The federal government's decision to eliminate the public transit tax credit (PTTC) in its latest budget will cost the Toronto Transit Commission millions of rides, and dollars, the agency's CEO says.
In his April report ahead of next week's TTC board meeting, CEO Andy Byford says the credit "has undoubtedly had a positive impact" on Metropass sales and ridership numbers. Scrapping the credit "will erode at least some" of those gains, he said.
Byford estimates that the end of the credit will result in 2.5 million fewer rides and a loss of $5 million in 2017.
"These estimates will be further refined as better data to assess the impacts become available later in spring 2017," Byford's report says.
It notes that even before the federal Liberals tabled their budget, passenger revenue was projected to be $3 million under budget based on three million fewer trips than previously estimated. However, this was to be partially offset by the recent fare increase, the report says.
TTC riders can claim the credit, which was introduced in July 2006, if they purchase the monthly Metropass, which currently costs $146.25 for adults and $116.75 for seniors and students.
The credit is worth around $200, but will be eliminated effective July 1.
In scrapping it, federal Finance Minister Bill Morneau said that while the credit was designed to help boost public transit ridership, it was not having that effect.
Rather, the $20 billion over 11 years that the federal government has pledged for transit projects will do more to draw passengers to public transit, Morneau told CBC Radio's Metro Morning last month.
"What we are doing is making very significant investments in public transit around our country," he said.
The morning after the budget was tabled, TTC riders disagreed with Morneau, telling CBC Toronto's Linda Ward that the credit helped make their transit costs more affordable. Losing it, they said, would make them reconsider public transit.
"Commuting is not easy: limited seating, [being] shoved, pushed, you're bound by schedules, they're late. And the only tax break that the 'Working Joe' has is 'Okay, I can put it on my income tax and now I can't do it anymore,'" Rose Clavet said at Union Station.
Clavet said the credit helped reduce her burden at tax time, which means she will have to re-arrange her budget. The decision will also encourage her to drive and park downtown, she said.
"There's no point in taking it anymore," she said.
Jump in Metropass use 'mainly attributable' to credit, TTC says
In his April report, Byford acknowledged that the exact impact of losing the credit can't currently be determined, given that data of taxpayers who claim the credit does not offer a breakdown of users who are claiming a TTC pass. However, the TTC will conduct a survey this spring to get an idea of rider awareness and uptake of the credit.
But taking the data that is available, the report says that although the credit "likely hasn't attracted non-transit users to public transit," it has likely encouraged some riders to switch from single-purchase rides to monthly passes.
The biggest jump in Metropass purchases occurred between the introduction of the credit in July 2006 and December 2008, the report says. Over that period, average monthly Metropass sales were 250,000, a significant increase from the average of 174,000 over the two-and-a-half year period prior to the implementation of the credit.
The TTC considers that boost "mainly attributable" to the credit because "there were no significant enhancements to the TTC's Metropass programs during this time period that could help to explain this sales growth."
"If it is assumed that 75 per cent to 100 per cent of the above-noted Metropass sales growth was attributable to the PTTC, the elimination of the PTTC could result in lost annual Metropass sales in the range of 675,000 to 900,000 passes," the report says.
After the budget came down, Toronto Mayor John Tory demanded "more information" from the federal Liberals about the move. A spokesperson for the mayor said Tory was "very concerned" about keeping transit affordable for residents.
Ontario Finance Minister Charles Sousa would not speak to the federal government's reasoning behind its decision. But he said last month that "we need to provide support and encouragement" for public transit use.
He would not say whether he plans to introduce a similar credit in the provincial budget, which is scheduled for April 27.
"I haven't taken a look at a tax credit specifically for the use of public transit, but I am looking at ways to make it easier and more effective to use public transit," Sousa told Metro Morning in March.