Zero-emission transit, accessibility and support for new housing among the targets of the single largest public transit investment in Canada’s history

The government is investing $30 billion over 10 years into a new Canada Public Transit Fund, beginning in 2026.

The funding, which looks to expand access to public transit, will spread across three streams at a rate of roughly $3 billion per year. The three streams are: metro-region agreements ($2 billion annually), baseline funding ($500 million annually) and targeted funding ($500 million annually).

“Investing in public transit is essential to ensuring Canada’s economy reaches its full potential. Better transit makes it quicker and more affordable for Canadians to get to where they need to go, all while reducing emissions,” reads a press note from Chrystia Freeland, deputy Prime Minister and minister of finance.

Freeland, Prime Minister Justin Trudeau and Toronto’s mayor, Olivia Chow, were at the announcement, made this month at a Toronto Transit Commission yard.

A call for applications is already open for metro-region and baseline projects. More information about a call for applications for targeted projects is forthcoming.

Stream descriptions

The fund (and the initial $30 billion investment) is the result of findings from a 2022 public consultation. It is also tied to the national push to build more (and affordable) housing.

“The Canada Public Transit Fund is designed to meet the unique needs of communities of all sizes — from urban centres, to mid-sized communities, to rural, remote, Northern, and Indigenous communities,” reads government materials.

“As we build more homes faster, public transit is also key to connecting communities and making life cost less.”

The government describes how the three distinct streams each have separate requirements for eligibility.

• Metro-Region Agreements: will provide funding to support partnerships between provinces and large urban areas with the largest public transit systems. Funding amounts will be based on merit, with the highest amounts of funding going to the most ambitious partnerships, including those that can best demonstrate how investments in transit will help build more homes.
• Baseline Funding: will deliver predictable funding to communities across the country with existing transit systems, based on population and ridership. This will help communities of all sizes upgrade, replace, or modernize their transit infrastructure, including system expansion, lifecycle extension, performance upgrades and investments in the state of good repair of their fleets.
• Targeted Funding: will be available to support key priorities like active transportation, rural and remote transit, transit investments in Indigenous communities, and the electrification of public transit and school transportation. This funding will be delivered on a project-by-project basis through periodic calls for applications, so the federal government can respond to the evolving transit needs of communities in the future.

Industry response

Public transit systems across Canada consistently face challenges in the form of electrification, low ridership and service gaps.

A $30-billion pot to support infrastructure upgrades and improve transit access is welcome news to some.

“The Canada Public Transit Fund will help us not only enhance the quality and reliability of transit services, but also drive the transition to a low-carbon future,” said Dr. Josipa Petrunic, CEO and president of the Canadian Urban Transit Research and Innovation Consortium, in a press statement.

“We have been working diligently with the government to help ensure that the transition to low carbon public transit is done in a sustainable and practical way that supports the integrity of public transit for the future.” 

Transport Action Canada, a non-profit organization that promotes sustainable transportation, calls the fund “tremendously welcome.” But it cautions the program may not be accessible for smaller communities lacking resources to match grant funding.

Transport Action Canada suggests there should be a provision for operating funds, stating, “Adequate operating budgets are vital, both to ensure that the public receives the full value in terms of service level provided with the infrastructure and assets purchased, and to enable transit managers to plan for the maintenance and renewal of high-value assets that have multi-decade lifecycles.”

Role of municipalities

The government is clear in its announcement that it sees housing and transit as inextricably linked.

Municipalities looking to access the Canada Public Transit Fund, must meet key criteria to “access long-term, predictable funding.”

The criteria are:

• Eliminate all mandatory minimum parking requirements within 800 metres of a high-frequency transit line;
• Allow high-density housing within 800 metres of a high-frequency transit line;
• Allow high-density housing within 800 metres of post-secondary institutions; and
• Complete a housing needs assessment for all communities with a population greater than 30,000.

For more information on how to apply for funding visit here.