News  Private Quebec companies apply to sponsor metro line

STM offers exclusive advertising contracts to increase revenue

February 7 marked the deadline for Quebec companies to submit proposals to sponsor a Montreal metro line, the latest stage in Société de transport de Montréal (STM)’s new advertising strategy announced in November 2010. The plain involves companies entering into ten year exclusive advertising contracts on the metro line of their choice.

Received proposals will be evaluated by a committee of Transgesco, a wholly owned yet independent subsidiary of the STM that manages its commercial revenue. Since announcing the strategy, STM has since faced heavy criticism from Projet Montréal, a municipal party committed to sustainable urban development as outlined on their website.

In a statement released last November Richard Bergeron, leader of Projet and Jeanne-Mance councillor, equated STM’s new advertising strategy to “selling the metro’s soul” with advertisements that “defaced” metro stations. “The STM has reached a new low in its commercialization of public space by pursuing corporate sponsorship of metro lines,” Bergeron said in the statement.

The STM claimed that the ads would be controlled and tasteful, with specific sizes and areas designated for advertising. Dominic Perri, Transgesco president, member of the STM’s Board of Directors and councillor of Saint-Léonard borough, told The Daily. “We know how much advertising there will be and where it will be,” he said. “Projet Montreal wants to lower taxes, build tramways… they want to do this and they want to spend… Look, we’re not in Disneyland. Let’s face it; you cannot give more services with less money. It is impossible.”

According to STM regulations, prospective companies must display an interest in environmental sustainability and support public transportation in order to qualify to sponsor a metro line. Perri said selection will depend on the “quality of the partner,” not just money.

“We don’t want to deal with a company that has no environmental policy or doesn’t care about public transportation,” said Perri. “We’re forming a partnership. We’re not selling it. We’re not asking them to post ads there and that’s the end of the story – no! We work together.”

Advertising amounts to only 2 per cent of STM’s total annual revenue. According to Marianne Rouette, a spokesperson for the STM, to increase its revenue the STM aims to raise the percentage of funding it recieves from advertising. With this new plan a company would be required to pay a fixed annual fee, with rights to the highly coveted orange line costing a minimum of $6 million per year.
“We have to increase our commercial revenue,” Rouette said. “We are very low compared to the other transit societies in the world.”

Perri said revenues from the partnerships between the STM and private companies will go toward improving public transportation. He pointed to the announcement of bus stops as an example of the types of services the STM would be able to provide with more revenue.

“We want to facilitate the lives of the citizens so they say ‘I’m going to take the bus or the metro to go to work.’ In doing so, we have less pollution. That’s the whole objective,” Perri said.
Projet Montréal remains sceptical of Transgesco’s motives and voiced concerns about the secrecy surrounding their financial records.

“Transgesco was created to get around the bidding process and hide projects from the public eye,” Bergeron said in Projet’s press release. “If the STM goes ahead with its plan, most of the profits will never even reach public coffers.”

“The money will not get back to the passengers. It will be returned in terms of the service,” Perri said. He explained that profits generated by Transgesco are transferred to the STM at the end of the year.

To Bergeron, the issue is beyond services provided. For him the issue signifies a larger tendency: “We must stop sacrificing Montreal’s heritage for money.”