OC Transpo eyes fare hike to balance budget

City officials won't rule out higher-than-expected transit fare increases in 2016, as OC Transpo struggles to hang on to passengers while dealing with service disruptions related to light rail construction.

Earlier today city council approved a budget report that sets next year's transit levy at 2.5 per cent, or 2.85 per cent on residential tax bills.

But the proposed fare table that will go into effect next July won't be unveiled until staff table the 2016 draft budget on Nov. 12, and some councillors are asking whether OC Transpo users are in for a shock.

"Are staff contemplating an average fare increase above two and a half per cent this year?" demanded Kitchissippi councillor Jeff Leiper.

"It is in my view premature for us to target an amount," answered city manager Kent Kirkpatrick. "We will be able to do that in November."

Kirkpatrick says staff are currently working on an affordability analysis for OC Transpo, and awaiting more information from the federal and provincial governments about funding for transit. 

But asked again whether a larger-than-expected fare increase is on the table, Kirkpatrick said, "It is possible, yes."

This year's average fare increase, which went into effect in July, was 2.5 per cent. That meant a regular monthly adult pass climbed $2.50 to $103.25, while an express pass rose $3.00 to $127.25. Adult cash fares rose a dime.

That's been the typical annual fare increase since 2011, with the exception of 2014 when fares rose by only 1.9 per cent.

But this year OC Transpo is dealing two big headaches: stagnant ridership figures, and service disruptions connected to the construction of the Confederation Line. 

That has some councillors wondering whether this is the appropriate time for a big fare increase.

"Is that the right move during a period where we're experiencing a declining ridership, and when we're expecting difficult service standards," asked Rideau-Rockcliffe councillor Tobi Nussbaum. 

Nussbaum suggested staff hold off on any significant fare increase until 2018, when the first stage of the city's LRT project is complete.

But as OC Transpo continues to move towards a business model that strives to recoup 55 per cent of its operating cost from the fare box, transit commission chair Stephen Blais is reluctant to ask taxpayers for any more than they're already forking over.

"At the end of the day the budget still needs to be balanced," Blais said. "There's only limited places where we can get revenue for OC Transpo. Fares is obviously one of them. Unless people are willing to accept big increases to their taxes, and that's not what I hear in Orleans, and I don't think that's what most of our council colleagues hear when they talk to residents in their neighbourhoods."

Mayor Jim Watson said he didn't want to second-guess staff by naming a fare increase he considers reasonable.

"There is a cost that goes with providing a transit system in a city as large as the City of Ottawa," Watson said. "I think we have a reasonable proposal that has taxpayers pay for a portion of the cost, and those users pay a portion of the cost."

Watson says staff may also have "other revenue tools" at their disposal to help balance OC Transpo's budget, but he did not describe those tools in detail.

"My hope is that we come up with a reasonable level that continues to allow us to provide good transit service and not make deep cuts to routes in order to pay for that service," Watson said.

The highest OC Transpo hike in recent years came in 2010, when the average fare rose by 7.5 per cent.