HSR facing huge revenue hit as Mohawk, McMaster look to opt out of student transit deals
University, college transit passes account for more than $8M and 23% of HSR riders
A request from Mohawk College's student association to suspend its transit pass agreement with the city over the summer is a harbinger of even more financial hardship for Hamilton's beleaguered bus system.
University/College Transit Pass Agreements (UCTP) with Mohawk, McMaster and Redeemer University grant full-time students unlimited access to the HSR at a discounted rate.
They've been a boon for the city too, generating $8,691,702 in 2019 and accounting for approximately 23 per cent of total ridership, according to a report prepared by the public works department.
But, with post-secondary classes moving online during the summer semester, council on Wednesday officially accepted a recommendation to temporarily suspend the agreement with Mohawk between May 1 and August 31.
The report lists the estimated the financial impact at $280,000.
For a transit system already hampered by a reduced number of riders per bus in order to maintain physical distancing and a lack of revenue during the pandemic, it's yet another blow.
And, with schools announcing the fall semester will be taking place online, Ward 8 Councillor John-Paul Danko said he's anticipating the city's universities could follow suit.
McMaster Students Union (MSU) president Giancarlo Da-Ré said he's written to the HSR asking to "amend" the student bus fee for next year.
"The level of student usage will be significantly lower than usual considering the fact that students will be taking classes online," he wrote in an email.
Da-Ré described transit as "essential" for students, but noted the city has already made busses free during the pandemic, while reducing service.
"As the HSR continues to operate at no cost to riders, with limited service options, students won't be receiving the services they agreed to fund," he said.
"We're asking the HSR to recognize these facts within the current agreement by crediting students for the loss of services from April through August."
Public works estimated further requests to suspend transit passes would add up to a budget revenue loss of $3,704,950.
An added wrinkle is that while Mohawk charges students a UCTP fee each semester, both Redeemer and McMaster charge the full fee in September.
Councillor points to 2 risks
Danko said he sees the danger as two-fold.
"First of all there's a financial risk to the city of Hamilton because we risk losing the income from those agreements, but it's also on the ridership side," he said. "If we end up postponing those agreements do we lose the riders? And then our overall ridership numbers go down?"
Losing someone who takes to bus to a vehicle often means losing them as a transit rider forever, said the councillor, so it's possible the number of users won't rebound even after the COVID-19 pandemic ends and people are back in class.
At the same time, Danko said he recognizes charging students for a pass they won't use also presents a problem.
"It's unfair for them to be paying for a service that we know they won't be using."
Essential workers rely on transit
UCTP fees are considered ancillary, a type of student fee the Conservatives made optional in 2019. However, transit agencies and post-secondary institutions lobbied hard for the agreements and the government agreed that any program already in place before Jan. 1, 2019 would remain mandatory.
But, if they UCTP agreements were to be cancelled, any future agreements would be subjected to a choice from students of whether to opt-in or out, according to the report.
If not enough students decide to opt in then offering the current discounted rates would be impossible, said Danko.
The councillor said COVID-19 has made it clear who the real essential workers are, pointing out busses are critical for people who work as cashiers and clerks at places at grocery and drug stores.
"Those are exactly the people relying on transit," he said.
"[With] all of these hits the transit system is taking, it's probably the biggest financial challenge in the whole public works department. But it's also critically important to the residents of the city."