Financing public transport | Heartbreaking choices submitted to Montrealers

Lower the level of service? Raise user prices? Impose new taxes on motorists? Inflate owners’ tax bills? The Plante administration wants to hear from Montrealers about the difficult choices that will be necessary to resolve the public transportation funding crisis.

Objective: find 700 million

A group of elected officials from the Commission on Finance and Administration will launch a consultation on metropolitan financing of public transport on May 6. More than ever, while expenses are expected to be numerous and tariff income is weakened by teleworking, the objective is to diversify sources of income. In 2025, in Greater Montreal alone, the shortfall of transportation companies is estimated at $561 million, but it will jump the following year to 605 million, then to 670 million and to 700 million in 2028.

Take part in the consultation

Reduce service

By admitting that a “new effort to optimize resources (…) is desirable”, the Plante administration immediately recognizes, in a preliminary document to the consultation, that “the service offer could be reviewed to identify the modes of transport and the least efficient routes in order to assess their necessity. However, she warns that such a choice would reduce ridership and fare revenue, which would then lead “to a further reduction in the service offering, and so on”. In addition, it is added, “the savings generated by the reduction in the service offering would be partially canceled by the reduction in government operating subsidies”.

Raise user prices

According to the administration, an additional indexation of just 1% of public transport fares would generate “additional revenues of around 10 million at the regional level”. Thus, to compensate for a significant part of the imbalance, “indexation should be substantial,” asserts the City. On the other hand, the metropolis fears that an increase in fares will discourage the use of public transport in general, thus causing, once again, a fall in fare revenue, but also more road congestion and pollution. In 2024, residents of the Montreal agglomeration will pay approximately 69% of contributions to the Regional Metropolitan Transport Authority (ARTM), or $682 million.

Inflate certain taxes

On the taxation side, the City cites in particular the gas tax, whose rate of 3 cents per liter has not changed since 2010, when the average price per liter was $1.08. An indexation of this tax launched in 2020 would have made it possible to free up an additional 19 million by 2025. At the municipal level, Montreal is considering, like several other cities, increasing the $59 tax on vehicle registration, as The Press reported Monday. This measure alone should already bring in 125 million in 2024, but since it was extended to 450, the Montreal agglomeration “has lost 36 million in revenue”, we learn. The registration fee, $30 per vehicle, has also not increased since 1992; about $15 million would have been available if it had been indexed four years ago.

Increase municipal taxes

Another avenue considered: a “massive increase” in municipal contributions. But if cities have to pay more, they will have to pass the bill on to their citizens. To cover the shortfall in 2025, the City of Montreal estimates that it “should increase its property tax by 9% more than the increase planned for its other expenses.” At a time when new negotiations are beginning on this subject between transport companies and the Minister of Transport, Geneviève Guilbault, the Plante administration reiterates in its report that “governments should not only ensure the maintenance of services in public transport, but also support its growth.

Implement a mileage tax

Finally, the idea of ​​a kilometer tax – paying according to the distance traveled by car – should be explored. This option is being evaluated by the Metropolitan Community of Montreal (CMM). The problem is that it is an expensive system that could not be implemented before 2031, according to current estimates. According to the City, it would be consistent to deploy such a system “on a territory larger than just the metropolitan region of Montreal”, but above all, to eventually replace it with the current gas tax. However, the City fears that the government will end up using this revenue to maintain the road network rather than financing public transportation.