Trudeau confirms $30 billion annual permanent transit fund by 2026

Trudeau confirms $30 billion permanent transit fund for public transit expansion across Canada

A RapidBus vehicle in Metro Vancouver (TransLink), a TTC Subway train (JHVEPhoto/Shutterstock), and a STM Montreal Metro train (Benoit Daoust/Shutterstock).

New fine details have been revealed on how the federal government’s new permanent public transit fund will help cover the cost of building new and improved public transit infrastructure across Canada.

This comes five years after the federal Liberal party first promised such a program during the 2019 federal election campaign.

As of today, as announced by Prime Minister Justin Trudeau, the program is now formally known as the “Canada Public Transit Fund” (CPTF), and it will provide $30 billion in funding to public transit authorities for their projects over 10 years or an average payout of about $3 billion per year.

As well, it was reaffirmed that the fund’s start date is still two years away — in 2026.

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“We’re making the largest public transit investment in Canadian history. Our government’s new Canada Public Transit Fund will invest $30 billion in community infrastructure to expand, improve, and modernize public transit — giving Canadians affordable options to get around and making sure housing development is linked to that funding. Let’s make public transit better, faster, and easier to use,” said Trudeau.

The CPTF is not an operating cost subsidy; rather, it is intended to go toward capital costs such as building new and improved rapid transit lines, acquiring new buses and trains for replacement or service expansion, new public transit passenger ferries, improved maintenance facilities to support better services and active transportation, and other upgrades and state-of-good repair works.

But the major public transit authorities and local, regional, and provincial governments will have to a considerable amount of work over the next two years to achieve the full possible amount funding as a measure to optimize the federal investments for transit-oriented developments, specifically for new housing. The full amount will not be automatically provided to these public transit authorities.

The $3 billion annual fund will be divided into three separate streams.

The “Metro-Region Agreements” stream will support Canada’s largest public transit systems, such as Greater Toronto, Metro Vancouver, Greater Montreal, Calgary, Edmonton, Winnipeg, and Halifax. This funding stream will be established as partnerships between the federal government and provinces and their large urban areas. It will be based on merit, with the highest amounts of funding going to the most ambitious partnerships, including plans that best demonstrate how investments in public transit will help catalyze more housing.

As part of the application process, public transit authorities and local and regional governments must create an “Integrated Regional Plan” for their metropolitan region to receive a share of the Metro-Region Agreements stream. This plan must detail capital public transit planning over 10 years and consider impacts on ridership, housing supply and affordability, climate change, and social equity. To assist the regions in creating such a detailed plan, the federal government will provide $20 million in upfront funding between 2024 and 2026 to eligible regions for such planning activities.

Two-thirds of the CPTF or $2 billion per year — $20 billion over 10 years — will go toward the Metro-Region Agreements.

“This fund will offer substantial significant and predictable funding in regions with the highest funding demand and most complex public transit networks. Funding will support diverse projects, both from planning and feasibility studies to major and capital expansion projects, based on priorities identified in an Integrated Regional Plan,” reads the federal government’s description for the Metro-Region Agreements.

The second stream of “Baseline Funding” provides predictable funding to communities across the country with an existing public transit system based on their population and ridership. This will support communities of all sizes in upgrading, replacing, or modernizing their public transit infrastructure, including system expansion, lifecycle extension, and performance upgrades.

The Baseline Funding will account for 17% of the CPTF, with $500 million per year or $5 billion over 10 years.

As a condition for both the Metro-Region Agreements and Baseline Funding, the local and regional governments are required to eliminate all mandatory vehicle parking requirements for new buildings within an 800-metre radius of a high-frequency transit aline, and allow high-density housing within an 800-metre radius of post-secondary institutions. Such requirements were hinted at by Trudeau this past spring and are similar to the Government of British Columbia’s new transit-oriented development legislation of establishing 800-metre Transit-Oriented Areas within 800 metres of designated rapid transit stations and major bus exchanges.

The third stream of “Targeted Funding” will support active transportation (walking and cycling infrastructure), rural and remote public transit, public transit investments in Indigenous communities, and the electrification of public transit and school buses. This will be offered on a project-by-project basis through calls for applications.

Another 17% of the CPTF or $500 million per year — $5 billion over 10 years — will go toward the Targeted Funding stream.

“Public transit is an invaluable tool in making people’s lives more affordable, tackling climate change, and better connecting communities,” said federal housing minister Sean Fraser.

“We are excited and proud to launch the Canada Public Transit Fund today, and with it, to bring a new approach to transit funding in this country. This fund not only gives us an innovative way of working with partners on transit and active transportation projects but will also go a long way in our work to help build more homes.”

CPTF will begin providing significant funding in April 2026.

The $30 billion CPTF over 10 years between 2026 and 2036 is equivalent to the $30 billion the federal government has committed to new public transit projects over the past 10 years since 2015, including SkyTrain Millennium Line’s Broadway Extension in Vancouver and the Finch West light rail line in Toronto. The federal government’s previous commitments over the past 10 years were largely based on a formula of federal funding covering 40% of the project’s capital costs, with the remaining 60% covered by local, regional, and/or provincial governments.

The CPTF is in addition to the portion of the separate annual Canada Community-Building Fund (CCBF) that goes toward public transit infrastructure.

Early in 2024, Canada’s three largest public transit authorities — Metro Vancouver’s TransLink, the Toronto Transit Commission (TTC), and the Société de transport de Montréal (STM) — jointly called on the federal government to expedite the start date of the CPTF to early 2024 instead of the original schedule of 2026 to support critical projects and programs, such as for buying new buses and trains to replace aging fleets sooner than later.

Additionally, the three public transit authorities asked the federal government to permanently double the CCBF as a proven, predictable funding stream for municipal infrastructure needs toward public transit.

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