Would you pay $482 in taxes for free transit in Ottawa?

Studying the effects and costs of providing permanent, no-charge transit in Ottawa could cost the city nearly $1 million, according to city staff.

In a memo to city council, sent Monday, Renée Amilcar, GM of transit services, and Wendy Stephanson, the city’s chief financial officer, said a public transportation consultant, Brendon Hemily, worked with the city to develop a possible structure for a study to respond to the questions identified by Council on fare structures.

"We have to look at other cities, what they’re doing. There’s some good examples out there and we can learn from them. We want this to be a success and this is why that motion got put forward," Coun. Theresa Kavanagh told CTV News Ottawa.

According to the memo, staff estimate--based on Hemily's advice--that a comprehensive study on the issue would take up to a year to complete and would cost between $700,000 and $900,000, including the staff time to manage the project.

Currently, the memo says, there is no funding available to conduct this study unless other work is deferred to find the money. The cash could be included in the 2023 budget, if council directs staff to do so.

Staff are looking at three possible fare structures for OC Transpo: no-charge transit for all riders, shifting the revenue-to-cost ratio, and eliminating the annual 2.5 per cent fare increase.

Eliminating fares would cost approximately $209 million, based on pre-pandemic transit use. Staff say the move would increase the transit tax for the average property owner by an additional $482 in the first year.

An adult transit rider using a monthly pass is paying $1,506 at current fare for an entire year of service. 

Some riders say eliminating fares could help. 

"I definitely think it would be very beneficial. There’s a lot of people that cant afford it. It is really expensive," said transit user Kayla Taylor.

Others, however, don't like the idea of a property tax hike.

"Getting the free rides and so on, yes, it would be good for us, but once again, the property taxes are going to go up. I don’t think that's fair to the people," said rider Emile Rutledge.

Shifting the revenue-to-cost ratio from its current 45:55 to a proposed 30:70, meaning fares would represent 30 per cent of transit funding and taxes would cover 70 per cent, would increase property taxes by $162 per year, on average. 

Eliminating the annual fare increase of 2.5 per cent would cost an average property taxpayer an additional $11 per year.

The COVID-19 pandemic cut transit ridership in Ottawa significantly and it has yet to recover. While upper levels of government have helped cover lost revenues during the pandemic, council directed staff last spring to prepare an outline of a study into different fare structures for future policy decisions.

Kavanagh says getting ridership back up is critical. 

"Bottom line is, we’ve got to get more bums in seats in the transit to make good use of it," she said.

City council is currently on summer break, and is approaching its pre-election period wherein financial decisions are restricted. The municipal election will be held Oct. 24. 

At least two mayoral candidates have weighed in on the issue. Mark Sutcliffe said in tweet that Ottawa "can't afford to make transit free" and vowed instead to "fix light rail and improve bus service."

We don't need to spend $900k on a consultant's study to tell us what every taxpayer already knows: we can't afford to make transit free.

Let's work together to fix light rail and improve bus service.https://t.co/mPPfozdP6W

— Mark Sutcliffe (@_MarkSutcliffe) July 12, 2022

Param Singh also said a study would not be necessary and said he'd rather see the money be spent on affordable housing.

We don't need to spend almost 900 000$ on a consultation for something that is currently not viable. We need 2 fix transit, make it reliable & affordable. If the city has 900 000$ to spare, I would spend that on affordable housing and give a few families a place to call home.

— VoteParamSingh2022 (@VoteParam2022) July 13, 2022

Former Ottawa mayor Bob Chiarelli also weighed in, saying he would not support free transit.

We can all agree those who need a hand up should be supported, and they are through monthly community and equi-passes. As mayor, I would not support transferring the full cost of OC Transpo fares to the property tax bill. 3/3

— Bob Chiarelli (@Bob_Chiarelli) July 13, 2022

--With files from CTV's Dave Charbonneau.