Rapid transit funding deal will offset extra fare increase

The Manitoba government has changed its transit funding agreement to help the City of Winnipeg expand its bus rapid transit system without having to raise fares by an extra five cents.

Both governments announced the latest development on Friday, saying it will help pave the way for the second phase of the Southwest Rapid Transit Corridor to be built.

The agreement will also offset the city's plan, as laid out in the 2015 budget, to raise transit fares by five cents over and above inflationary increases.

"We have amended our transit funding agreement with the city to allow for an additional annual provincial contribution of $1.7 million which will help keep transit fares affordable and support the modernization and renewal of the bus fleet, including a new focus on electric buses," Municipal Government Minister Drew Caldwell said in a news release.

The city wants to extend the rapid transit corridor from Jubilee Avenue, where it currently ends, south to the University of Manitoba.

Changes cost-sharing agreement

Under the agreement, eligible transit expenses are cost-shared on a 50-50 basis between the city and the province.

The city can now claim up to $3.4 million in transfers to the Bus Replacement Reserve as cost-shareable expenses. That will result in an extra $1.7 million in provincial funding annually, according to the city.

"I want to thank the Province of Manitoba for their ongoing collaboration and willingness to work with us to fund the construction of the second stage of rapid transit," Mayor Brian Bowman said in the news release.

"This willingness to work together on creative and innovative funding models is encouraging, and I look forward to continued collaboration."

News that transit fares won't go up by an extra five cents is welcomed by Kate Kehler, executive director of the Social Planning Council of Winnipeg.

"I would like to commend the fact that they actually are rolling this back," she said.

"They really are looking at the impact of what a lot of people would think, 'Well, it's just five cents' — five cents really does matter to people."

Kehler said it would be even better if the city would provide transit vouchers to people who are on limited incomes, as people in poverty rely on buses as a critical means of transportation.