The federal government’s decision to eliminate the tax credit for public transit passes will decrease ridership on the TTC and cost the transit agency millions of dollars a year.

That’s according to an analysis in the latest monthly report from TTC CEO Andy Byford.

The report states that the public transit tax credit (PTTC) “has undoubtedly had a positive impact on TTC Metropass sales and ridership growth” and eliminating it “will erode at least some of these gains.”

The transit agency estimates that the Liberals’ decision to phase out the credit on July 1 will cost the TTC 2.5 million riders and $5 million in lost revenue this year. Extrapolated for a full year, the cost to the TTC is estimated at closer to $12 million.

The findings contradict statements made by the federal finance minister and the prime minister, both of whom have asserted that the credit had a negligible effect on transit usage.

TTC spokesperson Stuart Green said that the numbers are still being refined but they’re based on Metropass sales trends, which spiked by 75,000 a month after the introduction of the tax credit.

Green said the potential loss of revenue was “significant.”

“If it bears out that that’s indeed the number, obviously that’s of concern, that’s why we’re bringing it to the board’s attention,” he said.

The TTC was already struggling with lower than expected ridership, which the agency attributes largely to economic factors. The report states that if current trends continue, fare box revenue will be more than $3 million lower than expected this year. Combined with the impact from the loss of the PTTC, that would put an $8.5-million hole in the budget.

The PTTC was introduced by the Conservative government in 2006 and allowed people who purchased transit passes or fare cards to claim up to 15 per cent of the cost on their annual income tax.

The TTC’s regular adult Metropass costs $146.25 a month, making it among the most expensive transit passes in the country. Riders who were eligible for the tax credit could have saved about $260 this year.

Some transit users criticized the Liberals when they announced plans to scrap the credit last month as part of their 2017 budget. The move is expected to save the federal government up to $200 million a year.

Finance Minister Bill Morneau defended the decision by arguing that there was no evidence the tax measure had succeeded in increasing transit ridership. He also said it didn’t help lower-income Canadians because only people who earned enough to pay federal income tax could receive the credit.

Loading... Loading... Loading... Loading... Loading... Loading...

At a press conference two weeks ago to announce $1.9 billion in federal funding for GO Transit’s regional express rail (RER) program, Prime Minister Justin Trudeau dismissed the PTTC as “a boutique tax credit” and said his government was “committed to evidence-based policy.”

The effect of eliminating the credit could be somewhat mitigated by measures in the provincial budget, which the Ontario Liberals will unveil later this month. Speaking to the Empire Club on Thursday, Finance Minister Charles Sousa said the spending plan will include a public transit tax credit for seniors. Details of the credit are expected when the provincial budget is released on April 27.

Read more about: