Toronto Takes a Financial Hit From Lost Transit Riding

At its virtual meeting on May 13, the TTC Board will consider a report on the effects of the COVID-19 pandemic on TTC ridership and finances.

As an agency whose revenue depends heavily on fares paid by riders, any downturn in transit demand has a critical effect on TTC finances. This is compounded by the system’s reduced capacity to provide adequate distancing between riders, and so the amount of service required remains high even though there are far fewer riders. The report provides the simple explanation of the math:

  • Ridership has stabilized at about 20 per cent of normal demand.
  • Vehicle capacity is only 30 percent of normal conditions.
  • Operating 80 percent of normal service produces 24 percent of normal capacity.

The situation varies across the system with the subway and streetcar networks hardest hit because they serve the financial district downtown. Proportionately more people who would normally travel to this area are staying home or using other modes (walking, cycling, autos) to make their trips. The numbers below are based on Presto taps as a surrogate for demand. This is not the same as “ridership” because some trips do not involve a tap to enter a vehicle or station (pre-paid areas), and some taps represent transfers, not new trips. The proportional changes tell the story.

The effect on normally busy routes and stations is evident in the graphs below.

Fewer riders means fewer fares paid, with the drop bottoming out in mid-April.

Monthly pass sales dropped over 90 per cent as buyers chose to pay for rides, if any, with single fares. Note that the TTC has not made a decision on refunding passes purchased for March or April, and this is not discussed in the report. Refunds would bring an additional loss.

The change in system usage, measured by taps, is lower among seniors than for other fare groups. At 74 per cent, it is still substantial, but the difference probably reflects that more trips, proportionately, taken by seniors cannot be shifted or avoided. Student travel has, of course, collapsed as all schools are closed, as are alternatives such as shopping and entertainment.

Other revenue streams are also affected notably commuter parking and rents. The latter are only deferred on the assumption that they will be paid at a later date, not forgiven, and therefore they are not included in the table below. Rent revenue accounts for slightly more than $1 million per month ($14 million annually), and so it is on a par with commuter parking in the overall budget.

In addition to lost revenues, the TTC faces new costs. The table below breaks these down, and only one of the lines, Operator Absence Coverage, is non-recurring. This was the cost of overtime to maintain full service during the period when Operators began booking off work due to illness or self-isolation.

The TTC is providing support to City activities. Of the costs shown below, only the PPE cost (a donation of masks from TTC inventory to emergency services) is a one-time charge.

The TTC plans to reduce ongoing operating costs with service reductions and the reduction or elimination various areas. Service cuts bring a reduction in wages, maintenance, fuel and power costs, as well as lower Presto fees because these are a percentage of fare revenue.

The issue of layoffs of union and non-union staff is covered in a separate confidential report because this involves labour negotiations. The anticipated reductions in spending are included in the table below. Note that the weekly total, $5.5 million, is much less than the weekly revenue loss leaving a substantial amount to be made up from other sources.

Although the Capital Budget does not directly affect operations, it does affect overall draws by the TTC on City resources and on various subsidy programs. Overall, the TTC plans to reduce its capital requirements by $257 million in 2020, offset by the acceleration of $48.9 million in various projects. In the short term, this allows the City to redirect $116 million in provincial gas tax revenue that would normally go to capital spending to its recovery budget. (The gas tax funding already dedicated to operations is unchanged.)

Note that the gas tax redirection is a finite saving, and it will not be available to offset funding needs beyond Labour Day, at least until the next budget year. In turn, a downturn in motoring and related provincial revenues could affect the amount of money available to Toronto and other cities from that source.

Major items in the proposed changes include:

  • Acceleration of design work on subway station accessibility
  • Additional spending on environmental programs such as asbestos removal in the subway
  • Deferral of the initial payment for a new streetcar order, and for purchase of Wheel-Trans buses
  • Deferral of new buildings and structures work
  • Deferral of new IT spending
  • Deferral of costs assigned to Service Planning (typically transit priority projects

The full list is at the end of the TTC report, although it does not drill down to the individual project level in some cases.

Consolidating all of the anticipated effects and proposed changes yields the following summary.

I will update this article with any additional information that emerges at the TTC Board meeting.


15 thoughts on “Toronto Takes a Financial Hit From Lost Transit Riding

  1. The TTC is less subsidized than most other transit agencies in North America. It gets most of its revenue from the riders. It needs a cash infusion from the city, province, and feds.


  2. Thanks for your analysis, Steve. I find it rather strange that the TTC has not temporarily laid off their fare enforcement team given that they no longer enforce fares and are there solely for “customer service” purposes, which is already sufficiently provided by collectors, drivers, station supervisors, etc.. Do you know of any legal/union issues or technicalities that restrict the TTC’s ability to lay off them or at least have them work part-time?

    Also, with many of their office staff working from home, perhaps now would be an opportune time to make the case in favour of some staff continuing to work from home on a permanent basis. This could allow the TTC to sell off a few buildings or at least rent out a couple of floors which, in turn, would bring in some cash to an already cash-strapped agency. They could also save money on not having to purchase chairs, desks, stationery as well as on heating costs. Just a thought.

    Steve: The TTC has deferred the hiring of 50 additional fare inspectors (this is mentioned in the report), but there is no word on the makeup of the 200 non-union staff to be laid off yet. As for working from home, there are many issues about doing this on a permanent basis because there is no guarantee that this is a reasonable expectation beyond the period of the emergency when gathering in a workplace is difficult or dangerous. Not everyone has the space or the ability to work at home undistracted by other family members.

    As for legal constraints on layoffs, I suspect that if Doug Ford hasn’t already wiped them away with emergency legislation, it will be high on his priority list.


  3. Though I realise that one cannot just move a (Planned) capital project into action in a few weeks, it would seem that the TTC should be trying VERY hard to get as many capital projects as possible accelerated to take advantage of a time with far less street traffic and far fewer passengers. The Feds (and Ontario) seem to be working up to stimulating construction and infrastructure so I hope the TTC are ‘standing by” – with their hands out!

    Steve: You may have noticed an unusual number of construction diversions in recent weeks. There was also to have been a SOGR contract award on the May 13 agenda, but it is now marker “withdrawn”. I have to chase this to find out what was proposed, and whether it’s a case of waiting a while.

    The TTC cannot just launch into capital projects without consulting the City because of the timing of funding from various governments. This year they are actually pushing back some projects to 2021 to release the gas tax money to support operations.


  4. Any schemes of the TTC renting out some now-unused office space for extra cash run into the problem that, if they can do that, so can many, many other businesses in the same position. There will be a glut of space, and who is going to want to rent new office space?

    Steve: The TTC has a bunch of leased space which they have been planning to get rid of in coming years in anticipation of occupying a new consolidated building somewhere, possibly the Eglinton Station site. Some of the space they had was for projects that are now handled by Metrolinx and so that’s no longer part of the equation. It is difficult to say what the TTC’s staffing situation will be over the next few years, not to mention the status of any new building.


  5. Many of the votorists will NOT be happy at having the extra costs of transit; and that means once again, the City/province/feds will be less likely to step up, despite the climate emergency where we’re stinking bad. And the costs of cars, including the important health care costs, and demands on the system, won’t be clearly reported on, leading to more resentments, though it would be nice to know by what percentage the fall in driving has reduced the demands on the hospital system from crashes, often avoidable, including reduced speed.

    Steve: A non-working link was removed above.

    I’m not sure that any level is really up for doing the more-correct things: the TTC itself is akin to a curtain of sorts; but it’s clearly a City property/tool.

    Will the Board urge a Vehicle Registration Tax of, say, $400? Or will they contemplate stopping the operation of the Sheppard stubway? Can we close the Spadina Line extension beyond York U, or were the tracks built like the contracts to enable only a full-length run of what was a bad deal for taxpayers, and not just of TO.

    Will the TTC Board urge the same fate to the Scarborough Subway funds as the Waste Reserve Fund – gobble it up for current needs? It’d be better value to backstop current services.

    There’s also a real need for trackbed repair to enable the bike competition to have safer trips. It would be an excellent time for these repairs with less traffic, and less-open stores.

    It’s also beyond time for a long, continuous bikeway along Bloor/Danforth for subway relief – it’s been almost three decades of it being logical with planning back-up, and if they were at all serious about having other routes, there’d be continuity to Bloor up from Wellesley at its end at Parliament.

    Steve: I hate to repeat this, but cycling is NOT the TTC’s concern. Yes, there is an argument to be made for better cycling facilities, and in the medium term this can benefit the subway, but the TTC has other fish to fry and cycling lanes are in the City’s court. As for the question of lane repairs on streetcar lines, there are a LOT of roads with no streetcars, but lousy paving. Yes, streetcars are on some major streets, and we should be maintaining the pavement better on main streets generally rather than spending a fortune on the Gardiner. But please stop setting this up as a “streetcar” problem when it is much more widespread.


  6. The big question is whether “ridership” has stabilized at 20% of normal levels, or “fare collection” has stabilized at 20% of normal levels. My understanding is that very few riders are paying. At a time when the TTC should be enforcing fares, it looks like the TTC is turning a blind eye to collection.

    I encourage a journalist to board a TTC bus and count the number of people that actually pay. Unfortunately, once the habit of non-payment sinks in, it will be difficult for the TTC to collect fares after the pandemic is over.

    Steve: Well, someone is tapping all those Presto cards that count in the TTC stats. Yes some people are not paying, but in the limited riding I have done, most make the effort even if they have to deal with the cash/token-based machines.


  7. Steve,

    If streetcar riding stabilizes at the observed 10% to 20% level, would the TTC currently have enough streetcars to operate its entire nominal streetcar network, including both 505 and 511, and a Kingston Road route? 20% of ridership at the indicated 30% vehicle capacity would give 67% of previous service to be operated, if I have my math right?

    _If_ the streetcars would operate at reliable headways, this could actually be a quite okay network. Service every 5 or 8 minutes wouldn’t be bad if it’s not overfilled, and if it is always 8 minutes. (Having said that, I still see King cars in bunches from my window in King West…)

    Steve: Yes, I have seen bunching on several routes (and not just streetcars) by looking at NextBus. Considering that the TTC is incapable of running reliable service on a snow-free Christmas day with no traffic in sight, nobody should be surprised. My concern that the long-standing abdication of the responsibility to actually manage service, not simply look at meaningless “on time departure” stats for terminals, would bite us if there were service cuts appears to have been well-placed.

    As for streetcar service and capacity, there is a more general system problem that as demand builds up, the TTC simply does not have enough vehicles to run a “socially distanced” capacity.

    The network is currently operating with 130 peak cars down from 160. Buses are on 511 Bathurst which is not a big route. I cannot see the 503 coming back until there is substantially more demand into the core area.


  8. Thanks for time/space/content/comments – apologies if the chart about our poor GHG emission didn’t come through; hope this does. Steve Easterbrook at UofT Tweet.

    Steve: Yes. That link works. Thanks.

    Yes, poor road condition is everywhere, unquestionably. I’ve been more focussed on the core roads south of Davenport these last decades, where many cyclists are, or could be, if safer. The main direct routes are where much of the real injury/hazard occurs, and streetcar tracks are a hazard, the disrepair on margins makes them worse, and they aren’t readily moved, if at all. Since the road grid is deficient, there’s extra risk to cyclists, and yes, that means a focus on these main direct roads – there aren’t side streets to get in to Parkdale for instance, not E/W.

    We could have a car-free zone, or congestion zone – if we did better transit of course, and the cars paid more. High Park is a natural boundary. The tracks on the North and the Don on east make it possible; and biking is the better deal for many in the core, though at times, some of us are not Gaia’s finest gift to the world.

    And now, we need to provide non-transit and non-car mobilities.


  9. Fare evasion on buses is rampant. I travel between rush hours and more than half do NOT tap on (or same person day after day gets a buzz = no value). Recently on a short run that took in 4 transfer points 11 other riders boarded, ONE other person besides myself tapped on!

    Now is the time to make Presto mandatory! No excuse. BTW $6 is ridiculous. Card is worth no more $2. Do away with fare box entirely. No cash, no tokens, no transfers.


  10. My personal experience is that 80% of all riders no longer pay/tap. They just get on and sit down. Just ask a TTC operator how many people actually pay and he/she will tell you.

    The biggest problem with the TTC has always been fare evasion. This pandemic has only given more people an excuse not to pay claiming that “they don’t have a Presto card” since the TTC no longer accepts cash fares.


  11. “The biggest problem with the TTC has always been fare evasion.”

    Really? Fare evasion explains why I wait for 20 minutes for a bus or streetcar that should show up every six minutes, and then three show up in a row?

    Fare evasion explains the Russell Hill subway crash?

    “Just ask a TTC operator how many people pay?”

    You mean the ones who are sitting behind a plexiglass shield, or the ones on the streetcar with their own cab? I’m sure they’re right on top of it.

    Glad that’s sorted, then!

    Liked by 1 person

  12. The TTC retention of 20% of their usage is about 4 times the more normal percentage of 5% that other properties are seeing. It bodes well for other customers returning to TTC fairly quickly as businesses open up (and, as mentioned above, may make social distancing difficult or impossible).

    Steve: That level of retention, and the areas where it is happening, shows that the TTC does not just support core-bound commuters where, in Toronto, ridership has almost totally evaporated.


  13. “The TTC retention of 20% of their usage is about 4 times the more normal percentage of 5% that other properties are seeing.”

    Transit App has data on ridership and it shows ridership is at 25% over all and the TTC doing slightly worse then average.

    I suspect it is because the TTC has a higher number of white collar workers who are now working from home.


  14. I am an essential worker, so I have been traveling on the TTC in Scarborough throughout the pandemic. I am absolutely shocked at the number of people, clearly dressed for work (uniforms/ ID tags) or well dressed, who don’t even bother to tap their card. Surface routes in Scarborough are ridiculous. Half the people don’t pay while people who do have bus after bus drive by them because they are too full. I’m seriously considering getting a bicycle, because I can no longer guarantee that I will arrive on time for work, and I provide homecare for an elderly couple with mental health issues.

    Steve: I fear that problems with overcrowding and pass-ups are hurting the TTC’s reputation and reinforcing a “why should I pay for this” attitude. This will only get worse if the TTC is not given the financial support it needs to maintain and improve service. Transit could “break” through a combination of factors including resentment that becomes a standard behaviour.


  15. Will the TTC make further reductions on June 21 or a later date?

    Steve: The changes for June 21 have not yet been announced. I expect to see is some of the schedule problems from May’s hurried implementation (such as the need for buses on Long Branch, and scheduled gaps in service) will be fixed, and some of the routes that regularly need more service will get it. We shall see. The real challenge is September both for growing demand, and for the City’s financial crisis.


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