Researchers suggest rethink of Calgary Transit funding ahead of budget

As city council prepares to debate a four-year budget, researchers from the University of Calgary’s School of Public Policy suggest a long-term financial framework for Calgary Transit should be part of the discussions.

The research, from Wenshuang Yu, Lindsay Tedds and Gillian Petit, examined the COVID-19 pandemic’s impact on Calgary Transit’s revenues due to a steep decline in ridership.

“As of December 2021, revenues from adult transit passes were about 30 per cent of their pre-COVID levels,” Petit told Global News. “So that’s a huge decline.”

The research showed revenues from youth fares, as well as low-income riders, rebounded more quickly throughout the COVID-19 pandemic, which researchers attributed to a higher dependency on public transit.

According to Petit, the research suggests Calgary Transit should develop a long-term financial framework to address the decline in revenues from fares if ridership doesn’t rebound in 2023.

Currently, the city’s policy is to fund 50 to 55 per cent of Calgary Transit’s costs with revenues from fares.

“They could subsidize that through increasing how much property taxes they’re using to pay for the expenditures of public transit, and they could increase fares,” Petit said.

Calgary Transit has proposed an increase to fares in the upcoming four-year budget, which could see adults paying four dollars per ride by 2026. Youth rides are also expected to increase from $2.45 to $2.65 over the four-year budget.

The proposed changes to fares would include adult monthly passes as well, which could climb from $112 to $126 over the next four years.

Seniors’ annual passes are expected to increase $19 to $169 in 2026, while youth monthly passes could jump $10 to $92 in the last year of the budget.

“We would caution increasing fares as our research shows that during the pandemic, it was children and concession users that really relied on public transit,” Petit said. “These are likely the groups that a fare increase would land on the hardest.”

The budget also proposes an eight per cent increase in funding for Calgary Transit, which budget documents said would help sustain service levels and improve service frequency.

Willem Klumpenhouwer, a post-doctoral fellow at the University of Toronto’s Transit Analytics Lab, told Global News that frequency and reliability are the two factors that help improve ridership.

“You have to lead with the service, and you have to lead with what you’re going for. You have to make that service attractive, and then the ridership will rise to meet it,” Klumpenhouwer told Global News.

“Sometimes we kind of do the opposite and we try to react to what we think the ridership is and it becomes a downward spiral.”

Klumpenhouwer noted increasing the frequency of transit would require a “significant” increase in operating expenses.

Ward 9 councillor Gian-Carlo Carra agreed the city needs to increase frequency of transit service and look at Calgary Transit’s reliance on fare revenue, but added it would be a “difficult conversation” that council “needs to have” during budget deliberations next week.

“The solution for transit in an age of climate change, in an age where we want to have more people riding more frequently and not just commuting once a day back and forth, is to run more buses and more trains,” Carra said.

“We’re ramping that up a little bit in this budget but it’s very timid, and if we’re going to achieve the things we talked about, we have to run a lot more — and that means spending more money.”

Carra noted the budget will be tight, with property tax increases in line with inflation plus population growth.

“I feel like this is a worst-of-both-worlds-type situation where we’re increasing taxes, and that’s going to make the people who don’t want to pay more taxes angry,” Carra said. “And yet, we’re not doing a bunch of the good things that we talked about, which is going to make the people who asked us to do good things angry.”

Calgary Transit officials said they couldn’t comment on the proposed budget until deliberations begin on Nov. 21.