The Legault government will this year put up a lifeline of 400 million for transport companies crying out for hunger. But the long-term challenge is huge: Transport Minister Geneviève Guilbault must find a solution to help them, while finding new revenue to fund her own transport projects.
Posted at 4:31 p.m
Ms Guilbault is running out of time as her government still aims to reduce greenhouse gas (GHG) emissions by 37.5% by 2030 compared to 1990 levels. A large part of this effort requires reducing greenhouse gas emissions in the transport sector, particularly through improving public transport services.
However, the pandemic has wreaked havoc on transport companies. Quebec acknowledges that “the normalization of telecommuting” and the consequent decrease in traffic, together with the “general increase in operating costs” have weakened the financial situation of transport companies.
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In the short term, Ms. Guilbault will therefore offer 400 million for the year 2023, “the time to implement the solutions that will have been identified after the advisory tour”. The Legault government is also calling on Ottawa to “contribute to this effort.”
But the Quebec Public Transport Finance Alliance (TRANSIT) estimates “that the Montreal region would incur a deficit of 500 million for fiscal year 2022-2023.” TRANSIT also estimates that “if nothing is done for all transport companies in Quebec, the Quebec Urban Transport Association (ATUQ) fears an annual deficit of 900 million in 2027”.
A big deficit
At the same time, the Ministry of Finance warns that the fund for financing the road network and public transport is in the red, as La Presse wrote this autumn. Put simply, the Terrestrial Transport Network Fund’s (FORT) revenue is growing at a much slower rate than its expenditures.
Road and public transport projects
Revenue growth: 1.3%
Spending growth: 5.9%
For 2027-2028, the Ministry of Finance forecasts an annual deficit of 1.7 billion, which will have to be borne by all taxpayers who already finance part of the road infrastructure.
The FORT is financed in particular from the fuel tax, the rights to the driver’s license and those to the registration. It is based on the number of users principle. They are the ones paying for major projects such as the “extension of Route 138, the repair of the Louis-Hippolyte-La Fontaine tunnel, the reconstruction of the Île d’Orléans bridge, the extension of the Montreal blue line”. or the Quebec streetcar, we discover.
These findings are known to the Treasury Department. “Solutions […] need to be identified,” says the budget.
solutions
This issue was already on the Legault government’s radar screen in 2019, when former transport minister François Bonnardel launched a project on mobility. He already pointed out that an “imbalance could arise […] due to improved fuel efficiency of vehicles and a higher share of electric vehicles in the fleet” reducing revenue and increasing expenses due to “major investments required to maintain assets”.
But despite a regional tour with 18 stops, 240 meetings of “partners for sustainable mobility” and 58 briefings, no decision was made before the 2022 general election. In the autumn, François Bonnardel had promised that he “had no intention of adding any new taxes in the coming years”.
So it’s up to Geneviève Guilbault to solve this other problem.
Surprise in the carbon market
There is also new money for the environment, because this year the CO2 market, which is largely financed by motorists, is paying more than expected: Québec is paying 1.3 billion in the fight against global warming. Overall, she forecasts spending of 9 billion between 2023 and 2028.
What Environment Minister Benoit Charette does with these sums, however, we have to wait until spring. The same applies to the establishment of a “blue fund” that plans to spend an average of 100 million per year.
Exactly how they are funded is unclear. Part of its revenue will come from an increase in water taxes paid by industrialists, who currently only pay £3million a year, to pump water for various uses. We’ll have to wait for a bill later in the spring to find out how they’ll be increased. It will also be necessary to have patience to know what this money is going to be used for.
The “Nature Plan 2030” with an average budget of almost 100 million per year provides for the creation of new protected areas. It will also fund the fight against invasive alien species and the recovery plan for threatened and endangered species.
In 2020, Quebec emitted 74 megatons of greenhouse gases. To achieve this goal, it must reduce its pollutant emissions to 53 megatons. For now, Mr. Charrette’s plan can only do 51% of that effort.