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TTC says it will lose $300 million by Labour Day without government intervention

Despite several cost-saving measures implemented in recent weeks to help the TTC manage its losses in both revenue and ridership since the pandemic began, the transit agency says it expects to lose close to $300 million by Labour Day. 

The information is detailed in a new staff report, which was released Tuesday morning and outlines the agency's financial struggles.

"To the end of April, a decline in ridership due to safety measures enacted to combat the COVID-19 pandemic has resulted in a $123 million or 31.2% loss in TTC passenger revenue when compared to planned revenue for this period," notes the report.

"Based on current trends, a revenue loss of approximately $21 million per week or $90 million per month is expected to be realized. In addition, COVID-19 response activities are expected to require incremental unbudgeted costs of $15.4 million to Labour Day, over and above existing resources that were redirected to support TTC’s COVID-19 response."

The report states that, when combining the loss of passenger revenue with ancillary revenue losses and incremental expenses being incurred (such as masks and other personal protective equipment for staff), the transit agency would likely lose close to $520 million by Labour Day without any cost containment strategies. 

However, the TTC has established several actions to mitigate the extra costs and loss of revenue, including service cuts of about 15 per cent, roughly 1,200 temporary staff layoffs and delaying several capital projects.

These measures are expected to save $5.5 million weekly or $23 million in monthly operating costs upon full implementation in June, which will reduce the monthly shortfall to $69 million.

The agency has also reduced its 2020 capital budget by $208 million, enabling the TTC to release and redirect $116 million in Provincial Gas Tax to the city's Recovery Fund, which will be applied to further reduce the agency's revenue shortfall

But the report indicates that, even with these efforts, should current conditions continue to Labour Day, the TTC is looking at a loss of approximately $298 million. 

"Continued financial impacts will be contingent on the approach government will take to recovery and how quickly the economy will be re-opened," notes the report.

"However, it is expected that financial impacts are likely for the balance of 2020 and possibly into 2021 as some level of pandemic response measures will need to continue for both staff and customers, including remote working arrangements; physical distancing, vehicle and public space disinfection and other safety measures. Ridership and revenue will be dependent on ridership behaviour, and therefore, service demand."

In light of this, the TTC is calling on both the provincial and federal governments to provide much-needed financial support.

"Despite TTC cost containment efforts, a financial impact of this magnitude will require support from the Provincial and Federal governments," reads the report. "To date, major support programs announced do not provide financial support to the TTC."

The 33-page report is set to be presented to the TTC board during a virtual meeting on Wednesday.

Lead photo by

Hector Vasquez

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