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cityscape

Public Works: Discounting the TTC

The TTC offers discounted fares for students and seniors. Is it time we gave low-income earners a break?

Public Works looks at public space, urban design, and city-building innovations from around the world, and considers what Toronto might learn from them.

http://www.flickr.com/photos/tsarkasim/4179898853/

Photo by {a href="http://www.flickr.com/photos/tsarkasim/4179898853/"}Tsar Kasim{/a} from the {a href="http://www.flickr.com/groups/torontoist/pool/"}Torontoist Flickr pool{/a}.

May 6, 1986. Real Madrid wins the 15th UEFA Cup. Robert Palmer and Whitney Houston are topping the charts with “Addicted to Love” and “Greatest Love of All,” respectively. And back here at home, a TTC meeting approves this motion [PDF]:

“3. Advise the Municipality of Metropolitan Toronto that the Commission is willing to administer a Reduced Fare Program [that is, for low-income earners], if Metropolitan Council deems such a program appropriate and adequate funding can be found to overcome any revenue shortfall which would result to the Commission.”

Fast-forward 26 years. North Americans still don’t care about soccer, Palmer and Houston are headlining in rock ‘n’ roll heaven, and the metropolitan council and its mega-successor still haven’t deemed such a program appropriate or found adequate funding. In fact, it’s definitely the latter, since it’s unlikely that the terms “adequate funding” and “TTC” have ever been used in the same sentence except by hipsters ironically waiting for streetcars.

The idea was revived in 2010 and rejected as too costly, although the staff report on the idea did suggest slyly that the TTC would be happy to sell ticket-agent priced Metropasses to Social Services, who could resell them to their clients at any price they wanted.

Numerous other jurisdictions provide discounted transit fares for folks who might otherwise be afoot.

Calgary, for example, offers a slightly-less-than-half-price “Low-Income Monthly Transit Pass” to people with an income a certain amount lower than the federally-set low income cut-off (poverty to be confirmed through presentation of CRA Notice of Assessment). Calgary Transit recently extended the program to kids between the ages of seven and 18.

It’s estimated the Calgary program costs around $4 million annually. The kids’ discount is expected to add another $2 million.

Six million dollars is obviously a drop in the bucket in a city where the mayor uses the word “literature” without rolling his eyes and the streets are paved with oil-sands loot. The conventional wisdom seems to be that such a move wouldn’t be affordable here in the Rust Belt North.

However, discounted bus rides aren’t just an OCAP-placating, Sun-comment-troll-enraging freebie. There are social benefits.

Cheaper fares for the indigent won’t do much to ease gridlock, of course, since the target market is largely unwheeled. But a 2010 report [PDF] found that cheaper transit allowed low-income earners to enjoy new luxuries, like leaving the house to see family, or to buy groceries.

And if your heart isn’t of the bleeding variety, consider that a discounted pass also permits people to get to school and work more readily, advancing their bright future as, yep, taxpayers.

The likely cost for a Toronto program hasn’t been calculated, but it’s worth noting that the Calgary price tag is based on the assumption that every individual getting a discounted pass would otherwise have paid full freight. More realistically, some proportion would have relied on friends, stayed home, or jumped a turnstile instead of shelling out an additional $50 a month, meaning the real cost is probably less.

Various kinds of discounted fare programs are already in place across the country, from Victoria, to Regina, to Hamilton. Even Waterloo, Halton, and York regions have them.

And in Toronto we already have cheap fares for seniors and students, who could well be retired captains of industry or basement software tycoons respectively, for all we know. But they have larger, more organized lobby groups than the just plain poor.

The TTC remains famously cash-strapped, of course, so prudence is warranted. A pilot program with a cap on the number of participants (as is currently underway in York Region) would be a good way to start.

Surely we can scrounge a few bucks for a test drive without busting the bank?

Comments

  • Baltic Avenue

    Talk about burying the lede.

    A poor person making less the basic federal tax exemption pays $126/mo. for a metropass. Post-secondary students and seniors pay $104/mo.

    On the other hand, a rich person who uses the cost of the pass to offset the portion of their income taxed at 29% ends up paying only $89.46/mo. for a metropass (i.e., after the credit). If they’re on the discount plan, it’s $83.60/mo.

    This means that some poor people are paying over 50% more for transit passes than rich people.

    I think we need to address this discrepancy (read: stop giving massive discounts to the rich) before we even start pretending to discount passes for the poor.

    • Baltic Avenue

      And by “rich” I meant anyone making over $132,000 per year.

    • Tommy

      Completely agree. The (large) company I work for offers passes via the VIP program. Every single person here makes well over the average Canadian salary, yet *WE* are the people given the discount?! How does this possibly make sense!? Instead of cutting routes and hiking fares, maybe these discount programs need to be looked at, if the TTC is in such dire straits.

      As for the YRT – that program is laughable. The YRT has the highest fare and highest taxpayer subsidy in the GTA. Maybe their donors need to be reminded of this before throwing more cash into YRT’s growing money-pit.

      • Jonathan

        The VIP discount is offered because the TTC saves on bank transaction fees and mailing costs every month by distributing hundreds or thousands of passes in one go. It also encourages transit use. How is this a bad thing?

    • Jonathan

      As far as I know, transit passes are not an allowed deduction from income. There is a refundable tax credit available to everyone set at 15% of the cost of a pass. You get the same amount no matter what your income is.

      • Anonymous

        … unless your income is so low that your tax bill is less than 15% of a year’s Metropasses.

    • Anonymous

      You only save 15%, not 29%. The Fed’s Transit Pass Tax Credit is applied at the starting rate.

      • Baltic Avenue

        Duly noted. Thanks for the info.

        (I suppose I would’ve known this had I ever actually qualified for the credit.)

  • Anonymous

    Ok, I was going to leave a trolltastic comment but it’s the Christmas season, so here’s a proposal:

    1) Randomly select 200 households (or whatever number).
    2) Give them a time diary recording TTC use for 2 months to all of them. Check up on this weekly (daily?) to avoid problems with recall bias.
    3) Randomly give 50% of them the discounted pass for 2 more months.
    4) See how behaviour changed based on the time diary.
    5) Use these data that are both cross-sectional (across households) and time series (before and after the pass is given within a household) to examine how use of those already using TTC changes and also how much people who previously did not use TTC now use TTC.
    6) Do a full expenditure-revenue accounting after the 4 total month experiment.

    Never mind the fact that those who live further away are already subsidized due to the flat rate TTC fare schedule but if we want to do a careful accounting. The above seems like a reasonable place to start.

  • Heather

    Addressing the needs of Toronto’s (and the world’s) less fortunate is laudable and merits attention; but while I would support raising the minimum wage, and social assistance payments, I oppose more ‘discounted’ fares.

    My difficulty is this, every concession fare (meaning any fare priced below ‘full price’ increases administration costs to the system and in the absence of greater subsidies to the overall system means higher ‘full fares’ to offset the revenue loss.

    Age-based concessions require ID cards, and verification or there is abuse in excessive amounts.

    Income-based which can’t be verified by just looking at someone, means more special ID to either get the fare; or to use said fare, or both.

    That it seems to me is not only costly, but quite the assault on the dignity of someone going through tough times.

    Better to add another $100,00 to their social assistance cheque, Or raise minimum wage, so they are economically sufficient to pay for the normal fare.

    Were the TTC to eliminate concession fares, and charge 1 fare to everyone, with the possible provision that children not yet of school age ride free. (current 2 and under, some systems use 3) …..

    They could offer a vastly cheaper adult fare that would be more affordable in the first place.

    I’m not sure how much more, but I feel that 20% is a safe, conservative bet.

    That would make the service more affordable to everyone, more efficient to operate; and leave the business of income redistribution to programs meant to cover that.

    • Anonymous

      THIS.

  • Anonymous

    Here’s an idea: Cut all fares by 50% and upload the remaining costs to the province.

  • Anonymous

    Let’s give a discount to low earners, paid for by cutting the TTC operating subsidy to zero. WAIT, DON’T THROW TOMATOES. HEAR ME OUT. The TTC makes about $400m, or 25% of its income from the subsidy, so cutting it to zero would mean hiking fares by 33%: cash fare would be $4 and metropasses would be $168. (It’d be more complicated than that, but good enough for a first approximation.) Those fares are not extreme by today’s standards. And I’d still ride the TTC because (a) it’s a good deal compared to gas, parking, insurance, etc., and (b) I am not badly off and I DON’T NEED A SUBSIDY. Neither do most of the TTC’s riders.

    It’s way better to give the subsidy to those who really need it: $400m would buy 200,000 adults a free metropass for the year. (Lots of other ways to distribute the subsidy as well.)

    And if you think it can’t be done, that service would suffer, then just look at Canada Post: here’s a crown corporation that has a mandate to deliver a certain standard of service to every resident of the country, and yet does it without a subsidy. (Indeed, it normally makes a profit for the government. Last year was the first time in 16 years it made a loss).

  • Throwaway

    This doesn’t make much sense to me. The TTC exists for low-income workers. Rich people hardly ride the TTC at all. If we want to discount fairs for low-income workers, we might as well just call it what it is, a decrease in fare.

    • Anonymous

      “The TTC exists for low-income workers”
      Rubbish. It exists for everyone.

  • http://twitter.com/BHColeman Brian Coleman

    This is a direct welfare subsidy/payment and should come under the welfare department when it is considered. It is not a transit question! All welfare should be approved under one department budget.

  • Anonymous

    All of this is well and good (even great), but how is this going to happen when the TTC and Metrolinx is imposing an expensive RFID card (PRESTO) on all of Toronto that most poor people won’t be able to afford?

    • Paul

      The TTC fought against PRESTO — they knew what a boondoggle it would be. They’re only implementing it because the provincial government made it a condition of transit funding.

      • Anonymous

        I know: let’s turn the TTC over to Metrolinx!

      • Anonymous

        Then they should put the fucking thing on hold-full and complete stop-while the city council discusses this issue of how to service poor people better with lower fares. Just implementing this service because other cities have it is not reason enough.

    • Jonathan

      The PRESTO card costs $6 to buy and is good for 5 years. It is not expensive. It is also frequently given away for free during promotions.

      • Jonathan

        Also the TTC has never said that PRESTO launch will coincide with the elimination of the Metropass card or tokens. Eventually it will happen, but there will be Metropasses and tokens for years to come. GO Transit had a three year overlap before eliminating passes.

  • http://www.facebook.com/mark.j.richardson Mark J. Richardson

    I’m sure that some members of the LEFT of Council would be all over this “Means Tested” subsidy model for our under-serviced TTC, but when I have suggested the City do the SAME for our under-serviced Recreation Programs….suddenly, the very idea of any kind of “Means Testing” is a “Barrier to Entry”…

    http://www.youtube.com/watch?v=LWVGgkp_Xjs

    If the City’s goal is to provide greater access to TTC (or Recreation) for the poor and working-poor…their HAS to be a method of assessing/identifying their need.

    I even heard someone at an event this weekend describe the concept of “Toll Roads” on the DVP and Gardiner as an “Elitist Barrier to the Poor”. (*Let’s forget for a moment that even an old used car runs $500+ a month in Toronto for Gas, Insurance, Maintenance, etc).

    “Means Testing” is a part of many City Programs (eg. TCHC, Rent Subsidy, Welcome Program) – maybe the answer is to consolidate all those existing models into a SINGLE subsidy-confirmation.