Last week, the Halifax Transportation Committee (HTC) proposed a pilot-program that would offer 500 low-income Haligonians a MetroPass at 50 per cent of its scheduled price. The six-month program will cost approximately $120,000, although HTC’s report suggests that the $39 bus pass could potentially attract new riders (thereby offsetting any lost revenue).
Within the aforementioned report, however, are several discrepancies that merit further consideration.
To begin with, HTC’s assumptions are ambiguous. The report claims, for instance, that offering a discounted bus pass for low-income riders would encourage ridership, “thereby reducing the number of cars on the roads.” Yet, low-income individuals are the demographic least likely to own a vehicle. As a result, while the program might potentially increase ridership, it is unlikely to reduce traffic congestion.
In addition, the report discusses programs that already offer discounts to a wide array of individuals, such as the Seniors and Children Discount, the Student Discount, the U-Pass Discount, the Canadian National Institute for the Blind Discount, and the E-Pass Discount. Ironically, however, these discounts already target low-income individuals and, therefore, there will likely be a considerable amount of overlap between existing programs and HTC’s proposed program.
The Community Foundation of Nova Scotia (CFNS), for instance, reports a 7.8 per cent poverty rate among HRM’s 51,000 seniors. This amounts to roughly 4,000 individuals. Assuming that 500 (12.5 per cent) low-income seniors ride Metro Transit, it makes sense that they would qualify for both the Seniors and Children Discount (26 per cent) and the newly proposed discount (50 per cent). Therefore, it is necessary to clarify whether these individuals would qualify for a combined discount or if they would have to surrender one discount for the other.
Combining the discounts, though, not only decreases the probability of achieving cost-neutrality, but also increases the likelihood of incurring extra costs. Similarly, but to a lesser extent, allowing low-income seniors to substitute their 26 per cent discount for HTC’s 50 per cent discount achieves neither increased ridership nor cost-neutrality. In fact, because the pilot-program will cater to low-income individuals on a first-come-first-serve basis, it is theoretically possible for every applicant to have been already receiving some form of discount in the first place.
For example, consider a scenario in which 500 low-income seniors, who formerly qualified for the Seniors and Children Discount, are first in line to receive HTC’s proposed discount. If Metro Transit permits combined-discounting, these individuals will consume the new supply of low-income bus passes and receive a double-discount (thereby trumping HTC’s proposal and reducing Metro Transit’s revenue). Should it allow individuals to exchange their discount, they will similarly consume the new supply of low-income bus passes, but instead of receiving a double-discount, they will merely receive a more generous discount than before (producing a similar result as the first scenario). Nevertheless, both scenarios would create outcomes unanticipated by HTC and Metro Transit.
In any case, providing for low-income individuals is a respectable objective. Designing policies to achieve this objective, however, requires a more comprehensive understanding of their compound effect. Because poverty spans across various demographics, as opposed to indemnifying one specific group, simplifying Metro Transit’s discount system to cover low-income individuals (i.e. students, the working poor, etc.), seniors, and the disabled in a single inclusive discount would be a much more effective approach.
Shaun Fantauzzo is a policy analyst and the AIMS on Campus project coordinator at the Atlantic Institute for Market Studies