No charge transit study could cost nearly $1M memo states

Studying the option of no charge transit services for OC Transpo riders could cost the City of Ottawa nearly one million dollars a memo states. 

A memo to Ottawa city council sent by Renée Amilcar, the general manager of the City's transit services and Wendy Stephanson, the City's chief financial officer on Monday, July 11 said the study, which could take one year to complete, could cost the City anywhere between $700,00 to $900,000. 

The memo said that based on pre-pandemic ridership levels, no charge transit would mean a loss of $209 million which would cost the average taxpayer an average of an additional $482 in the first year. For a property assessed at $800,000, it would be an additional $930 in transit taxes in the first year, or a
one-time transit tax increase of 60 per cent. This represents a one-time 11.9 per cent increase to the overall tax bill.

A second option presented to City staff is to reduce the revenue sharing amount which means instead of 45 per cent of all funding covered by fares and the rest by taxes, the revenue cost ratio would shift to 30 per cent and taxes would cover 70 per cent, which would also increase property taxes by $162 per year, on average. 

The the third option is to cut the annual 2.5 per cent increase costing homeowners an average of $11 per year. 

The memo said there is no funding available for the study unless other work is put on hold to find the money. The money could be included in the 2023 budget, if council tells City staff to do so.

Mayoral candidate Mark Sutcliffe told The Rob Snow Show on Wednesday, July 13 he doesn't think free transit will attract people who don't use the service. 

“These people aren't going to start taking the bus because it's free, they won't take the bus because it's not service them,” he said.

Sutcliffe said expanding and making Ottawa's transit system more reliable would be better than eliminating transit fares

He doesn't think free transit will attract more riders, adding taxpayers can't afford the idea. 

“Free transit isn't free, it still costs money to run a transit system even if people aren't putting money in the fare box,” he added.

Listen to the full interview with Mark Sutcliffe below: