FAO RELEASES REPORT ON ONTARIO’S PUBLIC TRANSIT AGENCIES
TORONTO, September 12, 2024 – Today, the Financial Accountability Office of Ontario (FAO) released a report that reviews Ontario municipal and provincial transit agencies’ ridership and finances, including their own-source revenues, operating expenses and operating subsidies. The report also provides an overview and projection of provincial transit operating subsidies through 2028-29 and estimates the cost of new subsidy programs, including the One Fare program. Finally, the report analyzes the distribution of provincial subsidies across economic regions on a per-resident basis.
In 2022, Ontario’s public transit system was operated by 106 municipal transit agencies and two provincial transit agencies, Metrolinx and the Ontario Northland Transportation Commission (ONTC). Combined, these agencies facilitated 590.9 million passenger trips, of which municipal transit agencies accounted for 556.0 million (94.1 per cent) of total ridership, while the remaining 34.9 million trips (5.9 per cent) were recorded by provincial transit agencies.
Municipal and provincial transit agencies fund their operating expenses through a combination of own-source revenues, largely generated from passenger fares charged to riders, and operating subsidies provided by governments. In 2022, Ontario’s transit agencies recorded $6.1 billion in operating expenses. In the same year, these agencies recorded total operating revenues of $6.0 billion, which consisted of $1.9 billion in own-source revenues and $4.1 billion in government operating subsidies from provincial, municipal and federal sources.
Higher expenses and the effect of the COVID-19 pandemic on transit ridership have made transit agencies more reliant on government subsidies. From 2019 to 2022, total operating subsidies to municipal and provincial transit agencies increased from $2.5 billion to $4.1 billion. As a result, in 2019, 52.4 per cent of transit agencies’ operating expenses were funded by own-source revenues and 47.5 per cent were supported by government subsidies, while in 2022, about one-third of transit agencies’ operating expenses were funded by own-source revenues, with the remaining two-thirds supported by government subsidies.
In 2024-25, the FAO estimates that the Province will spend $1.8 billion on operating subsidies to provincial and municipal transit agencies, up from $0.8 billion in 2019-20. This includes direct subsidies to provincial transit agencies ($1.1 billion for Metrolinx and $74 million for the ONTC), ongoing funding to municipalities ($370 million under the Ontario Gas Tax Program), and time-limited programs ($121 million for the One Fare program and $110 million to the City of Toronto to support transit operations under the Ontario-Toronto New Deal Agreement).
The FAO estimates that the Province’s $1.8 billion in operating subsidies to provincial and municipal transit agencies in 2024-25 is equivalent to a subsidy of $112.16 for each Ontario resident. However, per-resident subsidies will vary significantly across Ontario’s 11 economic regions. The Toronto economic region, which includes Durham Region, York Region, Peel Region, Oakville, Milton, Halton Hills and the City of Toronto, will receive an estimated $196.49 per resident, followed by the Northeast economic region ($90.01), the Hamilton – Niagara Peninsula region ($61.87), the Muskoka – Kawarthas region ($58.03), the Northwest region ($45.67) and the Ottawa region ($31.91). Regions with the lowest per-resident provincial transit subsidies in 2024-25 are Windsor – Sarnia ($11.40), Stratford – Bruce Peninsula ($11.70) and London ($15.33). Overall, regions served by both municipal and provincial transit agencies receive more provincial operating subsidies than regions with only municipal transit agencies.
To learn more, read the full report here.
Quick Facts:
- In 2019, the $2.5 billion in government operating subsidies to municipal and provincial transit agencies was funded by the Province (27.6 per cent) and municipalities (72.4 per cent). In 2022, the $4.1 billion in government operating subsidies was funded by the Province (38.9 per cent), municipalities (53.6 per cent) and the federal government (7.5 per cent).
- In 2022, of the three largest transit agencies in Ontario, the TTC funded 35.9 per cent of its operating expenses through own-source revenues and 64.1 per cent from government subsidies; OC Transpo funded 19.0 per cent of its operating expenses through own-source revenues and 81.0 per cent from government subsidies; and Metrolinx funded 28.1 per cent of its operating expenses through own-source revenues and 67.2 per cent from government subsidies.
- In 2024, the Province implemented the One Fare program, which eliminated the municipal fare for transfers between the TTC and GO Transit, as well as the second fare for transfers between the TTC and its neighbouring transit agencies. The Province has committed funding for this program through 2025-26.
- Going forward, the FAO projects that total provincial spending on transit operating subsidies will remain at approximately $1.8 billion each year through 2028-29, as the expiry of time-limited programs is offset by a projected increase to the Metrolinx base operating subsidy.
About the FAO:
Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office of Ontario (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario.
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For further information, please contact:
Sophia Zhu l 416 931 5498 l SZhu@fao-on.org l fao-on.org