The City of Ottawa is projecting a multi-million-dollar budget deficit this year, as harsh winter weather and a funding shortfall at OC Transpo drive the city’s budget into the red. A report for the finance and corporate services committee shows the City of Ottawa posted a $16.277 million budget deficit in its tax-supported programs and OC Transpo budget through the first six months of the year. The city reported an $8.8 million surplus in water and wastewater services. Staff say the City of Ottawa is projecting a $2.134 million deficit in tax-supported programs and a $46.6 million deficit for transit services by the end of 2025, while the water and wastewater budget will post an $11.5 million surplus. “The continued management commitments and financial mitigation measures, such as the discretionary spending freeze and hiring pause, continues to reduce the overall operating deficits,” staff say in the report for the Sept. 2 meeting. Staff note the federal government’s elimination of the consumer carbon tax will save the city an estimated $10.6 million this year, including $7 million at OC Transpo. Here is a look at the City of Ottawa’s finances through the first six months of 2025 and what staff project at the end of the year. City of Ottawa services The City of Ottawa’s tax-supported programs ran a $9.7 million deficit in the first six months of the year, which includes snow-clearing operations, garbage collection, roads, paramedics, fire services and recreation services. The report notes Public Works reported a $25.1 million deficit in the first half of the year, mainly due to snowfall and weather-related expenses. Staff say the city saw several surplus budgets in the January-June period, including $918,000 in elected officials budgets, $1 million at Emergency and Protective Services due to higher parking fine revenue and vacancy savings, a $6.7 million surplus in Community and Social Services and $5.8 million in non-department budgets due to higher than anticipated investment income and interest from water and tax billings. Public Works is expected to end the 2025 budget year with a $29.8 million deficit, due to park maintenance and the impacts of severe weather. At the end of the year, the non-departmental budget is expected to post a $20.3 million surplus. OC Transpo The report shows OC Transpo is projecting a $46.6 million deficit for 2025. Staff say revenue will be $51.815 million short of the budget projections due to lower than budgeted fare revenue and no funding from upper levels of government. The 2025 budget included a $36 million “placeholder” for possible funding from the upper levels of government, but no funding has been announced. OC Transpo posted a $6.6 million deficit in the first six months of the year. Staff said expenditures were $2.8 million over budget due to the delayed implementation of the New Ways to Bus system and changes to the Canada Labour Code for sick leave. Revenues were $3.8 million below budget due to lower than budgeted fare revenue and lower provincial funding. The report shows OC Transpo will save $5.2 million due to the delayed opening of the O-Train Line 1 east extension (scheduled to open late this year) and lower diesel fuel costs. The city has updated its reserve policy for a one-time shift of $36 million from the Tax Stabilization Revenue to cover an OC Transpo deficit if there was no funding from the upper levels of government. Mayor Mark Sutcliffe unveiled the 2026 budget directions last Thursday, which proposes increasing the transit service levy between three per cent and 15 per cent, and fare increases of 2.6 per cent and 7.5 per cent to boost revenue. A 2.5 per cent transit fare hike would add approximately $3 to the price of an adult monthly bus pass. A 7.5 per cent increase would increase the monthly fare by approximately $10.
