Council contends with Calgary Transit’s $33M revenue shortfall and low-income pass

As part of budget deliberations this week, Calgary city council is being asked to fill a multi-million-dollar revenue shortfall for Calgary Transit due to escalating costs of the low-income transit pass program.

According to budget documents, Calgary Transit has a revenue gap of $33 million this year, including $19 million from administering the subsidized transit passes.

City council is being asked to approve $13 million in operating funds, and a one-time allocation to cover the shortfall for the low-income transit pass program.

“If we don’t get that funding, we’ll have to look at a variety of different options,” Calgary Transit director Sharon Fleming told reporters.

“One might be service reductions, it could also include increases to fares and, finally, maybe changes to the services we’re used to having.”

Fleming said fares could increase by 14 per cent, translating to as much as 70 cents per ride if Calgary Transit was to fund the low-income transit pass on its own.

Costs to administer the low-income transit pass program have risen to $52 million, as around 40 per cent of all transit riders use the subsidized pass, according to Fleming.

The city’s low-income transit pass uses a sliding scale system that bases a purchase price on income. Riders who earn the least pay $5.80 per month, with riders in the second tier paying $40.25 per month and $57.50 per month in the third tier. A regular adult monthly transit pass costs $115.

1:47 Request to increase Calgary low-income transit pass funding worries advocates

Earlier this year, the provincial government temporarily cut the $6.2 million in funding it provides the city’s low-income transit pass program, but reversed course and reinstated the funds.

Calgary Mayor Jyoti Gondek and other councillors are arguing the province should contribute more than its current share.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

“Delivery of transit and operating budget are our responsibility, but low-income supplements aren’t our responsibility and yet we take it on,” Gondek said.

“We will not let Calgarians suffer because another order of government isn’t doing their share.”

Ward 10 Coun. Andre Chabot, one of five councillors who announced more than 20 incoming amendments to the budget, said the federal government should be pitching in as well.

Chabot said the city is facing pressures from both inflation and population growth, and that is partly due to the federal government’s expanded immigration targets.

“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 said. “Absolutely we should be going to the federal government to see if we can get additional support.”

2:06 Proof of fare and age may be required under new transit rules in Calgary

According to Fleming, hybrid work has resulted in less sales of monthly passes, which is also contributing to the funding gap despite ridership returning to nearly pre-pandemic levels.

Shortfalls in Calgary Transit’s budget have become a reoccurrence since the pandemic, and transit experts believe it’s time for council to have a discussion about other avenues to fund the service outside of the tax base and fares.

“The funding model for transit has been broken all across the country,” said David Cooper with Leading Mobility Consulting. “We go through this conversation every budget year where we plug the hole with existing funds; there’s no couch with $33 million under the cushion.”

Cooper said cities like Vancouver allocate a percentage of on-street parking revenues as well as the gas tax to help fund transit service.

“At some point you just can’t find patch after patch when you need to look at different ways to fund the service,” he said.

The budget situation means Calgary Transit is making some sacrifices which include shelving plans to expand night bus service and frequency across the network beyond what’s already funded.

“This budget has been about sustaining the services we already provide,” Fleming told council. “It is not about enhancing services further.”

However, four-car CTrains are set to return on an infrequent basis starting in December, as maintenance work continues at Calgary Transit facilities.

City council will begin debating the budget and making amendments on Thursday.

1:36 New transit snow route gets cold response northwest Calgary community

&© 2024 Global News, a division of Corus Entertainment Inc.