TTC set to increase fares for sixth straight year

The transit agency is proposing to increase the cost of a token to $3 from $2.90, though it would not affect the $3.25 price of a cash fare.

Thestar.com
Nov. 17, 2016
By Ben Spurr

The TTC is proposing a 10-cent fare hike in 2017, but even with the additional revenue it would bring, the transit agency is still facing a major funding shortfall next year.

According to a report released Thursday on the TTC’s 2017 operating budget, the fare increasewould raise an estimated $27 million, leaving the transit agency with a funding gap of at least $61 million.

The report will go before the TTC board next Monday. If the fare increase is approved, next year the price of a token would go from $2.90 to $3, while a regular adult Metropass would go from $141.50 to $146.25. Adult cash fare would stay at $3.25, while children 12 and under would continue to ride free.

Jessica Bell, executive director of the TTCriders advocacy group, slammed the proposed increase, which would be the sixth to hit transit users in as many years.

“I think it’s going to hurt the TTC and it’s going to hurt transit riders. We’ve had six years of fare hikes, we don’t deserve another,” she said, arguing that raising fares goes against the mayor and council’s poverty reduction plan.

“The real solution, what we need, is for city council and Mayor (John) Tory and Premier (Kathleen) Wynne to step up and fund the TTC.”

Tory was travelling in the West Bank on Thursday. In an emailed statement his spokesperson Keerthana Kamalavasan said he has stated previously that fares should be “reviewed every year” to keep up with the growing costs of the transit system.

“People paying a little bit more will get better service in return,” she wrote.

The proposed budget would increase service by 0.4 per cent next year, according to the report. The price of a Metropass would rise by 3.4 per cent.

The $61-million shortfall described in Thursday’s report is down from an earlier projection of $231 million, and represents the difference between the TTC’s net costs and the amount of subsidy expected from the city.

In July, the mayor and council voted to ask all city departments to reduce their net operating budgets by 2.6 per cent, which the TTC has interpreted as a 2.6-per-cent cut to its subsidy. Last year, the subsidy was roughly $610 million for the conventional system and Wheel-Trans.

On top of council’s requested cut, the transit agency is facing millions of dollars in additional expenditures next year that it is being asked to absorb to meet the budget target. They include rising labour costs, the implementation of the Presto fare card system, the opening of the Toronto York Spadina Subway Extension, booming Wheel-Trans demand, and lower-than-projected ridership on the conventional system.

The report released Thursday said TTC staff have found roughly $170 million in potential savings and revenue to bridge the original $231-million gap.

Proposed cost-saving measures include lowering estimates for fuel and employee benefit costs, pushing back the timeline for replacing Metropasses with Presto cards, deferring some bus maintenance, reducing overtime, and saving money on supplies.

In addition to the revenue from the 10-cent fare increase, transit agency staff are also proposing to drain a $14.4-million reserve fund.

Staff also propose shifting about $37 million from the TTC’s operating budget to its capital plan, a scheme that would lower expenses next year but has already been rejected by city staff on the basis that it goes against municipal accounting practices.

If the idea isn’t approved, the TTC’s shortfall would be closer to $100 million next year.

To bridge the remaining gap, the report lays out additional options that are likely to be unsupportable for many at city hall. They include cutting service on low-ridership and night routes, reducing the number of routes with 10-minute-or-better service, and increasing crowding standards during off-peak hours.

Hiking fares by an unprecedented 50 cents, and eliminating discounts for seniors, students, and children could generate millions more. The report suggested these measures could lead to a massive drop in TTC ridership.

“None of them are palatable,” said Councillor Joe Mihevc, who sits on the TTC board.

TTC CEO Andy Byford stressed that he included the service cuts and drastic fare increases in the report at the request of the TTC’s budget subcommittee to illustrate options to eliminate the shortfall, but wasn’t recommending them. He said it would be “impossible” to find $231 million in savings without affecting service, however.

“We now await board direction on the savings we have identified to date and on any further changes they want us to make,” he said in an email.

Asked whether the mayor would support service cuts to balance the transit agency’s books, Kamalavasan, the mayor’s spokesperson, said that under Tory’s leadership the city has made “historic” investments in TTC service and “we have no intention of reversing course.”

“Toronto is facing serious budget constraints which require us to look seriously at our spending across the board,” she wrote.

Council is expected to debate new taxes and revenue tools in the coming weeks, and Kamalavasan suggested those measures could be used to fund better transit service.

According to the city report, the TTC remains one of the least subsidized transit systems on the continent, at an estimated 90 cents per rider this year. By contrast, the subsidy for Montreal’s system was $1.16 per rider in 2015, and in 2014 New York City’s was $1.52 (U.S.).