Alberta steps up with $79.5M transit money for struggling cities, matches federal funds

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Alberta steps up with $79.5M transit money for struggling cities, matches federal funds
Edmonton's transit system will get federal and provincial funding to make up for pandemic revenue shortfalls. Breanna Karstens-Smith reports. – Mar 11, 2022

Two weeks after the provincial budget left Alberta’s major cities empty-handed when it came to critical transit operations, the provincial government is stepping up with funds that also triggers a cash injection from Ottawa.

On Friday, the Alberta government said it would partake in the federal-provincial grant program to support municipal transit systems affected by COVID-19.

“I am pleased to announce that Alberta’s government will step up with $79.5 million for transit systems in Alberta municipalities that are feeling the financial pinch brought on by the pandemic,” Transportation Minister Rajan Sawhney said in a statement.

“Our commitment will match the federal government’s recent funding announcement.”

The announcement out of Ottawa on Feb. 17 said the federal funding would be conditional on provinces and territories matching its contribution and accelerating their efforts to improve housing supply, in collaboration with municipalities.

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The federal government said its funding, up to $750 million nationwide, would be allocated to provinces using a formula already used for the public transit stream of the Investing in Canada Infrastructure Program.

The calculation is based on a mix of transit ridership (70 per cent weight) and population (30 per cent weight).

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The one-time payment aims to help cities maintain service levels despite decreased ridership as a result of the pandemic.

“This plan allows for providing municipalities with nearly $159 million to help offset losses to transit revenue, which in turn has affected their operating costs,” Sawhney said, adding that barring any questions from Ottawa, the province will move quickly to advance grant agreements with municipalities and get the money distributed.

The province said recipient municipalities will be required to utilize all funds on transit operating shortfalls or transit capital.

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The news comes two weeks after Edmonton Mayor Amarjeet Sohi slammed the province for not including this type of support in the 2022 budget.

The city asked the province for $41 million to help cover a transit operations shortfall, but that was not funded. On Friday, Sohi said he was very pleased with the turn of events.

“We will be the first municipality to fully recover from the pandemic by end of 2023 or early 2024, with this support from the federal government and the provincial government,” he said.

Sohi thanked Sawhney for her leadership and the way she worked with both the City of Edmonton and other municipalities to make it happen over the past few weeks. He said she was a strong advocate for getting as much funds as possible.

“I am satisfied, even though it’s not the full amount that we asked for,” Sohi said. “This is significant support, so I don’t want to anyway undermine that aspect.”

The mayor said the money will allow the Edmonton Transit Service to continue to run at 100 per cent capacity.

“I think it will go a long way for us to continue to run our transit systems and continue to provide this service to Edmontonians and help with economic recovery.”

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Sohi said it is not yet known exactly how the $159 million will be split across Alberta, as the province and feds are still in talks on the final deal, “But I can tell you, it’s going to be a significant amount of investment in Edmonton’s transit system that we’ve been asking for.”

It was exactly two years ago that the World Health Organization declared the COVID-19 health crisis a pandemic, triggering millions of people worldwide to begin working and studying from home, resulting in a widespread drop in transit ridership.

The timing of Friday’s announcement is perfect, Sohi said, as the Alberta government ended most public health restrictions related to COVID-19, including a provincial work-from-home order, on March 1.

Sohi expects more and more people to begin commuting to work and school again in the weeks and months to come.

“You will have thousands and thousands of more people using public transit, so we need to continue to run that system at 100 per cent capacity,” he said.

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“Had it been delayed, I think the consequences would have been worse for our city.”

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The City of Calgary was also hoping for transit funding and expressed similar disappointment at budget time.

Calgary was projecting an $89-million shortfall for 2022. Calgary transit’s revenue budget shortfall for 2020 was $93 million, and in 2021 it was $106 million.

Calgary Mayor Jyoti Gondek also thanked the transportation minister for securing the emergency operating funds, calling it “late-breaking and much welcomed news.”

The City of Calgary also does not yet know how much of the funding it will receive.

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The Canadian Urban Transit Association thanked the provincial government for Friday’s announcement, saying Alberta is the first province to partner with Ottawa.

“Every day, about 300,000 Albertans rely on transit to get to work, school, and for daily life,” CUTA president Marco D’Angelo said. “(Friday’s) announcement means buses and trains will keep running as they have throughout the pandemic.”

“Public transit is essential to cities, and Alberta’s support is needed and welcome.”

CUTA said when the pandemic began, the federal and provincial governments delivered an unprecedented $4.6-billion to keep transit running across the country, even as ridership plummeted.

The funds are expiring, but ridership is still at about half pre-pandemic levels, the organization said, adding about 40 per cent of the cost of running Alberta transit is covered by fares.

“For every 10 per cent drop in ridership, Alberta transit systems lose $31-million in revenue. Without extended support, service reductions would likely be inevitable,” the organization said in a statement.

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