New study shows the problems and solutions to Ottawa and Canada's transit woes

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Good morning,

One of our missions here at the Lookout is to explore urban city issues around Canada and the world, to put Ottawa’s issues into context, and to help all readers be more informed.

Today’s story is one of those, and it focuses on one of our favourite (or, I guess, least favourite) topics, transit. A new report has broken down the challenges and solutions for transit systems in major cities in Canada, with specific solutions for each city. 

We’ve broken down the report for readers. It’s a fascinating read and a comparison of how different cities are dealing with transit funding problems.

If you like these types of cross-city stories, let us know! And, of course, we’ve got our Monday list of events throughout the city. 

Let’s dive into today’s newsletter.

— Geoff Sharpe, Lookout co-founder

PS - If you find this newsletter valuable, please consider forwarding it to your friends. New to the Lookout? Sign up for free.

WEATHER

Monday: 18 🌡️ 12 | 🌧️

Tuesday: 19 🌡️ 12 | 🌤️

Wednesday: 21 🌡️ 11 | 🌤️

TRANSPORTATION

New study shows the problems and solutions to Ottawa and Canada's transit woes

Transit operators in major cities across Canada are facing massive financial challenges, with operational funding shortfalls potentially leading to service cuts across the board. 

Now, a new report from Leading Mobility called This is the End of the Line: Reconstructing Transit Operating Funding in Canada, lays out a host of solutions, tailored to each city, for how politicians can shore up the funding gaps. Today we’re breaking down this report, covering the two cities the Lookout operates in — Ottawa and Vancouver — so residents across the country can understand the scale and breadth of these challenges. 

What’s going on: The report outlines how post-COVID declining ridership and fares, the ongoing decline in certain types of commuting from remote work, and inflationary pressures on existing cost inputs, have created deficits for operational transit budgets. 

• For example, fewer people are purchasing monthly passes since they don’t have to go to work, a boon for families who hate commutes, but a problem for funding transit services.

As cities expand transit capital costs like building LRT or SkyTrains, and different levels of government chip in to fund those capital costs, operating costs also rise, and the existing taxation tools used by cities are not enough to cover these new costs. Senior levels of government are also less willing to fund those operational costs — it’s much more splashy for a province to fund an LRT or SkyTrain expansion than cover the maintenance costs and salaries for those transit workers. The report calls this the “Underfunding Trap”.

• As we’ve covered previously, if these problems aren’t dealt with, then the system may collapse into a transit death spiral, where fewer people use the system as route services decline.  

Canadian transit funding is very susceptible to demand changes. Prior to COVID, an average of 51% of transit operating costs in Canadian cities were funded by fares, compared to 39% in the US. Ridership dropped 85% across the country after COVID, causing part of the problem we see today. 

City funding formulas: Each city is somewhat different in terms of how they fund transit. Since the Lookout covers Vancouver and Ottawa, we’re breaking out each below.

• For Vancouver, the city uses a very small percentage of property taxes to fund transit, and varies by municipality. In Vancouver, it’s around 10%, while in Surrey, it’s 4.4%. The fuel tax covers 18% of funding, while fares cover 29%. It’s worth noting that property taxes are quite low in Metro Vancouver cities compared to similar-sized jurisdictions. 

• For Ottawa, fares cover only 23% of operating costs, with 55% from property taxes. It’s also worth noting that the system covers one city, while TransLink in Vancouver covers 21 municipalities of varying sizes. 

International examples: I’m a huge nerd when it comes to comparing how other cities operate compared to Canadian cities. Each place is different, but I’ve summarized the most interesting findings from the report’s analysis.

In the UK, private operators run routes, tendered by the government, with 59% of revenue derived from fares. The Mayor of London was recently given more power, allowing them to implement congestion pricing. Cities in Canada have less power to enact policies like that. 

For Germany, funding is more equitably distributed among different jurisdictions. In 2022, German adults were able to purchase a monthly transit pass for €9 per month, with around half of all German adults participating. After the trial ended, the government was pressured to reintroduce something similar, and a new €49 per month pass was implemented, costing €6 billion annually. 

You might think the United States would be more capitalistic. You’d be wrong. All levels of government provide around 75% of funding for transit, with the federal government covering 25% of that. Sales taxes are a primary mechanism.

Solutions: The biggest solution proposed by the report is the addition of operating funding as part of the Permanent Transit Fund, not just new capital projects. The report notes that unlike other countries in the report — Germany, UK and the US — we are the only national government that doesn’t provide operational funding. New routes require time to generate fare revenue. 

For municipalities, the report argues transit operators need more flexible forms of taxation and funding mechanisms, creating enabling legislation for them to act, though most agencies said the federal government would need to be involved with funding in a big capacity.  

• Counterpoint: The challenge with this is obviously politics. Both Ottawa and Metro Vancouver are suburban heavy cities, which require balancing the needs of both communities. 

The report argues that municipalities and transit agencies should increase public transparency about what happens when funding isn’t met, and the cuts that that could entail. TransLink has done something like this with the huge report that 50% of bus routes could be cut without new operational funding. 

The report identifies different funding models for each city, and is calculated based on a range of criteria, including equity and implementation.

Vancouver: TransLink faces a $600 million funding gap after 2025. The report’s main recommendation is a Vehicle Levy, which is a tax or surcharge on a vehicle registration. In Montreal where this is already implemented, this fee is expected to generate $125 million this year. 

TransLink also has the legislative authority to implement this, though councils and the provincial government opposed it in the past. Other tools include a Vehicle Kilometres Travelled Tax or an Electric Vehicle Charging Tax, similar to the Motor Fuel Tax already implemented in Metro Vancouver. 

Ottawa: OC Transpo’s budget gap is $140 million per year, according to CTV. An Off-Street Parking Tax is the main recommendation, which would target privately owned parking spaces, and could generate $101.7 million per year. This tax is already implemented in places like Vancouver and Montreal.

• Other tools include a Vehicle Levy. Gatineau is in talks with Quebec to implement one of its own. The last tool would be the Transportation Network Company Fee, to target ride-hailing companies like Uber on a per-ride basis.

What it all means: Should we add transit funding problems, next to maple syrup and beavers, as a national Canadian symbol? It sure feels that way after reading this report. Rather than playing a game of hot potato, each level of government has a role to play. It may even require (gasp) tough political decisions by our leaders. 

Further reading: You can read about transit death spirals in our members-only story here.

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OTTAWA BY THE NUMBERS

👮 25: The number of rounds recovered from the shooting in the 1000 Block of Bank Street on Aug. 10. Neighbours and businesses still have questions, while police have not released any other information. [CBC]

🏈 51: The number of yards that Lewis Ward kicked to score the winning field goal against the Calgary Stampeders last week. The CFL team now sits at second in the East, with a record of 6-2-1, three games behind the Alouettes. [TSN]

🏠 24: The number of supportive housing cabins coming to Brockville, which are envisioned as a temporary solution for people as they try to find a permanent home. [CTV]

CHILDCARE

More childcare money coming to Ottawa

What happened: Parents, things may, potentially, possibly, get better on the childcare front, as Ottawa will be getting $443 million in funding next year to support the $10-a-day childcare program championed by the federal government, according to CTV. 

• This is on top of the $308 million that was provided this year to the city. 

Background: One of the signature promises by the federal government was $10-a-day childcare for children across the country, funded by them and delivered through the provinces. The Liberals earmarked $30 billion in a five-year proposal for the provinces, with money arriving if they cut fees in half, followed by a cut to $10 in 2025-26, according to CBC.

Problems abound: Daycare operators who joined the program have struggled to stay afloat, as the program did not cover the costs of operating. The federal government said back in January that the provinces knew what they were signing up for when they joined the program.

The province altered the funding formula last week, announcing that they were changing compensation for the program, with more flexibility to pay staff. Yet advocates warn that what was actually needed was increased pay for workers, according to CBC.

NEW LOCAL JOBS

Check out the new open positions in Ottawa.

1. Account executive, federal government at Compugen

2. Director, procurement at Canadian Blood Services

3. Manager, communications at Deloitte

4. Portfolio manager, private market investments at CMHC

5. Associate producer/technician (French services) at CBC/Radio-Canada

Local jobs are selected by the Lookout team and are not paid ads, unless specifically noted.

THE AGENDA

🚆 The LRT will shut down Aug. 25 from St-Laurent to Blair stations, for work on connecting the Stage 2 expansion. The city noted that more work will need to be done in the future. [Ottawa Citizen]

🌧️ Crews continue to try and fix washed-out roads and flooded homes in Chelsea after high volumes of rainfall this month. Residents are still advised to bring their water to a rolling boil for one minute before drinking. It’s expected to take weeks to fix the damaged areas. [CBC]

🏥 After a brief closure on Saturday night due to a shortage of nursing staff, the emergency department at Almonte General Hospital reopened yesterday at 7 am. It was closed for a total of 12 hours from Saturday to Sunday. [Ottawa Citizen]

🏳️‍🌈 Groups are pulling out of the Pride Parade this year, including Ottawa Hospital, CHEO and Mayor Mark Sutcliffe, over a statement the organization made about the Israel-Gaza conflict. [Ottawa Citizen]

🐕 It’s not just the food bank that’s dealing with high demand. Ottawa Humane Society’s pet food bank is also dealing with increased demand for animal food from pet owners. [CTV]

👮 A man who was reported lost on Thursday near Britannia Beach was found and has been declared deceased by police. It’s been reported he was last seen in the water the day before. [Ottawa Citizen]

EVENTS

Capital Fair | 3837 Albion Road | Until Aug. 25 | Come see the agricultural and wildlife exhibits, music and food | Various prices

Company of Fools — Macbeth | Various locations | Until Aug. 24 | This year it’s Macbeth, at Raven Park, Alta Vista, Strathcona and more | Learn more

Toddler Tuesdays | National Arts Centre | Aug. 20, 10 am | Crafts, arts and singing for kids aged 18 months to four years | Free

Taste The Rainbow – A Queer Wine Social | Corner Peach | Aug. 20, 6 pm-10 pm | Try a selection of curated natural wines | Tickets starting at $31

Bridgehead Roastery Tour and Coffee Tasting | 130 Anderson Street | Aug. 21, 1 pm-2:45 pm | Come see a behind-the-scenes tour of the roastery | Tickets $12

Summer Sounds Concert Series | Andrew Hayden Park | Aug. 21, 7:30 pm | Bring your lawn chair and enjoy classical music | Free

Public Archeology Digs | Leamy Lake Park | Aug. 21, 9 am and 5 pm | Come dig and help uncover artifacts with the NCC Archeology Program members who supervise the digs | Free

Capital Pop-Up Cinema | Sparks Street | Aug. 23, 8 pm | Come see Mama Mia! | Free

Lowertown Brewery's Summer Brewfest | Lowertown Brewery, ByWard Market | Aug. 23, 6 pm-2 am | Byward’s first Oktoberfest with dance, music, food and local beer | Tickets $8

RESTAURANT PREVIEW

Where to find some of Ottawa’s best chicken (that isn’t KFC)

Written by our food editor Ralf Joneikies

Growing up in Ottawa, I look back and recall how simple the food scene was back then. Chicken for example, before we all learned to speak in code, was Kentucky Fried Chicken. Once a month my parents had enough to splurge on a bucket of the Colonel’s finest and I always volunteered to pick it up.

I have a soft spot for those memories, but today we Ottawans have a much more global set of chicken options. In the next Capital Eats, we share we you what we feel are two of the city’s best.

To read this story, subscribe to our free food newsletter instantly by clicking here.

TOP PHOTO

One Reddit user managed to capture these great shots at the airport.

GOOD NEWS

Start your Monday off with some good news:

Last year an Ottawa woman, Alaina Tripp, had her dog stolen from her home which was caught on camera. It’s a traumatic experience for any pet owner. And after a year, it’s hard to imagine ever getting that pet back. 

But fate must’ve had different plans, according to CTV. Alaina was reunited with her pet this month when a man was pulled over for a traffic violation. The man’s name was run through the system, and he had a warrant out for a stolen dog.

The crazy part? The man was caught in Wyoming, in a small town called Riverton. It was a complicated trip home, but Alaina was able to reunite with Teddy.

COMMUNITY HIGHLIGHTS

• If you follow TikTok, you may have seen Cucumber Boy Logan Moffitt. It turns out Moffitt is an Ottawa local, and shares his experience of becoming a viral sensation. [Ottawa Citizen]

• Here’s a lovely story about a pilot’s letter written during WW1 that brought together two different families in Ottawa. [CBC]

• It looks like favourite ice cream spot Moo Shu has custom designed t-shirts selling at Uniqlo. [Reddit]

• Speaking of ice cream, here are two spots in town that our food editor reviewed last year.