The economic case for affordable public transit

by Celia Lee

On Monday, city council invited feedback on proposed revisions to the 2018 Calgary budget. I shared the following thoughts on proposed increases to the sliding scale transit pass. TLDR? I ask whether we’re considering the costs we incur when we don’t invest in affordable transit for Calgarians, the same way we consider revenue-generating potential of new capital projects.

As well as being Program Director for Sustainable Calgary’s Active Neighbourhoods Canada program, I am co-author of three reports calculating the cost of poverty.  They include: Poverty Costs (Alberta, 2012), the Cost of Poverty in Toronto (2016) and the Cost of Poverty in Ontario (2019).    

Social investments are often viewed from a limited perspective: as line items on a budget. This neglects the reality that not spending has an associated cost. This is precisely why we prioritize line items in our budgets: we hope that spending will bring about a return on our investments.

In this vein, the Cost of Poverty reports ask: what does it cost us if we do nothing more to reduce poverty?  They look at costs to the justice system, the health care system and lost private and public revenue associated when we allow poverty to persist.    

Above and beyond social benefit, reducing poverty shows economic benefits that outpace their initial investments.  Investing in our most vulnerable, it turns out, is so much more than a line item. It is critical piece of a macro-economic strategy.  

As I read the news about council’s decisions on budget, I saw there have been financial analyses on prospective capital projects, such as the BMO Centre, Arts Commons and the new arena.   I was curious if the same has been done for investing in public transit, including the low income transit pass. Do we know the costs and benefits of having a healthy, affordable transit system for Calgary’s economy?  

If we are weighing investment in transit and low-income Calgarians against investment in other projects, we should be analyzing all options with the same level of sophistication.  Otherwise, we’re operating on limited information, and increasing the risk associated with spending decisions, taken as a whole. 

Here are a few things I know:  

  • Low- and middle-income Calgarians are more likely to spend the money that they earn, and spend it locally. If they have more money in their pockets, they contribute more to our local economy.  

  • A robust and affordable transit system helps people get to work on time, reduces absenteeism and reduces employee turnover. 

  • A robust and affordable transit system connects more people with more opportunities for employment and education.  

  • A robust and affordable transit system gets some people off the road, which lowers the costs of congestion – themselves associated with lower productivity. 

  • A robust and affordable transit system is part of a poverty reduction strategy.  Reducing poverty reduces associated public and private costs.  

  • Transit users are measurably healthier because they receive regular, moderate physical activity

I assume a good, affordable transit system gets more bums-in-seats at major sporting events.  During tough economic times – which many Calgarians are certainly experiencing right now - Calgarians are more likely to spend on local and affordable recreation options.  

So what are the economic implications of all of this?  Have we taken the time to apply numbers to these benefits?  

Here are some of the numbers I do have: 

  • Cost of Congestion: $10.1 billion for Greater Vancouver, Greater Toronto and Greater Montreal (2015)  

  • Cost of Inactivity: $10 billion for Canada (2014)

  • Cost of owning a motor vehicle in Canada: $8,600-$13,000, or 20% of a middle-class after-tax household income

  • Cost of Poverty in Alberta: $9.5 billion (2012)

If we disinvest in our sliding-scale transit pass, what costs do we then incur? How do those line up against the benefits of other investments?

A robust and affordable transit system is also part of a strong climate change strategy.  If we have 11 years to act on climate change, we need to be making the right decisions right now.  Let’s not debate the 11 year mark – this is an issue that merits the use of the precautionary principle more than any other.  

Decisions surrounding transit and city design are supposed to be the low-hanging fruit. By this I mean: they tackle climate change without talking about pipelines.  This is something we should all be rallying around.  This is our common ground.  Investing in affordable transit is good for the economy.  It’s good for climate.  It’s good for equity.  It’s good for quality of life.  It’s good for our health.  As transit encourages more dense development, it benefits tax revenues for our city. This is our win-win… win-win-win. This is where social good, environmental good and fiscal conservativism meet.  

The role of cities in alleviating and preventing poverty is limited. There are a few key levers of influence, and lowering the cost of transportation is one of the biggest impacts a city can have. As the province reduces its support for low-income Calgarians, favouring an approach of austerity, there is a gap to be filled. Our City can help.

But the best policies don’t just alleviate a problem for some. They create value for as many people as possible, addressing as many issues as possible.

Developing a robust, affordable system of transit is such a policy direction.  

Celia LeeANC, healthy places, Budget