Calgary council asked to increase budget to offset $33M transit revenue shortfall

Transit needs funding boost… from somewhere Transit needs millions of dollars more to account for sinking revenue and help support a growing number of low-income riders.

Although transit ridership in Calgary has almost fully recovered compared to pre-pandemic levels, revenue has fallen by $33 million and more money is needed to help offset the shortfall and support low-income transit riders.

As council mulls mid-cycle budget adjustments this week, it's being recommended to increase transit's base operating funding by $13 million to cover off some of the projected shortfall for 2025.

An additional $19 million is being requested to support the Low-Income Transit Pass Program, the cost of which has ballooned to $52 million.

"With hybrid work, we're not seeing as many monthly passes being sold. And that was our bread and butter," said Sharon Fleming, director of Calgary Transit.

The low-income transit program offers reduced fares for people who qualify based on how much a rider earns.

Monthly passes for 2024 range between $5.80 and $57.50 for people who qualify for the low-income support program, while a regular adult monthly pass runs $115.

"If we don't get that (additional) funding, we'll have to look at a variety of different options. One might be service reductions, it also includes increases to fares and finally, maybe changes to some of the services we're used to having," Fleming said.

Some councillors and the mayor argue the provincial and federal governments should cover more, if not all, of the program, since it is a social support program.

"The deal was that municipalities would take care of core services, but that we would do it in partnership with the other two orders of government who are enjoying the amount of income tax that they're collecting from our city," said Mayor Jyoti Gondek.

"I've heard commentary that transit is a Calgary problem. Absolutely, delivery of transit and operating budgets are our responsibility, but low-income supplement is not our responsibility and yet we take it on."

In May, the provincial government reversed course on a decision to pull its funding from the program.

Following public feedback and calls from councillors, Alberta's minister of seniors, community and social services recommitted to providing $6.2 million to the City of Calgary.

The federal government should also take on a role to support that program, said Coun. Andre Chabot.

"Ultimately, immigration and adding more people to our city is contributing to our deficiency in our transit funding, specifically on low-income transit buses," Chabot said.

"We should be going to the federal government to see if we can get some additional support for that additional cost that we've incurred."

If councillors vote against increasing the budget for transit costs, officials said the shortfall would have to be covered by fare increases for all users.

Every $3 million in lost revenue equates to about a 10-cent fare increase, officials told council.

More money for roads

Wednesday's budget discussion also included justification for increases to improve Calgary's pavement quality.

Administration is recommending a $10-million increase to "rehabilitate or reconstruct high-speed arterial roadways" that are in poor condition.

Just 40 per cent of Calgary's road network are categorized as in good or better quality, well below the national average.