Thoughts On A Liberal Government

This blog has been churning along since January 2006, and for almost all of that time, Stephen Harper and his Conservatives have been running Canada. The idea that Ottawa would have a significant role in transit beyond the occasional showcase project simply was not part of the landscape.

Now, to everyone’s amazement, we have a Liberal majority government, one whose campaign platform includes a very substantial presence in infrastructure spending including the public transit portfolio.

We will get our communities moving again, by giving our provinces, territories, and municipalities the long-term, predictable federal funding they need to make transit plans a reality.

Over the next decade, we will quadruple federal investment in public transit, investing almost $20 billion more in transit infrastructure. [Liberal platform p 12]

That is a lot of new spending, but is has to stretch over the entire country and the next ten years. Advocates of many schemes will project their enthusiasm onto that pot of money saying “Look! We have funding”, but it’s not that simple.

It is instructive to look at how funding is divided up today. The federal gas tax allocations for 2014-15 totalled $2-billion of which $750-million went to Ontario, and of that about 20%, $150-million, to the City of Toronto for transit capital spending. On a proportionate basis, this would yield only $1.5-billion “more” funding over the next decade. This has to be read in the context of targeted funding for specific projects such as the Spadina subway extension that lies outside of the gas tax stream. If all of the new Liberal funding comes from that $20b pot, the actual change, all things considered, may not be as generous as expected.

Other funding lines in the Liberal platform focus on housing and non-transit infrastructure. These are not to be ignored especially to the extent that they relieve municipal governments of spending where they have carried a substantial share of the programs. However, if total spending goes up, Toronto may be forced to bump its investment level in transit and other portfolios because “we don’t have a funding partner” will no longer be a convenient excuse for inaction.

Whatever money does appear on the table, it will not be enough to build every single pet project, and Toronto cannot evade hard decisions about priorities claiming that the Feds will shell out for everything. There is also the delicate question of how much new matching funding will arrive from Queen’s Park Liberals who do not share the deficit spending plans espoused by their federal cousins.

Capital projects, especially on the scale of transit infrastructure, require a long view. Projects may be “shovel ready” in some cities, although Toronto has little in that status thanks to years of dithering and backtracking on transit priorities. Major proposals would do well to reach significant construction spending within the current federal mandate or even well into whatever follows. Toronto may build a bus garage here or renovate a subway station there in the short-to-medium term, but the big projects are years away.

This brings us to the rationale for new spending. If the idea is to stimulate the economy and create employment in the short term, a clear focus of Conservative programs, then long term project funding is doomed. Conversely, if the aim is to invest in the future of Toronto, the GTHA and cities in general, a longer view is possible at the expense of big, immediately visible results and ribbon cutting.

Inevitably, the conflict will be between one shot announcements and “long-term predictable funding”. These address very different political goals and produce very different outcomes. Without a shift away from unpredictable ad hoc decisions (the Scarborough Subway and SmartTrack promises are two examples), local pols will continue to jockey for yet more isolated planning to suit quick political ends, rather than looking at broad-scale goals and benefits. Long-term funding only works with long-term planning.

Absent from any federal platforms was new federal money for transit operating costs. These will grow through the combined pressures of inflation, population growth, shifts from auto to transit and eventually the need to operate all of the new buses, LRVs and subway trains that might arrive thanks to higher capital spending. Operating subsidies, service quality and fare strategies will challenge municipal budgets, and the long-standing question of provincial funding, of getting back to the “Davis formula”, cannot be ignored.

There is a new government, a new outlook on national priorities, and the debate on our transit future begins today. We all want more transit, but nothing is free, and even the “new” money has its limitations. Let us spend it wisely.