Benjamin Dachis and Rhys Godin of the C.D. Howe Institute have a new report out talking about the effect of COVID-19 on the future of public transit in Canadian cities. In it, they make the argument that public transit is a key enabler of the agglomeration economies that make cities so valuable. And right now, most people aren’t using it (see above).

Why are agglomeration economies so important?

According to some studies, doubling the population of an urban area has tended to increase mean incomes by between 3-8%. In the Canadian context, similar research has found that people living in more populated regions (cities) tend to have incomes that are between 3-5% higher than those living in more rural areas. So when it comes to average incomes, bigger cities tend to be better. (Does Zoom change this? I’m not convinced.)

Of course, to make bigger cities function properly, you generally need public transit. And when you do have fast and reliable transit, that, they argue, is going to help drive the agglomeration economies which ultimately help to increase incomes. Because of this important relationship, Dachis and Godin argue that Canadian governments have a habit of systematically undervaluing the importance of transit investment.

If you’re interested in reading the full report, click here.