Archived columns and blog posts by Matt Elliott

Federal budget makes transit more expensive, and that's not what Toronto needs: Matt Elliott

Prime Minister Justin Trudeau's latest budget is set to hit TTC riders for an extra $240 a year.
Prime Minister Justin Trudeau's latest budget is set to hit TTC riders for an extra $240 a year.

Justin Trudeau is about to make your TTC trip more expensive.

Surprised? Yeah, me too. Making transit cost more is usually our municipal government’s thing, not Ottawa’s. But in a new twist, the federal budget for 2017, tabled today by Finance Minister Bill Morneau, is set to increase your costs by eliminating the public transit tax credit.

The credit, which allows transit riders to claim a tax refund of 15 per cent of money spent on transit passes, will disappear as of July 1.

Happy Canada 150, transit fans.

For the average Metropass wielder the change will mean costs increase by about $20 a month – or $240 a year.

That’s going to be a hard pill to swallow for Toronto transit riders who have put up with years of consistently rising costs. Since 2011 the cost of TTC fares has increased faster than inflation and far beyond the pace at which new service is being added to routes.

And now this. Removing a credit that offered a bit of relief for cash-strapped strap-hangers is a bad look for a prime minister that has talked a big game about his support for public transit.

It’s not something the TTC was seemingly prepared for either. In an interview with Metro, TTC chair Josh Colle said the elimination of the tax credit wasn’t on his radar prior to the release of the budget.

While Colle also lauded the federal government’s “landmark” investment in funding capital and maintenance costs of transit projects, he’s concerned about the impact this will have. “The last thing we want to do is make [transit] more expensive,” he said.

He said the city’s next step will be to consult with the Canadian Urban Transit Association and work to determine how many riders take advantage of the credit – something the city doesn’t have much data on.

Indeed, publicly-available data on usage is limited. But there’s reason to think this change will cause pain for Toronto transit riders.

A 2011 report by the Department of Finance revealed that just under half of all claims for the tax credit came from Ontario transit riders – the majority of whom ride the TTC and GO Transit – and a report from the TTC in 2007 pointed to the credit as one of the reasons behind a surge in Metropass sales.

If the removal of the credit reverses even some of that growth – resulting in further ridership declines across the TTC – the financial crunch will hit the transit agency hard.

Trudeau’s federal government will inevitably point to its renewed investment in building transit projects across Canada as an offset to the elimination of the tax credit. But that’s cold comfort to riders already feeling the pinch. The question for the Prime Minister is simple: what’s the point of an expanded transit system if people can’t afford to ride it?

With files from David Hains

This post was originally published at on 2017-03-22T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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