Prime Minister Justin Trudeau, right, shakes hands with Finance Minister Bill Morneau after he delivered the federal budget in the House of Commons last Wednesday. The government said the transit credit was not encouraging people to take public transit and so would stop it on July 1.

Prime Minister Justin Trudeau (right), shakes hands with Finance Minister Bill Morneau after he delivered the federal budget in the House of Commons last Wednesday. The government said the transit credit was not encouraging people to take public transit and so would cancel it on July 1.
Photo Credit: Sean Kilpatrick/Canadian Press

Tax credit for using public transit removed

The idea was introduced  in 2006 under the Conservative government as a “green” measure.

In the face of climate change and a desire to cut greenhouse gas emissions, the public transit tax credit was instituted to encourage people to leave their cars and use public transit by giving a 15 percent credit on income tax for users of public transit.

However, that’s coming to an end.

In the just announced Liberal federal budget, Prime Minister Justin Trudeau announced the tax credit would end in July.  The Prime Minister said the credit was not really working in getting people to switch to public transit.

The loss of the transit tax credit came as an unpleasant surprise to many riders who say it amounts to a tax increase © Radio-Canada

The government said evidence showed it wasn’t working, adding it was choosing instead to invest in improvements to public transit which would in turn increase ridership.

It is hard to quantify the effect the tax credit had in creating ridership growth, but many are disappointed with the credit withdrawal saying it amounts to another tax.   What is known is that transit fare increases have had a noticeable negative effect on ridership.

The Toronto Star news reports that Canada’s biggest transit service, the Toronto Transit Corporation (TTC) says they noticed a 3.6 percent drop in transit pass sales when they raised their fares in 2015.

Over the ten year period of the transit credit, TTC fares have risen by 47 percent. The current cost in Toronto for a monthly pass is $146.25 and the credit amounted to an effective annual discount of $263.25.  About half of the the TTC’s annual ridership of 538 million used the monthly passes.

  • In Vancouver. British Columbia, depending on the zone, passes range from $91 to $170.
  • In Calgary Alberta monthly adult passes are$103.
  • In Quebec, the greater Montreal region has 8 zones, ranging from $83 for central Montreal to $123 for zone 3 where the subway extends and then to $263 per month to zone 8 with rail and bus.
  • In Halifax, Nova Scotia  a monthly adult pass costs $94.50

On a federal government website, figures for 2008 show that over 1.4 million taxpayers claimed the public transit tax credit (PTTC).

With files and information from

Categories: Economy, Environment & Animal Life, Politics, Society
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