contribute to public transit funding through two separate contributions:

  • A basic contribution established at one cent ($0.01) per $100 of standardized property value (SPV contribution). In 2018, the basic contribution was $53M.
  • Contribution to the remaining service deficit for the region. This was $781M for 2018.

Municipal contributions planned for 2018, therefore, have been evaluated at $834M, or the amount established in the funding policy adopted by the CMM on September 28, 2017.

Government subsidies: 33% of the public transportation budget is funded by different government sources.

  • Operations: For 2018, just over $239M in operating subsidies from programs and mitigation measures put forward by the Gouvernement du Québec are anticipated. The Québec government supports public transportation operating costs through three programs; that is, the Programme d’aide gouvernemental au transport collectif des personnes (PAGTCP), the Programme d’aide au développement du transport collectif (PADTC) and the Programme de subvention au transport adapté (PSTA). Lastly, through Mobilité Montréal, the government funds mitigation measures for congestion caused by major roadwork.
  • Capital assets: Capital grants planned for 2018 will reach close $875M, to which $74M will be added to support the ARTM for a total of $949M. Some investment projects by the ARTM and the four public transit authorities are eligible for capital asset management programs: the PAGTCP by the Ministère des Transports du Québec (MTQ) and the Public Transit Infrastructure Fund (PTIF) by the federal government and the MTQ. Each program has its own eligibility criteria, subsidy rates and form of reimbursement.

Contribution of drivers: 5% of the public transportation budget is funded by vehicle taxes.

To secure some of the funding for its activities, the ARTM receives a portion of motorists’ contributions to public transit through registration fees and fuel taxes.

  • Registration fees: For each passenger vehicle under 3,000 kg registered within its territory, the ARTM receives $30 in registration fees. This income, which was estimated at $61M in 2018, is based on applications for vehicle registrations, primarily according to population growth.
  • Fuel taxes: For each litre of gas sold within the territory, the ARTM receives income from a portion of taxes, valued at $0.03, from the Gouvernement du Québec. This source of funding is dwindling due to the growing energy efficiency of vehicles. Despite an increase in the number of vehicles registered in 2018, the Autorité received a sum of $97M, slightly below the sum of $97.7M received in 2017.

Other revenue: 3% of the public transportation budget is funded by own-source revenues, service revenues outside the territory and Transportation dues.

Own-source revenues: The ARTM’s other revenues come from activities associated with regular public transportation services and were approximately $57M in 2018. Other related revenue-generating activities include:

  • Charter services
  • Advertising in the métro, trains, buses and bus shelters
  • Rental of business spaces associated with public transportation services and facilities
  • Training and consulting activities

Out-of-territory services: To ensure continuity of public transportation services to regions situated outside the ARTM territory, agreements were reached with municipalities that will be serviced by exo. Revenues from these agreements will be nearly $9M in 2018.

Transportation fees: Bill 137, assented to on September 27, 2017, adds “fostering the coordination of shared transportation services and urban growth” to the ARTM’s mission and grants it the power to collect fees for public transportation, a new source of funding that must be reserved for developing a public transit project, in particular. This fee will be a contribution paid for a construction permit from the municipality. The Bill provides for this new power to be used initially to finance the Caisse de dépôt et placement du Québec’s REM up to $600M or over a period of 50 years or more.

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.
A question, a comment?