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COMMENT: Doing the math on free transit

An OC Transpo bus downtown. (Photo/Shankar S./used under a Creative Commons license.)

Mayor Jim Watson and Capital Coun. Shawn Menard had their semi-regular Twitter argument about free transit last Sunday (April 14) and, as all good arguments should, it involved a little math.

Menard is for free transit. He campaigned on introducing a pilot for no-fare buses along Bank Street, to kick-start the idea. Starting no-fare service along this key urban street would be a “game-changer for the city,” Menard says, and possibly be a gateway to getting it across the city.

Their debate last weekend was not about the merits of this proposed pilot, but on the broader topic of free transit for all.

Where Watson shot it down out of hand because of the implication for taxpayers, Menard observed it already exists to some degree here — like on New Year’s Eve and Canada Day. Or, for seniors, on Wednesdays and Sundays. Events at Lansdowne Park with fewer than 5,000 attendees also include free bus rides with the ticket at no added cost, Menard says. More than 5,000 and the cost of the buses is included in the price of tickets and paid to the city, he added.

“I just found it odd that throughout your campaign you never told people how much it would cost for ‘free’ transit,” countered Watson. “It’s a 12 per cent tax hike on top of all other increases.”

Watson is correct that it would require a 12 per cent tax hike, besides the 3 per cent annual hike the city would already need to manage inflation and rising costs.

OC Transpo’s total budget for 2019 is $575 million. Of that, $200.7 million is expected to come from fares, according to the City of Ottawa budget.

In 2019 the city expects $1,681,933,000 in tax revenue — 12 per cent equals $201,831,960. OC Transpo would need most of that to make up for lost fares.

He’s right this shouldn’t be called “free” transit. He used the term “no-charge” to describe his expansion of no-fare transit for seniors to include Wednesdays as well as Sundays. (The measure was costed at $100,000 annually.)

But that’s not it for the math, folks.

Some on Twitter chimed in that even with a 12 per cent hike to their taxes, they would come out on top not having to buy monthly bus passes.

I wanted to know how much money could end up saved by switching to this scheme. So, here’s a little estimate. I am no mathematician, and OC Transpo’s most recent public data is from 2016 (all numbers presented here are from that year), so let’s just call this a ballpark.

Average weekday ridership: 320,000.

Broken down by category, here’s the ridership in percentage.

Regular pass: 31.8% (including 7.8% express pass, which doesn’t exist anymore.)

“Student pass”: 9.9%

Senior pass: 3.9%

Community pass: 3.2%

U-Pass: 26.4%

DayPass: 1.6%

Cash: 3.5%

Tickets and Presto e-purse: 17.3%

Other: 2.3%

So, we have based on this data the majority (75.2 per cent, or 240,640 riders) using a monthly kind of pass on this average weekday. The “student pass” I believe refers to the youth pass as opposed to the OC-Transpo-in-lieu-of-yellow-school-buses-pass; I doubt there’s more than 31,000 high school students using school board-provided bus passes. If anyone knows more about this, please send me mail with the subject line “you moron” here.

Assuming “regular pass” refers to adult monthly passes, which cost $105.75 in 2016, here is what we end up with. (We’ll just pretend express passes cost the same for the purposes of this estimate, as it would be moot today.)

With no-fare transit, 101,760 riders would not be spending a cumulative $10.76 million every month on bus passes. The individual who rides every month in a year saves $1,269 over 12 months. It adds up to more than $129 million in a year for all those riders, assuming they all ride for the whole year.

The average assessed value of a home in Ottawa in 2016 was $431,000, according to MPAC.

I plugged that value into the city’s property tax estimator, using a hypothetical home in the urban area that was built in 2012. This estimated a $765 transit levy for 2019. The levy has been increased by 8.5 per cent cumulatively since 2016. I don’t know what it was exactly in 2016, so I estimated based off that it would have been $705. I then added 13.5 per cent (the 2016 equivalent of what the hike would need to be to get free transit) to get $800.17

So instead of spending $1,269 a year on bus passes, this homeowner spends just two dimes over $800 and can jump on a bus whenever they want. They have saved $469, which is now disposable money available for other economic activity. Maybe they’ll spend it at places where they ride the bus to.

It benefits more than this homeowner, too. People with disabilities will not have to buy the Community Pass, likewise those in poverty save on the cost of an EquiPass. Post-secondary students will retain a chunk of change by not needing a U-Pass. In short, everybody wins here.

We don’t know how many of those average weekday bus riders are homeowners, but we know how much taxes need to be increased by to make no-fare transit. Obviously, the effects will vary and I can’t calculate everything. Some homeowners with high property values will pay more. While it’s reasonable to think this form of transit would encourage higher ridership, not all homeowners will be able to take advantage of it for a variety of reasons, like they work odd hours or the routes don’t work for them. Homes in Richmond, where only commuter bus service is provided, will have to be taxed differently than homes in Nepean, for example.

But for a ballpark, this gives you an idea of what it would cost and how it can end up saving money.

Given that more people riding transit will put less strain on our roads and environment, it seems reasonable that there would be further savings to be made. The math seems to indicate it wouldn’t be so expensive, after all. Of course, Watson says he believes users of the system should pay for it along with taxpayers. So I assume he’ll be introducing congestion pricing for drivers in the urban area any day now.

No-fare transit is worth more public discussion. Watson should be more open to entertaining the idea of rather than shooting it down right away.

And, next time he and Menard debate (and there WILL be a next time), I hope they can focus more specifically on the Bank Street pilot and have a discussion around its cost and the pros and cons. Looking at the issue in the small-scale is much more helpful to fleshing out its usefulness than the broad discussion that’s been had to-date.

Correction: Due to a math error, the 2016 transit levy was estimated as being $699.97, it was probably more like $705. Because of rounding, the estimated annual savings of $469 for an individual doesn’t change.


Devyn Barrie

Devyn Barrie is the publisher and editor of OttawaStart.com. He currently studies math and physics at the University of Ottawa, and holds a diploma in journalism from Algonquin College.