Utilizing active and public transportation makes sense on a personal financial level and can help reduce your financial costs in these tough times.
Transportation is one of the costs of living that eats up anyone’s budget. According to Statistics Canada, Canadians spent $45.8 billion on transportation costs by the fourth quarter of 2023. On average, Canadians spend 17.2 per cent of their household budget to move around and 16.5 per cent on housing expenses. Smart Prosperity Institute’s PLACE Centre report acknowledged high transportation costs are a significant barrier to affordable housing, with most transportation costs coming from ownership and use of private vehicles. An Affordability Action Council report has shown these statistics were much worse for very low-income Canadians, taking up over one quarter of their before-tax income in the second quarter of 2023, far more than the 15 per cent threshold.
Ownership of a private automobile is not cheap. A Rate Hub article notes owning a car for an average Canadian costs $1,370 a month or $16,440 a year. On top of that, The Globe and Mail reported vehicle prices have advanced by 33 per cent in the last decade, according to the Consumer Price Index (CPI), as income increases have not kept pace during the same period. The Globe and Mail added that a worker who makes more than $76,000 would need to spend more than their entire after-tax income to buy an average new vehicle on Auto Trader. Factor in the rapid depreciation of automobiles, which lower in value between 15 per cent to 25 per cent a year, leading to over 60 per cent in their fifth year — owning a private car can often make no sense.
Despite small changes by Canadians toward using cycling and public transit, private automobile ownership reigns. Statistics Canada records that spending on new cars and new larger vehicles (sport utility vehicles, trucks) went up in the last quarter of 2023 as the industry bounced back from the pandemic. Public transit spending at the end of 2023 was down slightly compared to 2019.
This peculiar appetite for private automobile spending is personally, not sustainable financially. Canadian household debt reached $2.41 trillion, with 26 per cent of debt coming from unsecured debts, including credit cards, instalment loans and auto loans. As basic needs go up, perhaps it’s time (where applicable) not to purchase a private automobile and take public transit, cycle or walk when possible.
Despite the bus fares being too darn high in Winnipeg, public transportation gets someone to point A and B. Transit will take you to most key places you need to go. Meanwhile, the average cost of a bicycle is just over $700. Factor in yearly maintenance cost of bicycles ($300-$600), equipment purchases every few years for a couple of hundred (including helmet, racks and pannier bags) and the costs of combining active and public transportation would be more financially beneficial to a person’s financial situation. Those savings can be the difference between renting and having savings to pay for a home.
From my own personal experience, cycling and taking public transit have been key in my financial management. It helped control my transportation costs when I saved for a tiny home on a low to modest income a few years ago, while working two part-time jobs. When I moved into my new home, I cycled as my main mode of transportation, while taking public transit at the odd time helped me save time for taking continuing education courses to upgrade my training in climate policy. These cost savings help me enjoy local pro sports teams (Valour FC and Winnipeg Sea Bears) and grow my book collection.
Small steps can go a long way toward improving your quality of life. Ditching the car, taking Transit Tom and cycling just makes cents.
Adam Johnston hosts Not Necessarily The Automobile on Thursdays at 11:30 a.m. on UMFM 101.5. He can be reached at notnecessarilytheautomobile@gmail.com
