An OC Transpo bus turns onto Elgin St. from Wellington St. in downtown Ottawa, Ont. in this undated photo. (Photo by Shubham Sharan on Unsplash)
The Ontario government is dropping another $7.48 million into OC Transpo's fare box to help cover its 2022 deficit, but it will not be enough to keep the transit service out of the red.
In December, Ottawa received $63.3 million under stage 4 of the federal-provincial Safe Restart Agreement to cover costs related to the COVID-19 pandemic, but it wasn't enough to cover the projected $85.5 million transit deficit last year.
In a report for the April 4 finance and corporate services committee meeting, staff say the Ontario government has advised the city it will receive an additional $7.48 million to offset more of the fare revenue lost due to lower ridership.
Despite the additional cash, OC Transpo ended 2022 with a $17.582 million funding shortfall, according to the report. The city will use Transit Reserves to cover the shortfall.
"The city will seek additional (Safe Restart Agreement) funding through the province to address the remaining funds to cover the remaining COVID-19 related impacts," staff say.
The transit service reported a $99.6 million impact on its 2022 budget due to COVID-19, including lower transit fare revenue.
OC Transpo is projecting a $39 million budget deficit in 2023, and is hoping for funding from the provincial and federal governments to offset the funding. There was no mention of funding for municipalities to cover COVID-19 related costs in the Ontario government's budget on Thursday.
The city of Ottawa's budget ended 2022 in the red.
The report for the finance and corporate services committee meeting says city-wide tax supported services ended the year with a $3 million deficit, while the rate supported water and sewer services ended the year with a $6.119 million deficit.
Several departments posted a surplus last year, including Recreation, Cultural and Facility Services due to higher revenue for recreational services and Planning, Real Estate and Economic Development due to vacancies and financial mitigation strategies.
Staff say the Public Works Department ended 2022 with an $18 million deficit, mainly due to the city's response to the derecho weather event last May. Under the Public Works budget, winter maintenance and fleet costs were $12 million more than budgeted.
Emergency and Protective Services posted a $3.8 million deficit last year due to higher than anticipated costs for supplies, equipment, fuel and overtime.
The $6 million deficit in the drinking water and wastewater services was due to a shift in consumption as more residents stayed home and increased sewer cleaning and catch basin maintenance.
Staff say the COVID-19 impact on the tax and rate supported programs was $40.240 million in 2022, mainly affecting Community and Social Services, Innovative Client Services and Emergency and Protective Services, which covers fire and paramedics.
The total 2022 budget deficit due to COVID-19 was $198.9 million in cost pressures, including $99 million at OC Transpo, Ottawa Police Service and the Ottawa Public Library. The city received $193 million from the Ontario and federal governments to cover the COVID-related expenditures, which includes $11.219 million the city can use in 2023 for Ottawa Public Health School Focused Nurses and city-wide operations.
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