No funding in B.C. budget to avoid TransLink service cuts | Daily Hive

No funding in B.C. government’s new budget to avoid TransLink fiscal cliff and service cuts

TransLink's R4 41st Avenue RapidBus in Vancouver. (Kenneth Chan/Daily Hive)

The Government of British Columbia’s newly released 2025 budget does not specifically allocate any additional operating funding to TransLink to address its forthcoming fiscal cliff.

Since last year, TransLink has warned that its fiscal cliff of a budget shortfall of up to $600 million annually starting in 2026 could force it to perform steep service level cuts of up to 50 per cent of bus services, and 30 per cent of SkyTrain and SeaBus services, as well as the potential discontinuation of the West Coast Express commuter rail.

If the extent of these service cuts go ahead, it would be highly detrimental to Metro Vancouver’s economy, with some communities completely cut off from public transit and drastically increased overcrowding and pass-ups that could make the system unusable for many. Over the past two decades, Metro Vancouver residents and visitors have become far more reliant on public transit services.

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Service cuts to Metro Vancouver’s public transit network could begin as early as late 2025. TransLink staff and TransLink’s Mayors’ Council previously asserted the public transit authority needs additional operating funding secured by Spring 2025 in order to begin planning for its 2026 service levels, and that it requires new additional types of revenue sources that are more stable by not being dependent on demand-driven sources such as fares and the gas tax.

Ever since the pandemic, the provincial and federal governments have provided TransLink with operating subsidies to sustain services from the initial pandemic shock and years-long ridership recovery.

Following today’s budget speech, upon inquiry, TransLink indicated it remains hopeful that a deal with the provincial government can be hammered out through ongoing discussions.

“Investments in transit can be made outside of the annual budget process. TransLink and the Mayors’ Council remain in conversation with the Province on our 2025 Investment Plan and a solution to our ongoing funding gap,” a TransLink spokesperson told Daily Hive Urbanized.

Precedent was set for the last time TransLink received a provincial operating subsidy. The 2023 B.C. budget announced on February 28, 2023 had no specific mention of operating funding for the public transit authority, but it was announced several weeks later on March 15, 2023, when the provincial government announced $479 million in new TransLink operating funding to cover operating shortfalls between 2023 and 2025.

Unless provincial funding or new strategies materialize, the ball on addressing the fiscal cliff and avoiding service now appears to be in TransLink’s court.

While there are no new provincial operating subsidies at this juncture, the provincial government confirmed today it will amend its legislation governing TransLink to enable an increase in the rate of the public transit authority’s parking tax levied across Metro Vancouver. TransLink’s parking tax rate — which applies to off-street parking such as parking lots and parkades — will be increased by five per cent from 24 per cent to 29 per cent.

There could also be upward pressure on hikes to TransLink’s fares, property taxes, and gas taxes, which the Mayors’ Council has avoided considering to date. The next Mayors’ Council public meeting is scheduled for April 2025.

Under existing legislation, TransLink has the authority to introduce a new additional revenue source — a new annual levy on each vehicle registered in Metro Vancouver. Such a levy was previously considered during TransLink’s infancy in the early 2000s, but the unpopular strategy did not go ahead.

Over the past decade, there have also been considerations of mobility pricing, such as road tolls, to provide TransLink with a new additional ongoing revenue source. But such a move requires significant lead time due to the complex operational planning and infrastructure required.

Mobility pricing is also likely to be a controversial scheme, which also requires approval from the provincial government given that road tolls are under provincial jurisdiction. Since 2017, when the BC NDP formed provincial government, they have been against mobility pricing schemes, made evident by their decision to abolish the previous tolls on the Port Mann Bridge and Golden Ears Bridge, and cancel the planned tolls for the future new crossing replacing the George Massey Tunnel.

TransLink is already anticipating a budget shortfall of $72 million in 2025. The shortfall that begins in 2025 and exponentially grows starting in 2026 is due to a combination of factors, including market inflation in its operating costs, new collective agreements, falling gas tax revenues (due to the accelerating adoption of battery-electric vehicles), slower fare revenue growth due to the fewer trips taken by passengers (more single-trip fares, fewer monthly passes), and the depletion of previous provincial subsidies from March 2023.

To date, since the onset of the pandemic, the provincial and federal governments have provided TransLink with a combined total of $1.3 billion in operating subsidies.

It should also be noted that the $600 million annual shortfall beginning in 2026 is based on the operating budget of running and maintaining the system on existing service levels — it does not include the capital costs of undergoing improved and expanded services and construction projects.

But the provincial government has significant financial challenges of its own as well due to poor structural fundamentals and worsening economic headwinds, especially from the impact of the United States’ tariffs on Canadian goods.

The provincial government’s budget deficit for the new 2025/2026 fiscal year is expected to reach an all-time high of $10.9 billion, with these annual deficits sustained at $10.2 billion in 2026/2027 and $9.9 billion in 2027/2028. Total provincial debt will soar from $133 billion in 2024/2025 to $156.6 billion in 2025/2026 and $208.8 billion in 2027/2028, with taxpayer-supported debt rising from $97.7 billion in 2024/2025 to $118.7 billion in 2025/2026 and $208.8 billion in 2027/2028.

With these precarious economic conditions, the 2025 B.C. Budget paints a picture of austerity, with the provincial government focusing on maintaining its core services and mandate. This is not a splashy budget with new announcements, with the provincial government instead choosing to maintain some financial capacity through significant contingencies to cover any future unexpected costs, including room for measures to address the impacts from the tariffs.

Over the next three fiscal years, starting in 2025/2026, the provincial government’s budget provides a $4 billion contingency fund per year or a combined total of $12 billion. It is unclear whether such contingencies could be used to support TransLink.

Although the provincial budget does not provide any new operating funding to TransLink, it sets aside $47 million over three years to provide BC Transit with new operating funding, specifically to ensure reliable bus and HandyDART services. A a provincial Crown corporation, BC Transit is a direct responsibility of the provincial government.

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