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Calgary City Council Faces $33 Million Transit Revenue Shortfall
During the ongoing budget discussions, Calgary city council is confronted with a significant challenge: addressing a $33 million revenue shortfall for Calgary Transit. This financial gap is largely attributed to rising costs associated with the low-income transit pass program.
Documents presented during the budget negotiations reveal that $19 million of this shortfall stems from the administration of subsidized transit passes. To combat this issue, city council is being urged to allocate $13 million in operating funds specifically aimed at bridging the deficit associated with the low-income program.
Sharon Fleming, the director of Calgary Transit, emphasized the urgency of the situation during a press briefing. She stated, “If we don’t get that funding, we’ll have to look at a variety of different options” that could include service reductions, fare increases, or alterations to existing services.
“One might be service reductions, it could also include increases to fares and, finally, maybe changes to the services we’re used to having.”
The prospect of increased fares is concerning for many riders. Fleming indicated that if Calgary Transit were to independently fund the low-income transit pass program, it could result in fare hikes of up to 14 percent, which would add approximately 70 cents to the cost of each ride. The costs associated with administering the low-income transit pass program have surged to $52 million, largely because around 40 percent of all transit users rely on the subsidized pass.
The low-income transit pass is designed to be affordable, utilizing a sliding scale based on income. For instance, individuals with the lowest income are charged $5.80 per month, while those in higher income brackets pay $40.25 and $57.50, respectively. In contrast, a standard adult monthly pass is priced at $115.
This year, the provincial government temporarily reduced its funding contribution of $6.2 million to the low-income transit pass initiative, though it later reinstated those funds. Mayor Jyoti Gondek, along with other city councillors, has argued for increased provincial contributions, asserting that while the city is responsible for delivering transit services, the burden of low-income supplements should not fall solely on the municipality.
“We will not let Calgarians suffer because another order of government isn’t doing their share.”
Councillor Andre Chabot of Ward 10 also called for federal assistance, highlighting how rising inflation and population growth, driven in part by expanded federal immigration targets, are exerting pressure on the city’s transit funding. “Ultimately, immigration and adding more people to our city is contributing to our deficiency in our transit funding, specifically on low-income transit passes,” Chabot stated.
Furthermore, Fleming opined that the hybrid work trend has decreased monthly pass sales, which has contributed to the financial shortfall, even as overall ridership approaches pre-pandemic levels. Experts in the field of transit advocate for a reevaluation of how transit services are funded, pointing out that Calgary has struggled with its budget deficits since the pandemic began. David Cooper from Leading Mobility Consulting remarked on the need for systemic change in funding models.
“The funding model for transit has been broken all across the country,” Cooper noted, suggesting alternatives used by cities like Vancouver, which allocates a percentage of parking revenues and gas tax to support transit services.
Calgary Transit is now faced with making difficult decisions regarding its services. Plans to enhance night bus service and increase frequency across the network are on hold due to budget constraints. “This budget has been about sustaining the services we already provide,” Fleming informed the council. “It is not about enhancing services further.”
Despite challenges, the city is set to reintroduce four-car CTrains on a limited basis starting in December as maintenance work continues at Calgary Transit facilities. The city council will begin its discussions and potential amendments to the budget on Thursday.
Source
globalnews.ca