Updated December 16, 2016: A reconciliation of the City and TTC versions of the budget has been added at the end of the article.
Following numbers in the development of budgets can be like a game of Three Card Monte on a grand scale. Information is presented in various ways, at times in ways that obscure understanding, and at others where the path from “version a” to “b” is missing a crucial step. This article is an attempt to reconcile what has been presented to date. As and when further revisions occur, I will add updates here.
TTC management begin work on the following year’s operating budget midway through the calendar year. At that point, the actual results that will come out by year-end are unknown, and only some trends may be apparent. The starting point is the current budget which may or may not reflect the actuals by year end, but they have to start somewhere.
Budgets in Toronto are typically presented in terms of year-over-year “pressures” so that, for example, if there is a known increase in costs such as fuel or electricity, this translates to an amount by which this budget line will increase. Basic cost changes can be compounded if there is a substantial change in TTC operations such as the expansion of bus service or the opening of a new subway line. This is a fundamental issue in transit budgets – they must absorb not only changes in costs related to inflation, market rates, and labour contracts, but also the change in scale of operations. Typically the gross cost of the system goes up greater than the rate of inflation, although this can be offset by cost reductions and that favourite target of budget hawks, “efficiencies”.
The TTC’s Budget Committee was supposed to meet in June, but this was cancelled and a chance to get an early look at the 2017 situation was, therefore, lost by the Board (at least to the extent of any public discussion). In September, there were two separate meetings for the Capital and Operating budgets respectively. Finally in late November, the Board approved its Preliminary Budget for 2017. This went into the City’s budget process, and further refinements proposed by the City Manager await actions by the City Budget Committee on December 19, followed by Council in the new year. The TTC Board will then have to deal with the difference, if any, between the requested subsidy and what they actually will receive from Council.