Bus fares to rise about 20% as part of strategy to fill budget gap at London Transit

Riding the bus will cost riders more in 2024, just to maintain service levels at the status quo.

According to a new report, balancing the London Transit Commission’s (LTC’s) draft multi-year budget (2024-2027) will require greater financial support from city hall and bus passengers.

A proposed budget submission to city hall is divided into two parts. A base budget for maintaining the status quo and a growth budget for service improvements.

LTC Administration estimated that maintaining current service levels will require a 7.7 per cent increase to the operating budget in 2024 (conventional and paratransit) — boosting the total to $109.9 million.

According to a financial update provided to the commission in May, factors applying pressure on the base budget include:

• diesel fuel pricing 45 per cent higher than projected in current multi-year budget
• general insurance costs increased 48 per cent during current multi-year budget
• hourly cost of paratransit has increased 27 per cent
• bus/ancillary equipment pricing has increased 37 per cent
• Meanwhile, revenue generated from ridership hasn’t fully recovered from the COVID-19 pandemic.

Projected cost increases in 2024 include:

• $3.651 million in unit price and base program increases for fuel, energy, insurance, and personnel costs.
• $1.449 million increase in flow through costs of bus service added in 2023

According to the latest budget report, spending reserve funds to offset the budget pressure is no longer possible.

“Given the status of the commission’s remaining reserves and reserve funds projected at Dec. 31, 2023, there is no opportunity to continue the approach of utilizing reserves to offset inflationary pressures and decreased transportation revenue going forward,” read the report.

Covering the cost increases will require boosting city hall’s annual contribution to the LTC budget by 22 per cent ($10.1 million) in 2024 — to a total of $55.9 million.

An additional $3.3 million would be generated by increasing bus fares by 18 per cent to 20 per cent starting in January 2024.

“An increase beyond 20 per cent was not recommended, given increases of that magnitude would be expected to result in ridership losses in the 5 per cent to 10 per cent range,” said the report.

Level of fare increases required to meet 2024 budget expectations (Source: London Transit Commission)While waiting for her bus, Sally Gotlieb expressed frustration about the fare hike, “The bus is already too expensive. That’s a lot to spend on a bus that’s already on a horrible, horrible detour,” she said.

“I don’t think the quality of the bus service is keeping up with that [fare increase],” said daily commuter Winter Slade. “Some people taking the bus are already struggling to afford basic necessities. That’s very upsetting.”

In 2020, London Transit increased bus fares 15 per cent.

The budget report stated that the new fares would be in line with the average fare of similar transit systems.

The cost of post-secondary bus passes will not change until the current contracts expire.

The second budget report, providing cost estimates for possible service improvements, would be added on top of the status quo base budget.

LTC Administration recommended adding 22,000 hours of service next year — for an additional $2.1 million.

On Wednesday, the London Transit Commission will consider the draft budget submissions.

Council will consider the LTC budget request and potential funding for service increases as part of 2024-27 multi-year budget deliberations early next year.

Earlier this year, city council set the target for the average annual tax increase in the upcoming 2024-2027 municipal budget between 2.9 per cent and 3.9 per cent, plus an additional 0.5 per cent for growth investments.