Pandemic projected to cost city $254M in 2021

The City of Ottawa is expecting the COVID-19 pandemic to place more than a quarter-billion dollars of added pressure on its books in 2021, but those expenses should be almost entirely covered, finance staff said Tuesday.

Just three months into the current fiscal year, staff now peg this year's COVID-19-related costs at $254 million. The revised projections represent a major jump from the $153-million pandemic-related deficit staff calculated last fall while drafting the budget.

Despite the daunting figure, chief financial officer Wendy Stephanson told the city's finance and economic development committee Tuesday that Ottawa remains in "good shape," thanks in large part to millions in pandemic relief flowing from upper levels of government since last summer.

The city has already received enough to wipe out the $238 million in pandemic costs incurred in 2020. In fact, by pausing hiring and discretionary spending, the city finished 2020 with a $17.6-million surplus overall, enough to help mitigate this year's burden.

As well, upper levels of government have made several funding announcements to offset transit, social services and general costs, while OC Transpo has found an extra $5.5 million in savings from some bus routes.

That leaves a gap of just $13.5 million, and it's possible that the federal budget in two weeks could cover that remaining amount, Stephanson said.

Transit the biggest burden

The extra pandemic pressure is mainly due to higher-than-expected losses incurred by OC Transpo.

Ridership simply hasn't recovered the way staff projected months ago. They based the 2021 budget on ridership starting the year at 30 per cent of pre-pandemic levels and rising to 90 per cent by year end. But the majority of OC Transpo's customers — federal employees and post-secondary students — have not returned to their offices and classrooms, leaving ridership in March at just 27 per cent of normal levels.

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As a result, transit alone is projected to face pandemic losses of up to $153 million in 2021, accounting for more than half of the city's COVID-19 costs this year.

Mayor Jim Watson said he's grateful for all the help from upper levels of government and is pleased city's reserves are healthy, but said he's is already thinking forward to next year.

"We have to be very cautious of what 2022 will bring, because COVID and its repercussions will still be with us for some time after we defeat the virus itself," Watson said.

Staff said they would present another update halfway through the current fiscal year.