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We know that public transport is the best possible investment that a government could do to promote it's economy. Therefore, it is confusing why Quebec's provincial government is hesitant on providing proper funding to help it's operations. In this article, I look deeper inside the numbers that prove that continuing to invest money inside our deficient road system is actually worse for Quebec's economy than investing the same amount inside public transportation.
A large portion of this section is based on Richard Bergeron's book named L'économie de l'automobile au Québec, or written in English: The Economy of the Car in Quebec.
It is a really brilliant paper, and I highly recommend to read it.
Therefore, only sources that do not come from this article will be cited.
Quebec does not manufacture nor assembly a single car in Quebec, nor produces any fuel for these cars (it does produce electricity, but I will dive into this later on). However, on the other hand, Quebec does produce and manufacture buses and trains in Quebec, significant expertise in developing bus-based public transport solutions and employs thousands to operate these vehicles on a daily basis.
In fact, STM, the largest public transport agency in Quebec, states that 97 percent of it's 1.36 billion dollar yearly expenditures are realized within Quebec's borders. Therefore, reducing service and funding of the STM, would reduce spending within Quebec's borders and by extension Quebec's economy. Yet this will increase spending for cars, for which will be explored during the next section, the majority of which is spent outside the province (STM).
The STM also generates over 16,500 jobs, and 9,000 of those are directly employed with the STM. This could be expanded in the future, thanks to constant public transportation improvement projects, an expertise that could be exported, much akin to what the CPDQ-Infra has developed with the REM (CBC News). It is to be noted that Quebec previously was a leader in metro planning, as the whole process was done in house, from engineering to construction up until the 1980's, when budget cuts caused the lost of this expertise, the halting of future metro extensions, and by extension, astronomical cost increases in the subsequent metro extensions because much of the project's work and planning had to be exported to private firms (Marco Chitti). In fact, this expertise allowed the BTM (Bureau de transports Montreal) to export the Montreal Metro system to Mexico.
Many would believe that investing in cars is the best possible action to do in transportation to benefit one's economy, because the government has to do little capital investment, and that investing in public transportation is just throwing money at inefficient institutions. A recent article had even suggested to reduce the salary of bus and Métro operators, many of which must struggle to wake up early in the morning and deal with split shifts at unpredictable times, while being unpaid during mid-day breaks (Journal de Montréal).
Many have thrown around the idea of automatization would be able to reduce the operational costs of particularly the Métro system. However, if we do some quick napkin math, we could observe that it would take decades for it to be actually cheaper. This is because, when you automatize a Métro there are two large costs: a new signalling system (typically CBTC or Control Based Train Control) and platform screen doors or platform edge doors. Toronto recently installed the CBTC system on Line 1, which is 38 km long, for 610 million dollars (Steve Munro). Assuming that we only autonomize the Orange Line in Montreal, which is 30 km long, which adjusted for length, would cost an estimated 482 million dollars. Now for platform edge doors, the STM has already planned the installation of them by 2031, but only for 13 stations of Orange Line. Therefore, to install them at all 31 stations, it would cost an estimated 372 million dollars (Radio Canada). Together, we could estimate conservatively that the automatization of only the Orange Line would cost 854 million dollars; however, the final cost is likely to be much high due to inflation. As of 2011, there were 303 Métro operators (STM). Lets assume that every Métro driver makes a 120,000 dollars per year (they do not, in fact they make much less, but lets assume). Which translates to 36.36 million dollars of costs per year saved. This means that it would take 23 years to recoup that high cost of automatization. However, keep in mind that this only one line. This means there are still operators needed for the other three lines, and therefore lets assume that only a 120 operator jobs are removed, and that means that it would take 59 years to recoup the costs!
How about we cut the salaries and remove managerial jobs. First of all, I do not believe at all it is appropriate to discuss about salaries. Imagine if the company you worked at, said well, you have to take a 10% pay cut, you probably will not be that motivated to come to work tomorrow and start searching for a new job. This is exactly the problem that transit agencies are facing. In fact, EXO is the most impacted, as it contracts out it's bus and commuter rail operations to private companies, and these companies pay some of the lowest salaries in the industry. Result? EXO is cancelling departures left, right and center just because there are not enough bus operators (Les 2 Rives). This problem is not unique to Montreal, in fact this is common among the public transportation industry. In fact, the Boston transportation agency (MBTA) did exactly as this journalist wants the transportation agencies in Quebec to do, and cut massively salaries and cut the amount of operators because of the shortfall during the pandemic (La Presse, La Presse, La Presse). Well, now the MBTA is faced with a massive shortfall of operators, and cannot expand service until 2025 and beyond, despite planning a 25 percent boost in bus service proposed, because they employ fewer employees than pre-pandemic (The Boston Globe). On top of that, the MBTA is lacking 20 to 25 percent of the workforce needed to currently maintain the system at a proper level of repair. The result, was a train on fire, hundreds of slow-zones, and dramatically reduced service operating at the same subsidy.
In fact, it is impossible to cover the entirety of the costs of operations just by the fares of the users. But, the same could be said with the roads. The truth is that driving generates, not only a huge deficit for individuals in Quebec, but also a deficit that is mainly on the shoulders of cities, as city dwellers fund the deficits generated by suburbia.
On top of that, is it really sustainable to spend 30 billion dollars on roadways for which only a fraction of the population uses and that cause hundreds of deaths and thousands upon thousands of injuries per year? (La Presse). As will be explored in a future section, this investment causes limited returns for Quebec, and actually causes it to be behind it's peers. This is because driving a car causes society to subsidize more than 6 times more than taking the bus, despite both modes using public roads. Therefore, for the government to reduce the amount of road maintenance and capital investments, investing in public transport services and the creation of robust bike networks across Quebec is the best solution.
Cost of commuting per mode for personal costs and societal costs. (Strong Towns)
On top of building car-dependent roads, it induces car-centric developments, which reduce the tax returns of the government and therefore hinders it's ability to provide services. As explained by Strong Towns, an old, blighted block of buildings exceeds tax revenues by 41% compared to a new car-centric development (Strong Towns).
7.7 billion dollars
23% of the road budget will go to the expansion of highways and regional roads (PQI 2023-2033).
It is to be noted that the 31.5 billion dollars for roads is only for provincial owned roads: highways and regional roads. This excludes the amount that municipalities have to pay to maintain and expand their own road networks.
It is not inherently bad to spend money to maintain infrastructure, even road infrastructure. However, we must ensure that when we do these investments, they should result in a lower deficit, rather than spending more and more on maintaining roads every single year, because it is unsustainable. That's why when we pay sums to rebuild key infrastructure, we should make sure that it's new version is more sustainable, and this means adding dedicated public transportation services along with high quality stations and stops, bike lanes, etc.
In the budget for the next ten years, the Quebec government wants to spend 11 billion dollars on public transport. However, I had removed the 1.9 billion dollars destined for electric buses, as this is not a metric that will benefit public transport service. Electric buses is mainly an excuse to maintain the status-quo instead of spending money to induce a mode-shift towards public transportation. In fact, the greenest option is to increase public transportation services in an aim to convert as many people as possible, as made evident by a Polytechnique Montréal and Concordia study (Le Devoir).
9.1 billion dollars
Electric buses also dramatically decrease the efficiency of the ability to deliver services, as electric buses cannot be replaced one-to-one versus conventional diesel or hybrid buses. Some agencies are reporting that they require 150 electric battery electric buses (BEB) to the job of a 100 conventional buses (Christof Spieler).
The inefficiency of car infrastructure proves the point that long-term financial sustainability is impossible with a car-centric development pattern. This means either two of the following consequences will occur: increase in taxes or decrease in the amount of infrastructures and services. The only way to be sustainable is move to a more sustainable development patterns and cease road rebuilding opportunities to minimize future deficits and maximize long term economic returns for the region. This can only be done by optimizing our existing spaces and choosing the most efficient mode of transport.
Throughput of a single 10 foot lane. (National Association of City Transportation Officials)
On top of the low throughput for roads that cars use, the expansion of our road systems also shows that we want to induce car trips. Induced demand is often thrown around with a negative connotation, but it matters more which mode we choose to induce which influences if it is good or not (Oh The Urbanity!). This means, if we decided to construct a bikeway or a transitway, it would induce demand on to that particular bit of infrastructure since the capacity of that infrastructure had been increased. This type of induced demand is actually good and sustainable, because the throughput is high and the use of unit of space per user is low. This is contrary to induced demand for car infrastructure, which is not sustainable, because it's maximum capacity is reached within a few years or even months, due to the inherent inefficiencies of space by cars, even electric or autonomous ones. However, this is not to say that we should tear out roads everywhere and replace them with giant sidewalks, bikeways and transitways. But instead, we need to stop expansion of our deficient roadway system, and rethink the use of space in urban contexts.
Road space dedicated per mode. (PUM 2050 - Ville de Montréal)
(Forbes)
37%
A German research found that society commonly subsidizes a car to the tune of over five thousand euros per year. Among their study, 88% of respondents believed that they understood the true cost of ownership of their cars, while half of those respondents underestimated their costs of ownership by 52% (Gossling et al. 2022). Understanding the true cost of cars, increases the willingness to pay for public transport by nine to 22 percent (Andor et al. 2020).
If public transport has to have buses filled to the brim and still unable to operate a service that is financially sustainable (they should not have to have buses filled completely for public transport to make sense), then how on earth cars could break even, let alone make a profit?
Comparison of private and societal costs of per annum (Gossling et al. 2022)
On top of that, it is to be considered that the majority of cars being purchased in Quebec are currently SUV's. Despite the Mercedes being a luxury SUV, the cost is more dependent on the size of the car. In 2021 alone, 71% of car sales are SUVs. They are also responsible for 50% of the increase of greenhouse gases in Quebec (Équiterre).
Most SUV owners do not even need a SUV (Équiterre)
Car companies want to sell more SUV's because it solely increases their profits, while pushing it's negative externalities on to society and some on the owner itself. In fact, the only reason that car companies want to make SUV's for the North American market and claim that smaller and more fuel efficient vehicles is impossible, is because SUV's are not cars, they are light trucks. Light trucks fall into another category of emissions standards, and therefore these vehicles can pollute more without car companies needing to pay penalties to the government (The New Yorker). Therefore a term was coined, the SUV loophole.
The majority of STM's budget is already dedicated to operations, and fares are unable to cover operations costs alone. Therefore, public transport needs to be subsidized, just like roads are today, because they benefit immensely the economy of Quebec, a.k.a. it generates positive externalities.
These so-called positive externalities is exactly what makes investing in public transport different from investing in car dependent infrastructure. Cars generate negative externalities, such as: congestion, pollution, lengthening of distances between home and work and the corresponding urban sprawl, downtown devitalization, the trivialization of landscapes, impossibility to catch up to demand, constant deaths and numerous injuries on roadways, expensive healthcare system, etc. (Dupuy 2020). These positive externalities then lead towards a long-term sustainability as society saves money and expenses on the negative externalities caused by cars.
In fact researchers found that more a road is used, the larger the deficit it generates, because there is more wear and tear, more pollution, more crashes, lost productivity costs, etc. (Journal de Québec).
45%
Like mentioned at the beginning, Quebec does not produce any car nor fuel. Therefore, it is not in Quebec's economic interest to continue spending on cars and car-centric infrastructure, and it would benefit massively Quebec's economy to favor a modal shift towards public transportation. In 2002, Quebec households spent 47.5 billion dollars on cars; 45% or 21.4 billion of it went to benefit economies outside of Quebec's borders
Since household would be saving 64 billion dollars from spending it on cars (if it was spent on cars, 45% of it would have not benefitted Quebec's economy), 45% of it or 29 billion dollars of economic benefits would come from it, as households would spend this money on public transport and local activities that will enhance Quebec's local economy. This would help bridge Quebec's economy gap compared to it's peers, and could surpass other Canadian peers.
A 2012 study, by E&D Data firm for the STM, claimed that public transportation generates 2.7 times more jobs than cars if the same 10 million investment was done in both (STM). This is similar to what Richard Bergeron's study claimed, which is that if 1 million dollars was invested into cars, it would generate 5.5 jobs versus 11.4 jobs if the same investment was done in public transport.
Cars | Public transport | |
---|---|---|
Quebec's economy | POOR 1$ per 2$ spent outside Quebec, 3 jobs on 10 created outside Quebec 21,350 million dollars of economic activity and 106,000 jobs created outside Quebec in 2002. | GOOD Spending and job creation benefits Quebec entirely 1,400 million dollars of economic activity and 16,000 jobs created in Quebec in 2002 |
Public finances in Quebec | GOOD Rights and taxes are superior to the spending because the government spends a lot. 5 billion dollars received in 2002, however 66 percent of this excess is by the federal government, versus 25% for provincial and 9% for municipalities | POOR Participation to investment and to deficits of exploitation. Deficit of 680 million dollars in 2002. 40% of deficit assumed by provincial; 60% of deficit assumed by municipalities. |
As observed by Richard Bergeron, Figure 10 displays the disparities of what is good for consumers and what the government invests in. Richard Bergeron therefore concludes that the truth is the opposite of the belief, and that more Quebec can reduce it's spending on cars, better off it would be for Quebec's economy.
To meet the Quebec's growing transportation needs, it had imported, in 2012, 13.7 billion dollars of fuel and 7 billion dollars of cars. Together, these represent 94 percent of Quebec's commercial deficit (STM). Richard Bergeron stated since 1997, Quebecers spent 1.1 billion dollars on cars yearly, and therefore to balance out Quebec's commercial deficit, it would have to increase it's yearly exports by 725 million dollars. Therefore, Quebec's automobile consumption was clearly the main factor making the growth of exports from Quebec obligatory.
Therefore, the issue for not funding public transportation is not for the lack of money, but it is because cars have been effectively taking up the majority of private and public investments. The solution is not as clear cut as this, but put it simply, the Quebec government needs to find ways to reduce spending on cars and maximize spending on public transport if it wishes to remain a key economic force of Canada. This is especially important, as cars cost society as much as five times more than public transportation (Journal de Québec). Richard Bergeron came to the same conclusion as he calculated that the average cost per journey taken by car is 6.35 dollars for the car, while it is 1.27 dollars for public transport; therefore, public transportation costs five times less than the car.
In fact, even in 2002, Quebec was having much of the same debate it is having today. As Richard Bergeron stated:
63%
Between 1997 and 2002, Quebecers gained 25 billion dollars more purchasing power. 16 billion out of that 25, which is 63 percent of it, went towards automobiles. This means on a reoccurring base, cars gained 1,100 million out of 1,800 million of purchasing power; leaving only 700 million for other activities and sectors combined, those that actually help Quebec's economy. If we limit ourselves to just transporting people, cars obtained a hundred percent of new money.
Contrary to it's peers, Quebec does not benefit from cars. For example, Ontario has a 30 billion net positive from selling cars and Alberta has a 20 billion net positive from selling fuels. Despite that, Ontario provincial government is spending 61.6 billion dollars for improving public transport over the next 10 years, versus 11 billion for Quebec's government (Ontario Government).
To start off with, the proposition to fund 70% of the deficit is only for 2024. It is unknown what will happen after 2024. On top of that, the government and municipalities disagree on the calculation of the deficit.
This is because, the Greater Montreal Area (or Communauté métropolitaine de Montréal, CMM) had adopted a new tax upon registration of a new vehicle, in 2019. This new tax brings in roughly a 120 million dollars per year. However, this new tax was designated for the expansion of public transport services. The provincial government instead wants the CMM to use this to fill the deficit instead (La Presse). This means that there is likely to be no increase of service, and likely and a decrease of services as salaries increase and road congestion worsen, further increasing the costs of public transportation services. That is why the members of the CMM want the provincial government to increase it's contribution for 238 million dollars to 346 million dollars.
However, there is still the elephant in the room that only 20% of the deficit would be covered by the provincial government in 2025 and beyond (there is likely going to be last minute negotiations).
On top of that, the provincial government has the austerity to say that transit agencies do not manage well their funds and wants to submit all of them to an independent audit (Radio Canada).
Meanwhile, just to save a little bit of money, the STM had been changing destination signs programming to be a little bit less informative so that it can save money from replacing destination signs.
STM changing the Out of service sign so that the pixels of the destination sign are used less.
On top of that the provincial government claims that they already fund one-third of public transportation services in Quebec. However, this is only barely true for the ARTM, only for the year 2023, thanks to massive injection of funds for 2023, that will also stop in 2024. For example, RTC, the public transportation agency in the city of Quebec, claims that only 10.6 percent of operations are funded by the provincial government (Radio Canada).
One main point of contention is that municipalities should pay more for public transportation (L'actualité).
François Legault (L'actualité)
Already, municipalities fund transit the most, with the largest portion of the pie. For the sake of comparison, I had compared funding for Canada's three largest public transportation agencies: Toronto, the TTC; Vancouver, Translink; Greater Montreal Area, ARTM.
It is notable that Montreal's funding is not that different compared to it's peers. However, Toronto Transit Commission (TTC) only serves Toronto proper, and Translink serves Metro Vancouver. But the ARTM serves the entire Greater Montreal area which is a 4,000 km squared service area with over 600 bus routes (ARTM). On the other hand, Coast Mountain Bus Company, which operates 96% of Translink's bus routes, operates in a 1,800 km squared area with 220 bus routes (Translink). This means that Montreal gets more service per dollar spent than it's peers (Note: Service hours would be a better way to determine which agency gets more service per dollar spent, but this figure is impossible to come by).
It was noted that if the provincial government does not step in, the contribution of municipalities for the ARTM would have to go from 931 million dollars (2023 budget) to 1.255 billion dollars (La Presse).
It will not be favorable to increase fares, just as ridership is increasingly. On top of that, it should not be transit users penalized for doing a service to the government and saving them 5 times the amount of money that the government would otherwise spent on the roads. For example, in Germany, to encourage the use of public transportation post-pandemic, they had introduced a Germany-wide farecard for 49 euros per month (72 Canadian dollars at the time of writing) (The Guardian). This follows the 9 euro subscription during the pandemic recovery.
The main reasons according to the ARTM, is that there are less public transport users and that the REM would be in operation. Effectively, since the REM would shift users from riding public agency's buses towards the REM, and that the ARTM pays the REM per passenger per km (La Presse). On top of that, ridership is at 84% compared to pre-pandemic and the ARTM estimates that it will not return until 2032 (La Presse). However, the North American darling of post-COVID ridership is Translink, with a 90% ridership recovery and B.C. Transit with 100% ridership recovery. There are even some areas in Vancouver that have surpassed pre-pandemic ridership by over 20% (Daily Hive). This is mainly because costs of living are more expensive in Vancouver and therefore more people are turning towards public transportation. On top of that, Vancouver is doing significant investments in their public transportation systems.
Part of the 20 billion dollar ten year plan, Vancouver transit would expand by:
(Daily Hive) (Translink)
In comparison to Montreal, elected mayors had trouble convincing the government to increase public transport service by seven percent per year (Équiterre). One reason why B.C. Transit was able to recover ridership quickly is that the provincial governments foots about 41% of the bill, versus 20% in Quebec (La Presse).
Remember from earlier, that we need to induce demand for public transportation, and the only way to do it is to invest as much as we can in public transportation and only invest to maintain the existing network and by extension, reduce the deficit that the road network creates. It is not by expanding capacity in the road network, which does the exact, induce demand in a system that we know does not work.
Another reason for the increase of costs, is that public transit today is less efficient. Again this is due to cars, as public transport is often slowed down by congestion. On top of that, the frequent spacing of stops reduces the average speed of buses, which again increases operating costs. When the average speed of buses reduce, more money is spent on salaries, more money on operating the bus, and eventually more buses are needed to provide the same service. That's why, despite an increase in the number of buses, service is not improving. This is another avenue that Translink innovates in.
These improvements reduce the day-to-day operation costs of the system. But these improvements have to be done with the help of a multi-level government funding program and the courage to be able to remove space from motorists and redistribute it more equally. Both things the current provincial government does not want to do.
Confusingly, the Quebec provincial government insisted on spending 1.1 billion dollars on 1,229 electric buses (Gouvernement de Québec). As mentioned earlier in this article, this rapid transition towards battery electric buses could reduce the efficiency of the bus network, as these buses take 3.25 hours to recharge their batteries for up to 470 km of range (Nova Bus). This means that transit authorities will need to spend money to adjust existing bus depots, and the reduced amount of availability of electric buses could mean that more buses is needed to provide the same service.
FORT (Fonds des réseaux de transport terrestre or Land Transportation Networks Fund) had been in deficit since 2013. The FORT was set up as a way that the users pay to fix the road network and fund public transport operations and expansion. The FORT is funded by a tax upon car registration, yearly driver license renewal fees, and a tax of 19.2 cents per liter of gas sold, which had not changed since 2013. Revenues had also been stagnant due to the increase of electric vehicles and increased efficiency of road vehicles.
Revenues et expenses for the FORT. (La Presse)
To fill the shortfall, the government must therefore use public money to fill it, and therefore from those who do not use the transportation system as much. Therefore, not making car owners pay, leads to making everyone pay. Why does not the government want to increase the tax?
The main reason being the high amount we pay collectively to maintain our roads is getting out of hand, which is about 2.8 billion dollars per year (keep in mind that this money is only for highways and provincial roads, not for municipal owned roads). It is even more than the 2.66 billion dollars that was offered to public transportation agencies in Quebec, which includes the COVID relief fund of 1.4 billion dollars (Gouvernement de Québec).
The increase in 2020-2021 includes the 1.4 billion COVID bailout for public transit agencies. (La Presse)
But many say that roads are useful because it's not just for the transportation of people, but also goods and services, which justifies it's high cost. I would beg to argue that in fact, because roads are bogged down and congested so much by personal transportation, that it affects greatly goods and services to be moved. Arguing that spending more on roads to expand it, to remove congestion, would in fact worsen economic activity as those who did not have to drive, will drive and trips that did not have to occur, would occur (La Presse). It masks the true problem in roads, which is not the lack of capacity, but instead when there is capacity, it tends to get filled up quickly with non-essential trips.
Therefore, freeing up roads for those that need it, and for goods and services to move more quickly is essential. The only way to do that efficiently, is to create a modal shift towards public transportation and biking (C40 Knowledge Hub). It is proved in many studies that a modal shift can be generated simply by increasing the service on offer, even if existing services are not full. Future public transport services need to be frequent, all-day from 5 am to 1 am, along key corridors, not only in Montreal, but across Quebec.
Therefore, we need to urge our government to stop a historical mistake. Investing in an expanded road network, will just send the message that people have to drive and should not take public transport, which is the opposite of what is wanted. On top of this, the added infrastructure for roads that will be built, will be a burden for the future generations to upkeep, repair and eventually replace. All-levels of government (not just provincial) must intervene and work together to develop a funding solution that will allow not only to build new transit infrastructure, but also that provincial and federal funding could be used for operations.
Sunday, 19th of November 2023 @ 11 am.
The meeting will be at Square Victoria.
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