City has received no financial help in ‘Fairness for Ottawa’ campaign as OC Transpo faces $130 million a year shortfall

September 4, 2024 Canuck

The City of Ottawa has received no response to its call for more federal and provincial funding to support OC Transpo, as the transit services faces an annual operating deficit of $130 million to $150 million over the next five years.

One month after Mayor Mark Sutcliffe launched his ‘Fairness for Ottawa” campaign to advocate for the city’s “fair share” of funding, city staff provided a bleak outlook to council on the state of Ottawa’s finances heading into the 2025 budget debate.

Sutcliffe is calling for $140 million a year over the next three years from the Ontario and federal governments to support transit, and $100 million from the federal government for payment in lieu of taxes on federal properties in Ottawa and guarantee payments over the next 10 years.

“We haven’t seen any help come our way to help deal with this,” City Manager Wendy Stephanson told councillors on Wednesday, saying city staff have spoken with federal and provincial officials.

Sutcliffe added, “The conversations have not yielded a specific outcome at this point, but they have been constructive.”

In a one-hour presentation to council, staff outlined the financial challenges facing OC Transpo in the years ahead and a shortfall in funding for payments in lieu of taxes on properties.

“The last four years have been particularly challenging,” Stephanson said. “Ottawa has been disproportionately affected particularly with respect to our transit ridership. It hasn’t fully recovered.”

Staff say OC Transpo is projecting a $120 million funding shortfall in 2025, $131 million in 2026, $145 million in 2027 and deficits of $150 million in 2028 and 2029.

“The situation we are in is the equivalent of buying a new house based on a salary that you expected to earn and a mortgage you could afford and then losing your job, living on a reduced income and at the same time, interest rates go up,” Isabelle Jasmin, Deputy City Treasurer, told councillors.

“We built LRT thinking ridership would increase, but instead a pandemic hit, ridership dropped and the cost of construction and operating went up.”

Staff told councillors the long-range financial plan for Stage 1 and 2 of LRT in 2023 estimated 112 million rides in 2023, but ridership was only 57 per cent of “affordable level” last year at 64 million.

Sutcliffe said in August that if the federal and provincial governments don’t come through with support, the transit levy would need to increase 37 per cent, equalling a seven per cent increase in property taxes each year.

The head of OC Transpo says the transit service is looking at five scenarios, if the city doesn’t receive federal and provincial funding for transit.

“Everything is on the table,” Renee Amilcar, Transit Services general manager, said. “We will present some scenarios and we will make the decision we will share with council. When we receive the budget direction, we will know what to do with those scenarios.”

When it comes to the payments in lieu of taxes (PILT), staff say there has been a $99.2 million shortfall over the past five years related to federal and NCC properties in Ottawa. The city is estimating a funding shortfall of $252 million to $445 million over the next 10 years unless the federal government changes the PILT formula.

Part of the funding shortfall is linked to a reduction in the business education tax rate by Ontario, which provided relief to businesses during the COVID-19 pandemic. Staff estimate the reduction in the business education rate will be $110 million to $140 million over the next 10 years.

The city provided a breakdown on the payment in lieu of taxes shortfalls from the federal government over next 10 years

Business Education Rate reduction – $110 million to $140 million
Reduction of federal property inventory – $20 million to $90 million
State and condition valuation issues – $45 million to $90 million
Prolonged Renovation Valuation Issues – $45 million to $75 million
Self-Imposed Tax Exemptions by the federal government – $30 million to $45 million
National Capital Commission Tenants – $2 million to $5 million.

The city wants a 10-year commitment on PILTs related to the reduction of federal property inventory as the federal government looks to reduce its office footprint.

The federal government paid the City of Ottawa $119.6 million in 2022, $114.6 million in 2021, $124.4 million in 2020 and $122.7 million in 2019.

Stephanson says staff have met with the federal government officials to discuss PILTS, with the city presenting some potential solutions.

“There was no movement to rectify the issue or find a solution that worked for everybody,” Stephanson said.

The city manager told council that $153.5 million in savings have been identified through service reviews, efficiencies and continuing improvements to city services in 2023 and 2024. The efficiencies include $72.2 million in transit services, $21 million in service reviews, including $10 million through bus route optimization, and $2.6 million through the Ottawa Police Service.

Stephanson says the cost of the city administration in Ottawa’s budget accounts for 5.3 per cent in 2024, down from 7 per cent in 2016.

Council will finalize the 2025 budget later this year.

Other major cities in Canada passed much more significant tax hikes for their 2024 budgets. Toronto’s rate went up 9.5 per cent, Edmonton approved an 8.9 per cent increase, Calgary saw its taxes go up 7.8 per cent, and Vancouver’s tax rate increased by 7.5 per cent.

Last year, some city councillors voted against the 2.5 per cent property tax increase in the budget directions, with some calling it “arbitrary” and saying it amounted to a service cut with inflation higher than the directed increase. Several unions representing police officers, firefighters, OC Transpo employees and other workers at Ottawa City Hall issued a letter last year, calling on the mayor to “provide a vision for the city that goes beyond another round of cuts.”

View original article here Source

Queen Size 4 Piece Sheet Set - Comfy Breathable & Cooling Sheets - Hotel Luxury Bed Sheets for Women & Men - Deep Pockets, Easy-Fit, Extra Soft & Wrinkle Free Sheets - White Oeko-Tex Bed Sheet Set

(329020)

$29.99 (as of September 3, 2024 08:27 GMT -05:00 - )

Utopia Bedding Queen Bed Sheets Set - 4 Piece Bedding - Soft Brushed Microfiber Fabric - Shrinkage & Fade Resistant - Easy Care (Grey)

(218664)

$26.99 (as of September 3, 2024 08:27 GMT -05:00 - )

Pure Protein Bars - Nutritious, Gluten Free protein bar, made with Whey protein blend - low sugar, protein snack. Deliciously satisfying. Chocolate Peanut Butter (Pack of 6) (Packaging May Vary)

(12419)

$12.98 (as of September 3, 2024 08:27 GMT -05:00 - )

TheraBreath Fresh Breath Oral Rinse - Icy Mint | Fights Bad Breath | Certified Vegan, Gluten-Free, & Kosher | 473ml

(5706)

$11.98 (as of September 3, 2024 08:27 GMT -05:00 - )

Xpand No Tie Shoelace System with Elastic Laces One Size Fits All Adult and Kids

(32535)

$15.99 (as of September 3, 2024 08:27 GMT -05:00 - )

Jacked Factory Creatine Monohydrate Powder 425g - Creatine Supplement for Increased Muscle Mass*, Improved Strength, Power, & Performance** - 85 Servings, Unflavored

(8898)

$29.99 (as of September 3, 2024 08:27 GMT -05:00 - )

Utopia Bedding Waterproof Mattress Protector Queen Size, Viscose Made from Bamboo Mattress Cover 200 GSM, Fits 17 Inches Deep, Breathable, Fitted Style with Stretchable Pockets

(40186)

$33.99 (as of September 3, 2024 08:27 GMT -05:00 - )

Canada News