OC Transpo digs into reserves, weighs layoffs to fill $50M hole

OC Transpo plans to dig into a rainy day fund and cut positions to fill a deep budgetary hole next year.

With ridership forecast at just three quarters of pre-pandemic levels and costs mounting faster than tax revenues, the Ottawa transit service needs to come up with about $50 million.

It will pull $12.7 million from the transit operating reserve, a move the city's chief financial officer acknowledged is "not sustainable." Fewer than $4 million will remain in that pot.

"It's not something we can continue doing," said transit commission chair Glen Gower as councillors weighed OC Transpo's budget on Tuesday. "I am concerned about that high amount that we're taking from reserves."

Renée Amilcar, the city's general manager of transit services, expects to find more money from an administrative process review that will mean cutting positions. She said the city will make every effort to find those employees jobs elsewhere — but it could mean layoffs.

"We have identified areas where savings can be made through a reduction of positions," Amilcar said, adding that most are vacant or short-term contracts.

"Still, a small number of individuals will be affected by this decision and those announcements will be made early next year."

OC Transpo is also banking on reduced payments to the contractor that maintains the east-west Confederation light rail line.

The rest of the money will come from fare increases that will add a dime to the cost of a single ride or $3.25 to the price of a monthly pass, together with route changes that will save somewhere around $10 million to $11 million.

Some city councillors object that it isn't fair to riders as the changes mean ditching about a dozen 200-series routes and reducing service by roughly 74,000 hours.

Capital Coun. Shawn Menard said costs keep going up without any noticeable improvement to service.

"We can't have this kind of service reliability and increase fares at the same time," Menard said at the end of the meeting.

He said riders "shouldn't have to pay more for less service."

Fare freeze gets mixed reactions

Menard proposed a fare freeze instead, expected to cost about $3.8 million in lost money. He moved a motion that would pay for it with a one per cent hike to the transit levy on property taxes.

Coun. Jeff Leiper said he would support the proposal when it goes to a full meeting of council next month. He said it would mean about $8 on the average annual property tax bill.

"Most folks will never even see that in the context of their tax increases," he said.

The proposal also met skepticism. Beacon Hill-Cyrville Coun. Tim Tierney said every little bit of added taxes counts for residents struggling with affordability.

"I know it sounds like a cup of coffee here, a cup of coffee there, but we're all stressed and pressed," he said. "And I think we have to look at other orders of government to be able to assist us and not be dependent on a tax levy."

Menard noted that low ridership numbers are a major factor behind OC Transpo's budget woes. He argued that the city needs to make a bold move to get people back on the buses and trains.

In his view, the city will save money in the long run by investing in transit affordability.

"My goal is to get riders back on the bus to reduce congestion," he said. "It saves us money on road widening and road maintenance, so there's corresponding savings that come with it. It's better for our city if people take the bus. That's the idea behind a fare freeze."

Commission chair Gower noted the city is already keeping fares frozen for low-income people who use the EquiPass, while transit remains free for children under 12, refugees and people staying in emergency shelters.

Amilcar said the best way of drawing more people into the transit system is improving reliability. Her aim is to successfully deliver an average of 99.5 per cent of trips.

2023's monthly numbers ranged from 96.7 per cent in January and August to 98.7 in May.

"At least, can we deliver what we promised?" she said. "This is very important, and then we can build on other things."

City saves money on O-Train contract

OC Transpo expects to hold back about $5 million in payments to Rideau Transit Group for LRT maintenance next year.

That follows even bigger savings this year because of the three-week shutdown this summer.

Amilcar had previously revealed that OC Transpo withheld one month of payments since the service wasn't being delivered at all. On Tuesday, she revealed that she's now held back payments for both July and August.

She said that will mean somewhere between $8 to $10 million in savings. That money went partly to replacement bus service along the LRT route and some is still going to a shuttle running to Blair station to downtown.

Amilcar said the penalties she's banking on next year don't assume another shutdown — but only that temporary speed reductions on the line continue.

Trains are running slightly slower as one of the mitigation measures put in place following repeated bearing issues on the trains.