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Canadian study calls for increased Fed investment

Posted on September 16, 2008

Transit leaders from across Canada this week called on federal party leaders to pledge increased funding for transit during the current federal election campaign.

The call was supported by the release of an economic study by HDR Decision Economics Inc. that analyzed the optimal supply and demand for urban transit in Canada.

The study conducted had several important conclusions, including:

• The economically and socially optimal level of transit supply in 2006 would have required an estimated 1.7 billion vehicle-kilometers of transit service, or 74 percent more service than actually supplied.

• In 2006, capital investment of $78.1 billion would have been required to bring the supply of transit into line with the optimal conditions of supply in that year.

• Results of the analysis conclude that Canada is clearly underinvested in urban transit.

• Bringing transit to the optimal level of supply would produce several positive economic and social benefits – more than two-thirds of these benefits are constituted by the economic value of reduced roadway congestion.

HDR's economic study release comes on the heels of a public opinion poll, conducted by The Strategic Counsel, which was released two weeks ago by the Federation of Canadian Municipalities and Canadian Urban Transit Association (CUTA). The major findings from the nationwide poll of urban Canadians demonstrated that 40 percent of respondents believe rising gas prices have already or will push them to consider using public transit.

“Transit providers welcome new riders, but without new funding, this kind of increased demand would overwhelm transit systems, many of which are already at or beyond capacity during peak hours,” explained Steve New, CUTA chair.

Over the next five years, CUTA is expecting that Canada's transit systems will require $40 billion to meet demands and expand public transportation.

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