Transpo could lose tens of millions at the fare box in 2021 but no signs of major overhaul — yet
Jon Willing, Ottawa Citizen
Publishing date: Oct 22, 2020 • Last Updated 1 hour ago • 4 minute read
OC Transpo could be projecting a fare revenue loss in the tens of millions of dollars as management gets closer to releasing their projections as part of the 2021 draft budget, but there are few indications the transit agency will undergo major transformation to match the new financial reality.
If a big change in public transit is required as a response to ridership levels forever altered by the COVID-19 pandemic, it’s not clear if next year will represent the beginning of that journey for Transpo and its customers.
The urgent matter is getting through 2021 and being able to pay the bills.
Hints of what’s in Transpo’s forecast came out during a council meeting last week when Coun. Mathieu Fleury asked staff about their 2021 projections for the transit agency.
“You’ll see that when we table the budget,” responded Wendy Stephanson, the city’s chief financial officer. “I think we’re talking about … a 40 per cent ridership gap which could be to the tune of $50 to $60 million next year.”
John Manconi, the general manager of transportation services, was reluctant to talk about the budget projections during a press availability Wednesday, but he indicated he’s collecting intel from multiple sources when asked about the 40 per cent estimate.
“We’re going to walk through that at the budget tabling,” Manconi said. “We’ve got some forecasts that our planning group has done with Mr. Willis’s team (planning and economic development GM Stephen Willis) and Stats Canada. We’re in that range. It is a crystal ball analysis with some science to it and I’ll have to wait until the tabling of the budget.”
The 2021 draft budget lands on Nov. 4.
The transit commission meeting this week didn’t dig into budgeting, but fiscal concerns wove their way through debates about spending millions to install shields on buses to protect drivers and adding electric buses to the fleet.
Investments in workforce safety usually don’t spark a lengthy debate about spending money to bolster security, but the discussion at the committee meeting touched on the unknowns of the 2021 budget and the future size of the bus fleet.
The discussion dovetailed with another exchange over buying electric buses, prompting Manconi to warn commissioners about a larger problem.
“COVID has really thrown a wrench here,” Manconi said during the meeting. “We have to update our entire transit affordability plan because your pressure now is not just how do you convert to electric buses. It’s, how do you deal with the ridership gap? Are you into major service changes? Are you reducing (or) are you slowing down capital? Are you adjusting O and M (operations and maintenance)? Are you changing standards? And the list is going to go on and on.”
Ridership in September was 30 per cent of what Transpo would normally expect in the month. The number of customers taking public transit plummeted at the start of the pandemic in March and there were small increases over the summer, but ridership is nowhere near where it was last winter.
Management’s challenge is predicting the ridership level, and with that information, forecasting fare revenue.
Decisions on workplace culture by major Ottawa employers, such as the federal government, Crown agencies, post-secondary institutions and the municipal government, will impact ridership and cash flow.
Manconi said Transpo has been losing $4 million each week during the pandemic, though the federal and provincial governments have rolled out a financial safety net for transit agencies this year. Upper government money made available to municipalities will help the City of Ottawa pull through 2020 and could put Transpo on solid financial ground through the first quarter of 2021.
After that, the city could be left to figure it out on its own.
The city is banking on the upper levels of government bailing out the municipal budget for all of 2021, so the financial forecast in the draft budget could pretend like there’s no pandemic happening.
However, the city has an undisclosed mitigation plan in case the upper governments don’t parachute in money, and while transit management has mused about COVID-19 driving a transformation in public transit, there has not yet been a blueprint put on the table for the transit commission to consider.
An inkling might come with the draft budget, but the commission hasn’t provided direction to management on its expectations for the transit system under a reimagined service model.
The only certainty is that Ottawa’s transit network will have a sprawling rail system in place by 2025 when the full Stage 2 O-Train expansion is complete. From there, it will be about getting customers to rail stations and providing local bus service in high-demand areas, but potentially only where it’s affordable for Transpo.
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