Carbon tax costs to Calgary Transit could be offset by new riders: Economist
Although councillors, and Calgary's mayor want a rebate for carbon tax costs to Calgary Transit a local economist is lending a different point of view
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What's a few cents added to your transit ticket bill between friends?
According to a city report coming before the Transportation and Transit committee on Wednesday, the carbon tax is adding $1.5 million more in fuel this year, and $2.25 million more in 2018 under the provincial carbon levy. The report says those costs equal 15,000 to 22,500 hours of transit service.
Coun. Shane Keating, chair of the committee, is concerned because with transit's declining revenue, he believes the city will have to increase transit fares – which could translate into a decline in ridership.
But University of Calgary economist Trevor Tombe said the carbon tax only increases the cost of a trip by pennies. And while car ownership continues to climb, citizens might look for an alternative route to work and play.
"It’s about 2 cents per trip, they wouldn’t actually need to adjust average fares that much," said Tombe. “The carbon tax will make driving more expensive by a much higher proportion than it will make riding transit more expensive.”
He said since Calgary Transits costs are largely fixed, additional passenger revenue from passes and tickets could offset additional increase due to the carbon costs.
Keating said no matter which way you slice it, an apple is still, an apple. And those who can't afford vehicular travel, and currently can barely afford transit will miss out.
"If you're going to raise costs on the private vehicle that's what the carbon levy does," said Keating. "The more anything costs, the less people can afford it."
He said if the province gave Calgary Transit a rebate, just like they're offering Albertans on light bulbs, transit wouldn't have to worry about millions in added costs.
"We know if the City of Calgary has an increased cost that's in the millions and we don't have the ability to raise fares or tax base, there's only two ways we can deal with it," he said. "Reduce service, meaning less buses going less frequently, or we eliminate some of the low ridership routes."
Brent Wittmeier, press secretary for Environment and Parks Minister Shannon Phillips said transit has many benefits for Albertans, including the reduction of emissions.
"Municipalities like Calgary stand to benefit from a carbon levy, which will help fund investment in renewables, green buildings and transit," Wittmeier said. "That’s why $2.2 billion dollars has been set aside under the Climate Leadership Plan for green infrastructure funding like public transit."
But he makes no mention to a rebate specifically for the carbon tax, pointing out the province's other investments in Calgary.
"Last year, municipalities received just over $1.2 billion under the Municipal Sustainability Initiative with $373,850,304 going to the city of Calgary," Wittmeier said. "This demonstrates our strong commitment to municipalities. We will continue to support municipalities through reinvestments from the carbon levy as they shift to a lower carbon economy and as we move forward with creating a more resilient and diversified economy for Alberta families."