1. menauitpuitptransport#MENAUITP Innovative financing solutions to meet customer needs + Engaging customers to enhance satisfaction Marvin Rotrand, Vice-chair of the Board Société de transport de Montréal (STM), City of Montréal councillor 1

2. menauitpuitptransport#MENAUITP ABOUT MONTREAL Montréal is Canada’s 2nd largest city Population - metropolitan area: 4 million Population - Island of Montréal: 1.9 million Montréal is North America’s most uniquely European flavoured city with its blend of French, English, multiethnic and multicultural population 2

3. menauitpuitptransport#MENAUITP STM PROFILE A publicly owned transit operator with 150-year history Ranked second among public transit enterprises in Canada, third in North America 9,199 employees An $1.5 B budget CAD Asset replacement value of $26 B CAD Backlog in asset maintenance is $4.3 B 416 million rides carried in STM system in 2015 3

4. menauitpuitptransport#MENAUITP RIDERSHIP: POSITIVE RESULTS Second-ranked city in North America, after New York, for heaviest transit use per capita (rides/inhabitant) with 331 rides 80% of all public transit use in the Montréal area 70% of all public transit use in Québec Modal share 32.3% and downtown modal share 71.9% Overall customer satisfaction level at 85% 4

5. menauitpuitptransport#MENAUITP MÉTRO SYSTEM 100% powered by hydroelectricity since its inauguration in 1966 4 métro lines, 68 stations, 759 subway cars Rolling stock consists of 759 cars, with 336 MR-63, 423 MR-73 and 468 new AZUR cars being acquired 5

6. menauitpuitptransport#MENAUITP MÉTRO SYSTEM 6

7. menauitpuitptransport#MENAUITP BUS NETWORK 1,721 buses, including 8 hybrids and 257 articulated vehicles, and 102 minibuses, with 86 for paratransit and 16 for city service Network covers a 500 km 2 area 220 bus lines, of which 209 are wheelchair-accessible 23 bus lines provide all-night service 223.5 km of roads feature bus priority measures Going forward, the STM will only acquire hybrid buses, the first step toward the complete electrification of the surface network 7

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9. menauitpuitptransport#MENAUITP THE FINANCIAL CONUNDRUM To spur transit use, the Government of Québec, the City of Montréal and the STM have kept cost recovery low. Passenger revenues do not equal operating costs Monthly pass is $82, with reduced fare at $49.25 In Toronto, monthly pass is $141.50, with reduced fare at $112 9

10. menauitpuitptransport#MENAUITP THE FINANCIAL CONUNDRUM Riders cover 40.6% of STM’s budget Other sources: City of Montréal via property taxes for 28.1%, Government of Québec for 22.9 %, tax on gas at 2.4%, other operating income 2.9%* The STM has created Transgesco, which partners with the private sector to generate non-fare revenues * Budget 2016 10

11. menauitpuitptransport#MENAUITP Commercialization Transgesco aims to provide value for transit customers while generating revenue In its budget projection for 2016, Transgesco would contribute $31 million to STM’s budget Considered extremely successful by North American standards, but represents only 2.75% of 2016 operating budget Transgesco’s partnerships include: Sale of advertising/media space, bus shelters, free newspaper in metro, cell and wi-fi coverage in metro, television screens in metro for displaying information and ads, property development 11

12. menauitpuitptransport#MENAUITP BUS SHELTERS The STM will renew its urban furniture of bus shelters through Transgesco’s deal with private partner Design approved for bus shelter of the future Partner to install or replace 2 642 bus shelters in 2013- 2036 for the right to advertise 12

13. menauitpuitptransport#MENAUITP BUS SHELTERS Some shelters to provide dynamic video information and ads: STM customer service announcements free of charge for partner’s right to advertise Partner to be responsible for maintenance and cleanliness of transit shelters 13

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15. menauitpuitptransport#MENAUITP MOBILE COVERAGE STM has undertaken to retrofit its underground métro network to provides its customers with 3G, 4G and 4G LTE mobile coverage Network’s deployment will be phased in over five to seven years, thanks to a joint $50 million investment, shared equally by telecommunication providers Bell, Rogers, TELUS and Vidéotron To date, 15 of 68 métro stations have mobile coverage 15

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17. menauitpuitptransport#MENAUITP CAPITAL REQUIREMENTS The initial métro system and first generation of métro cars date from the early 1960s. The STM faces major financial hurdles to renewing its métro fleet, upgrading stationary equipment in the métro, expanding its bus fleet, building new garages and completing bus rapid transit ways Capital needs are $2.81 billion for projects on the books* New AZUR cars for métro cost $1.18 billion* Métro asset maintenance costs $972 million* Bus acquisition program $31.55 million* * Capital budget 2016-2018 17

18. menauitpuitptransport#MENAUITP FINDING THE MONEY How to provide good service with efficient and safe infrastructure at an affordable price? Government of Québec is the major contributor to STM’s capital projects subsidizing between 50% and 100% of projects Some transfers from Federal Government STM’s debt servicing is mounting, putting pressure on its operating budget Financial environment of austerity as Government of Québec is faced with budget deficits Local politicians want fares to remain low and services to grow 18

19. menauitpuitptransport#MENAUITP IMMEDIATE CHALLENGES Population in the Montréal region projected to grow to 4.4 million by 2030. Investment in public transit is vital No new métro extensions on Island of Montréal since 1986 Need for new transit expansions in region to fight congestion Government concern with deficits challenge additional direct public investment Municipalities have limited capacity for raising property taxes for transit Considerable growth in car ownership: Time now for bold public transit initiatives 19

20. menauitpuitptransport#MENAUITP SOME NON-TRADITIONAL AVENUES The Government of Québec has mandated the Caisse de depot, the pension fund manager, to examine the possibility of funding new métro lines The Caisse is an institutional investor managing public and parapublic pension plans with net assets of $240 billion CAD The Caisse has a diversified portfolio that includes real estate, shares in 4,000 companies worldwide, fixed income securities, along with airports and transport systems In a low interest environment, the Caisse is interested in transit investments for a greater rate of return 20

21. menauitpuitptransport#MENAUITP THE PLAN The Government of Quebec has invited the Caisse to review two possible lines, one being a LRT over the new Champlain Bridge from the South Shore to the Island of Montréal and the other, a LRT or train from downtown Montréal to the Airport New Champlain Bridge will replace busiest span in Canada, which carries 156,000 vehicles a day. The 6-km bridge has BRT service moving 20,000 passengers weekdays. A LRT could increase ridership Montréal airport is 3rd busiest in Canada with 15.2 M passengers in 2015. A high volume of international traffic is currently served by STM’s 747 Express Bus carrying 1.4 M passengers annually. Train or LRT could make Montréal airport more competitive than Toronto 21

22. menauitpuitptransport#MENAUITP WILL IT PAY OFF? The Caisse’s mandate is to earn a good rate of return for its pension plans. Cannot be used by Government simply to replace direct government investment. Challenges in proving business case: Local politicians oppose toll on new bridge. Could that dampen potential ridership? Toronto Pearson Airport Express train launched last year struggling to build ridership and pay for investment despite Toronto Airport’s 41 million annual passengers Arguments over what type of service. Express to airport or local service to communities on way to airport and beyond? 22

23. menauitpuitptransport#MENAUITP HAS THE ELECTION CHANGED THE EQUATION? The October Federal Election saw a party that pledged massive investment brought to power now promising to address the following issues : Chronic under-investment. Canadian Urban Transit Association (CUTA) estimates Canada has a $60 B CAD deficit in transit infrastructure The new Government of Canada promises $19 billion in new money for transit over next 10 years, $19 billion for green infrastructure and $19 billion or municipal investment. The later two categories could be partially attributed to transit Canada is the only OECD without a National Transit Strategy. The Government has promised to address this 23

24. menauitpuitptransport#MENAUITP CUSTOMERS MORE DEMANDING ! The STM has done a good job interfacing with its clients: Board meetings are public and have a question period Customer Service Committee periodically holds public meetings in different neighborhoods Online panel sees more than 60,000 people sharing opinions and observations (My Voice My STM) Focus groups consulted regularly about customer satisfaction Enhanced social media presence, e.g. 113k followers on Twitter 24

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26. menauitpuitptransport#MENAUITP REAL TIME INFORMATION NEXT STEP Customers are satisfied with STM’s success but push for far more information : STM offers 5 ways to obtain schedules: web, mobile, telephone, print, at bus stops Next stage will be iBus offering real time information iBus will offer real time info on mobiles, vehicle display screens, at métro station entryways and via passenger information terminals Real-time information including schedules broadcast on all existing platforms (smart phone apps, SMS, Web and mobile Web, interactive voice response (IVR) 26

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28. menauitpuitptransport#MENAUITP MONTREAL WILL HOST THE WORLD 2017 marks Montréal’s 375th anniversary and the 150th anniversary of Confederation in Canada Montréal is proud to welcome the world as host for UITP’s Global Public Transport Summit May 15-17, 2017 Local co-hosts STM and AMT will work with UITP MENA to welcome Middle Eastern and North African delegates Contact : Marvin Rotrand at 1 514 872 4863 marvin.rotrand@stm.info marvin.rotrand@stm.info 28

29. BIENVENUE - WELCOME RÉSEAUX HÔTES HOST SYSTEMS www.uitpsummit.org

31. BIENVENUE - WELCOME RÉSEAUX HÔTES HOST SYSTEMS www.uitpsummit.org