Transit Fare Increases: Do you deserve to pay more?


Yesterday, the Toronto Transit Commission (TTC) board met to vote on the operating budget for 2016. The Commission is dealing with a $58.4 million shortfall in a $1.75 billion operating budget. To close the gap, the board voted to increase fares on adults while freezing the fares for students, seniors, and monthly Metropass users. These prices take effect in January.

Adult cash fare increases 25 cents, to $3.25. Adult token fare increases 10 cents, to $2.90. The price of a Metropass remains unchanged at $141.50. When thinking of consumer rewards, this is fair: the price of a Metropass has seen a 42% jump over 10 years, far greater than the percentage increase in the costs of tokens or cash fares. According to a TTC staff report, approximately 50% of all Toronto transit users pay using passes. To attract more consistent riders in the system it makes no economic sense to make it less attractive for those riders to purchase passes.

These fare hikes reduce the $58.4 million to shortfall to $48 million. The TTC will ask City Council for an increased subsidy to cover this amount in order to balance their books.

Toronto city councillors and transit activists were quoted yesterday saying the same thing; the TTC relies on two sources of revenue: the fare box and what the city gives the commission. Yes, the provincial government could and should increase its subsidy to the city for transit. Yes, the city’s subsidy per rider is lower than other major cities in North America. While valid, these arguments are tired. The TTC is not using common sense to balance its books and increase revenue.

Let us start by stating clearly that it is shortsighted to say fares should be frozen every year. The cost of running the system increases and predictable, very modest fare increases should follow. It is also shortsighted to say the restoration of service and improvements on transit routes in Toronto are unwarranted. The TTC board voted to start subway service an hour earlier on Sundays, at 8:00am, and increase the frequence of express bus services. Toronto has a congestion crisis: reducing service is not the answer.

But when Toronto taxpayers see their transit fare increase, we get angry. Justifiably so. In Toronto, transit riders feel they don’t deserve to pay more for a system that’s not world class.

In Toronto, we see transit riders fumble around in their pockets to grab a token (easily mistaken for a dime when in a rush) or loose change. The TTC’s electronic payment system, called PRESTO, won’t be rolled out through the entire system until the end of 2016. Other major cities introduced electronic systems many years ago.

In Toronto, transit riders are left to ride buses in the winter cold because rapid transit isn’t getting built fast enough. We’ve discussed the delays on subway construction before, but it’s worth repeating: the Scarborough subway and the downtown relief line are priority transit projects. These projects are getting sidetracked so the Mayor can figure out a way to get SmartTrack off the ground when it’s clear his transit plan is far from doable with the timeframe and budget proposed.

Why should Toronto taxpayers pay more for transit when the city makes a contract with Bombardier and they decide to play fast and loose with public money? The company was contracted to build Toronto’s new streetcars and trains for the Eglinton Crosstown LRT. The streetcars are bought and paid for. 67 are supposed to be on the road, but only 16 have been delivered due to “production issues.” Even better, Bombardier hasn’t delivered a prototype for the Eglinton LRT to Metrolinx, the agency responsible for building the line.

It’s easy to say “the transit system needs more money.” But how is the TTC currently spending money in its operating budget?

There are 2075 TTC employees on the Sunshine List. That’s 2075 TTC employees making $100,000 per year or more, and the number of employees given access to this exclusive list increases by several hundred each year. Not to mention the almost 3000 other Toronto city workers on this exclusive and well-paid list, all of whom add pressure to Toronto’s operating budgets. It may not be politically popular to say but we’ll say it, clearly: there are far too many overcompensated transit employees in Toronto.

The TTC must consolidate its head offices. Its 3000 employees are spread out over half a dozen offices across the city. That’s half a dozen offices paying leases, electricity, and other operating costs. Not to mention the unused, vacant, and non-TTC occupied properties the commission owns. Here’s an idea: pick a property to build one new headquarters, and make money from the other properties.

Interestingly, TTC Chair Councillor Josh Colle introduced a motion at the board yesterday to develop a long-term strategy for increasing non-fare revenue. This is appreciated but far overdue. The TTC serves its customers but needs to run like a business. This means that, yes, it needs to license its image and develop merchandising strategies to promote its brand while increasing revenue. Yes, it needs to look at “potential customer amenities and services that could be introduced in stations.” Most TTC stations only have one convenience store. Why retail, and the revenue that could be generated from retail contracts, has not been explored in year 2015 is beyond us.

In order for taxpayers to accept fare increases, we need to see stark improvements on how the TTC operates. The fact is every one million riders amounts to $2million in revenue for the system. The TTC can’t afford to lose more public support.

About Andrea Micieli