Calgary Transit’s free fare zone that runs through the heart of the city is going to look a lot more green, years before the Green Line comes into operation.
Friday morning, Mayor Jyoti Gondek announced TD Bank purchased the naming rights for the stretch of track that runs from 11 Street S.W. to 3 Street S.E. under a five-year agreement.
“This partnership to create the TD Free Fare Zone is a unique step for our city, and it’s actually the first time that a transit agency in Canada has worked with a sponsor to rename a section of its network,” Gondek said.
“Once again, Calgary is leading the country. We’re finding innovative revenue sources to support our operating costs while we look to expand transit service and improve reliability.”
Gondek and transit officials would not release a dollar amount the sponsorship brings into non-fare revenue for Calgary Transit, nor how many companies responded to the application process that began in 2021.
“The deal is very precious to the city and we cannot disclose the dollar amount,” Gondek said. “It is going to offset the operating costs of the free fare zone.”
A recent study from the University of Calgary showed transit fare revenues as a proportion of expenses have been nearly cut in half since the onset of the COVID-19 pandemic.
“The drop in revenue from transit fares was the largest source of revenue decline for Calgary Transit,” the report read.
As part of November’s budget deliberations, city council approved using budget surpluses to freeze transit fares at 2022 levels for next year and to cover the cost of transit for children under 12.
New look with the new name
The mayor said it was “critical” for the city to work with the private sector “particularly as we look to revitalize our downtown core and offer a safe, affordable transit network.”
“Early in the new year, you can expect to see some interesting branding around the city – flashes of green, as we like to say at TD – as well as some marketing activities where we could surprise and delight some C-Train riders,” Robert Ghazal, TD senior VP, said.
“We know the C-Train is a fantastic mechanism to bring people to different events, whether they be cultural, economic or just to enjoy the vibrancy of our city.”
The multinational banking, insurance and financial services corporation already has a downtown presence, with TD Canada Trust Tower sitting above The Core shopping centre on 7 Avenue S.W. at 4 Street S.W.
It also owns naming rights for a number of sports venues, including TD Place Stadium, home of the Ottawa Red Blacks, TD Garden, home of the Boston Bruins and Boston Celtics, and TD Ballpark, home for the Toronto Blue Jays spring training games.
Ghazal said this isn’t the first transit-related infrastructure with TD green on it.
“Union Station in Toronto is actually heavily (TD-)branded and we have a fantastic partnership with the operators,” he said.
One sports economist called the sale of the Calgary Transit-related naming rights a “fantastic idea.”
“You already have advertising on the side of the trains themselves. TD already has a presence in the downtown core — it’s one of the stops, essentially — so why not allow them to add some of their dollars into the local economy?” Concordia University economics professor and Alberta resident Moshe Lander said.
“If it adds dollars into the local economy, if it adds money in a way that we don’t need to see as big of a tax hike on property taxes, then welcome aboard — literally and figuratively.”
The city has had a policy for sponsorship and naming rights since 2016.
Lander said sports franchise owners have, for decades, tapped into the additional revenue selling the name on an arena brings in.
The Concordia economist said companies that buy naming rights usually expect equal or greater value in new customer activity, or as an advertising-related tax write-off.
Lander said it also creates brand associations on a relatively low-risk property, even if performance of the city-owned and operated transit service drops.
“That’s not on (TD). Even if somehow they got associated with poor quality service, then they would just yank their dollars and say ‘Thanks’ when the contract is up, ‘We don’t want to renew it.’”
Renderings from the city show TD-branded banners hanging around the Downtown West/Kirby train station.
“We’ll maintain the current practice of having wrapped C-Trains come through 7 Avenue, but we won’t have banners that represent any other agencies,” Calgary Transit director Sharon Fleming said.
The other out-of-home advertising by Pattison Outdoor will remain in place, she said.
On Thursday, TD Bank Group announced its fourth quarter profits beat expectations, thanks in part to higher interest rates.
For its full year, TD reported a profit of $17.43 billion on $49.03 billion in revenue, compared with a profit of $14.30 billion on $42.69 billion in revenue in the previous year.
— With files from The Canadian Press
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