Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Feds can’t prove their costly green programs work

with one comment


This is very bad news. Canada does very little in terms of trying to reduce its greenhouse gas emissions. Now we know that what they are doing is not having much effect.

My eye was caught by the section on the transit tax credit

The report also looked at the public transit tax credit, which was introduced in the 2006 budget and is expected to have cost the government $635 million by the end of the 2008-2009 fiscal year. In 2007, Environment Canada predicted the tax credit would reduce greenhouse gas emissions by 220,000 tonnes, but a year later, it later lowered its estimate by 84 per cent, to 35,000 tonnes.

“Given the lowered figure, the tax credit will have a negligible impact on Canada’s greenhouse gas emissions,” Vaughan’s report said.

So first of all the government over predicted what this measure could do. That is, I am afraid, not unusual. Hype and spin are the main concerns when launching new programs – when the government wants to be seen to be doing something. And being conservatives, they have never seen  a tax cut they didn’t like.

The very obvious problem with the approach is that giving transit users tax credits is rewarding them for what they are doing anyway. The probability that some one will say  “Hey, if can have a tax credit for a transit pass I will stop driving” seems to me to be pretty slim. What gets people to use transit is good service. In fact, when commuters who drive are asked why they do not use transit money is not the concern – neither fares or taxes get mentioned. $635m in transit terms nationally is in fact not very much at all. But you could have spent that much more effectively – for example by finding ways to cut the cost of increasing transit service. Of course tax cuts might be one route but the problem is that saving service providers money does not guarantee they will provide more service with the savings. Better program design is needed than just “throwing money” – so broad based tax cuts are as ineffective as open ended grants.

Oddly enough the federal government has in its filing cabinets numerous reports and studies it has paid for. One of them is called the Urban Transportation Showcase Program. It has been running now for several years – and the Showcase projects  in Greater Vancouver will, by now, have collected quite a bit of data on what works and what doesn’t. But then Environment Canada did not fund that. It was Transport. Do you think they talk to each other?

Written by Stephen Rees

February 5, 2009 at 5:36 pm

Posted in Environment, transit

One Response

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  1. You’re certainly right about the tax credit rewarding people for doing something they’re already doing… one thing though, by reducing the price from $99 to $84(2 zone) it affects the “should i buy a pass for a month if I’m taking a vacation this month” calculation. I haven’t gone without a pass since July 2006… time for a longer vacation.


    February 13, 2009 at 11:52 pm

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