Ottawa city council has unanimously endorsed a campaign by the mayor aimed at getting more provincial and federal help to cope with financial pressures, especially the cost of running OC Transpo.
Mayor Mark Sutcliffe has been championing his “Fairness for Ottawa” campaign since holding a news conference on Aug. 8. He received the formal backing of his council colleagues on Wednesday, when they reconvened after a summer break.
Ottawa’s top city staff gave council a fulsome briefing on the two issues that have been the mayor’s focus: the challenge of running an underused transit system — and the municipal share provided for its construction — as well as the lower- than-expected payments in lieu of taxes (known as PILTs) received from federal properties.
Top financial staff again laid out how the City of Ottawa’s 2019 projections for transit ridership and revenue are significantly below target, primarily because they were based on pre-pandemic assumption that public servants would commute downtown five days a week.
Rather than having 112 million rides in 2023 as projected, OC Transpo counted just 64 million rides. In other words, it had 57 per cent of the ridership the city had been depending on when it decided Stage 2 of LRT would be affordable to build.
Staff also drilled into how federal buildings are paying less to the City of Ottawa than before, arguing those federal owners are using a COVID-era tax break intended for struggling businesses.
Details on 2025 budget imminent
The accounting of Ottawa’s fraught financial situation, and the mayor’s campaign, come as the city’s finance committee is preparing to discuss directions for its 2025 budget at a meeting on Sept. 16.
Transit is among the City of Ottawa’s biggest expenses, and is currently responsible for the biggest hole.
Chief financial officer Cyril Rogers estimated the transit shortfall for 2025 to be $120 million. Without extra funding, that would require an extra seven per cent tax increase to avoid a deficit.
“That’s a huge, huge gap,” remarked Gloucester-Southgate Coun. Jessica Bradley.
She asked if the city might contemplate further route cuts, less frequent bus service, or alter its discounted transit passes for seniors and youth.
“Everything is on the table,” acknowledged transit general manager Renée Amilcar, who provided few details.
Nor would Sutcliffe, who takes part in a smaller working group related to transit finances, give a sense of the tough choices he would be willing to make on the transit file.
He did recommit to his election promise of maintaining tax increases in the range of 2.5 per cent, pointing to how residents face higher cost of living. The city must first try to get increased funding and ensure it has the same financial arrangements on transit projects as other cities, he said.
“I’m not going to raise taxes before we do everything we can to protect the interests of local taxpayers,” Sutcliffe said.
Municipal message
All members of council backed the mayor’s push for support from upper levels government, but some noted the debate should be a broader one.
They pointed to criticisms they’ve heard from their residents, and from Kanata-Carleton MP and former Ottawa city councillor Jenna Sudds, about how the city should first consider its own spending and tax rates.
Capital ward Coun. Shawn Menard suggested the message should be one of advocacy that avoids placing blame on upper levels of government.
“There’s lots of blame to place around this table, too,” said Menard. Cost pressures such as the Lansdowne Park redevelopment and the expansion of suburbs should be part of a larger discussion of city finances, he said.
Riverside South-Findlay Creek Coun. Steve Desroches cautioned that municipalities should be united in their message and not blame themselves.
Across Ontario and Canada, municipalities have been seeking more ways to bring in revenue that go beyond relying on property tax to be able to pay for the infrastructure and services they provide.
“A big part of our work is to bring the transparency and expose where there is unfairness,” Desroches said.
