Down here in Liberal land, getting the shaft from the federal government can come as a surprise. With no political opposition and just the remnants of a vigilant media to raise the alarm, nasty shocks can arrive without warning.
This past week the CBC reported on the trials and troubles of Trius Transit, which has a contract to operate public transit for Charlottetown and environs. Company owner Mike Cassidy had planned to take advantage of the big ticket federal transit infrastructure program to put ten new vehicles on the road. He made the plans based on the assumption that public transit money announced in the federal budget would, as in the past, be distributed to provinces on a per capita basis.
On that per capita basis, he estimated P.E.I. would get about $4 million, enough to cover most of the cost of ten vehicles. But not so fast. To his surprise, he found out that the Trudeau government had changed the funding formula to base it on how many people use public transit in a given province. Using that method, Charlottetown’s fledgling system (founded just in 2005) was eligible for no more than $660,000 in federal bucks over the next three years. Trius was forced to resort to Plan B, purchasing a fleet of used six-year-old buses from the City of Calgary.
According to the CBC report, Trius owner Cassidy “hopes to convince Ottawa to change the funding formula back to the population-based system.” It would be nice if his efforts get support from the local Liberal MP, but he shouldn’t hold his breath. As I reported in April (Low profile for federal budget at Liberal lovefest), adoption of the ridership approach to transit infrastructure was announced in the March federal budget. That budget was, of course, supported by Charlottetown MP Sean Casey and the Island’s representative in cabinet, Chretien-era retread Lawrence MacAulay.
Transit funding in the budget of almost $3.4 billion over three years is Phase I of the infrastructure program that had such prominence in the Liberal platform last summer and fall. Forty eight per cent of that Phase 1 transit money is earmarked for Ontario, 27% to Quebec and 24% to Alberta and B.C. The Atlantic Provinces will get a mere 1.4% between them, with most of that coming to Nova Scotia. P.E.I.’s share (0.0019%) does not even rate as crumbs – or the dripping off of the pork barrel if you prefer.
Moreover, the funding formula that leaves Charlottetown scrambling to buy second hand buses is a major break with the past. Cassidy and transit riders had a reasonable expectation that transit money would be distribuited on the basis of population. That’s what happened when the Liberal government of Paul Martin set up the Gas Tax Fund to support transit and other municipal infrastructure programs in 2004, and followed up with the Public Transit Capital Trust in 2006. And per capita, not ridership, was once again the approach when the Harper government extended the Public Transit Capital Trust in 2008.
The money involved in the formula change is not chicken feed. The transit pot contained in the 2016 federal budget is far bigger than anything Trius would have seen from the Martin and Harper governments. And the feds are willing to pay 50% of the cost of transit projects, an improvement over the 33% formula that has prevailed in most cost-sharing arrangements.
If the enriched $3.38 billion pot were distributed per capita, P.E.I would be eligible for about $14 million, over three times more than past experience had told Mike Cassidy to expect (and 21 times what it’s in line for). In addition:
- Newfoundland would be eligible for $50 million instead of the measly $4.9 million promised in the budget;
- New Brunswick $70 million instead of $8.7 million;
- Nova Scotia $90 million instead of $32 million;
- On the other hand, Ontario and Quebec would receive only $2.1 billion instead of $2.4 billion.
Why not health?
As discussed in my April post, there are a couple of issues that emerge from this new way of funding infrastructure. The first is specific to public transit. We need more of it, in big cities of course, but also in small cities and towns (like Charlottetown) and in rural or suburban areas. A funding formula based strictly on ridership does little to encourage expansion or improvement. Indeed, provinces are penalized for past failure to develop public transportation, failure that is usually the result of geography and population density.
The second issue is the ease with which the Liberals threw out the long-established per capita approach to infrastructure transfers. Maybe public transit, like wharves or ferries, doesn’t lend itself to strict per capita funding. Maybe there is an element of need involved. You don’t need many ferries or wharfs on the Prairies, just like you may not need as much public transit in Charlottetown as you do in Toronto. But there seems to be something un-Canadian about a new federal program that gives the Atlantic provinces the equivalent of $20 per person for transit while giving Ontario and Quebec $110. And if the Liberals can so easily dismiss the per capita formula when it comes to transit, why can’t they do the same when it comes to health funding? As I wrote in April:
…eschewing the per capita approach to transfers to take ridership – or need – into account makes sense. But then again, so does modifying per capita health transfers to consider need based on age and health status, a principle that isn’t gaining traction with the federal Liberals because of opposition from some provinces. As the saying goes (sort of): “What’s sauce for the transit goose should be sauce for the health care gander.”
Now that the rubber has (literally) hit the road in the form of Charlottetown’s hand-me-down transit buses perhaps the Liberals -in Ottawa and Atlantic provincial capitals – will be moved to address the glaring contradiction.