Could Tech Transform Public Transit Use To Lower Congestion In Canada?

Traffic congestion and greenhouse gas (GHG) emissions are two of the most pressing challenges facing Canadian cities. A recent Canadian Centre for Economic Analysis study has found that gridlock costs the Ontario economy C$12.8 billion annually, with C$10.1 billion of that burden concentrated in the Greater Toronto and Hamilton Area (GTHA). Including social impacts such as stress and health problems, the province of Ontario’s total congestion cost rises to C$56.4 billion annually (Table 1).

^{Table 1: Impacts of Congestion in the GTHA and Ontario}

The problem extends beyond Ontario. Vancouver, for example, is among North America’s most congested cities, with commuters losing an average of 86 hours annually to traffic delays. These delays not only erode productivity but also exacerbate air pollution. Health Canada estimates that, each year, traffic-related air pollution contributes to 1,200 premature deaths and costs the economy $9.5 billion in healthcare expenses across Canada. Transportation is Canada’s second-largest source of GHG emissions, accounting for 22% of total national emissions. Road transportation dominates this figure, and emissions from passenger vehicles and freight trucks have steadily increased since 1990.

With Canada’s urban populations growing rapidly—Toronto, Vancouver, and Calgary gained over 100,000 residents last year—the need for innovative mobility solutions has never been more urgent, especially given the slow growth rate and rising costs associated with urban transit development. As digital connectivity improves, Canada can better leverage on-demand transit services to address first- and last-mile gaps, while also partnering with ride-sharing apps to link commuters more effectively to public transit networks. Cities worldwide have begun exploring these tech-driven solutions and reported positive outcomes, offering Canadian municipalities a valuable blueprint for reducing congestion, cutting emissions, and creating more sustainable urban transportation systems.

On-Demand Transit Can Boost Ridership and Improve Network Efficiency

Canada’s urban transit systems have started to rebound from pandemic lows, but they remain strained. According to Statistics Canada, urban transit ridership reached 131.7 million trips in December 2024, recovering 81.5% of pre-pandemic levels, but it still fell 21.6 million trips short of 2019’s volumes. Meanwhile, transit agency operating revenue (excluding subsidies) rose 13.8% from December 2023 to $336.2 million in December 2024, falling $2.5 million short of December 2019 figures (Chart 1).

^{Chart 1: Monthly Urban Public Transit Operating Revenue and Passenger Trips, 2019–2024}

The public health measures introduced in March 2020 to mitigate the spread of COVID-19 triggered a steep decline in transit use—from nearly 1.9 billion trips in 2019 to 849.1 million in 2020 and 778.4 million in 2021. Although annual recovery has been gradual, overall ridership in 2024 amounted to 1.6 billion passenger trips (an 8.8% increase over 2023), reaching only 84.2% of pre-pandemic levels (Chart 2).

^{Chart 2: Urban Public Transit Ridership, 2019–2024}

Between 2021 and 2024, Canada’s population has grown by almost 3.7 million (9.8%). With congestion on the rise, the decline in per capita transit use suggests that fewer people currently rely on transit than pre-pandemic, which underscores the urgent need for innovative solutions to attract riders.

One solution that has emerged to attract more public transit riders is on-demand transit, which dynamically routes buses in real-time to better reach users and serves as a cost-effective tool for reversing declining ridership and addressing service gaps in sprawling suburbs. According to research from Toronto Metropolitan University, on-demand transit can expand service coverage by 70% in low-density zones and increase overall ridership by 30%. In recent years, Belleville, Ontario, replaced underused late-night fixed-route buses with on-demand service, resulting in a 300% ridership surge and C$150,000 in annual fuel savings through optimized routes. Similarly, Milton Transit’s on-demand service doubled ridership in its 401 Industrial Zone, reducing operational costs by C$27,500 annually.

The environmental benefits of on-demand transit are also compelling. A MaRS Discovery District analysis estimated that scaling on-demand transit across 46 Canadian cities could reduce emissions by 210 kilotonnes by 2038, compared to relying on conventional fixed-route buses. Despite these advantages, funding instability remains a barrier. Powell River, BC, ended its on-demand pilot when provincial grants fell short in 2023, and other initiatives—such as in Edmonton—are at risk of cancellation. Still, by adopting on-demand transit in low-density areas where large buses often run underutilized and public transit use is usually around 12%, Canadian cities could more effectively address service gaps than traditional bus systems alone.

Integrating Ride-Sharing Apps with Public Transit Networks Can Improve First and Last-Mile Mobility

According to Statistics Canada, the number of car commuters in major Canadian cities has grown since 2021, with notable increases in Ontario, Alberta, and Prince Edward Island. In Toronto and Vancouver, car commutes surpassed May 2016 levels in May 2023, highlighting a growing preference for cars over public transit post-pandemic, especially for long commutes (Chart 3).

^{Chart 3: Number of Car and Public Transit Commuters With a Long Commute, 2016–2023}

As the congestion problem worsens, Canada needs a more effective strategy to encourage drivers to shift from private cars to public transit. One promising approach is integrating ride-sharing apps with subway networks, allowing commuters to use discounted or subsidized ride-hailing services to reach or leave a station. This addresses the ‘first and last mile’ gap—often the most inconvenient part of any transit journey—by providing a seamless, affordable way to get from home to the station and from the station to one’s final destination. For example, Riyadh, a city long reliant on cars, recently launched a new metro system alongside a partnership with Uber to offer discounted (and initially free) rides within a three-kilometre radius of metro stations.

While results are still emerging, this initiative aims to make public transit more appealing and cost-effective for everyday commutes. This model can be a solution for Canadian cities like Toronto and Vancouver, where public transit use remains below pre-pandemic levels and record investment in transit expansion has to translate into higher ridership in coming years.

Canadian cities have previously explored integrating ride-sharing apps with transit systems to address first-mile/last-mile connectivity. In 2019, Metrolinx partnered with Lyft to offer a CA$4 discount on rides to and from select GO Transit stations. However, this pilot program concluded in December 2019 without being permanently adopted.

To build on such initiatives and provide lasting solutions, cities like Toronto could look towards launching comprehensive Mobility-as-a-Service (MaaS) platforms. Before this is possible, Toronto’s existing Presto card system would require significant upgrades to seamlessly integrate metro scheduling, payments, and, potentially, ride-share bookings. By adopting a MaaS approach similar to Madrid’s Mobility 360 app—which integrates public transit and shared micro-mobility services—Toronto could unify trip planning and payments across TTC, GO Transit, and other mobility options, creating a more cohesive and user-friendly transportation experience.

As Canada’s population is projected to reach approximately 50 million by 2030—up from around 42 million in 2024—the demand for integrated and efficient first- and last-mile transit solutions will become even more critical. Building on existing pilot projects and embracing scalable, technology-driven approaches like MaaS and ride-sharing integration will help Canadian cities create transit networks better aligned with commuters’ evolving needs. The proactive pursuit of these solutions will enable Canada to offer practical, sustainable commuting alternatives that ease gridlock, reduce GHG emissions, and significantly improve mobility and quality of life—even in traditionally car-dependent suburbs.