New government funding will eliminate need for TransLink service cuts for now

Jul 30 2020, 2:39 pm

TransLink will almost certainly be the primary recipient of the nearly $1.1 billion in senior government funding that will be allocated to public transit systems in British Columbia, but the precise amount has yet to be determined.

The federal and provincial governments last week confirmed they would each provide $540 million to support the operating costs of BC’s public transit systems in the backdrop of COVID-19.

The federal allocation is part of a $19-billion fund to provide emergency operating funding to municipal governments and public transit agencies across the country.

During today’s Mayors’ Council meeting, TransLink CEO Kevin Desmond said they are still working on the fine details on the funding with the provincial government. They expect to achieve a firm understanding by September, so that TransLink can develop an operating budget by the year for 2021, and begin to develop an updated capital investment plan.

For the time being, the operating funding will reduce the need to cut service levels, but uncertainty remains given that ridership is still greatly below normal levels, although it has improved substantially since the pandemic low.

“This funding very likely removes any pressure from our end to reduce services, and that’s something we were very concerned about,” said Desmond, noting that it is sufficient to close the near-term fiscal gap.

“However, the nature of our deficit remains unclear. We’ve developed several scenarios that have modelled how the pandemic could play out.”

Ridership is now 40% of normal levels — up from below 20% in April. By September, when students and more people return to work, ridership levels could potentially reach 50% to 60% of normal, but this depends on the pandemic’s trajectory and its continued impact on the economy.

About two third of TransLink’s revenues typically depend on transportation demand-drive sources, specifically fares, and fuel and parking taxes.

“Although we don’t know the exact details yet, it does look like that public transit funding in British Columbia is going to be well served by the federal program and is definitely being matched by the provincial government, which is not necessarily the case in all provinces across the country,” said Jonathan Cote, the Mayor of New Westminster and the chair of the Mayors’ Council.

Desmond says there will be structural deficit problems over 10-year period as a result of the health crisis.

The timeline for SkyTrain Expo Line extension along Fraser Highway to Fleetwood could be affected by TransLink’s fiscal issues. The project will cost $1.6 billion, with about $1.1 billion coming from the public transit authority.

Updated revenue forecast models in late June project TransLink’s cumulative losses for 2020 and 2021 could range between $544 million and $945 million in the best-case scenario, and between $1.3 billion and $1.4 billion in the worst-case scenario.

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