Something exciting is coming to Calgary. Over the next year we will see one of the largest expansions in transit service in our history. The new service, called MAX, will change the way Calgarians move around our city. MAX will offer four brand new high-frequency direct connection routes: the South Crosstown BRT (opening fall 2018), the North Crosstown BRT (opening fall 2018), the SW BRT (opening 2019), and the 17th AVE SE BRT (opening fall 2018). The new routes are projected to carry 30,000 daily transit riders upon opening. Transit will be enhanced for 53 Calgary communities with a combined population of 320,000 people. The $304M program was made possible through $102M in local funding, $160M in funding from the Government of Alberta, and $42M from the Government of Canada.
These new express routes are nothing like the existing 301 and 302 BRT routes that we currently have. The new service isn’t LRT, but it isn’t a regular bus service either. It’s something totally different. The MAX service will have fewer stops, run at higher frequencies, offer segments that run in dedicated laneways for improved travel time and reliability, and offer station amenities like heated shelters and electronic displays that provide real-time bus arrival information. You can find more details here.
This is a big investment. In order to capitalize on this investment, we need to communicate the program to Calgarians. This is especially important when you consider that 25% of Calgary’s existing transit routes will be adjusted with the launch of this new service. Calgary Transit has proposed a marketing campaign to add value to the BRT investment. This campaign, valued at $366,000, would provide new and existing riders with information on the MAX network and its benefits, while also communicating localized route changes.
I’ll admit, at first I was skeptical of spending funds on a marketing strategy for MAX. My key concern was the lack of a measurable return on investment for this expenditure. I wanted Administration to view this marketing campaign the same way a business would. It isn’t just something we do; it has to be something more.
Thankfully Administration has reevaluated the strategy and provided some projections on the return on our investment. By analyzing similar campaigns in other jurisdictions we can project a 3-5% increase in ridership. If we take the low end of that spectrum (3%), we can expect to get our money back from the marketing campaign in 1-2 years. And the benefits of the campaign will go well beyond that initial investment as we entrench ridership for years to come. Sounds like a smart use of funding to me.
Marketing is important. If you are going to make a large capital investment, you need to be prepared to support that investment. You wouldn’t see a company launch a new product and then not market it. The same approach should be true with the MAX campaign. Next week Council will make a decision on whether or not we will be moving forward with the marketing strategy. I believe it is money well spent, and I hope Council will offer support.
There is another side to this conversation. There are groups in Calgary that do not believe we should be investing in transit. I want to touch briefly on some of the points being offered by these groups:
Why are we spending money on transit when ridership is dropping?
Yes, we have seen a dip in ridership over the last number of years. The biggest reason is the economic downturn. With fewer people employed in downtown Calgary, there has been an impact on transit ridership. But that trend is changing. Since the fall of 2017, as the economy improves, we have seen a 3.4% increase in ridership compared to the previous year. But there are other factors that impact ridership beyond economic cycles. We see more people working flexible hours or remotely, and we see new employment hubs in other areas of the city. From my perspective, these factors actually make the case that we need more investments in transit. Historically Calgary has been able to offer reasonable service for commuters to downtown, but not to other destinations. The MAX network not only moves Calgarians north-south, but also east-west. These new transit investments are going to serve the evolving travel needs of Calgarians and prepare us for the Calgary of tomorrow.
Autonomous vehicles and ride-sharing will make transit obsolete.
Frankly speaking, I don’t buy this argument. Autonomous vehicles and ride-sharing are going to change how people move, but it will not be a replacement for mass public transit. The economies of scale just aren’t there. That’s why investments in transit have stood the test of time. 60 years ago people assumed that we would have flying cars by now. I, for one, am glad that decision makers at that time chose to keep investing in subways, highways, and other forms of conventional transportation infrastructure. Of course we need to keep an eye to the future, but I don’t see a compelling case being made to stall out these long-term investments.
Money should be spent to better understand why transit ridership is dropping.
Why? We already have an understanding, as I outlined above. Commissioning a study seems rather redundant to me. I would seem to me that the most fiscally responsible thing we could do is spend money to maximize returns on the investments we have already made. If we want some insight into ridership, we can look to the biennial Calgary Transit Customer Satisfaction Surveys. Those surveys clearly show that Calgarians are looking for shorter travel times, more direct connections, and more reliable service. And that’s exactly what we are giving them. Calgary Transit has also launched monthly surveys to have a better understanding of changes in performance and how service may be adjusted to better serve the needs of Calgarians.
We won’t recoup the capital funding spent on these projects.
This is one of the most head scratching arguments out there. It makes an attempt to blur the lines between capital and operational budgets. Capital budgets focus on building something. The funding for capital comes partially from City funding, but the majority comes through grants from other orders of government. Capital projects come with an expectation that a future operational allocation will be required to run the service. You don’t build a new service and then not hire bus drivers. When we evaluate return on investment, you cannot combine capital costs and operational costs and expect to come out positive. It just doesn’t work that way. By that argument, we would never be able to justify building an overpass or an interchange. Where’s the direct return on investment in that? When we evaluate transit we look at revenues as a way to offset the operating costs (Council policy mandates that roughly half of the operating costs for transit are covered through fares/fees and half subsidized through the tax base). But we also need to look at societal benefits. Benefits like reductions in GHG emissions, better quality of life through more reliable commute times, and less congested roadways. The reality is that projects cost money. Revenues from increased ridership will offset some of the costs of operations, but they will never directly recoup the capital spend. And that shouldn’t be the expectation.
Thankfully, the voices against transit expansions in Calgary represent a vocal minority. Over the last decade Calgary City Councils have repeatedly supported expansions in our transit network. The benefits of those investments will be realized by Calgarians very soon. And we are only just getting started too. In the next decade we will open the Green Line LRT which will open up yet another transit corridor. These are investments that will revolutionize our city, and I’m thrilled that I have had a chance to play my part in this process.