Area Rating

What is area rating?

Area rating was introduced in 2001 as a means of handling taxation and services post-amalgamation. In theory, it served to only collect taxes from residents of the new City of Hamilton who had services such as transit, fire and recreation. Today, transit is the only remaining area rated service. In other words, outside of the borders of the old pre-amalgamation City of Hamilton, residents through their tax dollars only pay for the service that runs through their ward.

This has resulted in stunted or non-existent service to communities in our city, and a lack of funding for a vital public service that benefits all Hamiltonians regardless of where they live or if they use the HSR. As it stands right now, the fares for the HSR are the same no matter where you get on the bus, and we all benefit when there are less cars on our busy roads.

What should we do about it?

Environment Hamilton heavily encourages Hamilton City Council to eliminate area rating for transit, to both ensure the system benefits from being fully funded by all urban and suburban residents, and to ensure the full capability of expansion into underserved communities.

The core focus should be on ensuring we all are contributing equally to our public transit service, and that this increases the funding for the HSR overall.


The history of area rating

  • Area rating began in 2001 following the Hamilton amalgamation
  • Various tax rates were set for police, fire, and transit services for each previous municipal boundary
  • Currently, Hamilton is the only municipality in Ontario that has kept an area-rating pay system for transit

The ‘rates’ of area rating in 2014

  • Where you live determines how much you pay to the HSR through residential taxes
    • Hamilton: 0.095%
    • Glanbrook urban: 0.040%
    • Flamborough urban: 0.030%
    • Ancaster urban: 0.028%
    • Stoney Creek urban: 0.027%
    • Dundas urban: 0.026%
    • Glanbrook, Flamborough, Ancaster, Stoney Creek, Dundas rural: 0.000%

Preventing service to new communities

  • Unlike virtually all other Ontarian municipalities, due to area rating for transit, when a new development is built in Hamilton public transit service is not planned for the soon-to-be community
  • We’ve seen this happen in places such as Binbrook, and the new developments in Stoney Creek that are currently underway

A changing demographic

  • Hamilton’s ridership is not increasing nearly as fast as other cities in the GTHA
    • Between 2006 and 2013, Hamilton’s ridership only grew 3%, while Mississauga, York, Waterloo, and Brampton respectively grew by 23%, 33%, 60% and 91%
  • Hamilton ridership is shifting to a younger demographic
    • Younger populations are choosing to bus more often and use transit as their primary mode of transportation, while senior populations are driving until much later in life
  • McMaster students are currently the HSR’s largest ridership group, making up 12.05% of the HSR budget
    • Despite the student referendum to increase tuition fees for increased HSR service, these improvements have yet to be seen, and the University 51 route is still cancelled throughout the summer

The foundational problem of funding

  • The fundamental issue behind our lacking transit system is a lack of funding
  • When adjusted for inflation, the City of Hamilton invested in $83.85 million into transit in 1994, $61.15 million in 2005, and only $59.02 million in 2016
  • HSR fares have been continually increased to improve funding, creating financial barriers for riders and having all riders pay the same fees while service is not equal across the city
  • Eliminating area rating is a more efficient and fair solution as all Hamiltonians would contribute to the same fund to provide better transit throughout all of Hamilton
  • Hamilton invests the majority of its federal and provincial gas tax funds into roads as opposed to transit
    • One bus can replace up to 50 cars, meaning better transit would mean less cars - and less wear - on the road, reducing the need for constant construction and maintenance

The environmental impacts of eliminating area rating

  • Currently, transportation is the sector in Hamilton with rising annual greenhouse gas emissions
    • 75.8% of these emissions are from light-road vehicles - primarily single-occupant vehicles
  • Eliminating area rating would allow for increased service, increased connectivity across the city, and would make travelling by bus more convenient and easier for Hamiltonians
  • Buses emit significantly fewer carbon monoxide, hydrocarbons, and nitrous oxide emissions, leading to reduced greenhouse gases being released into the atmosphere as well as improved air quality in Hamilton

Area rating is outdated

  • Hamilton has seen many changes since 2001
  • While area rating may have made sense right after amalgamation, we cannot become a single connected city without proper transit systems, and area rating is preventing this from occurring
  • Now that Hamilton ward boundaries have changed, there are wards where only some of the residents fall within the area rating boundary, while others do not contribute to transit funding

Further Reading

Area Rating Keeps Us Divided (Raise the Hammer)

Area rating: Boring name, colourful history (Hamilton Spectator)

Unraveling Area Rating (CATCH - Citizens at City Hall)