TTC 2023 Budget: A Bit More Subsidy, But …

Updated January 4, 2023 at 6pm:

  • Change in fares clarified to include 10 cent increase in Youth (Student) fares.
  • Comparative table of budgets amended to update 2022 budget and add 2023 budget numbers.
  • Overview of proposed service changes added.

Where there are substantial changes from the original version, I have retained the old text, but formatted it with strikethroughs so that readers can see what has changed.

There is much more to write about in the Budget Reports, both Operating and Capital, but I will leave that to separate articles.

See: TTC Operating Budget Report

Mayor John Tory announced increased funding of $53 million for the TTC in 2023. To put this in context, the total TTC budget for 2022 was $2.28 billion for the conventional and Wheel-Trans systems. The total TTC subsidy will rise from $905.7 to $958.7 million. This has been presented as a “big thing”, but it is comparable to (even somewhat below) past increases. The City has fairly regularly boosted TTC funding at above inflationary rates.

Tory’s announcement highlighted system safety with:

  • the proposed hiring of 50 more Special Constables adding to an existing complement of about 80, and
  • doubling of the Streets-To-Homes workers assigned to the TTC from 10 to 20.

The budget focuses on four areas:

  • System safety (as above).
  • Service improvements in priority Neighbourhood Improvement Areas and on lines that are overcrowded.
  • Increased cleaning of streetcars on busy routes to counter a rising problem of litter.
  • Fare changes (see below).

On the revenue side, fares will go up for some riders, down for others:

  • Single adult and youth (aka student) fares will go up by 10 cents.
  • Fares for pass holders and seniors will not change (there was no mention of student fares).
  • The “Fair Pass” discount program which allows low-income adults to pay at the senior’s rate will be expanded to make 50,000 more people eligible.

The announcement gave the impression that the $53 million was intended primarily for safety initiatives. However, the 70 new staff must be recruited and trained. Assuming they are on the budget for 9 months, this only eats up a small part of this even allowing for the very high salary of Special Constables. For example, at $100k each, this would only amount to $7 million.

The projected cost of the additional Special Constables, the Streets-to-Homes workers and the streetcar cleaning is $4.4 million. The projected cost of the expanded Fair Pass program is $2.0 million to be funded from the TTC’s budget rather than through the Social Development department.

As for service improvements, the TTC has a habit of putting them off as long as possible to minimize current year budget effects. We do not know whether planned improvements will occur as soon as possible (Spring 2023) or if we must wait until the Fall to see more buses on the street.

From the budget details, we now know that service cuts are coming during some periods on the streetcar, and particularly on the rapid transit network. The overall weekly hours of service will drop in Spring 2023 from the current 95% of pre-pandemic level to 91%.

Defending his record as Mayor, John Tory claimed responsibility for three key TTC initiatives: the Fair Pass, the Two Hour Transfer and Free Rides for Children. Of these, only the last was actually a Tory initiative. Both the Fair Pass and the time-based transfer arose from years of public advocacy that met the usual response “we can’t afford it”, at least until they were deemed politically worthwhile.

Budget-to-Budget Comparisons

At budget time, comparisons are made on a budget-to-budget level, and so the $53 million is “extra” above what was planned in 2022: $905.7 million has risen to $958.7m. However, the TTC routinely underspends its allocation leading to a “surplus” that is normally directed to a transit reserve, a rainy day fund for a year in which things are really bad.

The 2022 budget assumed a service increase in fall 2022 in anticipation of rising commuter demand, but this did not materialize as expected. The total vehicle-hours of service planned for November were about five percent below budget, and January has fallen a bit more.

The 2022 budget assumed that the Eglinton Crosstown Line 5 would be operating for part of the year with associated higher costs to the TTC. This did not happen, and so the TTC has saved on that cost.

We do not yet know how much the 2022 expenses (and hence the base going into 2023) will fall below the budgeted level, but this gives added headroom for “improvements”. This financial game has been going on for years, and it makes the budgetary increase in subsidies look smaller than it really is on an actual-to-budget basis.

The announced City subsidy includes the operating portion of the Provincial Gas Tax funding received by the City. For many years this has been $91.6 million with the remainder going to the capital program. The split, which is decided as part of the City budget process, has not yet been announced for 2023. The city also budgets to pay part of ongoing capital costs from its operating revenue. This reduces borrowing requirements. However, based on the Mayor’s statement, some of the usual capital-from-current allocation will be directed to City operating costs to offset the shortfall.

The TTC has already cut back as-yet unspecified capital programs in response to the City’s 2022 revenue shortfalls, and we have yet to see how this will affect the 2023 capital plans.

Diversion of gas tax revenue from the Capital to the operating budget is one of many ways the City can lessen the year-over-year effect on the City’s support of transit operations.

I could not help the feeling that this budget proposal shows the effect of trying to please many, competing groups. Nowhere is this clearer than the fare increase proposal, something that can be pitched as “fiscally responsible” and making riders “pay their fair share”, while increasing the discount of concession fares and expanding their availability.

Service will be improved selectively, and we will likely see routes in parts of the city pillaged for resources to make this happen. Nowhere is there any mention of service quality, an ongoing and worsening problem for the TTC. One might argue that just making the buses and streetcars truly run “on time”, or something vaguely resembling the published service level without gaps and bunches, would in itself constitute a noticeable service increase. However, it’s easier for the TTC to complain about construction and traffic congestion rather than addressing chronic service management problems.

Although the TTC publishes route ridership stats, the most recent version is for 2021 and we have no idea of how the system has evolved since then. What we need is a specific commitment to track recovery route-by-route along with service levels and quality in a manner that reflects actual rider experience. If the fare increase is intended to help improve service, show us what we are getting.

I will return to the problems of bunching and gapping in future articles.

Looking Back at the 2022 Budget

A big problem in making year-to-year comparisons is that the probable actual figures for 2022 have not yet been published. The last TTC detailed breakdown was a report in June 2022 with a summary to the end of April 2022. Eight months have passed since.

The table below compares the 2021 actual spending from the audited financial statement with the budgetary numbers for 2022 as reported by the TTC in its June 2022 update. Note that they have been reformatted to simplify comparison.

The City receives an allocation of gas tax revenue from Ontario which was $185.2 million for 2020-21. Of this, $91.6 million has been allocated each year to transit Operations, and the rest to Capital. The Capital side has grown as the total amount received rises, but the Operating portion allocated by the City was frozen. Toronto also receives gas tax revenue from Canada, but this goes entirely to Capital and so does not figure in these numbers.

The gas tax has been broken out in the table below from the City/TTC figures to show the actual origin of this subsidy for clarity.

Update: The table below has been updated with 2022 and 2023 figures from the TTC 2023 Budget report.

TTC Operating Budget ($ million)2021 Actual2021 to 20222022 Budget2022 to 20232023 Budget
Expenditures:
Conventional System$2,034.4$114.2$2,148.6$88.4$2,237.0
Wheel-Trans System$118.6$16.8$135.4$7.4$142.8
Total$2,153.0$130.0$2,283.0$95.8$2,379.8
Revenues:
Conventional System $562.5$353.6$811.2$237.1$1,048.3
Wheel-Trans System$4.3$1.7$6.0$0.5$6.5
Total$566.8$355.3$817.2$237.6$1,054.8
Total Subsidy Required
Conventional System $1,471.9($134.6)$1,337.3($148.5)$1,188.8
Wheel-Trans System$114.3$15.2$129.5$6.8$136.3
Total$1,586.2($119.4)$1,466.8($141.7)$1,325.1
City Funding
Conventional System $553.9$132.7$686.6$44.6$731.2
Wheel-Trans System$97.7$29.8$127.5$8.4$135.9
Total$651.6$162.5$814.1$53.0$867.1
Provincial Gas Tax (* assumed)$91.6$0.0$91.6 (*)$0.0$91.6 (*)
Covid Special Funding
Conventional System $796.4($237.3)$559.1($193.1)$366.0
Wheel-Trans System$0.0$2.0$2.0($1.5)$0.4
Total$796.4($235.3)$561.1($194.7)$366.4
Note: Some numbers do not add due to rounding.

Proposed Service Changes

In 2023, the TTC will adjust service standards for crowding so that peak service will be planned based on pre-pandemic standards.

Off peak service will be planned based on greater crowding with the result that there will be reduced service on some routes. [p. 26 of Operating Budget report (proposed) and TTC Service Standards (existing)]

Crowding Standard (Busiest Hour)BusStreetcarRapid Transit
Peak Standard501301000/1100
Off Peak Standard (existing)3570500-540
Off Peak Standard (revised)4590600-650

Note that this includes minimal reductions on the bus network, but more substantial cuts on streetcar and especially on rapid transit lines. [Table 3, p. 26 of Operating Budget Report]

Some service improvements are planned to address specific demand issues. [p28 of Operating Budget report]

  • To account for capacity requirements of customers travelling with shopping bags, buggies and strollers, service will be increased on weekend afternoons on key shopping corridor routes including Dufferin Street, Finch Avenue East, Lawrence Avenue East, Wilson Avenue, and The Queensway.
  • In addition, a base grid of 15-minute overnight service on the Finch Avenue, Jane Street and Wilson Avenue corridors will be established. These corridors will complement existing 15-minute service on the Yonge Street and Bloor Street/Danforth Avenue corridors.

Tory didn’t mention any of the service changes in his speech, but concentrated on protecting existing services. Maybe he didn’t read as far through the reports as I did to see what is actually proposed.

18 thoughts on “TTC 2023 Budget: A Bit More Subsidy, But …

  1. As I read this, I can’t help but get a sinking feeling about what the future holds for transit in Toronto. The newspapers have had a slew of very depressing stories on the TTC of late.

    But it doesn’t have to be that way!

    Mayor Guthrie of Guelph used to be ‘Well to the Right’, but has turned out to be very progressive:

    Guelph Mercury reports:

    Saturday, December 31, 2022

    Mayor Cam Guthrie wants to see more people riding Guelph Transit for free.

    Speaking recently with the Mercury Tribune, Guthrie said he plans on bringing a motion forward during January budget discussions to have city staff look into what it would cost to make city buses free to ride for everyone in school up to Grade 12, along with senior citizens.

    That report, he said, would then come back to council in early summer when the city’s new four-year strategic plan, which will help determine what will go into city budgets through 2027, will be voted on.

    “What I’m wanting is to have all that information, have the real world report on what it would take to actually do that and then have it embedded into the discussion with council to see if they’re up for it,” the mayor said.

    Guthrie said if councillors are indeed up for it, it would build off the pilot project, currently ongoing, that makes Guelph Transit free for those up to the age of 12.

    As previously reported by the Mercury Tribune, that pilot project, along with another offering bus passes for as low as $4 per month for those with the lowest incomes — has been successful in bringing hundreds of additional riders on to city buses in 2022.

    To be clear, as the story doesn’t detail:

    Child: As of March 1, 2022, kids 12 and under ride free. A new OnYourWay farecard is required for those 5-12 years old. Children under 5, remain free and do not require a farecard. Source: Guelph fares

    Liked by 1 person

  2. As more and more Electric Vehicles (EV) come onto the roads, we can expect less and less revenue from the Provincial Gas Tax. Don’t forget that Canada will not have “new” internal combustion vehicles after 2035, unless they are “used” or smuggled in from outside of Canada.

    Liked by 1 person

  3. Missing unit, you likely meant “$100k”.

    “For example, at $100 each, this would only amount to $7 million.”

    Also, an employee in a private corporation often costs double their salary by the time you have payroll taxes, pension, equipment, management, etc. I’m not exactly sure what the TTC has for employee costs aside from salary, but it’s likely non-trivial.

    That said, $14m is quite shy of the $53m total too.

    Steve: Thanks for catching this. The article has since been updated with the actual numbers from the TTC Budget Report, and it’s even less than I estimated, but should be the fully burdened cost. What is rather sad about this is that the Special Constables will make vastly more than the Streets-to-Homes workers or the staff who will clean out streetcars.

    Liked by 2 people

  4. Service cuts in some periods? Looks like service cuts in most periods.

    I can understand that they might ultimately reduce service on surface routes because of reduced post-Covid ridership.

    But tossing out the old pre-Covid service standard has nothing to do with reduced ridership. It’s a service cut plain and simple.

    John Tory and any councillor who supports this, should be utterly ashamed of themselves. Why didn’t they mention such an extreme policy change during the election?

    Liked by 1 person

  5. nfitz said “Why didn’t they mention such an extreme policy change during an election?”

    Probably because politicians in general never discuss ‘cuts’ but repeatedly celebrate ‘announcements’ of new things – some of which never actually happen. In the case of Tory we also should not forget his disgraceful – and secret – request for ‘minority rule’ powers during the election. Not highlighting a possible TTC cut during an election is ‘to be expected’, not discussing or revealing a major change in our civic democracy is unforgivable.

    Liked by 2 people

  6. In typical TTC fashion, at Sheppard-Yonge station on Tuesday, the “head counters” were out – given as a lot of people are still off, they will use the reduced passenger count (even though NOT representative) to justify a service cut – Wile E. Coyote had absolutely nothing on the bosses at 1900 Yonge.

    Liked by 2 people

  7. The service reduction makes sense with WFH. You can’t have your cake and eat it too. Transit is becoming something progressives feel good about others taking, but don’t actually use while they code from home.

    Steve: There is a question of balance between the WFH effects and service cuts that really are a decline without WFH. The TTC is going to pack more people onto off-peak service even though ridership recovery is stronger then and is less affected by WFH. You can make the WFH argument for peak service to areas like King & Bay where there is a big impact, but not across the whole system.

    As for “progressives”, you assume that all of them are “coding from home”. This is a gross oversimplification of the ridership demographics, but it probably makes you feel good to slag “the left” as “not us” and therefore not worthy of attention.

    Like

  8. Steve answers Rod Taylor: What is rather sad about this is that the Special Constables will make vastly more than the Streets-to-Homes workers or the staff who will clean out streetcars.

    I was just digging on a parallel situation to this for “Traffic Wardens” hired (finally, after years of promises!) by the City, in the particular case I was researching, for redirecting traffic around the Eglinton West construction fiasco.

    The Wardens, from a number of reports, (albeit exact figures not available) were ‘half the cost of police constables’.

    There’s a game of obfuscation afoot on doable (due to costs) providing security on the TTC will cost. The real ‘wrench in the room’ is that *many* other cities do it with a combination of both the transit provider’s own security, and the participation of full police constables, to provide this security.

    I get the distinct impression the reason we’re not getting answers is because every measure is being taken to avoid this issue.

    Liked by 1 person

  9. On the operating budget. The modest improvements are fine; the fare hike could be absorbed; but the service reductions are absurd. My as-lived experience suggests the TTC is much more crowded that those ridership statistics suggest. Fare enforcement may change that, but one might want to be cautious about that impact. As it stands, I have a friends who works late in to the evening routinely and tells me that he had to let a train pass by at Bloor the other week, at 11:15pm as it was too full to board.

    Service reductions on an absolute hours basis are simply not reasonable. Some re-allocation of service may be.

    On fares, I happen to think fare-capping would be a more equitable solution for those who are low income, as a 40-ride cap would bring the routine Presto fare almost down to the same level as the low-income pass, while not requiring anyone to apply for it, ensuring its universal availability.

    ****

    On the Capital budget:

    I note that Broadview Loop Expansion is again mentioned, this time with a timeline of 2025-2030.

    Liked by 1 person

  10. Beating a drum no one ever hears (not a Toronto-specific issue, to be certain): All passengers should pay the same fare. You want to cover all or part of the cost for some group of passengers? Great! Buy tickets or passes for them and distribute them to your fav(u)ored group! Don’t make the TTC (or any other transit provider) into a part-time social-service agency.

    Like

  11. To be honest, I think a free fare for 12 and under is ending up as one of the dumbest policies implemented. Tory is touting it because I remember he made a promise to freeze the fare when he was campaigning for the first term.. and he suddenly brought that free fare for 12 and under in order to minimize criticism for breaking his campaign promise.

    And now.. a lot of high schoolers who look little are pretending to be 12 and under and hop on the bus without paying fare.. I know they are high schoolers because there is a high school along the route I use. Unfortunately, a driver can’t do anything since their hands are basically tied on fare evasion.

    Another question is, I am wondering if there are any updates on GTA co-fare agreement with the GO Transit. I know the provincial government announced a fare integration program with the GO and many GTA transit but the TTC were left out.
    I am wondering if it is the TTC who chose to opt out or the provincial government ditched Toronto since Doug Ford hates the city.

    I am wondering what is going on with that.

    Steve: There are always talks but no action because of the cost involved, and the simple fact that the Tories feel they can get more votes in the 905 than bothering with the 416. Ironically of course, TTC integration would help those coming from the 905 who must now pay a separate fare.

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  12. Steve, how come they don’t also put 15 min blue night service on the 395 either to create an east-west crosstown overnight corridor?

    The 395 sees heavy demand across the night and is usually crowded based on my experience…

    Steve: I get the impression that this is a small scale change for one section of the city possibly as a trial for wider application. However, it would have been useful to present it that way to give a sense of future possibilities.

    Like

  13. “Single adult and youth (aka student) fares will go up by 10 cents.”

    I think we (as Torontonians, who use the TTC) all need to start a boycotting paying TTC fares!

    Like

  14. And now.. a lot of high schoolers who look little are pretending to be 12 and under and hop on the bus without paying fare.. I know they are high schoolers because there is a high school along the route I use. Unfortunately, a driver can’t do anything since their hands are basically tied on fare evasion.

    Another argument in favor of relieving the TTC (and all other transit providers) from providing discounts. Make all fares the same price and discount them, if desired, via other means. If a school board/district/whatever wants to subsidize student fares, that’s great. Call TTC in July and tell them how many passes the board will need each month during the school year.

    Then the vehicle operator doesn’t have to play conductor as long as the passengers tap or swipe.

    Like

  15. plaws0 wrote: Another argument in favor of relieving the TTC (and all other transit providers) from providing discounts. Make all fares the same price and discount them, if desired, via other means. If a school board/district/whatever wants to subsidize student fares, that’s great. Call TTC in July and tell them how many passes the board will need each month during the school year.

    One option could be that everyone (kids under 12 included) must have a Presto card and must swipe it on all vehicles. Upon proof of age the Presto card is coded to provide zero cost rides.

    Liked by 1 person

  16. We need a revaluation of the Blue Night Network. The current routing need adjusting.

    For example, why is the 300A running express on Highway 427, bypassing residents along the West and East Mall in the process. There are no stops along Highway 427. Also, why isn’t the 300B in the west end not looping using Rathburn Road instead of cutting it short at Burnhamthorpe Road, against bypassing several high rises.

    Liked by 1 person

  17. I don’t know why all the fuss. If you don’t feel the TTC delivers what you need, why not just take the SmartTrack? John Tory spent 7 years building it with his own two hands and his burly biceps, delivering it on-time and under budget. There’s a SmartTrack station on nearly every corner of the city, taking you wherever you want to go for a pittance and running every 10 minutes or less. If he were gutting the TTC without having built the SmartTrack you might say that he’s a Rosedale Rob Ford who hates urbanism and the public realm and loves cars and developers. But that’s not John.

    Liked by 1 person

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