‘It’s not fair at all’: City facing tough choices to shore up transit budget

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Mayor Mark Sutcliffe is warning that transit fare hikes of as much as 75 per cent, or a transit levy that could add seven per cent to property taxes just to cover the cost of OC Transpo alone, might be needed as the city begins a “challenging” 2025 budget debate.

In a briefing to reporters Wednesday morning, Sutcliffe said he’s aiming to limit the tax increase for all city services — except transit — to 2.9 per cent. That’s less than half a percentage point higher than the 2.5 per cent increase the mayor promised and delivered in his first two years in office. But it doesn’t include the cost of OC Transpo, which is facing a devastating $120-million shortfall.

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“I want to be full and transparent with residents what the full impact of the $120-million structural deficit is in each of the areas we’re looking at and I want to leave all of our options open,” Sutcliffe told reporters.

The mayor repeated his plea that the city is being short-changed by the federal and provincial governments, particularly when it comes to public transit.

“It’s not fair at all. None of this is fair to our residents,” he said. “It’s incredibly unfair to our residents that they’re paying more than their fair share because other levels of government have not contributed to Ottawa in the same way that they have for other cities.”

Fare increases, which are borne solely by transit riders, and the transit levy, which is spread across all city residents, are two “levers” available to increase revenue for OC Transpo. Service reduction and other cuts are other levers that can be used to reduce transit costs.

Fare payments only account for about 35 per cent of OC Transpo’s revenue, well below the 55 per cent target set by council years ago, Sutcliffe said

“We’re not meeting our objectives. We’re already using tax dollars to subsidize public transit beyond what was intended by council going back 20 years.”

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Since municipalities are required to deliver a balanced operating budget, without more money from the feds or the province, raising fares, raising taxes or cutting service are the city’s only three options. “There is no other way,” Sutcliffe said.

Sutcliffe’s briefing was an advance on the “Proposed 2025 Budget Directions, Timeline and Consultation Process” that will be delivered Monday to councillors on the city’s finance and corporate services committee. The 75 per cent fare hike and the 37 per cent increase in the transit levy are the upper-end extremes that will be needed to balance OC Trasnpo’s books.

The 2.9 per cent increase for the non-transit portion of the budget is in keeping with Sutcliffe’s election promise, he said. But critics, including some councillors, say Ottawa’s increases have been far below those of other Canadian cities. Property taxes in Toronto jumped 9.5 per cent in 2024, while they climbed 7.5 per cent in London and 6.1 per cent in Waterloo.

“I made a commitment to the people of Ottawa in 2022 that I would keep tax increases as low as possible without cutting programs and services,” he said.

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“Ottawa residents are already dealing with rising costs in so many areas,” he said. “Big tax increases might help with our budget. But it won’t help our residents.”

Meanwhile, Sutcliffe says he’s continuing to talk with the federal and provincial government for more funding, including the $90 million the city says it’s owed for federal payments in lieu of property taxes. Kanata-Carleton MP Jenna Sudds, the minister of Families, Children and Social Development and the senior MP for the Ottawa region, has been cool to the mayor’s arguments for budget help, saying the city must “get its own house in order.”

Sutcliffe, however, said he remains optimistic and is continuing to press his case. He talked to Sudds about finances Wednesday morning before the briefing, he said.

“I remain hopeful. I never count on anything until it’s a done deal, but I’m cautiously optimistic and encouraged by what I’m hearing from the federal government and the provincial government. Premier Doug Ford has already said if the federal government is in, the province is in too.”

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