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Greater Niagara Chamber of Commerce

Transit Consolidation

The issue of public transit is of great importance to the business community. After our 2015 Niagara Economic Summit, we polled attendees to identify the top issues to emerge from that event – and integrated public transit with a single farebox was the most important issue by far.

Improved public transit offers many benefits to the business community. Moving people around more efficiently means a larger labour pool and employees who can get to work more easily. It means more students can find jobs and internships in their fields, helping better train the workforce of tomorrow, and it helps employers find motivated and interested employees for their industry. The success of the GO train, when it comes to Niagara, will depend in large part upon the efficiency of the feeder services that bring people to and from the GO stations.

Since January 2016, the Inter-Municipal Transit Working Group of Mayors, CAOs and transit managers from St. Catharines, Welland and Niagara Falls, with support from the Regional Chair and CAO, has been working together to develop options for integrated transit services for Niagara. The group has been working with Dillon Consulting to develop options for an integrated transit system that works for all of Niagara. The GNCC has partnered with the working group and with Dillon Consulting, putting together roundtables of local employers to offer their input on the future of Niagara transit.

The final Dillon report presents a governance strategy that recommends a consolidated transit model. This would see St. Catharines, Niagara Falls and Welland Transit systems combine their services into one large consolidated transit system to serve the entire Niagara region. The consolidated transit model would allow local municipalities to maintain control over transit system planning and allows the Region to be involved in the funding and decision making of inter-municipal connections.

The recommendation for consolidation calls for the creation of a new governing body such as a municipal service board or commission made up of representatives from St. Catharines, Niagara Falls, Welland and Niagara Region with advisory representation from Niagara’s municipalities involved with connecting transit services.

Implementation would require “triple majority” for approval – a majority on Regional Council, and then a majority of municipalities representing a majority of the population.

The Dillon report analyzed three proposed models: the status quo; a consolidated model in which St. Catharines, Niagara Falls, and Welland merge their transit services into a single consolidated system; and a regional model, in which transit services would be handed over to Niagara Region. They recommended the consolidated model.

The consolidated model is estimated to cost an additional $254,700 over the status quo in 2018, with the bulk of the increase being made up by Niagara Region and Welland. One-time costs of the consolidated model are $704,000, most of which is for bus restriping and bus stop replacement, with a possible further $450-740,000 for further studies and reviews as necessary. An additional $9.3-15.9 million in capital costs are projected in years 1-3, with a further $1.2-1.3 in years 4-7. However, this is for items such as the expansion of maintenance facilities in St. Catharines and Welland, fleet expansion, and a smart card system, which are developments that would – or should – happen regardless of consolidation. Additionally, a consolidated system has a greater chance of accessing federal infrastructure funding to support such items as facility expansion and smart card access.

In St. Catharines, each resident pays $177.05 per year on transit. The increased 2018 operating costs of the consolidated model would increase that levy by 36 cents per year. In Niagara Falls, it would be less than two cents. Even in Welland, which must pay more owing to needing the most work done on its fleet and upgrades, the increased cost per capita is a mere $2.84, but on existing costs of only $94.43. This is not unaffordable.

This increased cost delivers more service and makes some notable improvements in efficiency which would free up resources. For instance, duplicate services to Brock and Niagara College could be eliminated, allowing the expansion of off-peak service on key corridors, a new Niagara-West inter-municipal transit link integrated with GO transit, and improved connections to the forthcoming GO train such as an express service between Welland and the St. Catharines GO station. The plan would also use integrated fares and payment technology.

Remaining with the status quo would also incur costs. Annual net operating costs are projected to increase, due partially to inflation but also to the need for new mechanics to maintain reliability of the bus fleets and new maintenance facilities in St. Catharines and Welland, the need for additional supervisors and planning staff, and service growth such as the move to 30 minute peak frequency on all routes in Niagara Falls, a new cross-town route in St. Catharines, Sunday service in Welland, and service expansion in Fort Erie and the potential for new services in Grimsby, West Lincoln, and Lincoln.

When talking about transit costs, it is important to note that public transit never makes a profit. One of the only examples in the world of a profitable mass transit business is in Hong Kong, but even there, the Hong Kong MTR (Mass Transit Railway) does not make a profit from fares – even in a city where three times the population of Toronto is crammed into an area smaller than Guelph and where 90 per cent of the workforce uses the transit system to get to work. Instead, they make a profit by leasing land they own around transit stations, and are one of Hong Kong’s biggest developers and landlords.

The Niagara Community Observatory found in 2012 that poverty that costs Niagara $1.38 billion per year, including social transfers, private costs, and social costs. A major part of the cost of poverty stems from lack of access to jobs and services which are consequential to a sub-optimal transit system. Investment in public transit will be met with a payoff in terms of a reduction in the cost of poverty as Niagara residents are able to find work, move out of social housing, and access medical services. This means not only a reduction in social funding from taxation, but also a decrease in needed private contributions and social costs, helping to grow the local economy.

It is also worth mentioning that the biggest transportation-related recipient of tax subsidies is, in fact, the private car. In 2016, the City of St. Catharines spent seven million dollars on maintaining roads, bridges, traffic lights, road signs, and other infrastructure necessary for private cars. This does not even include the cost of maintaining parking lots and garages, or the opportunity cost that the valuable land they occupy represents. The City of Welland spent $2.4 million on maintaining roadways, street lighting and traffic control alone. Of Niagara Falls’ $15.5m transportation budget in 2016, nearly half – $7 million – was spent on maintaining roadways. These costs, which are paid out of general tax revenues and which are not passed on to the private drivers who make up the overwhelming majority of traffic on these streets, represent a massive taxpayer subsidy of private vehicles.

Surveys have repeatedly found that taxpayers are willing to subsidize public transit, and to pay more for a better system. Our own survey after our 2015 Niagara Economic Summit found that the business and community leaders who attended prioritized consolidated public transit with a single farebox as the most important political and economic issue for Niagara. Our 2016 municipal budget surveys found that infrastructure was a bigger issue for businesses than taxes and that businesses would much rather see investments now instead of tax cuts and deferrals. Public was transit rated as one of the more important items affecting business, and nearly half of respondents said that public transit needed to receive more funding – while less than a third felt that current funding was adequate.

The business community is willing to bear this cost because they recognize it as an investment in business development and attraction. Employers looking to grow their businesses need workforces with mobility, whether they are small-to-medium enterprises looking to scale up, or large firms moving to the region.

The various governments of the region are also investing substantially in bringing the 2021 Canada Games to Niagara, but without a consolidated transit system, it is likely that the games committee will pass over Niagara in favour of a more integrated community. It is not just the transit services while the games are being played, in which additional investment will be made, but the transit services for visitors who arrive early or stay late, who will find themselves unable to get around the region when the games-only services are not running.

The report projects that ridership will increase as a result of this consolidation, with boardings per revenue vehicle hour increasing from 14.08 in 2016/2017 to 16.92 by 2023, and boardings per capita from 1.67 to 2.25 – an increase of 33 per cent. The value of a public transit system is not in revenue but ridership. More riders mean more people accessing jobs, education, healthcare, and so on, less pollution, less congestion on public roads, etc. This is the ultimate goal of a public transit system.