A Better Way to Manage Transit
Nickel-and-diming OC Transpo is turning it into a half billion dollar a year white elephant.
Last week, the City of Ottawa released its draft 2025 budget.
That budget includes a tax increase that is about the level of inflation, so little room for any new initiatives, plus an adjustment to fill the transit funding gap.
Why the cost of transit is going up
The OC Transpo budget is going up by $88 million, an 11% increase.
That is not the City reinvesting in transit to turn around a failing system.
Rather, it is OC Transpo shifting to a higher cost model, as light rail line 2 comes on stream. Higher order transit (subways and trains that run on their own dedicated rights-of-way) costs more to run than a network of buses.
Below is a screenshot of what OC Transpo presented at a recent Ottawa Transit Commission meeting, showing the breakdown of costs. There is a big jump from 2024 to 2025 in rail costs (the orange bar). There is also a coming pop in debt charges (the green bar), reflecting the $3 billion Ottawa recently spent on LRT.
City Hall approaches transit as a cost to be contained
Ottawa, like other large and medium-sized municipalities, is required to provide a transit system. Cancelling transit is not an option.
Virtually every transit system in the world requires some level of subsidy. Public transit is a public service that requires public funding.
You might not take transit, but be grateful that others do. Anyone who remembers the 2008 bus strike understands the utter gridlock that results when there is no transit option.
Over recent years, Ottawa City Hall has increasingly viewed transit primarily as a cost to contain.
Providing a quality service to residents seems to be a secondary concern.
That may sound harsh, but the 2024 budget reaffirms this approach, that containing costs takes priority over providing a quality service.
Nickel-and-diming
I care deeply about keeping costs as low as possible. I grew up in a house of Scots and had frugality bred into the bone.
But at some point, penny pinching becomes counter-productive.
CTV managed to dig up a little more information on how the different budget measures help fill the OC Transpo funding gap. They report that:
increasing the cost of transit for seniors by 120% adds $2 million to revenues.
eliminating free transit for 11 and 12-year olds and increasing youth fares adds $5.6 million.
increasing the cost of a bus trip by 19¢ adds $6.9 million.
Users are being asked to pay another $15 million, for a transit system in crisis.
This is not the time to be nickel-and-diming customers. Anyone with options is giving up on transit in Ottawa.
In addition, CTV notes that OC Transpo will be reducing bus maintenance and undertaking other internal savings to lower costs by $1.7 million. Bus maintenance is the cause of many cancellations. It doesn’t sound like this is the time to cut back on maintenance.
A fork in the road
Our transit is a mess.
This Council inherited that mess. But what are they going to do about it?
City Hall has a choice.
1. Half-billion dollar a year white elephant
We can continue on the current path.
Of nickel-and-diming the system and watching transit spiral down. Of treating transit primarily as a cost to be minimized.
Of providing a system that residents consider a poor option for getting around town.
But here is the thing.
Ottawa taxpayers are already paying a lot for transit, whether they use the system or not.
In 2025, OC Transpo will cost $856 million to operate. Ottawa taxpayers will pay $555 million of that.
To put it another way, the average Ottawa household pays about $1,000 for transit, regardless of whether they step on a bus or not.
And to repeat, scrapping transit is not an option.
2. A good option for getting around Ottawa
Or, we can ask what it would take to turn OC Transpo into a transit system that people consider a good option for getting around town.
A system that people consider a viable and competitive alternative to driving. A system good enough that households could consider shedding a second car.
Rather than simply asking how we can minimize transit costs, Ottawa City Council should consider:
What would it take to turn OC Transpo into a good option?
How much would that cost?
How could we pay for it, beyond just raising taxes or fares?
Other ways to pay
A better transit system will cost more. But that doesn’t have to mean a big hit to municipal taxes.
The Mayor and 3 councillors were part of a working group looking at a transit long-range funding plan. That group was to consider a number of different funding options (see below), although in the end, had little to say about them.
This budget seemed like a missed opportunity. We are facing a historic jump in costs, and yet we didn’t take seriously the options that other cities are using to fill their transit funding gaps, such as:
Toronto is developing a commercial parking levy, that could bring in $150 million a year in additional funding.
In Quebec, municipalities can impose a vehicle registration tax to fund transit. Montreal expects this to generate an additional $125 million next year for transit.
TransLink in Vancouver has recently created a property development corporation, that would raise revenues by selling off development rights around stations and along routes. In hindsight, Ottawa seemed to miss an opportunity in not selling the air rights to build towers above LRT stations, such as at Tunney’s or Blair.
The better way
Taxpayers should be outraged that we have a transit system that continues to let residents down, but which costs us half a billion dollars a year.
As a city, we have to provide transit.
So why don’t we just do it right?
We, the taxpayers, have inherited the LRT debacle, not just the City Council.
The LRT system is a colossal failure, through no fault of our own. Its unreliability and poor service have eroded public trust, and there seems to be no clear path to rectify the situation. Adding insult to injury, taxpayers are burdened with increased costs for this dysfunctional system.
Short, medium and long term plans are required, along with costs to taxpayers, and clearly communicated to taxpayers.
Taxpayers need to know what to expect, with clear timelines, and hold Council accountable.
I find these transit discussions very conventional and repetitive. They rarely focus on viable solutions and instead always try to find additional funding sources. This process is a fundamental failing of most elected politicians and their advisors. We don’t need more of the same flawed, unrealistic approaches to problem-solving.
If the people of Ottawa want a functional, timely transit system within a reasonable annual budget, then find a manager who is allowed by Council to lead and make the tough decisions necessary to make it happen.
That means:
1. Permanently cutting bus routes that don’t have much demand, primarily in the newer suburbs. Inform the development community there will be no new transit services;
2. Take the resulting savings from less busses, fewer drivers and reduced fleet maintenance costs and start delivering reliable, on-time service to a more limited zone;
3. Appoint someone who has a clue about how to run a railway. The complexities of rail transit are way beyond the competence of the regular folks who get elected to Council, not to mention staff.
Now, having said all this, I don’t think the situation will ever Improve if suburban councillors don’t begin to understand that the city cannot service their outlying Wards. It’s just too costly. Amalgamation was a huge failure for Ottawa and the adjacent municipalities. But here we are.