OC Transpo reduces workforce as revenues stagnate post pandemic

OC Transpo announced Tuesday that it’s reducing its workforce to cut costs and improve revenue.

The transportation service said in a memo to the Mayor and Council the decision is based on the system’s needs, especially lower ridership levels.

OC Transpo is forecasting a $49.8-million deficit this year.

The layoffs are affecting management and administrative positions. In total 25 unionized employees and 10 management and professional employees have been laid off. They were notified Tuesday, OC Transpo says.

Ottawa’s transportation system is not anticipating the ridership numbers to recover more than 75 per cent of pre-pandemic levels in the near future.

“The most recent update to the Transit Long Range Financial Plan estimates it may take up to 10 years before ridership fully recovers, closing the revenue gap. This loss of ridership has created a permanent gap in OC Transpo’s annual funding at the same time as operational costs are increasing,” read the memo.

In an update on Thursday, OC Transpo says there were 64.2 millin passenger trips on buses and the O-Train in 2023, which is 66 per cent of pre-pandemic levels. O-Train ridership was 50 per cent, while bus servive was 70 per cent of pre-pandemic levels.

While other measures have been taken to increase revenue and reduce costs, such as retiring older buses, freezing discretionary spending and deferring capital costs, the current 2024 budget calls for immediate action, OC Transpo notes.

OC Transpo says the layoffs are not going to affect the transit system’s operations or its frontline employees. It adds that the need for bus drivers, mechanics and apprentices in 2024 remains high.

“We understand the profound impact that workforce adjustments have on the affected employees and their families, as well as our entire department,” read the memo.

Cuts one of many steps, transit chair says

Stittsville Ward Coun. Glen Gower, chair of the city's transit commission, said Tuesday that the job cuts are just one of many steps OC Transpo is taking to improve its finances.

"I understand why they're happening. We are seeing a lower ridership level at OC Transpo compared to 2019. We're at 75 per cent of the ridership and OC Transpo and the city have done a number of things to react to that lower ridership and this is one of them," Gower told Newstalk 580 CFRA's Ottawa Now with Kristy Cameron.

"We've also frozen a lot of the discretionary spending. We've deferred capital investments and so on. It doesn't make this announcement today any easier, but it's part of the overall challenge we're having with lower ridership in this city."

Gower says he doesn't anticipate additional job cuts.

"We could have another half a million people living in Ottawa in the next 30 years. There's no way the city can function without a great transit system so we need to continue to focus on that and make investments. I don't think additional cuts are any way to solve a problem."

Instead, he pointed to steps OC Transpo is taking to improve service.

"We do have the launch of Line 2 and Line 4 LRT, so transit rail service to the south end and to the airport. That's a significant boost in service for riders in the south end of the city, for Carleton University students. We've also talked about changes to the bus route network that are going to launch this spring. That's an adjustment to service to make sure the routes are serving where people live, work, and shop," he said. ". If we can serve people better, that's the way we're going to attract more riders in the long-term, and that's how we get back to a more sustainable budget and a more sustainable system."

Gower also called on the federal and provincial government for aid.

"We know in 2024, we're going to have to dip into our reserves again to cover the deficit. That's not something we can do every year, year after year, I think it will be important to get some additional support or funding from the provincial or federal governments to help Ottawa make it through this transitional period."

Other savings OC Transpo aims to find:

• $11 million in Bus/O-Train service adjustments
• $5 million – increased in cost recovery for Line 1 performance provision
• $19.2 million savings from administrative process review
• $1.9 million in "other" savings
• $12.7 million from transit operating reserve

--With files from CTV News Ottawa's Josh Pringle and Ted Raymond