A transportation blog.

A transportation blog.

How Quebec’s continual investment in cars and divestment of public transport is putting Quebec’s economy behind.

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November 12, 2023

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.

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Understanding your local bus network should not be as hard.

Why does the car-centricity harm Quebec's economy so much?

Note.

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 directly supports it's economy when investing in public transport.

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.

97%

of STM's expenditures are realized inside Quebec's borders.

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.

But public transportation is just a deficit!

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.

"This will come as a surprise to many people conditioned to believe that building new roads, installing new pipe and making other capital investments will stimulate the economy, create growth and provide jobs. Don't get me wrong: the spending it takes to get those projects off the ground may do all of that. But it also creates a future obligation for the government to maintain a road, a pipe or a building that people now depend on. Do the math; in our current development pattern, it never adds up."

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.

Spending money on our roads is the true deficit.

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

for expanding highway capacity and extensions within the next decade

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

for improving public transport infrastructure within the next decade

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).

"Electric buses aren’t the most effective way for transit to help the climate — getting people out of cars is. And riders care about how often the bus comes and how reliably it operates, not the fuel it uses. Still, there’s no doubt electric buses are good. But when I talk to people who plan, schedule, and operate transit systems they’re really worried, and for good reason. I’ve heard about three big issues with converting bus fleets to battery electric buses: infrastructure, reliability, scheduling. (Generally, agencies aren’t considering trolleybuses; they should.)"

We need to start looking for long-term financial sustainability.

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)

But I pay a lot to operate my car, therefore I must be paying my fair share, right?

"Motorists underestimate the total private costs of car ownership, while policymakers and planners underestimate social costs. Cars are expensive because of their high ticket price and depreciation and the additional costs incurred by insurance, repairs, and fuel purchases. Mass motoring’s social costs—known to transport wonks as negative externalities—include carbon emissions from burning petrol and diesel, congestion, noise, deaths and injuries from crashes, road damage, and costs to health systems from sloth. Other subsidies, such as the copious provision of free off-street car parking, are often mandated in building codes. America's 250 millions are oversupplied with an estimated 2 billion parking spots yet spend 95% of their time going nowhere."

If people knew the true cost of ownership for their cars, car ownership would decrease by

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)

"Clearly, automotive advertising has succeeded in convincing many people that they need an SUV when they don't necessarily, especially since SUVs don’t align with what the report says are the most important purchase criteria: price, safety and the cost of gas. It’s well documented that light-duty trucks, including SUVs, are more expensive to purchase, more dangerous to other road users, and are typically less fuel efficient than smaller vehicles."

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.

So why should public transport be subsidized at the end?

85%

of STM's expenditures are directly related to operations.

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.

"Transit is deeply deserving of public subsidy because its use produces societal benefits that economists call positive externalities, such as reduced emissions and traffic crashes, while also helping to achieve social goals related to equity. It is entirely appropriate for federal, state, and local governments to provide financial support, particularly in ways that make transit service more frequent and reliable (and therefore useful)."

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.

85%

of costs of driving a car are funded by society

61%

of costs of taking public transport are funded by society

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).

Quebec is behind compared to it's peers, economically, mainly because of car focused transportation systems.

Case study

The government investing 20 billion in public transit in the Greater Montreal Area would allow:

64

billion dollars

household spending saved from not spending it on car transportation

15 to 36 billion dollars

spent on public transportation

43 extra billion dollars

in household's pockets that could be spent on activities such as going to the restaurant, purchasing clothing and furniture, doing leisure activities, etc. These are activities that benefit the Quebec economy and boost job creation.

29 billion dollars

of economic benefits which will enable Quebec to catch up compared to other Canadian peers.

45%

of household car expenditures do not benefit Quebec's economy

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.

If Quebec spent 10 million dollars on:

Public transport

Car-oriented transport

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 do