OC Transpo projecting $46 million deficit in 2025, transit riders face fare hike in 2026

The O-Train operates on Line 1 on Thursday, July 3, 2025. (Andrew Adlington/CTV News Ottawa)

OC Transpo is projecting another multi-million-dollar budget deficit this year due to lower ridership and no funding boost from the upper levels of government.

A report for the finance and corporate services committee shows OC Transpo posted a $6.6 million deficit in the first six months of 2025, and is expecting to run a $46.6 million deficit by the end of the year.

Staff say OC Transpo is facing a $51.815 million shortfall in revenue this year, “primarily due to lower than budgeted fare revenue and budgeted funding from other levels of government not received.”

• City of Ottawa facing multi-million-dollar budget deficit in 2025 due to snow, OC Transpo

The 2025 budget included a $36 million “placeholder” for possible funding from the Ontario and federal governments, but no new funding was announced. The Ontario government is exploring the possibility of uploading the light-rail transit system to the province.

OC Transpo has saved $5.2 million this year due to the delayed opening of the O-Train Line 1 east extension from Blair Station to Trim Station, and lower diesel fuel costs. The report shows the City of Ottawa is expected to save $7 million on fuel for the transit fleet this year due to the elimination of the federal consumer carbon tax.

Council approved a plan to use $36 million from reserves to cover the OC Transpo deficit if funding from other levels of government wasn’t provided.

The Transit Service continues to run deficits coming out of the COVID-19 pandemic due to lower-than-anticipated ridership.

OC Transpo ran a $25 million deficit in 2024, a $29 million deficit in 2023 and a $25.743 million deficit in 2022, mainly due to revenue shortfalls from lower ridership.

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.

OC Transpo is “already unreliable”

Two councillors are suggesting the City of Ottawa’s transit network isn’t prepared to handle a return-to-office by all city employees in the new year.

City Manager Wendy Stephanson announced Tuesday that starting in January, all city employees will be required to be in the office five days a week.

“The social infrastructure to support working parents still hasn’t recovered from the pandemic,” Coun. Glen Gower said on Bluesky. “And our transportation network isn’t ready for a full return-to-office either.”

• Commute times increase in Ottawa-Gatineau as more workers head to the office: StatsCan

Coun. Jeff Leiper said the return-to-office mandate, “ignores the reality that Ottawa’s public transit system is already unreliable for too many.”

“With inconsistent bus service and a lack of dependable options for those outside the core,” Leiper said on social media.

Coun. Riley Brockington says OC Transpo remains “stuck in this trough that we can’t get out of” with lower ridership.

Ridership continues to be 70 per cent of pre-COVID levels, and Brockington says the city needs a plan to improve bus service reliability to boost ridership.

“If you want to attract more people to public transit in Ottawa, you must give them consistent public service every day – bus, LRT and Para Transpo,” Brockington said, adding he has asked OC Transpo to provide a plan to boost bus service reliability to 85 per cent.

“If you can’t provide a reliable public transit service to the people of Ottawa, they’ll look for other alternatives.”

Data presented to the city’s transit committee in June showed OC Transpo on-time performance for frequent bus routes was 82 per cent in May and 70 per cent for less frequent routes. A total of 97.9 per cent of bus trips were delivered as planned in May.