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This report provides a comprehensive framework for applying Cost-Benefit Analysis to a wide range of prospective transit investments (both greenfield and expansion projects) as well as rehabilitation and maintenance work.  The framework is applicable to various transit modes, including stage bus systems (local and express bus service in regular street operation); bus rapid transit (buses in various types of dedicated rights-of-way); light rail; heavy rail; commuter rail; and highway investment.

The report is accompanied by a user-friendly computer analysis tool ( TransDec )designed to facilitate ready-application of the framework.  The computer tool permits Cost-Benefit Analysis to be performed with either default values or locally generated data.  It is scaled to apply over the range of differently sized urban areas and over the range of variously sized projects.

The report begins by positioning transit in the context of national congestion related problems.  The need for a comprehensive Cost-Benefit Analysis framework is shown to arise from the critical search for effective, sustainable solutions to a problem that is not only eroding the benefits of economic growth, but also is materially inhibiting the growth process itself.  The study then demonstrates that existing mainstream methodologies used to assess transit investments are poorly suited to the meet this need.  Through a survey and detailed evaluation of a representative sample of 30 actual investment appraisals, it is shown that comprehensive Cost-Benefit Analysis is extremely rare.  It is shown that in the absence of comprehensive Cost-Benefit accounting for transit benefits, highway investment projects nearly always appear more effective, even where “induced demand” guarantees that the effects of highway investments are short-lived. 

The details of the benefit-cost analysis framework are described including an examination the different types of benefits and costs associated with transit investment projects.  Various key points of the methodology related to highway investment evaluation, net present value and risk analysis are discussed.  The report also provides an overview of the computer program to be used in the evaluation of transit and highway investment projects.

The report then uses the computer model to evaluate three case studies:

• Winnipeg: Southwest Transit Corridor;

• Kelowna: New Bus Capacity;

• Toronto: Spadina Light Rail.

The results for all three case studies include benefits associated with congestion management (time savings, vehicle operating costs, criteria air contaminants emission savings, GHG emission savings and accident savings), low income mobility and liveable communities. Project costs (capital, O&M) are presented and three summary statistics are given (net present value, benefit-cost ratio, internal rate of return).

The document also describes the current Canadian federal government role in urban transport, including issues such as planning and policy, service delivery, and other support.  It reviews the current federal role and then summarizes the alternate service delivery experience in the U.S. and other selected countries and presents possible options for changes to the current federal role.

Finally, the report presents summary conclusions and a set of recommendations.
These include:

• The Canadian government should seriously consider establishment of a transit capital funding program targeted at specific types of projects and under specific sets of conditions;
  
• In concert with an expanded federal role in capital funding the federal government should establish more explicit transit-friendly planning and policy principles (guidelines, goals, etc.) at the national level;
  
• The federal government should encourage, though not require, local transit providers to seek competitive bids from private and public operators for discrete service elements such as, for example, a geographic grouping of bus routes, special or ancillary services and, possibly, select rail operations;
  
• The federal government should increase its investment in research, education, and direct technical assistance such as training to transit service providers and project sponsors; and

PLEASE NOTE: Transport Canada recognizes that there is some debate regarding specific values in this model (ie. social discount rate, value of statistical life, value of time) . Transport Canada has adopted specific values for these inputs based on it's own research as well as advice from Treasury Board and does not endorse or propose the use of different values included in this model. The user is free to use values of their own choice.