TTC Now Facing $520 Million Shortfall Due to COVID: Report
A new report reveals the TTC is now facing a $520-million shortfall by Labour Day as a result of the COVID-pandemic. This is up significantly from the City’s initial forecast which estimated $439 million in losses over nine months.
On Tuesday morning, the City’s transit agency released a preliminary report on COVID-19’s financial impact on the TTC up until Labour Day. The agency says the forecast financial shortfall is driven by “the decline in ridership and the incremental costs associated with TTC’s operational and service response to the pandemic.”
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According to the report, PRESTO Taps have dropped from 1.72 million rides to 240,000 rides between Monday, March 2 (Pre-COVID-19 “normal” business day) and the end of April 2020, or approximately 86%, representing the average reduction over all modes. PRESTO usage on the subway declined by almost 90%.
In addition to the decline in PRESTO taps, the report also notes the TTC has experienced an “unprecedented” decline in fare revenue due to the pandemic. According to the report, the TTC saw a dramatic drop in weekly revenue of almost $18 million, or 75%, by March 31, 2020 compared to the first week of March 2020, as shown in the chart below.
To provide relief, the report maps out a “cost containment strategy” that is anticipated to save $5.5 million per week and minimize the financial pressures currently placed on the TTC and the City of Toronto.
The report says the TTC could reduce the overall deficit to $297.7 million through the cost containment strategy and by reducing service further, deferring service improvements, and $116 million in “permanent capital reductions.”
Taken together, these actions are expected to reduce the TTC’s financial pressure from $21.4 million to $11.4 million per week but will still leave a pressure of almost $300 million by Labour Day.
Finally, the report says the agency is now seeking the Board’s approval to adjust the TTC’s 2020 Capital Budget and 10-year Capital Plan, that will “defer spending to account for delays in capital project delivery arising from COVID-19 impacts as well as accelerate funding for some key projects tracking ahead of schedule and other opportunities.”
The report notes that all the listed actions “do not provide fiscal relief” and “a financial impact of this magnitude” cannot be handled by the TTC or the City alone and will require support from the provincial and federal governments.