OC Transpo faces deficit after strike, could scale back on buses
Last Updated: Tuesday, February 10, 2009 | 1:01 PM ET
CBC News
For a time, Ottawa transit buses are free to riders, but that's costing OC Transpo. (CBC)The head of OC Transpo says Ottawa's transit company lost more than just days on the road during its 51-day transit strike. It also lost important earnings that will leave the company in a deficit.
Alain Mercier, the head of OC Transpo, says that because of lost fares and the cost of winning back riders, the company is in the hole by $13.4 million.
That's a bill the city will have to pay.
"I'm not looking forward to any fare increase right off the bat," said Rainer Bloess, the city councillor for Ottawa's Innes Ward.
First, he said, the city will do what it can to win back riders as quickly as possible and to make sure operating bus routes are taking on as many riders as they can.
"There is a loss in revenue and there is an increased cost for bringing the system back on," he said. "This will be felt on the bottom line."
In December, Mercier had said that the transit strike would save the city $3 million a week.
But OC Transpo's lost revenues, he now says, are eating up those savings.
The money brought in by the sale of bus tickets and passes pays for 48 per cent of the cost of running OC Transpo, according to the city.
And since the city's transit committee voted Monday to recommend fares be waived for longer than just until the end of the week, those much-needed fares might not be coming in again until March.
In the meantime, said Mercier, OC Transpo's deficit will continue to grow.
The other 52 per cent of OC Transpo's earnings come from taxes — a revenue stream Coun. Rick Chiarelli of College Ward said the city may have to exploit until ridership returns.
"You hope you find money elsewhere," he said, "but that's a decision council has to make."
The city could also consider increasing fares or reducing bus service across the city.
But Coun. Alex Cullen, the head of the city's transit committee, says the most likely scenario is that the city will have to cancel millions of dollars worth of new buses that are already in the budget.
The city was looking to buy 34 new buses to meet growth for the year — at $800,000 each, said Cullen.
"We may have to scale back and that may be the interim position we have to take because of the deficit from the strike," he said.
Cullen said that the city's losses due to the strike could end up being as high as $20 million.
Ottawa City Council will vote this week on the transit committee's recommendation to waive fares until the end of February.
