$5 Billion in Transit Cuts a Huge Step Backwards

Feb. 2, 2026

Statement from Sam Hersh, Clean Transportation Program Manager

Ottawa | Traditional, unceded territory of the Algonquin Anishinaabeg People – Cutting $5 billion from transit funding sends the wrong signal at exactly the wrong time. These cuts will hurt transit users and directly undermine Canada’s climate commitments and affordability goals. The federal government should restore the full commitment and ensure there is stable, dedicated funding for transit that Canadians can rely on.

In the 2025 federal budget, the government announced it was “folding” the Canada Public Transit Fund into a larger infrastructure fund, the Building Communities Strong Fund, effectively removing any dedicated transit funding. Many transit advocates saw this as a cut but, when pressed, government officials remained unclear on whether the fund would return or not.

However, after weeks of uncertainty and confusion, the federal government has confirmed that it has cut $5 billion from previously committed public transit funding in a serious setback for communities across Canada. These funding cuts come as transit agencies face growing operating deficits, rising construction costs, and aging infrastructure. Without predictable federal funding, cities will be forced to delay projects, cut service, or raise fares — outcomes that disproportionately hurt low-income riders and slow progress on climate goals.

Public transit is one of the fastest and most cost-effective ways to reduce emissions while connecting people to jobs, schools and housing. Pulling federal support mid-stream creates unnecessary instability for municipalities and could delay transit-oriented housing Canadians desperately need. At a time when governments say they want to tackle the affordability and climate crises, cutting transit funding does the exact opposite.

Background:

• In 2024 the federal government launched the Canada Public Transit Fund (CPTF) as a permanent and predictable federal funding program for public transit and active transportation across Canada, intended to provide about $3 billion per year beginning in 2026-27.
• In the 2025 federal budget, the government effectively cut public transit funding by folding the dedicated Canada Public Transit Fund into a new $51 billion Building Communities Strong Fund, forcing transit projects to compete with unrelated infrastructure priorities.

ABOUT ENVIRONMENTAL DEFENCE (environmentaldefence.ca): Environmental Defence is a leading Canadian environmental advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.

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For more information or to request an interview, please contact:

Lauren Thomas, Environmental Defence, media@environmentaldefence.ca