The TTC Board’s meeting agenda for December 20, 2023 deals primarily with the 2024 Operating Budget, the Capital Plans looking forward 10-15 years, the growing backlog of State of Good Repair (SOGR) spending, and a preliminary look at the Five Year Corporate Plan. A few items are carried over from the December 7 agenda that the Board could not complete due to time limitations, of which the most significant is the quarterly financial review.

• Financial and Major Projects Update for the Period Ended September 30, 2023
• Staff Recommended 2024 TTC Conventional and Wheel-Trans Operating Budgets and 2024-2033 Capital Budget and Plan
• TTC’s 2024-2038 Capital Investment Plan: A Review of Unfunded Capital Needs
• Update on the TTC’s Next 5-Year Corporate Plan 2024-2028

In this article I will preview the Operating Budget, but will turn to the Capital Budget in a second piece. I will also follow-up the Board meeting discussion and additional presentations from staff.

Major Issues

The overwhelming issue is, of course, funding: who will pay to continue TTC operations at their current level let alone to improve them?

No fare increase is proposed for 2024 “in recognition of the impact current economic conditions have on customers”. This has a cost in increased subsidy, or more subtly in works not undertaken for lack of revenue, if the gap is not filled. In 2024, this gap will use a reserve draw, but that approach is not sustainable due to declining reserves and the escalating cost from year to year of a continued freeze.

A political challenge in seeking profincial and federal subsidies for covid shortfalls is that a fare freeze appears to come on the back of covid payments that might not otherwise be claimed.

More generally, the idea of “covid costs” is going to run out of steam soon as support programs close down at the provincial and federal level. The TTC and City must figure out what TTC plans look like based on current revenue and ridership, plus whatever added subsidy might be available.

Future years include major challenges with a continuing reduction of core area work trips compared to pre-pandemic conditions. While total weekly trips might be lower than historical levels, daily volumes show considerable variation both on transit and traffic conditions. Service planned on the basis of average demand could be overloaded on the peak days.

Although the budget speaks of a return to 97% of the Service Budget level by Fall 2024, this is qualified by a note that this is to address traffic congestion. In terms of actual service level (i.e. buses per hour), riders may not see as much improvement as the 97% figure implies. There is almost no provision for additional streetcar and subway service. Peak subway service continues to operate at a much lower level than pre-pandemic schedules in spite of an overall return to 83% of the former service.

The budget contains little provision for additional service related to demand growth, nor is there any discussion of the implications of a growth rate higher than the assumed value. Ironically, added costs are included for maintenance of the growing streetcar fleet, but not for actual operation of these vehicles. Capital plans for buses see only a modest growth in fleet size and, by implication, in service levels.

There is no discussion of reversing changes to Service Standards implemented by management in 2023 that brought allowable off-peak crowding to almost peak levels. This keeps the cost of service down, but affects its attractiveness.

The net effect of demand changes in the core is that the TTC’s share of the travel market is falling even though ridership is strong for non-core trips with a higher recovery rate.

There is a major disconnect between capital plans for substantial growth in core area capacity on the rapid transit and GO networks, and the very modest plans for service growth to the same area.

This is very much the kind of budget presentation we have seen through many years of the Tory regime with small-scale changes. Given the funding limitations, this is no surprise, but there must also be a reconciliation between political aims for greater transit and what the money sitting on the table will actually pay for.

Other City initiatives, notably a greener fleet and proposals for massive service expansion, affect the Capital Budget and, eventually the Operating Budget, but these must be understood in the context of a basic question: what do we spend our money on? Basic operations and service quality will be compromised by bad choices or by simply hoping that a transit equivalent of the Tooth Fairy will appear.

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