OC Transpo's 2021 revenue loss double what was budgeted
OC Transpo is expecting to be approximately $17 million in the red by the end of 2021, largely due to revenue losses during the ongoing COVID-19 pandemic.
In a document prepared for the Transit Commission, staff say the year-end deficit forecast is made up of $26.3 million in lost revenue and offset by $9.3 million is savings due to "non-COVID-19 pressures."
With the pandemic stretching into the fall of 2021, city staff say projected revenue losses are more than double what the city initially budgeted.
"The budget reflected COVID-19 lost revenue of $60 million, but the revised estimated revenue loss for 2021 is $132.2 million, which is due to lower ridership and lower than expected advertising revenues," the report states.
The report says much of the lost revenue is offset by funding from the Safe Restart Agreement—a joint agreement with the federal and provincial governments to help manage the economic impacts of the pandemic. The 2021 budget expected the city to receive $72.8 million, but the actual funding was $115.3 million.
"The $115.3 million is estimated to be fully allocated in 2021 to cover the revised estimated COVID-19 pressures for Transit to the end of the year, with a remaining unfunded COVID-19 related deficit of $26.3 million," the report says. "As part of the overall deficit mitigation strategy, a letter was sent to the Province requesting that funds not applied in 2020 be reallocated to offset 2021 COVID-19 related cost pressures and to fund any additional unfunded deficits."
OC Transpo says it expects to spend $9.4 million on cleaning costs this year due to the pandemic, down from $12.8 million. The transit service also expects to save $9.3 million this year through lower salary costs due to vacant positions and temporary service reductions put in place over the summer.
OC Transpo temporarily cancelled nine routes that largely serve the downtown core in June and adjusted the service hours of many other routes to adapt to the ongoing low levels of ridership.
A memo from OC Transpo over the summer said ridership was at about 30 per cent of pre-pandemic levels in July but more riders were expected in the fall once school resumed.
The Transit Commission meets on Monday, Sept. 20.