Staff Report #2
November 27, 2024
To All Commissioners
Re: Canadian Permanent Transit Fund Update
Recommendation
The report be NOTED and FILED.
Background
On July 17, 2024, the federal government announced details pertaining to the Canadian Permanent Transit Fund (CPTF) and indicated that the expression of interest phase of the program was open. The CPTF will provide approximately $3 billion per year in targeted transit investments across Canada, with the funds beginning to flow in 2026. The core objectives of the CPTF include:
- increasing use of public transit and active transportation relative to car travel;
- increasing housing supply and affordability as part of complete, transit-oriented communities;
- contributing to climate change mitigation and improved climate resilience; and
- improved transportation options for equity-deserving groups.
The CPTF will be split into three different funding streams, each of which was expanded upon in Staff Report #4 dated August 28, 2024. The remainder of this report details progress with respect to the Baseline Funding Stream of the program.
Baseline Funding
The Baseline Funding stream will be approximately $500 million per year and is intended to provide stable and predictable funding for municipalities that operate public transit services. Eligibility requirements for this fund include:
- municipality must operate a fixed-route transit system;
- must provide a minimum of three years of historical ridership, population and capital investment data;
- must have a minimum annual capital expenditure of $100,000; and
- must have a minimum 30,000 annual ridership.
In addition to the transit-related requirements, participating municipalities are also required to comply with a number of housing-related items including:
- completion of a Housing Needs Assessment (for communities with a population over 30,000);
- additionally, for communities with a population over 150,000:
- concentrate more housing development near transit by allowing high-density within 800 metres of high-frequency or higher-order transit;
- eliminate mandatory minimum off-street parking requirements within 800 metres of high-frequency or high-order transit, excluding accessibility requirements; and
- enable more housing supply near post-secondary institutions by allowing high-density housing as-of-right within 800 metres of recognized post-secondary institutions
The first step in securing funding under this program was to submit an expression of interest (EOI), for which a deadline of September 16, 2024 was set by the federal government. Administration, in co-operation with civic administration completed the EOI and submitted it in advance of the deadline. On November 15, 2024, administration was verbally notified that London’s application had been approved, and that the allocation amount had been calculated at $5.1 million per year for ten years, beginning in April 2026 (see Enclosure I).
London Transit administration will again work with civic administration to file the remaining documents required to complete the funding agreement including confirmation of the aforementioned criteria and a 10-year capital plan as it relates to public transit and active transportation projects. This submission will require the identification of projects within the 10-year capital plan for which this funding may be applied, noting the following criteria sets out projects that would meet the funding program guidelines:
- capital infrastructure projects – acquisition, enhancement, modernization, rehabilitation, construction, expansion, restoration, renovation, refurbishment, or replacement of assets; and
- non-capital projects – planning or design of transit-related infrastructure projects, feasibility studies, stand-alone design work or other related capacity building, research, or data projects.
Use of this funding is limited to costs that are considered direct and necessary for the project (expenditures related to construction and/or acquisition of assets will only be eligible as of project approval). Expenditures relating to operating costs, regular maintenance, land purchase, legal fees and financing charges/loan payments are not eligible for this funding.
The CPTF also includes maximum contribution rates per capital project as set out below:
- up to 40% of eligible costs for projects located within provinces
- up to 75% of eligible costs for projects located within territories
- up to 100% of eligible costs for Indigenous recipients or Indigenous benefiting organizations
Non-capital projects can be funded to a maximum of 80% of eligible costs. These maximum contribution rates are for all federal funds utilized for a project (no stacking of funds), with the exception being for projects receiving funding through the Canada Community Building Fund, funding delivered by the Canada Mortgage and Housing Corporation, and the Canada Infrastructure Bank which may bring the maximum federal contribution up to 100%.
Municipalities making use of this funding will need to ensure compliance with a number of other commitments including the following:
- recipients will be expected to commit to supporting Canada’s plan to achieve net-zero emissions by 2050 and to ensure that future potential climate impacts are considered;
- recipients will be required to report on progress and outcomes as specified in any funding agreements; and
- recipients will also have to ensure that all projects comply with applicable codes and standards, environmental assessment and other applicable federal laws and regulations, Indigenous consultations and accommodation obligations, accessibility standards and other specific conditions that will be outlined at the Capital Plan Application stage.
Future updates with respect to this process will be provided as appropriate, noting any adjustments to funding sources for capital programs relating to this funding will be included in the 2026 budget reports.
Enclosure
I – Letter from Minister of Housing, Infrastructure and Communities
Recommended by:
Kelly S. Paleczny, General Manager