OC Transpo projecting $85M deficit by year's end if province, feds don't help

An OC Transpo bus at the Eagleson Park and Ride. (Dave Charbonneau/CTV News Ottawa)

OC Transpo is projecting an $85-million deficit by the end of 2022, as ridership has yet to recover to pre-pandemic levels.

The ongoing COVID-19 pandemic and the “Freedom Convoy” at the start of the year are two of the main items listed in a report prepared for the transit commission outlining the public transit system’s financial health at the end of the second quarter.

Staff say OC Transpo has so far lost $44.9 million because of COVID-19 and another $4.5 million because of the “Freedom Convoy” protest that gridlocked the downtown core.

The city budget had projected $26.15 million in lost revenue for the first half of the year but the actual revenue loss was $47.6 million. Staff say this is because of the unexpected provincial lockdown measures put in place amid the Omicron variant wave. By the end of the year, staff are anticipating a loss of $96.5 million in fare revenue, two times what was in the budget.

Fewer dollars have been confirmed by senior levels of government so far. The Safe Restart Agreement funding was budgeted for $37.2 million, but the Ontario government has confirmed only $11.1 million to cover losses in January. Savings were also found in lower salary costs because of vacant positions and lower costs to process fares.

The convoy led to $3.8 million in lost revenue, partly because of fewer people taking transit into the downtown core and because of some free transit options on the Confederation Line, 15 downtown bus routes, and Para Transpo, as approved by council. The protest also cost OC Transpo an extra $663,000 in security and customer service costs.

Staff are anticipating assistance from the federal government to bring balance the budget.

“The federal government announced it will invest up to $750 million in one-time funding across the country for local transit systems to cover pandemic-related fare revenue shortfalls. In addition, as announced as part of the 2022 Ontario budget, the provincial government is committing to matching dollar-for-dollar, in addition to its previous investments,” staff say. “At this time, individual municipal allocations are unknown.”

The city is also seeking to recover the cost of the convoy from Public Safety Canada under the Nation’s Capital Extraordinary Policing Cost program.

The transit system has found some savings in terms of cleaning and PPE. The budget covers $11.7 million for enhanced cleaning and PPE, but only $3.1 million has been spent as of the end of June and staff anticipate the year-end cost to be $7.8 million. Staff say lower enhanced cleaning costs and fare system savings from fewer fares being processed contributed to the savings.

If other levels of government come through to cover COVID-19 related costs, OC Transpo could see a budget surplus of nearly $7 million.

Transit commission meets Wednesday.