Backgrounder: Federal government launches the Canada Public Transit Fund, investing in public transit needs across Canada

Public transit funding in Canada

Since 2015, the Government of Canada has invested over $30 billion in more than 2,000 projects across the country, supporting a variety of projects, from new subway lines in Canada’s biggest cities such as the Millenium Broadway Subway Extension project in Vancouver, to transit lines in major cities such as the Finch West light rail line project in Toronto, and to new transit solutions in rural communities. Funding was delivered through several programs such as the Public Transit Infrastructure Fund, Public Transit Infrastructure Stream of the Investing in Canada Plan, the Zero Emission Transit Fund, the Rural Transit Solutions Fund and the Active Transportation Fund

The Government of Canada’s commitment to strengthening public transit and active transportation across the country is stronger than ever. Today’s announcement provides detailed information on how the new Canada Public Transit Fund which will provide up to $3 billion annually, on a permanent basis starting in 2026-2027 to respond to local public transit needs in communities across the country. 

The new, permanent Canada Public Transit Fund

The new Canada Public Transit Fund (CPTF) will transform the delivery of federal funding for transit by integrating long-term planning and enabling access to funding for multiple projects over several years. This approach provides stability and predictability of financial resources and better responds to the needs of communities of all sizes across Canada.

Sustained, integrated, and predictable federal investments in transit and land use planning also help create housing supply and improve affordability, ensuring that our investments provide maximum value to Canadians.

With the launch of the new CPTF, all orders of government, and transit authorities will work together to advance long-term plans and sign agreements. This approach will better respond to the needs of communities of all sizes across Canada by providing stable and predictable federal funding for projects, and integrating into long-term planning to provide the best value for public dollars. Once these agreements are in place, the CPTF will start funding projects in April 2026.

Benefits to Canadians

The CPTF program enables access to modern and efficient public transit infrastructure, that improves affordability, reduces greenhouse gas emissions, and strengthens climate resilience. 

The new Canada Public Transit Fund aims to:

• enhance capacity to meet demand for better transit services, especially in growing regions
• reduce car dependency by increasing the use of public transit and active transportation
• contribute to climate change mitigation and increased resilience; and
• support economic growth and improving transportation options for equity-deserving groups

Details on the new Canada Public Transit Fund

The CPTF considers longer-term transit needs and leverages the strong collaboration between partners. With a combination of new and existing programs, funds will be delivered through Metro-Region Agreements, Baseline Funding, and Targeted Funding streams. 

Metro-Region Agreements

• Ten year agreements
• Metropolitan Regions (i.e. partnership of organizations within or adjacent to a Census Metropolitan Area and supported by the Province)
• This fund will offer substantial significant and predictable funding in regions with the highest funding demand and most complex public transit networks. Funding will support diverse projects, both from planning and feasibility studies to major and capital expansion projects, based on priorities identified in an Integrated Regional Plan.

Baseline Funding

• Up to ten year agreements
• Communities of all sizes that have existing eligible public transit systems
• This fund provides stable, predictable support to communities seeking transit-related funds for routine growth and rehabilitation, such as system expansion, extension of assets lifecycle, and/or transit performance upgrades

Targeted Funding

• Single project agreements
• Communities of all sizes
• This fund will target specific federal priorities through targeted funding intakes, including active transportation, rural and remote transit, transit solutions in Indigenous communities, as well as electrifying public transit and school transportation

With this design, the CPTF will meet the needs of communities of all sizes.

Integrated Regional Plans

The development of Integrated Regional Plans is a key element to receiving long-term funding commitments under the Metro-Region Agreements stream. Local governments and transit agencies within or adjacent to a Census Metropolitan Area, as identified by Statistics Canada, in partnership with their Provincial government, will develop and share their Integrated Regional Plan, detailing capital transit planning over a ten-year horizon while also considering impacts on transit use, housing supply and affordability, as well as climate resilience and social equity.

A total of $20M in funding has been made available, for 2024-25 and 2025-26, to metro-regions for planning activities that will support the development of high-quality Integrated Regional Plans.  

Baseline

Baseline funding will require multi-year capital plans in order to secure funding. These capital plans will ensure projects are part of a long-term investment plan that aims to improve transit services and also supports positive housing and environmental outcomes.

Housing and environmental impacts

In Budget 2024, the federal government highlighted that more homes need to be built closer to the services that Canadians count on. New federal investments in public transit provides an opportunity to align housing and environmental priorities, including the development of communities around existing and new transit infrastructure.

To ensure that funding impacts are maximized, particular consideration will be given to policies and actions to increase housing supply and improve affordability, and to reduce greenhouse gas emissions. Funding agreements will include conditions to ensure that Canada advances infrastructure in a way that supports priorities with a positive and measurable impact on housing supply and affordability, reduction in greenhouse gas emissions, and more equitable and inclusive communities. Funding amounts will be established through the Metro-Region Agreements and will consider ambition, funding needs, and how the transit investments unlock housing supply where it is needed most. Once an agreement is in place, funding can be invested throughout the metro-region.

Applicants for funding through Metro-Region Agreements and Baseline Funding will be required to take actions that directly unlock housing supply, based on best practices from the Housing Accelerator Fund. This includes measures to:

• Eliminate all mandatory minimum parking requirements within 800 metres of a high-frequency transit line
• Allow high-density housing within 800 metres of a high-frequency transit line
• Allow high-density housing within 800 metres of post-secondary institutions
• Complete a Housing Needs Assessment for all communities with a population greater than 30,000