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Urban Development

What does it cost to run the transportation system?

TransLink spends $1.4 billion annually. Where does all that money go?

With contributions from Caitlin Havlak, Nelly Bouevitch and Graeme Stewart-Wilson

Part 3

The amount of money the average Metro Vancouverite pays in motor fuel tax is not even enough to cover one thousandth of the cost of a single traffic signal. What can be built for the equivalent of former TransLink CEO Ian Jarvis’s infamously inflated $438,000 salary? Just over half a kilometre of a single lane on one of Metro Vancouver’s major roads.

These are a few of the many numbers emerging from our analysis of transportation costs in the region. According to the Angus Reid Institute’s latest poll, 61 per cent of Metro Vancouver residents are planning to vote "no" on the Metro Vancouver Transportation and Transit Plebiscite arriving in mailboxes this week. One of the main concerns cited by residents? Unresolved questions about TransLink’s $1.4-billion budget and how the authority spends its money.

QUESTIONS SUBMITTED BY OUR READERS:

  • “I want to know more about how the money will be allocated.”
  • “How much of this money will be spent on roads and bridges used primarily by cars and trucks?”

If the referendum passes, TransLink will receive an additional $250 million per year in funds for new investments in transit and transportation. A chunk of new funding generated by a .05 per cent raise to Provincial Sales Tax (PST) is earmarked to go toward road upgrades ($1.3 billion in total) including the replacement of the Pattullo Bridge, which is estimated to cost $980 million. Funding dedicated to expanding transit totals $5.8 billion, including big-ticket items like rapid transit along the Broadway corridor ($2 billion) and in Surrey ($2.2 billion). (See for yourself exactly how much the Mayors’ Council on Regional Transportation plans to spend on what on page 24 and 25 of their plan.)

If Metro Vancouver residents vote "yes" and the region is successful in securing additional funding sources, TransLink’s budget would climb to $2.1 billion, or $745 per capita, from its current $534 per capita. However, the $250 million raised from the hike in PST will only cover a portion of the total funding needed to realize these plans. Additional funds are expected to come from the provincial and federal governments.

We dug into the data to shed light on why the transportation system costs so much.

translinkinfo_final-lg-3-1

How does TransLink spend its money now?

According to TransLink’s 2013 annual budget, 66 per cent of its expenditures went toward transit operations (as shown in the graph below). Seven per cent was spent on corporate expenses (including two per cent specifically on corporate salaries) while four per cent went towards maintaining roads and bicycle infrastructure. Additional costs of road infrastructure are carried by the municipalities and the provincial and federal governments.

Amortization and interest shown in the graph account for capital costs of TransLink’s current infrastructure. Of that, $98 million covers roads and bridges while $228 million represents transit infrastructure.

The fact that so much of TransLink’s budget is dedicated to transit, compared to roads, raises a few questions. Why is transit so expensive to build and run? The Mayors’ Council claims that more investment in transit expansion is required to decrease congestion on the roads. How will increased funding for transit address traffic problems?

We asked Todd Litman, executive director of the Victoria Transport Policy Institute, to help us make sense of the numbers.

Why transit seems so expensive

Litman, an independent researcher who has consulted on transportation policy globally, says that misconceptions arise when we consider the cost of any one element of the transportation system, such as transit, in isolation. (Litman has consulted for TransLink, most recently in 2012.)

When people compare the cost of transit to road infrastructure, we tend to underestimate the total cost of automobile transportation because the full cost isn’t as obvious. “So, the key is to look at the total costs, including the cost of owning and operating vehicles, the cost to businesses of providing parking and the cost to government of providing roads,” Litman says. Because only some of those costs are covered by public transportation budgets, we don’t always consider the additional costs to the user or private businesses providing parking.

Most costs associated with transit, on the other hand, are shouldered by the system. For example, TransLink pays the salaries of bus drivers, while no funding is dedicated to paying for the time car drivers spend in traffic. TransLink purchases and maintains buses, while car owners pay those costs themselves. Litman says this leads to an “inherent bias” toward underestimating the real cost of the road network versus public transit.

Take, for example, car ownership. According to the Canadian Automobile Association, owning and operating a compact car in British Columbia costs an average of about $8,800, including fuel, registration, depreciation and maintenance. A minivan comes in at over $11,000.

So while it may seem that transit accounts for a larger share of TransLink’s current expenses and proposed future investments, the amount allocated to roads doesn’t reflect the full cost including what users, businesses and government pay.

These things cost the same. Are they worth the same?

Is transit worth it?

This is relevant because, in the event of a "no" vote on the transportation plebiscite, the region’s growing population will still need to move throughout the region, be it by passenger vehicle or transit. Litman says that when you consider the full cost, transit is a more efficient investment.

“Total expenditures per capita on transportation tend to decline as public transit ridership increases,” Litman says. “The conventional narrative is that public transit is good for reducing traffic congestion and air pollution. My research suggests that those are marginal benefits compared to the [actual cost savings].”

To better understand whether the transportation system as a whole becomes more efficient as more people take transit, we did a deep dive into the full cost to both the system and the user of getting around in different ways. Next week we’ll publish our findings, which take into account things like the cost to users of waiting for infrequent transit, paying for car maintenance and even the savings to the health care system associated with cycling or walking, along with an interactive that allows you to calculate the full cost of your commute.

Full disclosure: Reporter Christine McLaren’s partner is an employee of TransLink.
Infographic photo by Edmond Lu. Design by Tyler Pentland.