Blessed by the Potato

In yesterday’s federal budget, one of the changes was eliminating the public transit tax credit, which looks like will be effective July 1.

For many people in Toronto living the car-free life, a metropass is a no-brainer, tax credit or no. If they live downtown they’re on and off streetcars and buses pretty much any time they leave the house shoebox.

For commuters, it’s not so clear-cut: metropasses are expensive. By signing up ‎with a discount through your payroll (if your employer offers it), they’re $129/mo, and $134 if you sign up for the yearly discount plan on your own (and over $146 a la carte).

With the tax credit, these are effectively 20% cheaper, so best case, a metropass only costs ‎$103.20, or $1238.40/year, and maybe as much as $1401/yr. With tokens (or a presto fare) now $3, you’d have to take at least 413 trips to make it worthwhile to choose a pass instead, maybe as many as 467 in the year if you pay full price each month. How many days will you commute to work? There are two trips each day you go to work and 365 days in a year, but with weekends, vacations, holidays, and likely a few sick/work-from-home days, you’ll likely have about 450-460 one-way trips for work.

‎So with the tax credit, a metropass is financially worthwhile — though not by very much, considering you do have to commit to it to get a discount, and not lose your cards/receipts to claim the tax credit. But it is more convenient than tokens, and opens up the option to take the TTC for non-work-related trips.

Without the tax credit, even the cheapest metropass option needs nearly 500 trips to break even. That’s not totally out of the realm of possibility — just a few extra non-commuting trips per month to do it. But I know in my case I probably only use the TTC 10 or 12 times a year outside of work purposes, plus another dozen or two trips on it for convenience when downtown (e.g., to take the bus or streetcar all of three stops to grab lunch at work) — walking-distance trips that I would not bother with transit if it weren’t free anyway (and often don’t if there isn’t a streetcar or bus in view).

So without a tax credit, unless the TTC changes its pricing scheme in response (which I doubt will happen), I’ll be unsubscribing from the automatic metropass purchases.

Aside from deciding how to respond to it in my own life, I’m not sure what to think of the move: it does make more sense to simplify things and just directly fund transit, especially given how many people have had to dig up receipts to prove their claim. However, in practice I highly doubt that the TTC will adjust metropass pricing (or soon presto monthly pricing) to compensate‎ for the loss of the tax credit, even if they get more direct funding, which means more people like me will make the decision to abandon the stable funding of metropass subscription programs and move to paying by the trip. That, in turn means taking transit becomes a visible, painful cost. And as for simplifying the tax system, there are a other tax credits out there that could have been targeted over (or with) this one.