OC Transpo will get 100 fewer electric buses for $1B price tag

UPDATE | City council voted Jan. 25 to go over the spending proposal further at transit commission.

The business case and funding for OC Transpo's big shift to electric buses have been updated, and now the City of Ottawa expects to get 350 buses instead of 450 for the previously announced billion-dollar price tag.

After originally exploring only a small pilot project, OC Transpo made a major turn in June 2021 and staked its future on a quick transition away from a diesel-powered fleet. City council resolved to buy only zero-emission buses — a move that would also tackle one of the municipality's largest sources of greenhouse gas emissions. 

At the time, the city was presented with the sudden promise of federal funding, and made plans to buy 450 zero-emission electric buses by 2027 for $986 million. 

• OC Transpo to spend $1B to bring in electric bus fleet by 2027

At a news conference at an OC Transpo garage last week after funding was secured, however, federal officials announced they would help pay for 350 buses. 

Richard Holder, the City of Ottawa's director of engineering services, explained that was what the city could afford given the funding it was allocated and the shorter timeframe of the federal Zero-Emission Transit Fund, with projects eligible to March 2026. It's possible that fund could be extended and the city might be able to tap into it again, he noted.

Until then, however, a report before city council on Wednesday now pegs the total cost of 350 buses at $974 million: $653 million on the buses, $214 million for charging infrastructure, but also "transition costs" of $107 million that are almost five times higher than the estimates a year and a half ago.

Holder said in an emailed statement that transitional services "include new tools and equipment, required training and program management, and essential facilities upgrades, such as structural upgrades and a new parking facility over exterior parking" although not electrical upgrades.

City receives big loan and grant

Transit commission chair Coun. Glen Gower said he expects a fluctuation in costs in any major procurement. The City of Ottawa received a smaller share of federal funding than it originally expected, he explained, after Infrastructure Canada decided it would help more cities with the transition to electric buses. 

Still, he points out the federal funding bridges the gap between the cost of a diesel bus and the higher cost of electric ones, making it possible for the city to afford to replace its fleet with the zero-emission alternative.

"It's not every day that the city is in the receipt of $350 million from the federal government. I mean that's a significant investment," said Gower. "I think it's also a reminder that we have so much attention on LRT, but a significant portion of our transit system is still buses and will be buses for the foreseeable future."

The City of Ottawa received approval in December from Infrastructure Canada to receive the maximum $350 million grant under its Zero-Emission Transit Fund. 

Last summer, city council also approved taking out a loan of up to $380 million with the Canada Infrastructure Bank that can be repaid with the savings it expects from fuel and maintenance.

Between those two sources, plus the $348 million the city intended to spend on diesel bus replacements anyway, city staff say the e-buses will be cost neutral. 

Fewer buses purchased in early years

The City of Ottawa intends to start out slow when it comes to getting the electric buses into service: 

• 26 in 2024.
• 77 in 2025.
• 110 in 2026.
• 137 in late 2026.

It was auditor general Nathalie Gougeon who recommended the city not be overly ambitious with its first purchase. She has been doing an unusual set of proactive audits of the electric bus plan because she was concerned about the cost, new technology and speed with which the city took it on.

• Auditor's review causes city to rethink how it will buy electric buses
• Auditor cautions City of Ottawa against big electric bus purchase

After one of those audits, the City of Ottawa decided to partner with the Toronto Transit Commission on the procurement of the buses, rather than putting out a request for proposals of its own. Gougeon had found Ottawa's own draft RFP wasn't specific enough about technical details.   

OC Transpo currently has a fleet of 855 buses, made up of predominantly 40-foot and 60-foot diesel buses along with 151 double-deckers. At the moment, only four buses in the fleet are electric.

Will go to transit commission first

City staff had urged council to give them the go-ahead Wednesday to start spending the money, but councillors instead voted 20-5 to send the file to transit commission for greater scrutiny.

The referral motion from Barrhaven West Coun. David Hill cited the report that came out of last year's inquiry into Ottawa's problem-plagued LRT line — including the need for council to "exercise meaningful oversight of critical decisions made by city staff."

Sending the electric bus spending plan to transit commission first, Hill said, would allow councillors to question city experts, and members of the public could share their thoughts.

"We're not two months out of the LRT inquiry, and we're about to embark on the next phase of a significant investment in our transit technology," he told council.

"I have concerns that, certainly, I would like to ... have the opportunity to address, so that I can look at residents in the eye and tell them that I did everything I could to rebuild their trust."

Transit commission is next set to meet Feb. 9, although several councillors floated the idea of calling a special meeting before then.