Western Canada: Transit systems formerly on track now critically damaged by pandemic

Good morning. Wendy Cox in Vancouver here.

For transit systems across Canada, COVID-19 has managed to turn the strengths of years and years of ridership acceptance against the very systems that worked so hard to achieve that success.

On Monday, Vancouver was forced to lay off 1,500 employees after warning that it was losing $75-million a month in revenue. On Wednesday, Calgary Mayor Naheed Nenshi declared his city couldn’t support the transit system indefinitely at the current rate, even though it has already reduced service by about 15 per cent. Layoffs are expected. On Thursday, the Toronto Transit Commission announced it would lay off up to 1,000 drivers and another 200 non-unionized employees.

The systems have also had to make service cuts, a difficult choice given that those riders who are still left dependent on transit are likely essential-service workers trying to get to their jobs in either hospitals or grocery stores, pharmacies or other key businesses.

All three cities have in the past enjoyed such robust fare revenues that civic governments have been able to spend less proportionately topping up the systems with property-tax money than places such as Edmonton, where ridership was lower. As Frances Bula reports this weekend, those cities have now become victims of their own success.

Ridership has plummeted in every transit system across the country as people stay home, meaning fare revenue has likewise been in free-fall. In Vancouver, patrons have been asked to board buses at the back, allowing drivers to avoid close contact with riders but also allowing riders to avoid paying. The loss of revenue has left gaping holes in the operating budgets, especially acute in those cities that rely heavily on fares.

Last year, fares made up 55 per cent of Calgary’s operating budget. In Vancouver, it was 57 per cent and in Toronto, 69 per cent. In Edmonton, though, fares made up only 40 per cent.

“How much operating pressure they’re under now is because of how successful they were in the past,” says consultant Tamim Raad, a former planning director of B.C.’s transit agency, TransLink.

Calgary’s predicament is in contrast to Edmonton, a smaller system that gets more of its support from property taxes and less from fares.

In Edmonton’s weekly update on Thursday, Mayor Don Iveson gave no indication of any more trims than the night-service cuts that went into effect on Monday.

“We continue to consider transit an essential service.”

Calgary had budgeted to get $170-million in transit-fare revenue for 2020. It is now losing $10-million to $12-million a month, although the system is still carrying 100,000 people a day.

Edmonton had forecast $131-million, and has projected it is likely to lose $28-million from the point in March where revenues started going down until mid-June. Earlier this week, Edmonton Transit Service cut late-night service, ending light-rapid trains at 10 p.m. and buses at midnight.

The Federation of Canadian Municipalities said this week Canadian city transit systems are losing $400-million a month during the pandemic and mayors are hoping the provincial and federal governments can offer some help.

As cities do their best to guide their transit systems through the budgetary chaos caused by the pandemic, they will also have to keep an eye on what happens after the crisis passes.

Cities such as Vancouver and Calgary have spent years trying to get people out of their cars, an effort to reduce traffic congestion and to respond to the still-percolating climate-change crisis.

Columnist Adrienne Tanner worries that transit riders will take a long time to get over the worry of riding a crowded bus. Many may find alternatives that include returning to their cars or discovering bikes and other forms of transport.

But she notes transit will remain the most practical, efficient choice.

“As a society we must pay to keep it running for the sake of our long-term economic recovery and environmental health,” she writes.

This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.

AROUND THE WEST

DR. BONNIE HENRY: When Dr. Bonnie Henry thinks back to the first, nerve-wracking weeks of B.C.’s response to the emerging COVID-19 crisis, the province’s Chief Public Health Officer recalls a three-day span in which she was too tense to sleep. But it was in that 72-hour period that she and top political and medical officials in the province made decisions that likely saved lives and helped put B.C. on a fairly quick path to flattening the growth of the COVID-19 virus in a way Quebec and Ontario did not. Dr. Henry has regularly been the object of praise for the manner in which she has led B.C.’s response to the novel coronavirus crisis. But in an extensive interview she conceded that, in the early going at least, there were no assurances that cases of the deadly virus wouldn’t end up swamping hospitals in the province. She detailed a three-day period during the second week of March of almost unimaginable pressure and responsibility.

SASKATCHEWAN’S REOPENING PLAN: Saskatchewan has laid out a detailed, comprehensive plan to reopen its economy, the first province in the country to do so. The plan, laid out in five phases, will start on May 4, with the resumption of non-essential medical procedures, and the reopening of provincial parks, campgrounds and golf courses. About two weeks later, retail businesses and personal services, such as hair salons and massage therapists, will be permitted to open. From there, the province will gradually ease back on other restrictions as long as COVID-19 infections are kept at bay.

MANITOBA SUMMER STUDENTS: The Manitoba government is promising wage subsidies for businesses that hire students this summer. Premier Brian Pallister says the government will pay half of eligible wages – up to $7 an hour – to a maximum of $5,000 per student between 15 and 29 years old. Each employer can get the subsidy for a maximum of five students, and the money is to be paid out after summer ends.

OIL CRASH: With global oil demand down by 30 per cent, owing to an estimated 60-per-cent decrease in driving and air passenger travel at just 5 per cent of pre-pandemic levels, the U.S. market is swimming in crude nobody needs or wants. This past Monday, U.S. oil futures went negative for the first time in history, as holders of May contracts found themselves unable to sell them as their expiry dates approached. Canada’s oil distribution and storage system wasn’t designed for such a sharp dive in demand. The Energy Information Administration (EIA) says Canadian oil exports to the United States have fallen at least 14 per cent from the start of 2020. Producers such as Saudi Arabia are filling supertankers to the brim, keeping it off the market until selling it is no longer a losing proposition. But the mostly landlocked Canadian industry doesn’t have that luxury. And so a temporary home to store oil has, for now, become more sought-after than the product itself.

ANTI-ASIAN HATE CRIMES: On Wednesday, Vancouver police released surveillance video of an attack in a convenience store on March 13 involving an unknown white man and a 92-year-old East Asian man who suffers dementia. The force also said that five of the 11 hate crimes reported in the city last month targeted East Asian people. This year, there have been nine hate crimes against people of this ethnic background, a total that already represents three quarters of all hate crimes reported against this group last year. Later in the week, police issued another statement saying they had identified the suspect in the convenience store incident.

AIMCO’S BAD BET: Amid unprecedented swings in the market owing to the impact of the COVID-19 virus, Alberta Investment Management Corp. (AIMCo) lost an estimated $4-billion in recent weeks on derivatives, investments that pay off only if stock prices remain stable, according to sources at AIMCo clients. This is in addition to other losses on its stocks, bonds and real estate. The money manager oversees 31 provincial pension plans and endowments and has a portfolio of $119-billion. Some AIMCo clients, including the $50-billion Local Authorities Pension Plan (LAPP), and the $4.8-billion Universities Academic Pension Plan, told AIMCo to limit their exposure to strategies tied to market volatility, or use more than one investment manager. As a result, these plans expect to be spared from some of the fallout from AIMCo’s poor performance. But the $18-billion Alberta Heritage Savings Trust Fund, which was built from oil and gas royalties, is 100-per-cent managed by AIMCo, and was fully exposed to the fund manager’s strategies, resulting in a significant loss in March and April, sources said. Income from the Heritage fund – $43-billion since it was founded in 1976 – is earmarked for public projects such as schools and hospitals.

DEAD INFANT DISCOVERED: The Vancouver Police Department on Thursday said it was investigating after a deceased newborn baby was found in a public restroom Wednesday evening. In a statement, VPD Constable Tania Visintin called the incident “extremely tragic” and said police hoped to speak with witnesses and the mother as police were concerned for her mental and physical well-being. The incident follows weeks of questions to public-health officials about conditions in the Downtown Eastside, where people congregate in close quarters on sidewalks and where dozens of tents are set up in a homeless encampment in Oppenheimer Park. The neighbourhood has also been hit hard by the overdose crisis. More than 1,200 people in Vancouver have died of illicit drug overdoses since the beginning of 2016, with many of them in the Downtown Eastside.

CALGARY STAMPEDE CANCELLED: The Calgary Stampede has cancelled this year’s event in the face of restrictions related to the COVID-19 pandemic, representing not just an economic loss but also a painful symbolic blow to a city that was struggling long before the novel coronavirus outbreak. The 10-day event, which attracts more than 100,000 visitors a day to a rodeo, exhibition and midway, was scheduled to start on July 3. The Stampede’s board chair, Dana Peers, said the indefinite ban on large public gatherings and the state of emergency mean the event cannot go on. He said planning will continue for the 2021 event.

MANITOBA TRAIN DERAILMENT REPORT: The report released Thursday said there was significant rain in the summer of 2018 and water levels were high in the weeks preceding the September derailment. Hudson Bay Railway employees inspected water at the crash site south of Thompson two days prior. It was some time after that when water levels surged, dislodging and destroying wood box culverts under the rail bed.The track’s rails and ties remained in place but were in fact no longer supported, said the report. The track collapsed under the weight of the train, and three locomotives and four cars derailed. The crew was trapped in the wreckage. About 6,800 litres of diesel fuel also leaked.

ORPHANED WELLS: A $1-billion program to clean up orphaned and inactive oil and gas wells in Alberta will begin on May 1, focusing on sites where there is no one left to pay for the environmental reclamation. Cash for the site-rehabilitation program, announced Friday by Alberta Premier Jason Kenney, comes from the federal government. The province estimates the grant-based program will put around 5,300 people back to work, but critics say it’s nothing more than a taxpayer-funded bailout of oil and gas companies.

VANCOUVER’S FOOD COALITION: A Vancouver restaurateur has devised a plan to feed the city’s most vulnerable residents, keep the local food-supply chain alive and, quite possibly, save a wide swath of restaurants by providing a sufficient and consistent volume of weekly meal orders to cover their fixed costs until normal operations can be resumed. The Food Coalition, spearheaded by Chambar restaurant owner Karri Schuermans, will launch next week, beginning with the distribution of 700 meals a day to social agencies and people living in privately owned single-room occupancy hotels whose food needs are not being met because of COVID-19.

OPINION

Jeff Jones on the AMICo $4-billion loss of funds: “Yet Mr. Kenney, in his first public comments on the debacle on Wednesday, said essentially that things are tough all over, given the unprecedented turmoil in financial markets. AIMCo chief executive officer Kevin Uebelein has been silent. This doesn’t cut it.”

Andrew Willis on the AMICo $4-billion loss of funds: “Surprises are great on birthdays. A nasty surprise on your retirement savings? That’s not acceptable. As executives at Alberta’s flagship investment fund are finding out, shocking clients with unexpected, eye-popping losses in their pension plans kicks off calls for heads to roll. There are lessons here for anyone paying financial advisers to take care of their savings.”

Ubaka Ogbogu and Lorian Hardcastle on Jason Kenney’s run-around of Health Canada: “On April 12, in response to a perceived delay in Health Canada’s approval of a Canadian-made testing kit for COVID-19, Alberta Premier Jason Kenney tweeted that he had directed Alberta officials to ‘consider use’ of ‘tests, vaccines, or medications that have been approved by the high standards of at least one credible peer country’s drug agency.' Mr. Kenney’s pronouncement prompted some plaudits, including from federal Conservative Leader Andrew Scheer, but it also caused outrage, forcing Ottawa to defend its response. But mostly, it raised a host of constitutional, logistical and political problems that must be addressed.”

Max Fawcett on the Canadian Association of Petroleum Producers: “Whether it’s cutting production or the salaries of their executives and employees, Canada’s energy companies are doing everything they can to batten down their hatches. Well, almost everything. They’re still sending their annual membership dues to the Canadian Association of Petroleum Producers, which for some companies can amount to as much as $3.51-million. Based on how that organization has behaved of late, they might as well be lighting that money on fire.”

Sandra Martin on why the pandemic should be a wake-up to all seniors: “The surge of COVID-19 deaths in long-term-care homes has outpaced what was expected in public-health models, according to Prime Minister Justin Trudeau, who admitted that the pandemic has had “a far more severe impact on senior’s residences and long-term-care facilities than we had certainly hoped for, or more than we feared.” The numbers coming out of places such as Lynn Valley in North Vancouver, B.C., Pinecrest in Bobcaygeon, Ont., and especially Résidence Herron in Dorval, Que., which has been likened to a concentration camp, are horrifying. Unfed, dehydrated, trapped in filthy sheets soaked in urine and stained with feces, residents, living in close quarters, are easy prey for a rampaging virus. Some panicked families are pulling their loved ones out of institutions in order to care for them at home without having the equipment, the training or the stamina to cope with physically and mentally compromised relatives.”