Long-Term Funding of Public Transit
TransLink is facing a serious funding shortage that can only be resolved by giving it new sources of revenue. This page describes the problem and sets out, chronologically, the steps that have been taken and the developments that have occurred over the last few years in an attempt to obtain new revenue sources. It also provides links to many of the letters and documents that have been produced in the course of this process.
To go to a specific section of this page, click on one of the following links:
- No Funding for Expansion
- Mayors' Council Taking the Lead
- 2010 Memorandum of Understanding Between Mayors' Council and Province
- Mayors' Council Funding Curriculum – April 2011
- Correspondence Between Mayors' Council and Minister – March/April 2012
- Ministry of Transportation News Release – October 16, 2012
- Mayors' Council Motion re Funding – October 18, 2012
- Meeting with Minister – December 5, 2012
- Mayors' Council Funding Proposal – January 31, 2013
- Mayors' Council Letter to Minister – February 28, 2013
- Ministry News Release – April 8, 2013
- Referendum – Minister's Mandate Letter – June 10, 2013
No Funding for Expansion
TransLink currently has three main sources of revenue: user fares, fuel tax and property tax. The general consensus is that these sources have been maxed out. Little or no additional revenue can be expected, apart from inflation increases in user fares, additional revenue due to increased ridership, and the 3% per year permitted increase in revenue from property tax. Furthermore, fuel tax is anticipated to yield considerably less revenue than was projected in previous years' plans.
These revenue sources will not provide TransLink with the funds it needs in order to expand the transit system to keep pace with the growth of the region and to improve the system, including building new rapid transit lines and upgrading the Expo line. Service hours per capita are declining as a result of the increase in population and this trend is projected to continue. One million more people are expected to live in the region in 30 years' time, which will place a much greater demand on the transportation system. TransLink's funding situation is so tight that it anticipates having to sell some of its real estate assets in 2016 and 2017 in order to fund operations.
Thus, new revenue sources are urgently required. These must be enacted by legislation or otherwise implemented by the province. Hence, the province has an essential role in making additional revenue sources available to TransLink.
Some commentators assert that TransLink can find the needed revenue by becoming more efficient. Two reviews of TransLink undertaken in 2012 did identify some modest cost-saving opportunities, as described on the Reviews of TransLink page of this website. TransLink's current financial plans reflect these cost-savings. The view that additional significant efficiencies can be achieved is not realistic. Even if this were possible, the amounts would come nowhere near satisfying TransLink's future financial needs.
Mayors' Council Taking the Lead
The Mayors' Council on Regional Transportation fully agrees that TransLink requires additional funding to provide adequate transit for the region. Although legislation assigns TransLink the responsibility for generating the funds required for its purposes, the Mayors' Council has taken the lead in identifying suitable new revenue sources and in seeking to convince the province to enable these sources through legislation. While this activity is not part of the Mayors' Council mandate, it is appropriate that elected officials take the lead given the political sensitivity of new taxes or the redirection of existing taxes . The search for new revenue sources has been a frustrating experience for the Mayors' Council, as will be evident from reading this page. Moreover, the Mayors' Council has been hampered in its attempt to identify and obtain new funding by having no budget and no dedicated staff for this purpose.
2010 Memorandum of Understanding Between Mayors' Council and Province
One of the initial developments was the signing in September 2010 of a Memorandum of Understanding (MOU) between the Mayors' Council and the province. The MOU is intended to provide a long-term strategy for creating a sustainable transportation network in Metro Vancouver. The province and the Mayors' Council commit in the MOU to work together to develop a long-term sustainable funding strategy, including open and ongoing dialogue between them on potential new funding solutions.
Since entering into the MOU, the Mayors' Council has devoted considerable effort to identifying new revenue sources and attempting to obtain the province's agreement. This has included numerous meetings with the Minister of Transportation and Infrastructure (Blair Lekstrom from March 2011 to September 2012; Mary Polak from September 2012 to June 2013; and Todd Stone from June 2013).
Mayors' Council Funding Curriculum – April 2011
A Mayors' Council meeting was held in April 2011 to discuss an extensive binder of material on funding prepared by TransLink for the Mayors' Council. This material included background documents on potential funding sources for TransLink, a history of TransLink funding, papers on best practices in transportation financing policy, and an update from TransLink on strategic planning and sustainable funding. For further information, see the Table of Contents and the Memorandum to the Mayors' Council from its Chair. The complete binder of material is available here. (PDF, 13.5 MB)
Correspondence Between Mayors' Council and Minister – March/April 2012
In a letter dated March 15, 2012, the Mayors' Council informed the Minister of the motions that were passed in its March 7, 2012 meeting. Motion #3 called on the province to enable the long-term revenue sources listed in the motion.
The Minister responded in a letter dated April 10, 2012. Regarding revenue sources, he stated that there should be an in-depth efficiency analysis of TransLink before considering legislation to enable any new funding tools. In addition, he made a few specific comments on the proposed revenue sources that were listed in the Mayors' Council letter and indicated that any potential new funding sources should be fully informed by meaningful public engagement led by the Mayors' Council.
Ministry of Transportation News Release – October 16, 2012
On October 16, 2012, the Ministry of Transportation and Infrastructure issued a News Release announcing the completion of the provincial performance audit of TransLink and commenting on long-term funding. In this document, the Minister put the onus on the Mayors' Council to work with TransLink and the public to develop a long-term regional vision and then to discuss with the public the matters of cost and how to pay. The News Release also set out criteria that must be met by funding tools and included Backgrounders on funding sources and property taxes.
Mayors' Council Motion re Funding – October 18, 2012
In its October 18, 2012 meeting (Minutes, page 6), the Mayors' Council passed a motion requiring it to bring forward a framework for a long-term funding plan by January 31, 2013 and setting a deadline of February 28, 2013 for the province and the Mayors' Council to reach agreement on a long-term funding model.
Meeting with Minister – December 5, 2012
Minister Polak met in camera with the Mayors' Council on December 5, 2012. In her remarks to reporters afterwards, she stated: "The mayors need to be able to put together what is their consensus for the priorities of the region and be able to show they have public support for new funding tools they want to bring on board." A recording of the 14-minute scrum with reporters can be heard on this BC Government web page. Reports of the meeting were carried by the Globe & Mail, The Province and the Surrey-North Delta Leader.
Mayors' Council Funding Proposal – January 31, 2013
On January 18, 2013, the Mayors' Council held a workshop to develop an approach to sustainable funding for TransLink. A vision for transportation in Metro Vancouver and possibilities for near- and long-term funding solutions were discussed. The results of this workshop were communicated to Minister Polak in a 9-page letter dated January 31, 2013. The letter recommends five funding options for implementation or further study and planning:
- a vehicle levy,
- a regional sales tax of up to 0.5%,
- regional carbon tax,
- land value capture, and
- road pricing (some form of pay-by-use charge for roads).
Land value capture refers to various approaches for capturing a portion of the uplift in the value of properties that often occurs by virtue of being near new transportation infrastructure. The province has insisted that new funding tools for TransLink must include land value capture.
For information on road pricing, see: Metro Vancouver Road Pricing Research Study Report (PDF, 1.7 MB), and Lessons for Metro Vancouver from Road Pricing Schemes Around the World (PDF, 459 KB).
Minister Polak's initial reaction to the letter was reported in The Province, the Surrey-North Delta Leader and by News1130. She said that the Mayors' Council needs to provide more details about how much money is needed and for which projects and when. She also indicated that rapid transit in the Broadway corridor and in Surrey cannot proceed at the same time.
Mayors' Council Letter to Minister – February 28, 2013
Minister Polak sent a letter (not publicly released) to the Mayors' Council on February 20, which was discussed at a Mayors' Council meeting that day. In response, the Mayors' Council sent the Minister a further letter on February 28, 2013 expressing frustration with the Minister's expectation of the role to be played by it and disappointment that the province is distancing itself from any active role in developing new funding sources. The letter ended by asking the Minister to demonstrate clear support for the funding discussions and to work together with the Mayors' Council. Also on February 28, the Mayors' Council issued a Media Release.
Ministry News Release – April 8, 2013
The Ministry of Transportation and Infrastructure issued a News Release on April 8, 2013 announcing agreement with the Mayors' Council on a process to work together. According to the Release: "The new process will outline findings and recommendations on how to move forward with governance and funding, as well as engaging the public. This will allow government to consider legislative changes in spring 2014." The Release states that the parties will consider new funding sources for transit in the Metro Vancouver region and also a revised governance structure for TransLink.
Referendum – Minister's Mandate Letter – June 10, 2013
On his appointment as Minister of Transportation and Infrastructure, Todd Stone received a letter from the Premier dated June 10, 2013 setting out the Premier's expectations of what he will accomplish, including:
Working with the Mayors' Council, develop improvements to the governance structure at TransLink and identify funding options to provide additional resources to fund transit in the Lower Mainland while remembering that any new funding source would need approval from voters through a referendum no later than the 2014 municipal election campaign.
The condition that new funding sources be approved in a referendum was first announced by the Premier during the May 2013 election campaign. The latest date for holding the referendum is November 15, 2014, the date of the next municipal elections.
As of November 14, 2013, the province has not provided any further information on the referendum, so it is not known when the referendum will be held, how the province will conduct it, what question or questions the province will ask, whether the province will fund the referendum, and whether the province will spearhead the "Yes" campaign.