The Trudeau government’s record transit investment, hailed for including $3 billion a year in permanent funding starting in 2026, promises more electrification benefits for stakeholders from OEMs to municipalities to riders

It’s not every day that Prime Minister Justin Trudeau, rather than one of his cabinet ministers, steps to the microphone to make a federal public transit funding announcement.

But then, a commitment to provide $14.9 billion in new money for transit — including $5.9 billion that’s available immediately and $3 billion per year in permanent funding starting 2026-27 — is hardly an everyday event.

“When we invest in public transit infrastructure, we are supporting good middle-class jobs, creating better commutes, fighting climate change, and helping make life easier and more affordable for Canadians,” said Trudeau.

The announcement, just over a week ago, was hailed by municipalities and transit planners — not just for the sum, which is the largest investment in public transit in Canadian history, but because stable, permanent federal support for transit has been a wish-list item for years.

Electrification front and centre

What got less attention, however, is where a good chunk of that money will likely be spent — on the electrification of urban transit systems and supporting the use of zero-emission vehicles.

“What this does is… send a public market signal,” says Sarah Petrevan, policy director at Clean Energy Canada. “It’s saying to transit agencies that the long-term objective is to go electric, and that we’re going to help you get there. And I think that’s the message that municipalities really want to see.”

While a number of larger Canadian cities, including Montreal, Vancouver, Victoria and Toronto, already count battery electric buses among their fleets, many communities have yet to act. One obstacle, Petrevan says, is that while electric buses are cheaper to operate in the long term, the up-front costs remain high.

As such, she’s confident that the guaranteed support in the new federal announcement — coupled with another $1.5 billion available from the Canada Infrastructure Bank for zero-emission buses and charging infrastructure, announced last fall — will spur them into action.

Supporting domestic OEMs

Municipal leaders weren’t the only ones cheering Trudeau’s announcement. Canada is home to five electric bus manufacturers — GreenPower Motor Co., The Lion Electric Co., NFI Group Inc., Nova Bus and Grande West — and all stand to benefit.

“The monumental $14.9-billion commitment enables Canadian transit agencies to execute on plans to drive cleaner, sustainable transportation across the country,” said Winnipeg-based NFI, the largest of the five companies, which makes electric buses under the New Flyer and MCI nameplates, in a statement.

“We look forward to supporting Canadian transit agencies as they deliver on the government’s vision of a more sustainable, healthier environment for all,” added Chris Stoddart, president of New Flyer and MCI.

In December, New Flyer signed a deal with the city of Ottawa to put four New Flyer electric buses on city routes later this year. In January, meanwhile, Vancouver’s Translink announced an order for 15 battery electric buses from Nova Bus, to go with the four already in operation.

More orders like these will keep investments circulating in the local economy while ensuring that these companies are able to grow and remain competitive in an increasingly crowded continental marketplace.

Other potential economic benefits include an increase in business for Canadian electricity providers and charging infrastructure manufacturers, as well as an increase in skilled jobs.

“Electrification isn’t just a fuel change, it’s a systems change”

Sarah Petrevan, Policy Director, Clean Energy Canada

Helping municipalities prepare

These multipliers also underscore why the promise of secure, predictable funding is essential to enable municipalities to take the next step. Transit electrification may seem like an obvious and necessary measure towards reducing transportation emissions, but it is far from a simple one. In addition to purchasing buses, transit agencies must invest in charging infrastructure and determine how charging rates and vehicle ranges will affect existing bus routes. The promise of long-term funding gives agencies significant time to prepare for those challenges.

As Petrevan points out: “Electrification isn’t just a fuel change, it’s a systems change. It’s a systems change in how you design your routes: what are the ranges of the different buses? How do you fuel up and when do you fuel up?”

Answering these questions and then executing requires new hiring or additional training and redeployment of personnel.

“You need to have a dedicated person or maybe a couple of people, depending on the size of the transit agency, that are actually fully focused on electrification and what the transition means and how and when you transition the different parts of the transit agency,” she says.

Suite of benefits

Once the agencies get there, however, they will then be able to reap the rewards of both lower emissions and reduced operating costs over the long term. It’s estimated, for example, that each electric bus reduces fuel costs by $40,000 and greenhouse gas emissions by 100 tonnes per year as compared to their diesel counterparts.

They’re also quieter and don’t emit the harmful pollutants such as NO2 that come from diesel vehicles, and have been tied to a number of significant health risks.

Which means, says Petrevan, that not only does speeding up the transition to electric help local transit agencies hit their climate targets, it also furthers their goal to “provide a better experience for their customers.”