Metro Mayors review Stone’s comments in Legislature for hints on future of transit referendum

Metro Vancouver Mayors are poring over the transcript of this week’s Legislature exchange between Transportation Minister Todd Stone and George Heyman, the opposition critic and NDP MLA for Fairview.

The takeaway: no breaking stories in this debate during estimates, but confirmation of some important developments in the continuing transit funding saga, including funding for a Pattullo Bridge replacement and a willingness to implement road pricing if it’s approved by voters.

Here’s the transcript, which can be found here:

G. Heyman: Thank you. I’m going to ask my colleague from New Westminster to take over for a moment or two as she has a couple of questions on the Pattullo Bridge, which is actually in her constituency — half of it.

J. Darcy: As you know, the Pattullo Bridge is probably issue number one in traffic transportation in my community of New Westminster. A number of weeks ago the minister announced that the province would put in $350 million for replacement for the Pattullo Bridge, so there are a number of questions that flow from that that certainly folks in my community are asking and would like me to ask the minister.

[1710]

Is that funding from the province contingent on it being a particular size of bridge? As you know, there is considerable debate on both sides of the river about how wide the Pattullo Bridge should be — in particular, in my community, very, very strong feelings that we cannot tolerate increased traffic going through New Westminster. So is that funding contingent on a certain size of the bridge?

Does the minister envision that bridge being tolled? Certainly, the conversations in TransLink about options have considered road pricing to be a part of the consideration, especially with the Port Mann Bridge and increased traffic that is being pushed over there.

The other question is…. I mean, we’re deeply concerned in my community about the existing traffic, but we’re pretty well served by public transit in New Westminster. We have several SkyTrain stations and a pretty good bus system. However, we certainly appreciate, and we feel the effects of, communities like Surrey south of the Fraser not being well served by public transit, because we experience the consequences of it every single day.

Is there an either-or here about this funding for the Pattullo Bridge? Are there conditions on what that Pattullo Bridge would be — the size of it? We certainly don’t want to see an expanded Pattullo Bridge. We need to replace the bridge. There’s no question of that. But we don’t want to see an extended Pattullo Bridge put in conflict with very, very needed projects south of the Fraser and in the city of Vancouver, because we really think this needs to be decided as part of an integrated and truly regional transportation plan.

[1715]

Hon. T. Stone: I’m certain that the member for New Westminster has follow-up questions, so I’ll try and keep each of my responses brief.

At a high level, with respect to the Pattullo Bridge, she’s quite correct — the member is — in that the B.C. government did recently announce its commitment to cover one-third of the capital for major transit capital projects as well as a replacement of the Pattullo Bridge.

I would like to say that the member: nice try on the $350 million. I don’t believe I ever put a number out there. There have been all kinds of wild estimates on the numbers. Obviously, it depends on the type of the bridge — if it’s a four lane, a six lane, an eight lane, a ten lane. I mean, the cost varies greatly. What we’ve said is we will support one-third of the cost.

Now, that would be contingent on a couple of key items. First and foremost, we have said very clearly that, as with all of the projects that the province invests in, there has to be a solid business case. That’s a standard practice with every single infrastructure project that we invest provincial dollars into.

Secondly, as part of that, part of the business case justification will be ensuring that the project fits within the provincial capital plan. That largely relates to timing. If this is a project that was to be announced tomorrow versus three years from now or five years from now, it has different implications in terms of the overall context of the provincial capital plan, both in terms of which other priorities move forward and which priorities need to be kind of moved back a bit. We obviously have very strict targets, very disciplined targets around our debt-to-GDP ratios and so forth.

Last but not least, a commitment of this size to the Pattullo Bridge would be contingent upon the cooperation of the city of New Westminster, as well, in terms of ensuring that New Westminster is investing in its road network to facilitate any replacement and expansion of the Pattullo Bridge. At the end of the day, it makes no sense whatsoever to replace the Pattullo Bridge with a brand-new bridge, no matter how many lanes, if driving over the bridge from Surrey to New West results in gridlock and results in driving into a wall.

Very clearly, we want to make sure that it’s a seamless experience for people as they travel over that bridge. That’s going to require New Westminster to come to the table and cooperate and work with its neighbours and work with TransLink.

At a higher level, this is a project that TransLink has been working very hard with its member municipalities on, particularly New Westminster and Surrey. As the member knows well, there are some very strongly held views and very different opinions, particularly between Surrey and New Westminster, as to what the right solution is.

At the end of the day, I believe that the people of New Westminster want what’s best for their community and the people of Surrey want what’s best for theirs. Everybody’s coming at this from a place of best intentions, but there is a gulf in terms of a preferred option here. We will continue to support the discussions that are taking place between TransLink and Surrey and New Westminster as they work towards a solution that everybody can live with.

[1720]

The final comment I’ll make is that I would expect that the mayors, in the context of the Mayors Council, are talking about the Pattullo project in the context of the plan that they’re working on prior to June 30, 2014.

Certainly, part of why we put the commitment to one-third of the capital out on the table, along with the similar commitment on transit projects, was to signal to the mayors that they might want to include a replacement of the Pattullo Bridge as part of the plan that would ultimately go to the people of the region in the referendum that would be held on the expansion of transit and transportation in the region.

We certainly believe that the Port Mann Bridge is a critical artery first and foremost for the movement of people, with lots of commuters, but also for the movement of goods it is critical that this bridge be replaced. It’s critical from a safety perspective that the bridge be replaced. It needs to be done in a manner that’s thoughtful and that takes into consideration the strongly held views of the communities on both sides of the Fraser River.

J. Darcy: Thank you for your answer, Minister. I actually wasn’t trying to put words in your mouth or negotiate about the size of the province’s commitment. I understood you had committed $350 million. The question is whether or not that commitment is contingent on the size of the bridge.

Also, the other part of the question was about tolling and about road pricing. As we know, and this has been the subject of considerable discussion amongst the mayors and municipal councils, when the Pattullo is the only toll-free or could soon be the only toll-free alternative, inevitably it will mean more and more traffic coming across that bridge.

It’s not a matter of, in this case…. My colleague has lots of other questions he wants to ask on many other aspects, so I don’t want to take too much time. We can perhaps discuss this in another forum.

It’s not a matter of my community not wanting that. Sure, they don’t want more traffic. We can’t sustain it. It’s 67,000 people in six square miles, and we’ve already got hundreds of thousands of vehicle trips that go through every day without stopping. There is a limit to the capacity of a community like that to absorb more.

Back to the question. Whatever the size of the bridge is, and my community has strong feelings about it, is the minister contemplating road pricing? How can a community like mine possibly cope with increased traffic coming through, even with a four-lane bridge, because it’s going to be safer than the present one? How is a community supposed to cope with it if it is the only toll-free alternative?

Hon. T. Stone: Thanks to the member for New Westminster. Again, I’m trying to be as thoughtful as I can here in terms of the questions.

The provincial commitment to one-third of the capital is not contingent on the bridge being any particular size, if it is four lanes, six lanes, eight lanes. Our commitment is to participate in the capital for a replacement of the Pattullo Bridge. As I mentioned a moment ago, the commitment is contingent upon there being a solid business case that’s supported by TransLink and the member municipalities, particularly Surrey and New Westminster, and that the project fit within the provincial capital plan. Those are the specific words that were in the letter that I sent to the Mayors Council.

We also believe that New Westminster needs to participate in this project in a sense of continuing to invest in its own road network and to facilitate the work that TransLink and other member municipalities believe is necessary to free up congestion.

[1725]

I bring one example to the table for the purposes of this discussion, and that’s the Bailey bridge, which I know the member is very familiar with. The whole concept of a North Fraser perimeter road and United Boulevard and over the Bailey bridge and so forth. When you looked at all the modelling on that, it was all about streamlining and easing congestion through Coquitlam and New Westminster.

By the way, New Westminster is my birthplace. I have family there, and I have a special place in my heart for New Westminster. So I get….

J. Darcy: You’ll come back and visit us soon.

Hon. T. Stone: I certainly will. I have fond memories of as a child going to Army and Navy for flip-flops, of all things. I can’t believe I just said that on the record.

J. Darcy: I can’t believe you still use the term “flip-flops.” That’s a generation….

Hon. T. Stone: There you go. I may be older than I look. Thongs, yeah, thongs. I’ll stick with flip-flops.

Anyway, it makes no sense, in my humble opinion, to have effectively two lanes — and if you go back a little bit further on either side, four lanes — leading up to a one-lane Bailey bridge, that in my understanding, Coquitlam and New West have had discussions for a number of years to sort out. I’ve talked to the member for Coquitlam-Maillardville about this, and I think maybe even the member for New Westminster and I have had a chat about it previously.

It really doesn’t make sense, and now there’s an arbitration process underway and so forth. I think at the end of the day, people that are trying to get to and from work and people that are trying to get their kids to school and otherwise move in that part of the corridor, just want to get from A to B as quickly as they can, as safely as they can.

I just say that there is a certain level of cooperation with neighbouring communities that we would hope we would see from New Westminster and moving forward, within the context of the Pattullo Bridge and all the related road improvements that would need to take place for a replacement of the Pattullo Bridge to make sense.

On road pricing, tolling. Let me just address that, or you’ll ask me a third time. Again, I have said several times…. I have been on the record very clearly. It’s highly premature at this point to suggest that there’s certainty around a replacement of the Pattullo Bridge being a tolled option. It potentially could be a tolled option. That will be the decision of TransLink, and the Mayors Council in particular, under the new governance model that will soon be in place. Certainly from a provincial infrastructure perspective, the replacement of the George Massey Tunnel — it’s a potential that that crossing could be a tolled option.

[M. Bernier in the chair.]

What I’ve said is if potentially these two new crossings, Pattullo and George Massey, were to be tolled, then quite rightly, as you pointed out, suddenly every crossing over the Fraser is tolled with the exception of the Alex Fraser. Alternatively, the George Massey could be tolled, and maybe the Pattullo isn’t and so forth.

My point has been that it has been over ten years since the provincial tolling policy was last reviewed, and I think that within the context of the discussions that are taking place at the Mayors Council, the discussions that we’re also having on potential funding sources for funding expansion, there may be an opportunity there to revise and update the provincial tolling policy.

G. Heyman: In a February 6 letter to the mayors caucus regarding provincial infrastructure, the minister stated: “The provincial government will not permit new funding to be collected from the provincial transportation system situated in the region.” Now, I had some questions on tolling and road pricing in general, but I think the minister anticipated the questions to some extent and answered them in part. I think I heard the minister essentially say that the tolling policy, in his preference, will be reviewed — he has certainly stated that publicly in the past — and that road pricing is not off the table as a funding option.

[1730]

Can the minister explain exactly what is meant by “the provincial government will not permit new funding to be collected from the provincial transportation system situated in the region”? Does that mean that tolls, as they currently exist, will continue? Or just that if there is a change in the system, the amount of revenue globally that the province is currently taking to pay for projects that have been already implemented would continue? And if he will — I think this is a simple yes or no — confirm that road pricing is in fact on the table — at least, it’s not off the table.

Hon. T. Stone: First, on the whole question of road pricing, whether that’s on the table or off the table. I’ve quite consistently stated, and I’m on the record saying, that I prefer to keep things on the table versus knocking them off.

Again, the challenge is very much in the Mayors Council’s court to develop the plan that they’re working on. The good news on that front is that by all indications they have rolled their sleeves up, as I expected that they would. They are working very hard to develop a regional plan for transit and transportation expansion. They’ve certainly indicated to me, as recently as just days ago, that they are very much expecting to have that plan developed well before the June 30 deadline in relation to the pending referendum.

Part of the funding discussion could include road pricing. I’ve said to the Mayors Council that whichever pocket it comes out of, there’s one taxpayer. Whether it’s property tax or vehicle levies or road pricing or a regional sales tax…. There’s been a wide variety of other potential ideas floated over the years. No new ideas, by the way. I think any potential resource source that could ever possibly be considered has been thrown on the table for discussion at some point. We’re prepared to sit down and talk to the mayors about those funding levers.

Ultimately, they need to develop a plan. They are developing a plan. The plan will have a total cost, and they are going to come forward and suggest funding sources for that plan.

I’d be more than happy to talk more about the tolling policy review and so forth if the member would like to.

Back to the initial part of your question, and that was with respect to the statement that I put out there in terms of revenue not being collected from provincial infrastructure. The best way for me to explain that would be this. We wanted to be very clear with the Mayors Council that certainly with respect to provincial infrastructure — whether it’s the Iron Workers Bridge, the Lions Gate Bridge, the Trans-Canada Highway — that this is infrastructure that the province has paid for, that the province expends dollars each and every year to maintain. In the case of the Port Mann Bridge, which now has a toll on it, there’s obviously a revenue source there.

The signal that I wanted to send through that statement to the Mayors Council is that in the context of future discussions around funding sources for an expansion of transit and transportation, the province is going to protect its revenue sources. The province is going to need to ensure that if, for example, road pricing is to be considered, either solely or as a package of funding levers, and if it’s to apply to provincial infrastructure, there’s a piece of that that’s going to have to be considered, and that is the revenue that’s generated, the debt obligations that exist on the Port Mann Bridge.

I hope I’ve answered the member’s question on the point on provincial infrastructure.

G. Heyman: Getting pretty close. I’m just going to, again in the interests of time, put it this way: I take from the minister’s answer that it’s the quantum of provincial revenue, not the specific form in which it’s currently collected, that the minister meant to protect. If I’m wrong in that, he will tell me. If he doesn’t say anything about it, I’ll assume I’m correct in that — which sort of takes care of some of my other questions.

[1735]

I just want to confirm with the minister. He appears to have said that for the suite of funding options,  he’s open to discussion on any of them, which I presume means that there is no form of funding which the mayors have proposed to date that he would reject out of hand or intends to reject. Again, if I’m wrong on that, I would appreciate the minister correcting me. If that’s what he meant in fact, then, no comment is needed.

Let me simply also ask: does the minister intend to apply the referendum requirement for TransLink to any other form of transportation funding or infrastructure anywhere else in the province? If the answer to that is no, what is the rationale for that?

Hon. T. Stone: Just to make sure it’s on the record, as well, in terms of some of the member’s comments a moment ago, he is correct in assuming that certainly to this point the province has not ruled out any funding sources. We are keeping that discussion wide open, and we’ll be working on that diligently with the mayors in the weeks ahead.

I will say, though, when it comes to funding sources, we continue to stand by the four principles that we have talked about for a number of years now — I believe since 2012. That is that any new funding source needs to be affordable for families. Certainly, the funding source cannot negatively impact the economy. The funding sources need to be regionally sourced.

We certainly are willing, from a longer-term perspective, to engage in discussion around land value capture and, you know, capturing investments from that. I think that piece is probably the one area that everybody can agree on. It’s just: how do you get there, and how fast can you get there?

In terms of the specific question — are we contemplating tolls or road pricing anywhere else? — the answer to that is no. I’m not contemplating that.

[1740]

The reason that we’re doing it in the context of the TransLink expansion plan, quite simply, is because this was a very specific commitment that we made in the last provincial election and that we campaigned on. We’re doing it in the context of the TransLink expansion plan quite simply is because this was a very specific commitment that we made in the last provincial election, that we campaigned on. We were elected, and we intend on fulfilling that commitment. Certainly, I absolutely understand that the mayors continue to this day to say to they don’t like the idea. That is their choice. But we campaigned on it, we were elected, and we’re going to fulfil that commitment.

G. Heyman: I’m glad to see that the minister has confirmed the suspicions that I and the mayors have always held — that this particular referendum is somewhat arbitrary and of a one-off nature.

Let me ask the minister…. In a February 6 letter to the chair of the Mayors Council the minister committed that the provincial government would fund one-third of major capital projects, specifically new rapid transit and the Pattullo Bridge replacement, if it fits within the provincial capital plan.

My questions to the minister. Could other provincial priorities bump these, resulting in less capital for TransLink, given TransLink may propose the bridge and a full suite of rapid transit expansion? What strings, if any, will be attached to the one-third funding commitment? Is there a quantum limit? Will the minister or is the minister planning to commit to including this in his ten-year transportation plan, which, presumably, will be the roadmap for ten years of capital dollars in the province for transportation?

[1745]

Hon. T. Stone: With respect to the member’s questions around the province’s commitment to the one-third share in capital for major rapid transit projects and the Pattullo Bridge, I think the first part of the question was, you know: how firm are these commitments? Could these commitments be bumped by other projects in the capital plan?

I think it’s important to note that we do have a tight capital plan. There are competing priorities; there always are. We have very specific debt-to-GDP targets that we’re very proud of and absolutely focused on maintaining.

That being said, we have made it very clear, I think, in the public domain on many occasions and certainly to the people of the Lower Mainland that if the Mayors Council is to include these major rapid transit projects — whether it’s LRT or some form of LRT in Surrey, whether it’s something down the Broadway line in Vancouver — and certainly if they decide to move forward with the inclusion of a Pattullo replacement in the plan that they’re working on, and if that plan were to be put to the voters in a referendum in the Lower Mainland and endorsed by the voters, passed, then the province will stand behind its commitment on those one-third capital commitments.

At the end of the day, the government of British Columbia recognizes just how incredibly important the Lower Mainland economy is to the provincial economy, so it’s in part the movement of people. It’s also in part the movement of goods. The rapid transit side is really about the people, and the Pattullo is about the people and the movement of goods. We will stand behind those commitments should they be included in the Mayors Council’s plan and should that plan be endorsed by the voters in a referendum.

I think it’s also important to note, again, what I talked earlier about when the member for New Westminster was asking a similar question. These commitments, in any capital commitment we make, are contingent upon there being a solid business case. In the case of the Pattullo, for example, that business case would largely be about TransLink, New West and Surrey all coming to a common place and standing behind a solution that they believe makes sense for their respective communities and putting that forward within the context of the Mayors Council for inclusion within the overall plan.

I look forward to that. I’m very excited about the hard work that the mayors are putting into their plan. As I have said many times, I think that locally elected officials…. It’s the best place for transit and transportation decisions and priorities to be set. I think British Columbians in the Lower Mainland will be well served by the plan that the Mayors Council brings forward.

The last comment I’ll make is with respect to the ten-year transportation plan. The member for Fairview is absolutely correct.

[1750]

The plan as developed by the Mayors Council and hopefully endorsed by the people of the region will figure prominently in the ten-year transportation plan, which will be largely about capital but will also be about operational priorities as well. Again, the economy of the Lower Mainland and the ability to meet the demands, the population growth, the demands that we know will continue to face the region increasingly over the next 20 to 30 years…. Getting that right, with the various levels of government working together on the right investments for transit and transportation expansion in the Lower Mainland is going to be critical to British Columbia’s economy.

G. Heyman: I particularly appreciate, as I suspect the mayors will, the clarification offered, because reading the minister’s letter to the mayor, it was possible to see there being a little bit of wiggle room there and out. I’m sure the mayors will be comforted to know if the voters in a referendum approve some specific rapid transit infrastructure funding as well as a replacement of the bridge, that the commitment to the province is to pick up a third of that. I think voters will want to have that assurance, as well, in any referendum going forward.

The minister also committed in the letter that the province would work with the mayors to seek federal funding on a one third, one third, one third basis. My question is whether the minister believes that if the referendum in fact doesn’t take place for another 14 months, if there’s any risk to the province and the mayors of losing access to funding under the new Building Canada fund or if the minister has already, in fact, had any discussions with the federal government around the ability to access that fund even if the specific commitments of the province and TransLink are in abeyance for a period of time subject to the referendum?

Hon. T. Stone: Certainly, it cannot be stated too many times that the federal government is a critical partner moving forward in the investments that I think we all agree need to take place in transit and transportation in the Lower Mainland. To that extent….

I’ll take the opportunity to say thank you to the federal government. They have been good partners on lots of projects that have been important to British Columbians in every corner of the province over the last 12 years.

I have indeed raised the subject of these projects with the federal government on a number of occasions with different ministers. We do that every opportunity we get. I’m sure that the member does, as well, when he has the opportunity to cross paths with federal officials.

The new Build Canada fund, on balance, is a good…. I think what the federal government has done in terms of how they’ve restructured it and so forth, on balance, is good and will be good for British Columbia. We have a few concerns around the margins and so forth, but generally speaking, things like a ten-year window for investment, moving from a five-year window to a ten-year window, works much better for the province. It works better for local governments as well.

There are a number of new funding envelopes. The criteria has been expanded on a number of the different funding envelopes, thus enabling a wider variety of projects, types of projects, to be included for consideration. There are all kinds of reasons to be generally supportive of the new Build Canada fund.

One of the concerns that we have expressed to the federal government is that the funding is significantly back-end-loaded when you look at the ten-year time frame. The vast majority of those funds are in the second half of that ten-year window. Frankly, from the perspective of the member’s question around whether we have any concerns around timing of a referendum possibly resulting in losing out on some funding opportunities through the new Build Canada fund, I believe that the simple answer to that is no. I’m not overly concerned.

[1755]

The federal government is going through their process right now of identifying their priorities, the projects that they deem to be priorities. We’ve been ready to go with our list of priorities for quite some time right now and just waiting for our federal partner to engage with. They appear to finally be ready, and we’re having those discussions behind the scenes.

We have talked to them about transit projects in the Lower Mainland. We have talked to them about the Pattullo Bridge. We’ve talked to them about other major transit and transportation projects in all corners of the province, and we’ll continue to do so.

G. Heyman: Thank you, Minister. If my memory serves me correctly, the mayors did have concern that in the absence of some specific capital proposals in the year coming up, there was somewhere in the nature of $100 million that might be allocated elsewhere and not to needed transportation projects.

I will take the minister’s word that he believes that is not the case but reserve the right to raise it at a future time if, in fact, that risk continues. If the minister, in further study, thinks there is some funding that won’t necessarily be lost to the province but might be allocated in a different way than it might be if TransLink was able to proceed with capital projects now, he will acknowledge that and let me know.

My last questions in this area have to do with land value capture, which the minister has partly addressed. Also, it’s known as a benefiting area tax.

The minister in April 2013 identified four conditions for supporting new funding tools for transit — that they be affordable for families, regionally sourced, avoid negative impacts on the economy and capture benefits from the substantial investments made in Metro Vancouver’s transportation system.

So I was going to ask the minister if he believed that a benefiting area tax or a land value capture met those criteria, and I think he has clearly indicated that he does.

There has been a recent report entitled Evaluation of Revenue Sources to Support Transportation Improvements in Metro Vancouver. Results and resources from a February 2012 evaluation process estimated that a benefiting area tax could recover between $30 million and $100 million in revenue, which could pay off a capital loan of $500 million to $1.9 billion in something like 35 years, assuming 4½ percent interest. So that’s one study.

My first question is: has the ministry done any further study of this funding option? Second question is: does the minister personally think that land value captures should be an option in the referendum, and/or does the minister think it’s already legal under the transportation authority act for the south coast or the Community Charter?

Finally, is the government studying or considering the possibility of applying land value capture to highways in general? Where highways are built or improved, there is also value added to land.

I’d simply say that if the minister can’t provide detailed answers to these questions now, I’d be happy to take a written response at a later date.

[1800]

CSA – 20140402 PM 046/bjh/1800

Hon. T. Stone: I assume the report that the member referenced a moment ago is the Urban Futures 2012 report. It may not have been, but land value capture figured prominently in that report, and I do have that report as well.

Certainly, there has been lots of discussion, particularly over recent years, amongst all kinds of different parties about the concept of land value capture. It actually has been…. Let me back up. It means many different things to many different people, depending who you talk to.

For example on the Evergreen line, the Lincoln station is a terrific example of what can happen when there is the ability to embrace and harness the value of the investment being made in transit. In that case, the developer in question came forward and, in working with the local government and with TransLink, was able to fund a station that doesn’t come at all out of the pockets of the taxpayer. There are other examples on other pieces of transit around the Lower Mainland.

I think more generally that I will say this. I think the province has said a number of times, and I certainly have said a number of times that land value capture in some form is a concept that we’re very much open to and willing to discuss in detail with the Mayors Council.

Again, I come back to the plan that the Mayors Council is working on towards the June 30 deadline. Concurrent with the development of the plan is a discussion related to funding, and land value capture is one potential funding source that I think we have been very clear we can support in principle. I look forward to talking through the details of what that could mean in practical terms with the Mayors Council.

G. Heyman: To the question of whether the ministry has done further study itself and whether the minister thinks that applying land value capture needs to go to referendum or if it’s already within the authority of the municipalities and whether the government would consider applying land value capture elsewhere.

Hon. T. Stone: Very quickly, I certainly will endeavour to provide a written response on these questions for you as quickly as we possibly can. We’ll make sure that we cover the areas of whether or not municipalities have the right or the ability to do this today.

[1805]