With great enthusiasm, I read Gordon Price’s synopsis of a new proposed plan for transit in Metro Vancouver, and more crucially, the funding methodology required to achieve it. Paul Hillsdon and Nathan Pachal recommend a 0.5% sales tax devoted to funding the region’s share of the $21.5 billion required to implement the transit improvements over the next seven years. (Almost) everyone pays; everyone benefits.
There are clear benefits to an improved public transit network, with frequent routes throughout the region. The authors cite reduced congestion and productivity losses, improved housing and transportation affordability, and social, health, and environmental benefits as examples.
Hillsdon and Pachal have clearly demonstrated why a sales tax is the most prudent solution. It is linked to the movement of goods and services through reducing congestion, and has been a demonstrably successful solution for funding transit in other regions, such as Seattle, Denver, and LA. It is acceptable given that the GST has been reduced by two percentage points in recent years.
The sales tax is also the most equitable, as it is applicable to everyone over the age of 15 who purchases goods and services in Metro Vancouver (about 84% of the population, according to the document). Stephen Rees rightly asks “why an ever more regressive tax system is supposed to be a good idea”. However, the negative impact of the tax on the poorest residents could be ameliorated with a tax rebate, similar to the current GST/HST rebate. It could be made even more palatable by removing less effective taxes, such as the gas tax (see below).
Other funding sources are unworkable at present. The gas tax is showing diminishing returns because of increased fuel efficiency and reduced driving. Regional mayors are rightly unwilling to increase the property tax burden on homeowners. Transit fares cannot be increased – many lower-income riders would not be able to afford the increases, and some riders would abandon transit; this is the opposite of what the plan is trying to achieve. A vehicle levy was previously rejected by residents in 2001, and is unlikely to be popular now.
Road pricing as a funding solution?
The report’s authors reject road pricing at present, arguing that it only applies to drivers, rather than all residents – despite drivers constituting a majority transportation share. However, in a comment on one of his recent posts, Hillsdon notes:
Once the tax is introduced and the transit system is “completed”, I think passing road pricing is realistic. But people need alternatives available first and the funding for those alternatives need to be stable and sustainable, not based on the mode we are trying to discourage.
I agree. While I am in favour of road pricing for encouraging a shift to more sustainable, less costly modes (transit, cycling, walking), and away from driving, the scheme would be more acceptable when the alternatives are essentially already built. It would be unfair to punish drivers with an additional cost when they do not have viable alternatives to driving in many regions of Metro Vancouver – specifically South of Fraser. We can reexamine road pricing/congestion pricing as a longer term funding solution, once the core frequent transit network, as envisioned in the plan, is built.
The time is now to Leap Ahead
Deftly dismissing the specious arguments about improving fiscal prudence within Translink (already achieved), and paying for transit through eliminating fare evasion (a comparatively miniscule amount, outstripped even by the cost of the new Skytrain faregates), Hillsdon and Pachal argue that the funding solution, and subsequent projects, must be implemented soon.
The provincial government, architects of a problematic structure within Translink (it is responsible for the conflicting needs of both roads and transit, with limited funding) and a disingenuous upcoming referendum on transit, are not taking the lead on implementing solutions. A modest sales tax to fund the transit improvements Metro Vancouver desperately needs is as affordable and straightforward a solution as we’ve seen yet.