La Vérif: How much would halving public transit fares cost? | Elections Quebec 2022
Québec solidaire wants to reduce the price of transit tickets by 50% by 2026-2027.
Québec solidaire (QS) proposes to reduce public transit fares in Quebec by 50% in a first mandate. The party estimates that it will be necessary to pay $ 500 million to the transport companies of the province to compensate for the financial losses linked to this measure. But what is the real cost of this promise?
We think that the best way to reconcile improved accessibility and improved service…is to aim for a 50% reduction in fares over four years and to do so gradually to allow transport companies to adapt, to make the price changes and to absorb the increase in traffic that should come if the prices are lowered, said solidarity co-spokesperson Gabriel Nadeau-Dubois in a press briefing on Tuesday.
Roughly speaking, revenue from ticket sales accounts for one-third of funding for public transit companies. The rest is covered by the Government of Quebec and the municipalities.
QS is committed to compensating all revenue losses resulting from a rate reduction that would reach 50% for all users starting in 2026-2027.
Québec solidaire estimates are based on transit fare revenues and ridership in 2019. The party estimates that public transit ridership will return to pre-pandemic levels as early as 2023.
Québec solidaire co-spokesperson Gabriel Nadeau-Dubois during an announcement concerning transportation to common in Montreal.
According to forecasts by the Association du transport urbain du Québec (ATUQ), which represents the province's 10 largest transit companies, revenue from the sale of passes will reach nearly $1.14 billion in 2026.
Half of this amount, which should be paid in compensation, is equivalent to $568.5 million, while QS estimates the cost of its measure at $500 million. The shortfall would therefore be $68.5 million if the measure had no impact on ridership.
However, Gabriel Nadeau-Dubois' training estimates that a 50% reduction in fares would encourage 5% more people to use public transport.
According to QS, this increase would increase revenue from transport companies, which would mitigate the financial impact of its policy in the end.
This logic holds true only if Québec solidaire does not fully compensate them for the reduced rates from which new users attracted by its measure would benefit.
If we still rely on the forecasts of ATUQ, a 5% increase in ridership in 2026 would increase fare revenues from $1.14 billion to $1.19 billion if the full fare were charged.
For compensate for a 50% reduction granted to users, it is $595 million that should be paid to the transport companies, rather than the $500 million indicated by QS.
The ATUQ points out that the arrival of new users would generate additional costs for the transport companies. However, the service offer must be taken into account in the equation, because if there are more users, it will probably be necessary to put in additional buses at times, which will increase operating expenses.
After the publication of this article, QS confirmed that compensation would not be offered to transport companies for the additional ridership its proposal would cause.
But the political party undertakes to compensate them if ever an increase in the number of users generates additional expenses.
To respond to these potential increases in operating expenses and increase the public transit offer, Québec solidaire is investing $21.8 billion in fixed assets over four years and increasing the envelope granted to the public transit development assistance program by $200 million a year, said a spokesperson. of the party.