Staff Report: Divert Transit Capital to Operations, Automate Annual Fare Increases

By Ryan McGreal
Published December 13, 2010

Tuesday's Public Works Committee meeting will consider a staff report [PDF link] on redressing Hamilton's underinvestment in transit. Specifically, the report recommends:

The report does not explain how the City will backfill the $3 million in capital funding it proposes shifting into operations, though one suggestion is for Hamilton to join nearly every other municipality in earmarking some of its Federal Gas Tax money for transit instead of roads and other capital projects.

The report does note that the HSR traditionally funds capital projects by diverting some of its operational funding. This is in contrast to other departments, which receive dedicated capital funding commitments in addition to their operating funds.

In recent years, the HSR purchased new buses through the Ontario Bus Replacement Program (OBRP) fund, as well as one-off Federal and Provincial grants. However, the Province recently killed the OBRP as part of its deficit-cutting efforts, reducing Hamilton's bus capital funding by $3.7 million.

Nor does the report explain how the City will achieve increases in transit ridership if it keeps raising fares. The relationship between fare prices and ridership is extremely well established and understood: every time the city raises fares, it flattens or reverses ridership gains.

The transit operational review the city undertook in 2009 concluded:

fundamental changes will be required if transit is to succeed in a world of increasing social, economic, environmental, technological and policy change citing the need for a significant shift in policy, from cost driven to a market-driven policy with less emphasis on cost recovery.

However, a comparative table in the report shows how Hamilton fares against other GTA municipalities in terms of transit service levels relative to population in 2005 and 2008.

While most other municipalities have increased their per capita commitments to transit significantly, Hamilton's commitment has actually fallen.

Transit Service Level Relative to Population
Municipality Revenue Svc Hours/Capita 2005 Revenue Svc Hours/Capita 2008 % Change
Brampton 0.95 1.30 37%
York 0.80 1.03 29%
Burlington 0.76 0.90 18%
Mississauga 1.39 1.58 14%
Oakville 0.87 0.94 8%
Durham 0.67 0.66 -1%
Hamilton 1.44 1.41 -2%

Transit funding - and ridership - have stagnated in Hamilton over the past several years, in large part because of several back-to-back fare increases.

As a result, Hamilton has suffered steady declines in its share of the Provincial Gas Tax. The cumulative annual loss is projected to reach $900,000 in 2011.

Appendix B of the report specifies which routes need additional coverage:

Appendix D details several complaints from HSR riders who had to wait while numerous overstuffed buses passed them. Here's one example: "Customer said he was standing at the stop and without a word of a lie, counted 10 buses that went passed him because they were full."

Given the conclusions of the operational review, the City's stated objective of doubling transit ridership by 2020, the request for the Province to invest in Light Rail Transit, and the terms of the Provincial Gas Tax transfer, it makes no sense whatsoever to keep kneecapping ridership growth with annual fare increases instead of committing to invest more funding to improve service and capture real gains in ridership.

See also:

Citizens at City Hall (CATCH) has a detailed report on this issue.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan wrote a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. His articles have also been published in The Walrus, HuffPost and Behind the Numbers. He maintains a personal website, has been known to share passing thoughts on Twitter and Facebook, and posts the occasional cat photo on Instagram.


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By Undustrial (registered) - website | Posted December 14, 2010 at 02:03:30

The point here is letting them increase fares without putting council on the hook in front of voters, who don't tend to look to fondly on this kind of nonsense.

I'm not much of a fan of classical economics, but sometimes they're just...relevant. When you charge more money for something, less people want it. And if you charge too much money for something, you actually make less money than you would have charging less. Furthermore, sometimes attracting customers requires an initial capital outlay which may not pay itself back overnight. People cannot base their schedule on a bus route which does not exist, or is not reliable. That's the kind of thing people get fired for. And people will not instantly flock to it the second it opens, or becomes better serviced. This will involve investing money and taking risks.

The same type of behaviour is seen with GO and Coach Canada - cutting the Guelph line, constantly raising prices on others - these are major policy decisions which send a clear message: "don't ride the bus".

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By James (registered) | Posted December 14, 2010 at 08:24:10

I become increasingly convinced that car ownership for people who write policy for public transit should be forbidden by law.

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By jason (registered) | Posted December 14, 2010 at 09:19:28

Can I assume that our road tolls will also increase by the same percentage each year? Oh wait, we don't have those....

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By Mogadon Megalodon (anonymous) | Posted December 14, 2010 at 09:27:47

Of the ten lines that need additional coverage, it seems mainly to be schools (I'm working in broad strokes here – haven't factored in public/separate/private schools) and shopping/mall jobs driving the appetite.

51 University > McMaster University/Columbia College
10 B Line > McMaster University/Columbia College/Eastgate Mall
5 Delaware > McMaster University/Columbia College/Meadowlands
1 King > McMaster University/Columbia College
21 Upper Kenilworth > Mohawk College
43 Stone Church > Meadowlands/Lime Ridge Mall
44 Rymal > Redeemer College/Eastgate Mall
6/7/8 Aberdeen/York/Locke > Westdale/??/Locke

No question, more buses added into rotation will improve frequency of service and reduce congestion on individual buses, but it's McMaster/Columbia riders who seem to reap the biggest benefit (20-21 of 29 buses).

Does anyone have an idea what sort of numbers are attached to subsidized fares (MSU, Passport to Hamilton, Support Persons, Golden Age, Affordable Transit) at present? Fare increases would obviously be less political if there were way of substantially expanding the numbers on the latter two, but fare subsidies come from somewhere. Is it principally a cake-allocation problem? Would generic transit users be okay with swallowing a fare increase if it meant that seniors, physically challenged and working poor were better positioned to make use of the system? Would transit advocates swallow a fare increase if it meant that underserviced areas would be brought into the sphere of transit service? If HSR service isn't proactively chasing areas where densification is increasing most rapidly, is a functional transit system even possible in the long term?

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By Mogadon Megalodon (anonymous) | Posted December 14, 2010 at 09:28:55

PS: Any bets as to whether automated fare increases will become a non-negotiable under Metrolinx synergies?

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By Mogadon Megalodon (anonymous) | Posted December 14, 2010 at 09:41:35

BTW, speaking "broad strokes"...

• Add Fortinos/Westdale to 1/5/51/10
• Add Jackson Square to 1/5/6/7/8/51/10

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By Mogadon Megalodon (anonymous) | Posted December 14, 2010 at 10:01:40

Partially related to transit service level, a comparison of cash fares.

Brampton $3.00 (adult/student/senior)
York $3.25 (adult/student/senior/child)
Mississauga $3.00 (adult/student/senior/child)
Oakville $3.00 (adult/student/senior)
Durham $2.90 adult;$2.70 student; $1.90 senior/child 5+
Hamilton $2.55 adult/student/senior/child

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By jason (registered) | Posted December 14, 2010 at 10:34:17

by the way, the 6/7/8 improvements include a new Dundurn bus that would run from Aberdeen to York Blvd. MUCH needed.

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By seancb (registered) - website | Posted December 14, 2010 at 12:16:51

I would like to see a trial period of $1 fares and see what happens. Just pick a month or two and plan to eat the losses. Maybe we will be surprised at the effect. I'd be more inclined to get on a passing bus if it was just a loonie.

I also don't understand the need for tickets. Just make the cash fare a nice round number and eliminate tickets and all of the overhead associated with it.

Make the handicapped discount apply only to those who can demonstrate a need - perhaps to the same degree required for acquiring a handicapped parking permit. No more free rides for everyone with a cane.

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By A Smith (anonymous) | Posted December 14, 2010 at 12:38:05

>> "Customer said he was standing at the stop and without a word of a lie, counted 10 buses that went passed him because they were full."

Here's an idea, instead of raising taxes on people, why not take some of the buses that run virtually empty every night (7pm onward) and put them on the street during the busiest times of the day. Then again, maybe Hamilton's leftie community now think it's a good idea to throw up tonnes of CO2 into the atmosphere, just so a few of people can have their own private bus ride?

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By Pxtl (registered) - website | Posted December 14, 2010 at 12:45:20

@seancb - yeah, the ticket thing makes no sense to me, as an occasional rider. Why does it cost a completely different amount of money to ride a bus depending on whether or not the local convenience store was out of stock of little strips of paper?

Either way, I look forward to a transit strike when the bus driver's union asks for a piece of that pie.

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By nobrainer (registered) | Posted December 14, 2010 at 13:07:21

why not take some of the buses that run virtually empty every night (7pm onward) and put them on the street during the busiest times of the day

Yeah, and 9 women can have a baby in 1 month!

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By Robert D (anonymous) | Posted December 14, 2010 at 16:10:48

Well I see A Smith's comment has been addressed.

To be honest, I often wondered why we don't have "mini-buses" to run at off-peak times, opposite to the "articulated buses" which we run on the busiest lines at the busiest times. They would presumably cost less to run, and could perhaps even be used to service lower demand routes more frequently (rather than less frequent service by larger buses).

As for someone asking how much McMaster/Mohawk pay, I believe their deal with the HSR is something to the effect of: If every student pays the equivalent of 1.25 times the monthly adult pass rate, every student will get an 8 month bus pass (valid only during the school months). It could probably stand to be higher (say twice the adult pass rate) but you have to be careful because there are students on campus who actively campaign against the bus pass deal, and when it does come up for vote every few years the result isn't always a "slam-dunk". I don't remember the figures, but the HSR gets a decent part of its revenue from the agreements with Mac and Mohawk students.

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By Mogadon Megalodon (anonymous) | Posted December 14, 2010 at 16:37:07

An enviable bargain that suggests an intriguing math problem (one I'm sure has been played out somewhere in the RTH archives): Unless the school is offsetting the difference, the HSR is offering a $696 value for $109 to 15,000 McMaster and undergrads 10,000 Mohawk undergrads. How many cash fares does the HSR need to sell in order to offset that kind of loss-leader?

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By Democrat (anonymous) | Posted December 19, 2010 at 10:20:33

Automating fare increases to avoid discussion, review, etc by the people's representatives is totally undemocratic.
Why not, then, automate property tax increases, and increases on rates for water etc?
If Council goes for this, they are reneging on their sworn responsibilities.
This has got to be one of the most stupid recommendations that has appeared on the Council Agenda.

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