Transit reserves likely won't cover OC Transpo shortfall for 2023
Kate Porter | CBC News | Posted: April 10, 2023 8:00 AM | Last Updated: April 10, 2023
Ottawa needs $39M for transit this year, but has just $9M left in transit reserve
The City of Ottawa had to cover a $29.3-million deficit for 2022 and doesn't have enough left in its transit reserve fund for the big shortfall expected at OC Transpo this year.
At last week's finance and corporate services committee — where staff presented the report with final results for last year — a few councillors raised concerns about how staff intend to deal with the latest financial juggling act at OC Transpo.
Council passed a budget on March 1 based on receiving $39 million from the Ontario and federal governments for operating costs.
Since then, both governments' budgets have been tabled. Neither has operating funds for municipal transit systems.
- Transit commission greenlights budget with $39M hole
- City's transit deficit not fully covered off by provincial grants
And yet, staff explained that by the end of 2023, the transit reserve is forecast to have a balance of just $8.9 million.
"We do not have enough reserves to cover that hole," noted Kitchissippi Coun. Jeff Leiper, who asked staff for its backup plan.
Cyril Rogers, the city's acting chief financial officer, told him they would review capital programs and be careful with hiring.
OC Transpo general manager Renée Amilcar said the transit agency would increase marketing to attract customers and aim to improve bus reliability to keep existing ones.
A pandemic problem
Since the COVID-19 pandemic hit three years ago, the transit department has posed the biggest budgeting difficulties for the city.
Ridership has only recovered to about two-thirds of its 2019 numbers, as people continue to work from home or only commute a few days a week.
The city had received bad news last fall, when provincial grants didn't quite cover their costs. The city had to take $25 million out of the transit reserve, dropping the balance to just $1.2 million at the outset of 2023.
The pain was alleviated a little bit two weeks ago when the city learned it would receive an extra $7.4 million because other communities didn't use up their own allocations.
Deficit in 2022
That overall transit funding gap from 2022 wasn't the only struggle for the City of Ottawa last year, however. Overall, it had to cover off a loss, compared to having a surplus the year before.
The City of Ottawa spent $18.8 million responding to the May 21 derecho wind storm, which knocked out power to 180,000 customers for days and caused a lengthy cleanup of downed trees.
The city has not been reimbursed for those costs.
Municipal costs related to the truck convoy protest have been pegged at $6.7 million, a figure that includes $2.2 million for the city's response and $4.5 million for foregone transit revenue while trucks occupied the downtown.
Reimbursement money in the recent federal budget might cover only a third of that, Rogers suggested to committee.
Meanwhile, the city was $5.2 million short when it came to running the wastewater system, which is paid by water bills.
All those shortfalls were somewhat offset by higher than expected revenues or savings, especially in the recreation department, as people returned to city programs faster than expected after pandemic restrictions lifted.
The Ottawa Police Service posted a $1 million surplus, while the Ottawa Public Library was $4.6 million in the black at the end of 2022.
At the end of the day, however, Rogers assured councillors that the city didn't have to use as much from the tax stabilization reserve as expected last year and that "overall, the reserves were in a good balance."