Allison Hanes: Hefty tax hike for motorists or public transit "doom" spiral?

Quebec’s refusal to cover transit shortfalls leaves municipalities with two bad choices: jack up vehicle registration taxes or slash service. The Communauté métropolitaine de Montréal has chosen the least worst option.

Article content

No one likes paying taxes. People don’t like paying more taxes even less.

So it’s no wonder motorists in greater Montreal are fuming over the hefty tax hike they’ll have to pay next year when the annual vehicle registration fee almost triples.

The Communauté métropolitaine de Montréal, the body encompassing 82 municipalities in the region, recently voted to jack the bill for car owners from $59 to $150 as of January 2025 to help defray a massive and growing deficit in funding for public transit. So that’s an extra $91 per car. Ouch.

Advertisement 2

Article content

“This brings us absolutely no pleasure,” said Montreal Mayor Valérie Plante, who may not pay much of a political price for the 150-per-cent increase, given her strong support among urbanites and cyclists.

But aside from a group of South Shore mayors who balked at upping the fee, elected officials from even the most vehicle-dependant suburbs went along with the measure. As Laval’s Stéphane Boyer said: “We’re facing a difficult choice that no one wants to make, but one that is necessary.”

The mayors of the CMM have correctly recognized that there may be something even worse than demanding more money from citizens already struggling to make ends meet amid inflation, a slowing economy and a housing crisis. And that worse thing would be a public transit “doom spiral.”

Those are the words two McGill University researchers used in a recently published article to describe the vicious circle in which service cuts due to budget deficits drive riders away from public transit.

The resulting drop in use then triggers further reductions in service, which lead to even greater declines in usage, according to Ahmed El-Geneidy, a Professor in McGill’s School of Urban Planning, and Paul Redelmeier, a master’s student, in the paper published in Transportation Research Record.

Advertisement 3

Article content

If You Cut It Will They Ride? Longitudinal Examination of the Elasticity of Public Transport Ridership in the Post-Pandemic Era” should be essential reading for Quebec Premier François Legault, Transport Minister Geneviève Guilbault and any driver up in arms about how the CMM can justify such a significant bump in the vehicle registration tax.

The study uses Montreal as a case study, although it is just one of many cities across Canada and the U.S. grappling with drops in ridership, financial difficulties and shifting commuting patterns in the wake of the pandemic. It offers an alarming glimpse into the future if not enough cash is found to operate public transit in the Montreal region at current levels.

“The study found that demand for transit was highly elastic and had grown more elastic since COVID-19,” meaning that ridership is sensitive to changes due to a variety of factors, from frequency of service to proximity to transit stations. But it’s the conclusion that must be underscored.

“This increase in elasticity has grave consequences for agencies, as it suggests the risk of a doom spiral is high,” wrote El-Geneidy and Redelmeier. “If transit agencies cut services, then they can expect to lose more riders, worsening their fiscal position. This suggests that further public funding for transit operations is necessary to stave off a total collapse of the system.”

Advertisement 4

Article content

Which brings us back to Legault and Guilbault. They are the ones with the means to fund public transit. Cash-strapped municipalities don’t have that many levers, other than property taxes, which already account for about 70 per cent of their revenues, and fares. They have already raised residential and commercial rates about as high as they can get away with politically, while reluctantly increasing fares as of July 1.

But Legault and Guilbault don’t seem to be able to wrap their brains around the dire consequences of abdicating their own responsibilities for funding public transit.

Last year, there was an 11th-hour standoff between cities and the Quebec government to fill a hole of more than $500 million in the 2024 budget of the Autorité régionale de transport métropolitain, which funds and plans transit in greater Montreal. As municipalities were about to table their budgets, Guilbault would only agree to provide 70 per cent of the missing money.

Next year, the ARTM is facing another shortfall in the order of $560 million. But Quebec has only pledged $200 million for 2025, while ordering performance audits, posturing about the need for efficiencies and playing political games by trying to stir up resentment in regions toward Montreal area residents.

Advertisement 5

Article content

The ARTM’s financial woes are only set to escalate: to $600 million in 2026; $670 million in 2027 and $700 million in 2028. The arrival in service of the full network of the new REM next year is an added wrinkle, since the Caisse de dépot et placement du Québec’s infrastructure arm will take a slice of revenue away from existing transit operators.

The time for stop-gap measures to bolster public transit has long since passed. But the Quebec government has so far declined to propose any sustainable solutions — like a greater portion of the provincial sales tax, perhaps, or a contribution from the green fund.

That Legault and Guilbault are also stubbornly determined to forge ahead with a third highway link between Lévis and Quebec City in the name of “economic security,” spending billions on a project a CDPQ Infra analysis said will, at best save drivers five minutes, and at worst worsen congestion, tells you everything you need to know about this government’s mislaid priorities.

So mayors of greater Montreal have had to take matters into their own hands. The 150-per-cent increase in the registration fee for each vehicle will raise $320 million to fund public transit. And even that’s not nearly enough.

Advertisement 6

Article content

Opposition parties are pinning the blame for the drastic increase on the provincial government, with Québec solidaire branding it the “taxe Guilbault.” But this has only fuelled another round of futile finger-pointing.

The average motorist may not care who’s sending them the bill. But everyone, whether they drive, cycle, walk or take the métro, should care about the fate of public transit.

For a lot of people, it’s their only way of getting around. For others, it’s better than sitting in traffic. And for those stuck in those snarls because they don’t have an alternative, imagine how bad Montreal’s notoriously hellish congestion would be if there were even more cars on the roads? As the STM’s ad campaign once reminded people: the average métro train takes 70 cars off the road; one bus removes 50.

Transportation accounts for Quebec’s largest and most intractable share of greenhouse gas emissions. If Quebec has any hope of meeting its climate commitments, the government has to invest in public transit — both building new infrastructure and ensuring adequate funds to operate it.

It is a public good that must be protected.

So until the Legault government steps up and does its part, raising the vehicle registration tax is the least worst option. It sure beats a doom spiral.

[email protected]

Recommended from Editorial

Advertisement 7

Article content

Article content