Will Sutcliffe Throw Bus Riders Under the Bus?
Ottawa's 2025 Budget is gearing up to be a big hit for transit riders.
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Tough choices
Ottawa city’s Budget Directions for 2025 came out this week. And it is not pretty.
Mayor Mark Sutcliffe has indicated that he has one main priority — keep property taxes low. He has chosen to limit property tax increases to 2.9%.
We all like lower taxes, but there’s a problem with his analysis. He has carved transit out of this number as if it’s not part of the city budget.
Transit has a $140 million annual operating deficit. That has to be funded also.
(That $140 million is not the projected deficit for 2025. Council was advised that the transit deficit was: 2025 - $120 million, 2026 - $131 million, 2027 - $145 million, 2028 - $150 million, 2029 - $150 million. The 2024 transit deficit is projected to be $26 million, so 2025 may not be as severe as he would have you believe.)
His four solutions for transit finance
Mark presents four options, or some combination of the four, to balance the books for transit:
Get other levels of government to pay the transit gap.
Increase transit fares from $3.80 a ride to up to $6.65.
Cut transit spending by up to $140 million.
Increase the transit levy (which is the tax we all pay specifically for transit) by up to 37%. Mark points out that is equivalent to increasing property taxes by 7%.
So really Mark is considering up to a 9.9% tax increase, which he will call a 2.9% increase.
Other transit finance solutions
The Budget Directions report to Council lays out a number of other options for increasing transit finance. The options included are noted below, along with my colour commentary of what these options likely mean.
There are some interesting ideas here. Sutcliffe along with Councillors Lieper, Tierney and Gower are part of a working group looking at Transit funding operations.
Will they adopt any of these approaches?
Mark seemed to reveal his preference in the Committee discussion, when he referenced a Financial Accountability Office of Ontario report to point out that “taxpayers are contributing more in Ottawa as a percentage to public transit”. His insinuation is that taxpayers are already paying too large a share, and riders a not large enough share — even though OC Transpo already has some of the highest fares in the country.
He was quick to add “which is not necessarily a reason for us to dramatically increase transit fares”. Although I worry that this is exactly what he has in mind. I suspect his prefered approach is to have increased bus fares do the heavy lifting of filling the transit financing gap.
This is not how to help with affordability
Mark thinks that the best way City Hall can help residents with affordability is to keep taxes low. Hence, his 2.9% target.
But there are other, arguably better, ways that City Hall can help with affordability.
Cars are one of our top household expenses. And poor bus service is forcing many households to buy, or hold onto, a second car. Reliable transit that allows families to shed a car would be a far more powerful action to help with affordability.
Or keeping wading pools and beaches open during September heatwaves. I imagine there are many families that need to find somewhere air-conditioned to escape the heat — somewhere such a movie theatre.
Mark’s sole focus on property tax increases seems penny wise but pound foolish.
What 2.9% actually means
The City provided the following table detailing taxes for the average Ottawa home, assessed at $415,000. A 2.9% tax increase would amount to an additional $125 a year in taxes in 2025. That’s $10.41 a month. Per household.
Let’s imagine for a minute that Mark doubled the tax increase — to 5.8%. A household would pay $21 a month in increased property taxes, or $10.41 more than they are currently planned to pay. But as a City, we would have about $60 million in additional funds — above the baseline 2.9% increase — to provide services that could help residents keep costs down. That’s a considerable amount of money that we could allocate to affordability measures.
Non-transit riders should care
Even if you don’t ride transit, you should care about transit.
A single articulated OC Transpo bus can hold up to 110 people.
When you’re stuck in rush hour traffic, consider if transit were reliable enough that people had the choice to take the bus. If every bus could take up to 110 cars off the road, that means a lot fewer cars jammed up in front of you on the 417, or whatever route you take.
Increased congestion has become the price we pay to save a few bucks on our property taxes.
It takes me 20 minutes to drive to work, or 45-60 minutes to take transit. Transit costs $3.80 per ride and parking costs $20 to $25 per day. If the increase to $5 per ride would make buses and trains more frequent, it would be worth it. But if the cost of the bus and cost of parking are the same, I choose to drive until driving becomes slower than the bus. There are some people who have to take the bus (no car) or would never take the bus (no Presto card). I'm in the middle, and I'm the person who Sutcliffe should be targeting.
Have you seen studies which look at how fare levels shift ridership ? It makes sense that keeping fares low or reducing fares would increase the number of people using public transport. However, it also makes sense that at certain points in the life of a family fares are not a determining factor in the choice to use a bus. If you have to get one kid to daycare, another to elementary school and a third to high school, it might just be so much easier to use your own vehicle(s). Same is true if at the end of the day you have to get kids to hockey, soccer, basketball, music lessons etc.
And how does one factor in the new federal government requirement for public servants in the office ? Ridership must be down compared to pre-pandemic levels when public servants were in the office 5 days a week. How much will in the workplace requirements increase ridership? Perhaps not a lot if one only needs to be in 2-3 days, since flexibility may trump the cost of parking.
It certainly seems clear that reducing service to save costs is not likely to put more people on busses. One of the reasons we cycled to work (and I recognize we are lucky that worked for us) was that public transit options were not frequent and reliable enough. Always hated being forced on the bus during winter when riding was too risky for those reasons.