As City Council’s Budget Working Group tackles the 2024-27 budget, a significant new challenge is a big shift in transit operating costs versus pre-pandemic projections.
“Over the next four years, Winnipeg Transit projects it will need $29 -$37 million more in operating subsidies every year,” explained Councillor Jeff Browaty, Finance Committee Chair. “It's a tough balancing act, given the scale of the increase, which is equal to a 4-5% property tax hike for the foreseeable future.”
The Transit operating subsidy cost began spiking in 2021, and it is driven by several factors:
- Lost ridership fare revenue due to remote work trends and other changes to commuting habits
- Lower pass sales among regular riders
- The introduction of new reduced fare products (WINNpass and free transit service for children)
- Higher fuel costs
- Changes to provincial grant policies under previous governments
With Winnipeg Transit's ridership at about 91% of its pre-pandemic level, the city's challenges mirror those of other North American cities grappling with significant ridership drops.
“Transit isn’t just a convenience; it’s essential for many Winnipeggers who depend on it daily, and it provides huge environmental, social, economic and traffic management benefits,” said Mayor Scott Gillingham. “We’re going to protect, and expand, transit service. But the increased demand for operating subsidies are creating challenges for the rest of the multi-year balanced budget.”
To enhance service and attract more riders, Winnipeg Transit plans to implement a high-frequency service schedule in 2025, a year earlier than planned. Additionally, the city is investing $2.5 million annually in a new Transit security team that will launch early in 2024.
The City of Winnipeg had to absorb more than $240 million in unexpected costs and lost revenue during the pandemic, depleting reserve accounts. Most Canadian cities are projecting 5-10% tax hikes for a second year in a row to address inflation and other post-pandemic cost pressures.