Shortfall after 2026 would result in 60 per cent reduction in service as rapidly growing Metro Vancouver needs new infrastructure
TransLink is staring at a $600 million-per-year void starting in 2026 — $4.7 billion by 2033 — if it can’t shore up its pandemic-damaged finances with a new funding model, the agency’s Mayors Council has heard.
The projected deficit represents about 30 per cent of TransLink’s annual revenue and “by the end of 2025, there’s either something new in place or you’re looking at a 60 per cent reduction in service,” said Brad West, Port Coquitlam’s mayor and chair of the Mayors Council.
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And that would happen “at a time when the region has never been growing more,” he added.
Senior governments have insulated Metro Vancouver’s transportation agency from the worst of its financial problems — including the collapse of fare revenue during the pandemic, diminishing returns from gas taxes, and inflation on expenses that have crushed TransLink’s budget — with $850 million in pandemic emergency funding.
TransLink’s last bailout, $479 million committed in the province’s 2023 budget, runs out in 2025 and CEO Kevin Quinn said that “after that time there is still no alternative funding model and the clock is ticking.”
Quinn’s report now puts stark numbers to the pitch that the Mayors Council has been making for more than a year looking for help from the provincial and federal governments to revamp its finances.
“Simply put, we need a better and more sustainable way to fund transit to ensure we can keep up with the high demand for transit in our region,” Quinn said in his presentation to Wednesday’s Mayors Council meeting.
In Surrey, the biggest municipality south of the Fraser River and where TransLink’s ridership is now bursting at the seams at more than 120 per cent of pre-pandemic traffic, the negative consequences of not filling the financial gap “are enormous,” said Mayor Brenda Locke.
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TransLink and its members have been impressing upon Victoria and Ottawa this importance considering “this is something they’re partially responsible for,” Locke said.
TransLink and the province have been among the transit systems and governments lobbying the federal government to create a permanent transit fund.
“Certainly if we’re increasing housing and doing all the things that other levels of government are asking us to do, it’s crucial that they participate in all of that need (for) infrastructure,” Locke said.
West said federal targets for immigration in particular, which added 77,000 new residents to Metro Vancouver, are among the government decisions placing demands on the region’s transportation network and “having a significant impact on the financial viability of TransLink.”
Historically, West said the model for federal participation in transit has been to pay for a portion of construction costs to build infrastructure, but “just constructing a transit extension is only half the battle. You then have to operate it.”
“We’ve been having those discussions (with Ottawa),” West said. “I would describe them this way: everybody says the right things, everybody says they understand the why, they understand the urgency.
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“But we haven’t seen anything concrete,” West said. “We need the follow through and we need it now because this can has been kicked down the road so many times over many, many years and there’s no more road left to kick the can down.”
Federal officials did not respond to Postmedia questions by deadline. However, in a statement, B.C. Minister of Transportation Rob Fleming said “safe, affordable and reliable transit service is a top priority” for government, which remains committed to pushing Ottawa on creation of that new permanent transit fund.
In his statement, Fleming listed the contributions Victoria has made to TransLink, including support to make transit free for children 12 and under and $2.4 billion in capital spending to back TransLink’s 2022 investment plan, which includes Surrey to Langley SkyTrain and bus-fleet electrification.
“We are actively working with TransLink on identifying potential long-term sustainable regional revenue options to help ensure a robust transit system long into the future to support priority expansion projects included in TransLink’s 10-year priorities,” Fleming said.
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Quinn noted that TransLink’s 18.5 cent per litre gas tax has become a stagnant source of revenue, which is set to decline dramatically, “and we know they’re not coming back.”
Locke said TransLink will “have to put everything on the table,” to find a sustainable funding formula.
“I don’t know what (all the options) are right now, but certainly people that drive cars are going to be responsible to some degree,” Locke said. She didn’t mention road pricing or vehicle levies specifically, but added “I think everybody is going to have to contribute to that.”
On the positive side, Quinn said that system-wide, TransLink has recovered 90 per cent of its 2019, pre-pandemic ridership making it the fourth busiest rapid transit and third busiest bus operator in North America. And the authority expects to hit 100 per cent recovery by next year.
“Each week the equivalent of one-third of (Metro Vancouver’s) population relies on our transit system to move them through the region,” Quinn said.
But the difficulty is that getting back to 2019 ridership levels would still be 20 per cent below pre-pandemic projections for where ridership would be by 2023.
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Travel patterns of transit users are also different with fewer regular long-distance commuters on weekdays, and a lot more weekend travellers, which influences revenue.
“Prior to the pandemic, fare revenues were our largest and fastest growing revenue source,” Quinn said.
Those revenues helped back big increases in service “that created a self reinforcing circle,” of increased ridership and revenue that was destroyed by the pandemic, Quinn said.
And getting back to 2019 ridership levels “doesn’t mean we’re able to pick up right where we left off,” Quinn said.
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