Explainer: An overview of the public transport funding situation in Montreal

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As Quebec cities grapple with public transportation funding issues, Montreal presented a portrait of the situation Monday as the first step in a public consultation on the issue.

“We need to find concrete solutions to prevent service cuts,” City Executive Committee President Luc Rabuin said at a meeting of the Standing Committee on Finance and Administration.

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In the context of the city's 2025 budget, the hope is to find “sustainable and predictable” funding solutions as transit agencies deal with multimillion-dollar deficits.

Cities have called on the provincial government to provide more funding to avoid cuts to services. On Monday, Quebec Transport Minister Genevieve Guilbeau met with mayors to discuss the issue.

Check out the situation in Montreal:

Who pays for public transport?

Transit agencies receive funding from users through fares, from Quebec and Canadian taxpayers through government subsidies, from municipal taxpayers through vehicle registration fees and gasoline taxes, from municipal taxpayers through Transportation Metro (ARTM) fees, and from motorists.

Deficits

The Greater Montreal area's deficit is estimated at $561 million. According to the committee's presentation, there are three main reasons: the COVID-19 pandemic, the launch of the Réseau express metro and rising costs.

The pandemic played a role for several reasons. In addition to the reduction in the number of journeys during the isolation, this has drastically reduced the number of fares sold – which has also accelerated the trend of telecommuting.

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REM, meanwhile, generates ARTM costs, and the agency estimates that by 2027 REM users will receive $120 million in fares that REM users spend on other modes of public transit. This REM does not generate additional income because it transfers it from one area to another.

ARTM also estimates that tariff revenue will only reach 2019 levels by 2027, when operating costs will increase by 28 percent.

ARTM presented a financial framework for public transit in the Montreal metropolitan area for 2025-2028, taking into account public subsidies and other sources of income. It projects that the current deficit will grow annually and reach $698 million in 2028.

Have services been affected so far?

In October 2023, mayors of the Montreal region threatened that budget cuts could mean shorter metro hours, such as closing at 11pm on weekdays and opening at 9am on weekends.

In November 2023, the STM union announced that the agency would lay off 255 employees in an effort to overcome the shortage.

In April, the STM board approved a decision not to replace 155 buses – most of them old diesel buses and articulated buses that have reached the end of their service life after 16 years of service. 2044 to 1855 buses that arrived in 2022 will be discontinued at the end of the year.

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At the time, Montreal Mayor Valérie Plante blamed the province for the cuts. Later that month, he urged Guilbault to step up and free up public transit agencies, worried that more cuts would be needed if the province didn't provide cash.

Solutions

Ways to reduce costs: Agencies are looking at ways to streamline after the Quebec government ordered an audit to better understand the problem. The committee said efforts to optimize resources, including consolidating equipment and expertise, were needed, but said they were unlikely to result in savings of tens of thousands of dollars.

Agencies can assess the need for routes that are not very popular and are likely to have service cuts, but the committee warned of a vicious cycle of driver loss and therefore revenue loss, thus requiring additional service cuts, etc. on.

Ways to increase financing: Available solutions noted by the committee include: raising fares, increasing the gasoline tax (which has not changed since 2010), increasing vehicle registration fees (the $30 fee charged by the city has not increased since 1992), further increasing vehicle registration taxes , increasing municipal taxes or creating a mileage tax.

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The table presented Monday proposes to increase the aforementioned funding revenues by just one percent in the case of transit fares and municipal taxes, by $1 in the case of registration fees and taxes, and by one cent per liter of gasoline, for an additional $79 million. income.

The committee also noted the need for increased funding from higher levels of government because public transit contributes to economic and urban development and social inclusion, and addresses issues related to traffic, air quality and climate change.

Can I share an opinion or idea?

You can participate in one of the following public consultations to share an opinion or idea:

Personal: Monday, May 27, 9:30 a.m. or 1:30 p.m., location to be determined.

Online: Tuesday, May 28, 9:30 a.m. or Wednesday, May 29, 1:30 p.m.

Those interested in participating must complete the online form or register by calling 514-872-3000 by May 21 at 5:00 p.m.

Written comments may be submitted by email, mail, or in person at the following addresses (deadline: May 29):

Activities of the Finance and Administration Commission
155 Notre Dame St. E., Montreal H2Y 1B5
[email protected]

The committee will take the recommendations at an online public meeting on Friday, June 14 at 1 p.m.

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