City Considers Taxing Your Car Parking For Transit

Please note that this bad-news note (and big tug on your pocketbook) was released hours before a weekend in the dead of summer. That’s the usual time the city tries to hide hard-to-palate information:

This is a release from the City of Ottawa:

From / Expéditeur Cyril Rogers, Interim General Manager, Finance and Corporate Services Department and Chief Financial Officer 

Isabelle Jasmin, Deputy City Treasurer, Corporate Finance 

Subject / Objet Transit Long Range Financial  Planning – Update 

Background 

Date: July 26, 2024

Council approved an affordable Transit Long Range Financial Plan (LRFP) in February 2019 as a  companion report to the Stage 2 Light Rail Procurement, which included revised operating and  capital cost projections over 30 years to 2048. Since that time, staff have continued to update the  transit affordability model reflecting the impacts of the pandemic, inflation and experience from  operating rail for the last several years.  

In September 2023, a technical briefing was provided to Councillors to present the latest updated  projections for the Transit LRFP, which by then had become unaffordable due to a variety of  factors, but primarily due to the reduction in ridership caused by the COVID-19 pandemic, an  increase in the cost of operating rail, and an increase in construction costs worldwide. The  briefing described the key pressures and changes from 2019 to the revised 2023 estimates,  making the transit funding model unaffordable and identifying a funding gap of $6.6 billion over  30-years, which is now $8.6 billion. The technical briefing identified several levers that Council  could adjust to support the financial sustainability of transit services, such as:  • Transit levy; 

• Capital contributions; 

• Transit fares; 

• Operating Costs; 

• Stage 3 light rail;  

• Development charges; and, 

• Transportation Master Plan updates for other future light rail, bus rapid transit and transit  priority projects.  

In November 2023, Council approved motion (ACS2023-OCC-CCS-0153) recommending that an  “internal working group be made up of City staff from the relevant departments, working with the  

Mayor, as well as the Chairs of the Transit Commission, Transportation Committee and Planning  and Housing Committee.” The group was given the task of exploring all mitigation levers and  options discussed in the technical briefing and some additional ones, including but not limited to: • Feasibility of bulk pass purchases;  

• Sustainability and equity lens review of passes;  

• Exploration of Urban Transit Area;  

• Other sources of revenue, such as, municipal vehicle registration fees, ride-hailing fees,  private parking levies, land value capture, sale of development rights at transit stations,  road tolls, cordon (area) charges, and mobility charges;  

• Feasibility of development rights / air rights on City-owned land near transit stations  (Transitway and O-Train);  

• Updated ridership projection model;  

• Service alignment review; and, 

• Advocate for additional funding from senior levels of government and funding similar to  Metrolinx / GO Transit in the Toronto area.  

The internal working group was established and includes the following members: 

Council  

Representatives
Finance and  

Corporate Services
Transit Services 
Planning,  

Development Building  Services 
Mayor Mark Sutcliffe 
Cyril Rogers 
Renée Amilcar 
Vivi Chi
Councillor Glen  

Gower
Isabelle Jasmin 
Pat Scrimgeour 
Jennifer Armstrong
Councillor Jeff Leiper 
Shawn Ferguson 
Derek Washnuk 
Deborah Lightman
Councillor Tim  

Tierney
Joseph Muhuni 
Matthew  

Wolstenholme

The working group first met in January and has continued to meet every two to four weeks since  that time. In the first meeting, staff provided a backgrounder on the key issues impacting transit  affordability and confirmed the list of levers to be analyzed in the immediate term in preparation  for the 2025 budget and some longer term items requiring more analysis but needed to be  resolved as part of the updated Transportation Master Plan, Transit Long Range Financial Plan  and next Development Charge Study planned to be completed in in the fall of 2024 and again  Q3/Q4 2025.  

This memo is an update to Council on the progress of that work, in particular the levers that were  explored by the Working Group to date, and the analysis completed on the shorter-term solutions,  primarily as input to the 2025 budget, which include the following: 

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• Transit fares 

• Sustainability and Equity Lens Review of Discounted Passes  

• Transit Levy 

• Operating Costs 

• Urban Transit Area (UTA) 

• Private Parking Levy  

Much of the work completed to date has been focused on diving deeper into each lever to get a  better understanding of the financial framework, analyze trends, and assess the impacts of  various scenarios/options, supplemented by comparisons to other municipalities. This analysis  has provided some critical insights for the working group, and input to the 2025 Budget Directions report recommendations, particularly for transit fares, discounted passes and transit levy target.  Staff continue to explore and assess operating costs and opportunities for greater efficiencies, to be included in the draft budget that will be tabled in November. 

A review of the Urban Transit Area and a Private Parking Levy as an additional revenue option is  ongoing, the results of which would be provided in future updates.  

Next Steps 

The working group will continue to meet on a regular basis to explore other levers and the  financial implications of each as input to the 2025 budget and to address future, expected budget  pressures. These levers could be implemented within a year or two to solve the more immediate  financial pressures as staff continue to advance work on the longer-term solutions. The group will also continue to identify areas for Council to advocate to senior levels of government for  additional funding or powers to implement new sources of revenue to ensure the financial  sustainability of Ottawa’s transit services.  

We will continue to report on the progress of the working group to Council with an update memo  later this year.  

If you have any questions, please reach out to Isabelle Jasmin at isabelle.jasmin@ottawa.ca.  Sincerely, 

Cyril Rogers 

Interim General Manager & Chief Financial Officer  

Finance and Corporate Services Department

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cc. Senior Leadership Team 

Chief Communications Officer, Public Information and Media Relations

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