The Government of Quebec transfers nearly $ 1 billion annually in grants to transport authorities and municipalities for the development of public transit networks. These grants are allocated through multiple programs dedicated to both capital investments and operations. This report analyzes the criteria used to allocate subsidies and explores the potential funding arrangements that could link government grants to features of transit network that influence their performance. The report begins with the presentation of a theoretical framework that describes the rationale for public transit funding from a public finance point of view. It then seeks to identify performance criteria for transit networks from a sustainable development perspective. A comparative analysis of eight territories is conducted to understand the relationship between network performance and funding. Three different types of jurisdictions are used: 1) Canadian provinces: Quebec, Ontario and British Columbia; 2) American states: Minnesota, Florida and California and 3) European countries: France, Germany and Switzerland.

One of the main findings of this analysis is that grant allocations based on transit network performance are rare in practice, at least for the eight studied cases. Although many indicators are used by transport authorities to measure the performance, efficiency and sustainable mobility effects of their transit systems, very few are formally tied to funding. Among the cases explored, Minnesota’s experience seems to be the most interesting to consider in the reassessment of Quebec’s funding programs. In this state, public transport authorities are divided into three categories (relative to their size and the density of the area they serve), and subsidies are distributed within categories according to their performance, as measured using four indicators that are easy to understand and produce: the average cost per rider, the average cost per hour of service, the number of rider per hour of service and the ratio of fare box revenues to operating costs.

In Quebec, the supply of public transit subsidies currently suffers from an overly complex system of programs. Multiple programs exist, are financed by a variety of funds and pursue their own specific objectives. Transport authorities have to justify their needs according to the goals of these programs, but the evaluation process, the selection criteria and granting justifications for these subsidies are not necessarily specified in public documents. To our knowledge, there is no official reporting on the impact of governmental grants or any long-term evaluation of these programs. In order to link the financing of public transit systems to their performance, Quebec’s government must first set objectives, unbiased, quantified, and easy to produce indicators on a recurring basis. These indicators should be aligned on programs’ objectives as well as on agencies’ plans and other mobility plans. They must also take into account territorial contexts and local particularities. These indicators would reduce the complexity of actual programs, make the allocation process more transparent, and clarify the requirements and expectations for proposing transport authorities.