Monday, August 22, 2011

NDP offers transit funding for freezing fares

According to a report on 580 CFRA, Ontario NDP leader Andrea Horwath promised her party would put pick up half of OC Transpo's operating costs if the transit utility would promise to freeze fares. From the story:
Speaking at the monthly Mayor's Breakfast, Horwath criticized the Liberals for not doing enough to help cities make transit affordable and championed her party's promise to take on 50 per cent of operating costs, in exchange for a fare freeze.

"It would begin to put cities like Ottawa on even footing with other cities around the world," Horwath told the crowd. "Other cities where national and regional governments step up to the plate and take on a fair share of transit funding."
The promise was also covered by the Ottawa Citizen.

Although I'm unable to price out this promise, if it were feasible, it would be a huge boon to OC Transpo; right now, they're re-couping fifty per cent of operating costs by fares, so if they freeze them (rather than lowering them), they'd actually be sitting on a pretty hefty budget surplus after the year.

Realistically, if the Provincial Governments (whether it's NDP or aything else) were to absorb half of OC Transpo's operating costs, we could see one of two things happening to offset that budget surplus:
  1. A pretty hefty fare decrease, because less of the operating costs need to be recovered at the fare box; or
  2. A lesser subsidy from the municipal government.

The second option seems significantly more likely, as unfortunate as that would be for transit users (although property tax payers in Ottawa would be happy with it).

What could Ottawa do with that money? A lot of things. Transit-wise, it could be put towards adding a few bells and whistles to the upcoming LRT project, or expediting the expansion of it further east, west, or south. (We could also see lower property taxes, but that seems pretty unlikely, too.)

The NDP is a way down in the polls leading up to the provincial election, but once again they're offering some of the most significant transit promises. We'll see what happens out of it.

1 comment:

Anonymous said...

There is a third option, one that governments always resort to when given some sort of windfall: a very generous wage increase.