Rising Transit Operating Subsidies Pose Challenge for City's 2024-27 Budget

Released: December 14, 2023 at 11:40 a.m.

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.

Was this information helpful?

How can we make this web page better?

Information collected will be used to improve our website. Do not use this form to submit a request for service or information because it will not be forwarded to departments for response. To submit a request for service or information, contact 311.

This form is not intended to collect personal information; however, any personal information you choose to include in your comments is collected by the City of Winnipeg under the authority of section 36(1)(b) of the Freedom of Information and Protection of Privacy Act for the purpose of improving our website and will not be used or disclosed for any other purposes, except as authorized by law. Contact the Corporate Access and Privacy Officer by mail (City Clerk’s Department, Susan A. Thompson Building, 510 Main Street, Winnipeg MB, R3B 1B9) or by telephone (311) if you have any questions about the collection of this information.