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

Archive for November 7th, 2009

“Major Translink Reform Needed”

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Comptroller General Cheryl Wenezenki-Yolland released her report on Translink and BC Ferries on Friday morning. I only heard about it on the CBC News that evening.

So far I have only scanned what is in the report with respect to to Translink. I think it would be a good idea to take the time to digest the report carefully, but having said that it is also worth pointing out was this report is – and is is not. It was a rush job and was politically targetted to be critical of the role of the Mayors in this region, and was also designed to direct attention away from the province’s actions. Specifically it was designed to highlight attention on cost control and executive compensation.

The province tipped up the organisation only eighteen months ago with new legislation and a new structure. That in itself says a lot about this government. The new arrangements have hardly been working long enough to determine anything, yet already the province is clearly dissatisfied. There has long been dissent between the province and the municipalities in Greater Vancouver over transit. The old arrangements of BC Transit and the Transit Commission were clearly unsatisfactory and the creation of the GVTA was supposed to deal with that. But the Liberal government cannot resist the instinct to try and run things itself. While it made a great song and dance about independence and the need for a business model, it stuck to the idea that it alone was the right authority to determine major investment decisions. It also carries to this day the conviction that property taxes should be increasingly used to fund transit – and transportation in general. It is very significant that the Comptroller General says nothing about the impact that decisions on rapid transit have had – are are having – on Translink’s operating costs. Attention is only directed towards bus service. And right up front there is a table that compares how much other Canadian cities use property tax to fund transit compared to this region.

Transit share of City Property Tax and Utility Charges

I think the prominence that this report gives to the property tax issue and the way that it is presented is a dead giveaway of the province’s intentions. Throughout the discussion of Translink’s plans two themes were constant in statements by Minister Shirley Bond. That Translink had the capability of raising enough revenue and had not done enough to control costs.

In a report put together as quickly as this one, and with such a short document there is not a great deal of evidence presented, and even less discussion about what it means. The comparison in Figure 7.0 is inadequate, because Calgary, Toronto, Montreal and Ottawa do not have access to a dedicated regional gas tax collected by the province. Prior to the creation of the GVTA the gas tax was a key point of disagreement: the province maintaining that it represented a provincial contribution and the Mayors stating that since it was only collected in this region it was a local contribution. Gas tax is actually not a very good way to pay for transit at a time when gas prices are rising. We have seen here and across the United States how reliance on gas tax tax has meant there has been less revenue at exactly the same time as more people want to use transit because of rising gas prices. This observation is, of course, absent from the report. Also absent from the report is that Translink is unique in having a hydro levy for transit – an historical anomaly, but one that is not a significant revenue source. If the comparison between different cities were to be valid I would argue that gas taxies that are solely collected in this region should also be included, becuase that would show the relative share of provincially raised taxes and locally raised taxes. It is who pays that is important (the taxpayers of the province or those of the region) not how they pay or who collects it.

The report also avoids any discussion of whether or not property taxes are an appropriate revenue source for transit – or transportation in general. It might also be worthwhile pointing out how municipalities are moving away from property tax as a revenue source, and substituting user fees or charges for essential municipal services such as water supply and garbage removal.  That in itself is another discussion, but it is entirely consistent with the local politicians approach to Translink funding.

The Comptroller General does indulge herself in presenting a model for publicly related enterprises which displays a distinctly conservative bias. Transit is not a commodity like gas or electricity. Indeed it is only recently that those utilities have begun a serious effort to try to reduce per capita consumption of their services, whereas it is very much in the public interest that transit use increase, and for very similar reasons. I do not accept her assertion that it is necessary for the governance model of public enterprises to reflect those of the private sector. Indeed I would suggest that her preference for such a model displays a political bias. The reason that governments established public enterprises (crown corporations being only one of several possible models) was that private sector provision had proven to be inadequate to meet legitimate public concerns. The health service being one of the most obvious examples where the profit motive was (and in the US still is) detrimental to providing adequate service to the entire population. Transportation is also very clearly a case where the supply of public roads, without user fees, has lead to a major distortion of the market greatly against the public good but very much in favour of a few, very powerful, private sector corporations. It has cost us dearly in land use, environmental degradation and also human health impacts. Transit has to be subsidized to exist at all let alone to compete effectively against the much more heavily subsidized private car. But once again none of this is in the mind of the Comptroller General. She is an accountant, not a policy analyst. So her characterisation of the need public control as the “shareholder” is not just misleading it is wildly inappropriate. Shareholders have only one interest: to maximise the return on their investment either through dividend payments or capital appreciation of their shares. Shareholders in general have very little control over corporations. Some groups of shareholders, often public sector pension plans, have a very strong influence, but they do not act in the broad public interest and indeed would fall foul of the law if they did. They are bound to pursue narrow financial objectives. So one the major drivers of Canadian urban sprawl has been the property investment arm of the Ontario teachers’ pension fund. I would bet that there are many teachers who would be very critical of how their funds are used to spread concrete over farmland, but who are also worried about how they will fare financially after retirement.

Because of her limited terms of reference, she could not examine why we need to have effective integration of transportation and land use, and what role transit provision plays on securing a more sustainable future. Those issues are not on her radar, but in dealing with the governance of Translink ought to be front and centre.

Her suggestion that there should be direct provincial representation on the Translink board is quite extraordinary.   The GVTA board was supposed to have had three MLAs. They never once took their seats. The province, on the other hand, has been quite overbearing in its relationship to the Board – even imposing new legislation to limit the powers of the Mayors when they had the temerity to stand up for the region’s priorities in rapid transit provision. With a majority in the legislature, the provincial government can do pretty much as it pleases and there is very little to stop them. Kevin Falcon did mange to bully the Board into reversing its decisions on the Canada Line, but then hit them with the legislative cosh anyway. Yet they still trot out the Comptroller General to suggest that even more provincial control is needed. The word democracy, or representative and responsible government, is also absent. But note too that among those who get to appoint SoCoBriTCA’s board is something called the Gateway Society. Not elected local representatives, but a special interest group gets to chose who runs Translink. No transit user’s group gets consulted, of course. Or anyone who might represent the people who pay regional taxes.

One thing she was supposed to look at was executive compensation. This was flagged by politicians as being excessive at both BC Ferries and Translink. I imagine there will be great disappointment in the premier’s office that she did not find that to be true at Translink. Without presenting any evidence at all , or explaining how she arrived at the conclusion, she does say that there are too many of them. Somewhat to my surprise  Translink does not disagree (scroll down to near the end of that article).  I am not clear if she is talking just about Translink, or its plethora of operating subsidiary “companies”. That structure, inherited from the GVTA was designed to stop local politicians from interfering with the day to day operations of transit services and keep their attention focussed on policy issues. Now that these politicians have been removed even further, perhaps this structure is no longer necessary. But I will bet that it will be retained since it facilitates eventual privatisation, which may not be a currently achievable arrangement but I am convinced remains a long term goal of the BC Liberals. One thing is clear that now there is a professional board as well as the Mayor’s board, the structure is top heavy. There is even less local input into decision making and almost no effective way of achieving a regional growth strategy that might be directed towards ends other than private sector profit maximisation. Which, of course, is the only thing that Gordon Campbell really cares about.

I will probably return to this report again. I cannot say that I am surprised by much in it, and I do not think it is enough for good decisions to follow. Simply because it is so devoid of evidence. I want in particular to look at what she says about bus service, because what she says has been happening and what I am aware of are two different things. But since I have already covered that in my discussion of Martin Crilly’s report, I think I will leave this for now. I am not all hopeful about the eventual outcome. I think it will be used as a justification for yet more provincial direction, which will lead to more tax and fare increases and bus service cuts and quite possibly a head on collision with the transit union similar to that we see with the Ambulance service and HandyDart. Because executive remuneration may be an easy way to get popular support but is not actually the big ticket item of bus operating costs. And sooner or later, that is where the focus will shift.

Written by Stephen Rees

November 7, 2009 at 11:30 am