Sales tax and vehicle levy suggested for new TransLink revenue sources | Daily Hive

Metro Vancouver sales tax and vehicle levy suggested for new TransLink revenue sources

TransLink's R4 41st Avenue RapidBus. (oasisamuel/Shutterstock)

Earlier this year, the Government of British Columbia announced it will provide TransLink with an additional $312 million in operating subsidies.

This is intended to be the provincial government’s final post-pandemic operating subsidy to the public transit authority, providing just over $100 million per year from 2025 to 2027.

Beginning in 2028, the provincial government plans to shift away from renewing temporary operating subsidies and instead introduce legislation that will grant TransLink a new, permanent revenue source. This approach is expected to expand TransLink’s funding tools beyond its existing revenue streams of fares, property taxes, and the regional parking tax applied across Metro Vancouver, which were already increased earlier this year as a measure to fill a sizeable portion of the public transit authority’s operating shortfall.

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Neither the provincial government nor TransLink has publicly specified the potential new revenue sources that could be introduced by new legislation, which has stirred speculation and, most recently, some debate.

Late last week, the Movement: Metro Vancouver Transit Riders advocacy group staged a competition at Simon Fraser University’s Surrey campus, inviting eight teams to make their case in front of hundreds of spectators on the most feasible ways to create new funding for TransLink. Two ideas were selected in the competition.

The “Judge’s Choice” winner — by a team entailing Kiranjot Kaur Nahal, Khadija
Rana, and Jasleen Kaur Johal-Takhar — pitched the idea of a sales tax of 0.5 per cent or one per cent applied across Metro Vancouver. This would function similarly to federal GST or provincial PST.

The “People’s Choice” winner — a team comprising Will Dawson and Philip Vargas — suggested introducing a vehicle levy, with the fee added to the annual ICBC vehicle insurance bill.

Other funding tools explored during the competition included eliminating the provincial government’s Homeowner Grant and ICBC rebate, sharing a portion of the provincial Property Transfer Tax revenue, introducing a land value tax or land value capture mechanism, implementing an employer-funded transit pass program, and establishing a per-kilometre road usage charge.

It is worth noting that both winning ideas have been previously seriously formally explored — and ultimately rejected — in Metro Vancouver’s long search for stable public transit funding.

In 2015, under direction from the provincial government, residents were asked to approve a new 0.5 per cent regional TransLink sales tax dedicated to public transit investments. The proposal became a highly divisive plebiscite, with 62 per cent voting “No.” Voter turnout in the mail-in ballot campaign reached a relatively high rate of 51 per cent.

A similar fate met an earlier funding attempt in 2001, during TransLink’s early years as Metro Vancouver’s standalone public transit authority, completely separate from BC Transit. At that time, local officials sought to introduce a $75 per vehicle annual levy to provide a predictable revenue stream for public transit expansion. The plan faced swift political backlash and was ultimately abandoned before implementation.

In 2024, a comprehensive report by transportation planning consultancy firm Leading Mobility also suggested the ideas of filling TransLink’s revenue shortfall with a vehicle levy and/or mobility pricing — such as road tolls and a per-kilometre road usage charge.

Dozens of U.S. jurisdictions also use vehicle registration fees and levies to fund transportation upgrades, and Montreal similarly has a vehicle levy that directly funds its public transit.

TransLink extensively studied and performed public consultation on mobility pricing between 2017 and 2018, but TransLink’s Mayors’ Council has yet to act on its recommendations. This option not only requires provincial approval through new legislation, but likely requires significant capital investments for new technological infrastructure. Leading Mobility also examined the idea of a new battery-electric vehicle charging tax, but did not recommend this as a revenue tool due to its high costs and complexities for implementation.

The provincial government’s forthcoming legislation to create a new revenue source for TransLink is also aimed at offsetting the public transit authority’s diminishing gas tax revenues — a decline driven by improved fuel efficiency and the rising adoption of battery-electric vehicles. TransLink CEO Kevin Quinn previously told Daily Hive Urbanized the public transit authority’s gas tax revenues peaked in 2022.

The gas tax is TransLink’s third-largest operating revenue source, accounting for roughly one-fifth of its operating income — just behind fares and property tax revenue.

Although TransLink has experienced a robust post-pandemic ridership rebound, its 2024 figures still remain below the levels seen in 2019 — hovering instead near what the system last achieved in 2017. With hybrid and remote work now more common, many riders are purchasing fewer monthly passes and increasingly opting for cheaper single-trip fares for the fewer workplace trips they make each week.

At the same time, TransLink is contending with rising labour, operational, and maintenance costs, as well as escalating expenses for its ambitious capital projects.

All of this unfolds against the backdrop of the Canadian Urban Transit Association’s (CUTA) warning that the federal government’s long-promised Canada Public Transit Fund (CPTF) is being diluted in the 2025 federal budget. Originally conceived as a dedicated $30-billion fund to support public transit capital projects from 2026 to 2036, a portion of the funding has been redirected into the broader Building Communities Strong Fund (BCSF) — a $51-billion, ten-year program beginning in 2026 that spans infrastructure types from hospitals to sewage treatment.

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