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Tax Break for Public Transit Users Won't Get Cars Off the Road, Critics Say

Posted on: Sunday, 30 April 2006, 18:00 CDT

By DENNIS BUECKERT

OTTAWA (CP) - Public transit users will likely get a lift in Tuesday's budget, but the Tories' biggest environmental initiative to date probably won't cut pollution, experts say.

Making transit passes tax-deductible, a major Conservative election promise, is expected to cost $2 billion over five years and has been portrayed byh its champions as a practical step to clearing city air.

"Transportation is one of the largest causes of air pollution and greenhouse gas emissions," Environment Minister Rona Ambrose said last week. "We have to find ways to get people out of their cars and into public transit."

But experts say the tax measure will have little impact on commuter behaviour unless it is coupled with new investment to improve transit systems.

"I don't think you can expect the tax credit on its own to be very effective in generating increased ridership," said Michael Roschlau, CEO of the Canadian Urban Transit Association.

"It needs to be coupled with significant increases in service quality. A lot of our transit systems in this country are already at capacity and have very little room to accommodate new riders.

"There needs to be balance between investing in the supply side of the equation and providing incentives for demand."

Dale Marshall of the David Suzuki Foundation said the tax credit will mainly benefit those already using public transit.

"Nobody's going to say, you know, 'I really like driving my car but that extra $16 a month I'm getting in tax credit on transit passes, I'm going to switch now.' You just don't get a lot of that.

"Essentially its a tax cut, it doesn't do anything for greenhouse emissions."

Ambrose has insisted that tax breaks on transit passes have proven effective in the United States, but Roschlau said the U.S. programs are set up differently.

In some U.S. states, employers provide transit passes for their employees, and the cost of the passes is tax-deductible. That has worked well, but that is not what the Conservatives are doing.

Roschlau expects the Tories to provide a 16 per cent credit on monthly transit passes. The average commuter would save about $153 a year.

Internal government documents provided to The Canadian Press earlier this month suggest the Conservative plan would increase transit use by five to seven per cent, and cost $2,000 per tonne of carbon saved.

That is considered a very high cost compared to other measures. The most expensive measures in the Liberals' defunct environmental plan would have cost about $200 per tonne of carbon saved.

About $1 billion of the new tax break's cost is expected to be taken from the climate fund the Liberals set up for emissions-reductions projects.

John Bennett of the Sierra Club said the transit tax credit is the most expensive way possible to reduce greenhouse gas emissions.

"For that $2 billion you could get 10 times as many emissions reductions very easily, even 100 times."

Massimo Bergamini of the Federation of Canadian Municipalities said the tax break is welcome but it must be accompanied by new investment.

"There's not much value in increasing the number of people at a bus stop if the bus doesn't come."

Source: Canadian Press

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