Staff Report #2
July 29, 2020
To All Commissioners
Re: Advocacy Update
Recommendation
That the report be NOTED and FILED.
Background
Since the onset of the COVID-19 pandemic in Canada, both the Federal and Provincial levels of government have made clear, through commentary and emergency orders, that public transit services are considered essential in order to keep communities moving, and to continue to provide transportation for essential workers as well as those customers that rely on public transit for access to the community.
While these comments and orders call for the continuation of services, they do not provide transit operators with any form of relief funding to cover the negative operating budget implications relating to continuing to provide service during the pandemic, including but not limited to reduced ridership levels, rear door boarding (and resulting waiving of fares), the provision of higher service levels than warranted by ridership in an effort to provide physical distancing, and increased costs associated with the provision of appropriate personal protective equipment to employees and the increased cleaning protocols put in place for buses and facilities. These issues, among others have been impacting every transit system in the country to varying degrees since the onset of the pandemic declaration.
Given that municipalities and transit systems by extension are not allowed to operate at a deficit as a requirement of the Municipal Act, both the Ontario Public Transit Association (OPTA) and the Canadian Urban Transit Association (CUTA) have been working in partnership with the Association of Municipalities of Ontario (AMO) and the Federation of Municipalities of Canada (FCM) respectively in an effort to seek funding relief from both the Provincial and Federal governments. Most systems were creative in managing shortfalls in the short term; however, as time progresses the situation is becoming critical. Many transit systems have been forced to further reduce service levels at a time when the Province begins to loosen restrictions and demand for ridership increases. This approach will place increased pressure on the limited resources that are on the road, and have the potential to result in a loss of ridership that will be extremely difficult to get back.
Subsequent to the last update report a number of announcements have occurred that respond, in some respects, to the call for relief funding, each of which is discussed in greater detail below.
Province of Ontario – Municipal Transit Enhanced Cleaning Program
On June 29, 2020, the Province of Ontario announced a program that will provide $15 million in funding to municipalities across the province to support the enhanced cleaning of their public transit systems and help reduce the spread of COVID-19. The funding envelope was allocated to every jurisdiction that provides public transit, with the City of London allocation being up to $433,025.
Subsequent to the announcement, the Ontario Public Transit Association (OPTA) has held discussions with Ministry of Transportation staff with respect to the details of this program. At time of report writing, the following details have been confirmed:
- this program provides a one-time allocation to jurisdictions, intended to offset costs associated with enhanced cleaning requirements during the initial period of the pandemic declaration
- the allocation provided to each jurisdiction is a maximum amount that can be claimed against, noting actual paid invoices for purchases meeting the criteria for spending must be submitted to support the claim
- eligible expenditures will be limited to those directly relating to cleaning of buses and facilities; however, details with respect to eligible expenditures have not yet been confirmed
- eligible expenditures will also be subject to a specific timeframe in which the expenditure occurred; however, the timeframe has not yet been confirmed
OPTA representatives continues to work with Ministry of Transportation staff in an effort to ensure the final details of the program provide the flexibility that will allow jurisdictions to utilize their entire allocation. Future updates will be provided as the details with respect to this program are finalized.
Federal/Provincial/Territorial Safe Restart Program
An agreement between senior levels of government has been reached for the Safe Restart Program, which includes $19 billion in new federal funding. The program includes seven funding envelopes, two of which relate to transit. The details of this program are currently being finalized, the bullets below provide the elements of the program relating to the transit envelopes that were confirmed at time of report writing.
- There is a dedicated envelope for public transit operating costs only (no capital funding) which includes up to $1.8 billion in federal funds, which will only be leveraged with matching provincial contributions. Participation by provincial governments in this program is optional. Discussions with Provincial government representatives in Ontario have indicated the intent of the Ontario government to participate; however, the extent to which this will occur is currently unknown. The manner in which the funds will ultimately be distributed from this envelope are also currently unknown.
- The second transit-related envelope includes $2 billion in federal funds, and is intended to cover COVID-19 related costs incurred by the municipality, including transit. This envelope does not require matching contributions from the Provincial government. Eligible expenses covered by this fund are expected to be broad in nature, and also cover retroactive expenses incurred since the onset of the pandemic.
Administration will continue to work in cooperation with OPTA and CUTA to ensure these programs meet the needs of transit systems to the greatest extent possible. It is anticipated that details with respect to all of these programs will be available in the coming weeks and will be included as a possible source of funding to offset COVID-19 related costs in both the recosted 2020 and 2021 operating budgets which will be presented to the Commission at the August 2020 meeting.
Recommended by:
Kelly S. Paleczny, General Manager