June 9, 2011
Gary Webster, the seemingly unflappable chief general manager of the Toronto Transit Commission, looked grim while discussing the agency’s money problems, which appear to be considerably worse than first reported.
Forget a $39-million hole. Transit officials are bracing for the city to cut its annual subsidy by 10% next year, widening its budget gap to more than $80-million. And that’s without factoring in a new labour contract with workers that will add millions more, given that every 1% wage increase adds $10-million to the TTC’s bottom line.
Do the numbers scare him?
“Yes they do, absolutely,” Mr. Webster said flatly. “We’ve invested a lot of money in the system in the last five years, we’ve added a lot of service, and it’s going to be very, very challenging to find efficiencies that are going to cover a large portion of that. So there’s going to be significant pressure on us.”
What to do about that “pressure” remains to be determined, but TTC chairwoman Karen Stintz said everything is on the table, from service cuts to a fare hike.
Financial woes are not new at the largest public transit system in the country, which receives no cash from the federal government for day-to-day operations, and has for the last two years received no subsidy from Queen’s Park. The fare box pays for the lion’s share of its cost, and the city covers the rest, which this year is $429-million.
Ironically, the TTC’s booming ridership, projected to climb to 502 million next year, is also contributing to the financial crunch, since the TTC subsidizes about $1 for every ride. The rising cost of fuel also adds to the growing budget, which will total about $1.5-billion in 2012.
Ms. Stintz acknowledged the task is tough.
“It’s fair to say that the expectation of the city is that we will need to cut our subsidy by 10%,” she said Wednesday following a commission meeting. But there are glimmers of opportunity: the TTC is hoping to make more off advertising, which accounts for 5% of its revenue, trying to cut back on fuel costs, and looking at surplus land it might be able to sell. There may also be ways to “rationalize” the organization, said Ms. Stintz, such as getting the city’s audit department to do work that is now completed by a separate audit department at the TTC.
Then there is the workforce, set to grow by 128 positions (to 10,834) in order to deal with ridership growth. The commission has asked for a report on what savings can be gleaned by cutting back on staff, without negatively affecting services. “Staff cuts would be a last resort,” said Mr. Webster.
Transit activists are gearing up to protect service levels.
“The fact of the matter is the system isn’t funded properly,” Jamie Kirkpatrick, transit campaigner for the Toronto Environmental Alliance, told the commission. “And to introduce cuts to a system that isn’t funded properly shows there is a lack of understanding of how the system operates.”
Ms. Stintz said officials are being as creative as possible in search of savings. “They’re not small numbers, and we will need to make decisions as will every other agency, board and commission across the city. But we’ll know what those decisions look like in the fall.”