Vancouver weighing several financing options for Broadway subway line

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Mayor Gregor Robertson says he has staff looking at all possible ways for Vancouver to finance its one-third share of a Broadway subway line, including special bond issues, property taxes, new charges for developers building near the line and more.

"We are assessing the tools that we have," said Mr. Robertson, as he, like other mayors, contemplates how to move forward after 62 per cent of local voters said no in a plebiscite to a new sales tax for transit improvements in the region. "There is an array of tools we have access to."

Mr. Robertson emphasizes that his first choice is to see a new revenue source that would help all municipalities with their transit needs, including the $3-billion Broadway line.

"I'd hugely prefer that we approach all of this as a region to fund transit."

That is similar to what Surrey Mayor Linda Hepner is saying. Like Mr. Robertson, she says she'd prefer it if the region were given a new source of revenue for the entire $7.5-billion mayors' plan that people voted on in the plebiscite.

But failing the introduction of a new regional revenue source – which the mayors and the province have been arguing over for 15 years – Ms. Hepner has talked about taking back Surrey's share of the regional gas tax, getting developer contributions and using other Surrey resources for the $2.2-billion in light-rail lines that were part of the regional transit plan.

Mr. Robertson says Vancouver has one advantage over Surrey as it looks at financing options: A Broadway line would generate enormous ridership.

While light rail in Surrey would need subsidies because of low ridership for at least a decade, Vancouver's engineering department has estimated that a Broadway subway would carry 250,000 passengers a day upon opening and grow to more than 300,000 by 2040. Engineers are currently assessing whether that volume might mean the line would produce profits that could be used for transit funding throughout the region.

"Vancouver's in a unique position," the mayor said. "The one advantage to financing Broadway separately is it could take the pressure off the rest of the region on that financing piece. And maybe with a reduced load on the mayors' 10-year plan, it's easier to raise the balance of it and invest in the region."

It's likely that if Vancouver finances its $1-billion share on its own, it would come from a variety of sources.

Mr. Robertson said a part of the money needed could be included among the usual approvals for capital projects that Vancouver asks from voters in every civic election. The city got an approval for $275-million last time for improvements to a wide array of roads, bridges and community facilities.

"It's conceivable, though our borrowing power is limited," he said.

Any money borrowed through such long-term bonds ultimately comes from property taxes, although spread out over 30 years, with taxes helping cover the yearly paybacks.

The mayor, who's been criticized by residents who fear the city will pay for the subway line by allowing massive density increases along its route, says any new transit money will not come from unbridled development.

"We'll look at all the options … development being one source of funding," he said. "But we are definitely not looking at wall-to-wall towers."

He said studies have shown there is already lots of capacity for development along the line with existing zoning.

City staff say Vancouver has already submitted three applications to two federal programs to get the necessary one-third funding from Ottawa for the line.

The city was turned down for what's called "Round 6" of the federal government's public-private-partnership fund, but has an application under review for the Building Canada Fund and a second application for the P3 Canada Fund.

Vancouver and Surrey are not the only cities trying to make transit improvements through local spending. Delta Mayor Lois Jackson said her city already pays $80,000 a year for a bus to serve seniors at a community centre in north Delta. The city is looking at adding a second bus for south Delta and using those buses to provide transit service at night for people who work on Annacis and Tilbury islands, a service she says regional agency TransLink has failed to provide despite requests.