Federal transit aid rejected by NB is flowing to other small provinces

A federal relief program for municipal transit the New Brunswick government declined to participate in after misunderstanding who it was for and what it covered has been paying millions of dollars to the smaller provinces that did sign up.

Documents show Saskatchewan, Manitoba and Nova Scotia have received a combined $57.1 million from Ottawa's "Safe Restart" public transit aid program, which is compensating city bus systems in those provinces for revenue losses caused by the COVID-19 pandemic.

Saskatchewan has received $8.1 million, Nova Scotia $16 million and Manitoba $33 million, according to documents prepared by the federal government outlining details of its massive $19 billion Safe Restart collection of programs.

It was very clearly stated and I remember Doug Ford saying this that this was for infrastructure funding so we didn't pursue it any further.    ​​​​​- Premier Blaine Higgs

New Brunswick Premier Blaine Higgs, who wrongly believed small provinces were not eligible for the transit program and also mistakenly thought funds in it were for new capital projects, did not sign on and New Brunswick has received none of the money.

"That was a specific request for infrastructure funding for subways and for systems in Toronto and Montreal and BC — for the big cities," Higgs said on Aug. 24 about why he believed the program was not open to New Brunswick.  

"It wasn't a transit program for the municipalities in the smaller provinces."

That was never the case.

Federal program loopholes

Saskatchewan is one of the smaller provinces that did sign up and was given $8.1 million from Ottawa to distribute to its four municipal bus systems in Regina, Saskatoon, Moose Jaw and Prince Albert.  The funds are to make up for operational losses caused by the pandemic.  

On paper, provinces are supposed to match those funds, but generous loopholes in the federal program allow that provision to be sidestepped and provincial governments to put up no new money of their own.

In Saskatchewan's case it was allowed to retroactively assign unrelated money it unveiled for provincial cities as its share, even though it was announced two months before the federal program was negotiated.

"This federal funding was matched by $150 million dollars announced previously from the Government of Saskatchewan in the Municipal Economic Enhancement Program,"  the province said in accepting the federal help.

Nova Scotia and Manitoba used similar manoeuvres to avoid matching the federal transit aid with any new money.

At a news conference two weeks ago, Winnipeg mayor Brian Bowman wanted people to understand that pandemic transit relief for his city was being 100 per cent funded by Ottawa, with no additional money provided by the province.

"It's disappointing today, but not entirely surprising, that there would be zero dollars of support for transit" from the province, Bowman said.  

Winnipeg is getting most of the $33 million in federal transit relief sent to Manitoba, but four other bus systems, some much smaller than those in New Brunswick are also getting money including services in Brandon, Selkirk, Thompson and Flin Flon.

'We didn't pursue it'

Transit aid was negotiated between the federal and provincial governments in mid–July but New Brunswick Premier Blaine Higgs was unaware of the details for several weeks. 

In late August, he explained New Brunswick left negotiations early because at the time it appeared large provinces were pushing for transit spending on major capital projects and New Brunswick was not interested.

"We finished our agreement and they [other provinces] said we need more from the federal government," Higgs told CBC News in an interview about how he came to misunderstand what transit funding was available to New Brunswick. 

"It was a discussion Chrystia Freeland had primarily with the other provinces after we had concluded our agreement," said Higgs  

"It was very clearly stated, and I remember Doug Ford saying this, that this was for infrastructure funding so we didn't pursue it any further."    

"We had concluded our discussions and those discussions went on afterward between those three provinces (BC, Ontario and Quebec) and the federal government." 

Utilizing separate federal funding 

Although most smaller provinces became aware federal transit aid was available to them for pandemic losses suffered by even small municipal bus systems, New Brunswick went more than a month before realizing what happened and never did sign on.

However, because New Brunswick is getting none of the special federal transit assistance, it has instead had to dip into a separate federal fund set up for municipalities under a different Safe Restart program to pay transit bills.

Under the municipal aid program each province has been given a pool of money equal to just over $52 per person to compensate municipalities for their pandemic costs and losses.   

In New Brunswick's case the amount is $41.1 million and last week the Higgs government announced it was taking $1.6 million of that to compensate transit systems in Moncton, Saint John and Fredericton. It is something provinces who signed up for federal transit assistance have not had to do.

"The municipalities component, which is part of the $218-million Safe Restart program for New Brunswick, will provide up to $41 million to local governments in the province to help them deliver essential services, such as public transit," said a government news release announcing the move Friday.

The province has insisted $41 million is more than enough money to cover all COVID-19 costs encountered by municipalities and provide assistance to transit systems, although so far transit compensation announced in New Brunswick is among the lowest in Canada. 

No money has been offered to help restore transit routes cut in New Brunswick cities during the pandemic because of plummeting revenues, only money to retire excess deficits left with all the service reductions still in place.

A request for an interview with the province about whether New Brunswick could have been more generous in its transit compensation and helped restore lost routes and service if it had accessed federal transit aid was not granted.