Despite revenue crunch Mississauga pushes free transit for children, expansion of $1 senior pass
Some Mississauga councillors are questioning a move to let children 12 and under ride the city’s transit system for free, while expanding a $1-fare program for seniors, as budget pressures stretch municipal finances.
A pilot program to gauge interest and ridership impacts is set to move forward after a majority of council members supported the idea Tuesday.
In a November budget committee meeting, additional information was requested to determine the impacts of free fares for children ages six to 12 and expanding the current $1 seniors program to all day during weekdays — a motion put forward by Ward 2 Councillor Alvin Tedjo to alleviate the burden on families and individuals struggling with food, fuel and housing costs.
“We're trying to make an investment here in transit and I think we want to see more service. And we want to see more options for people to take and I think this is exactly the investment that we should be making and in the next generation and transit users, and in seniors who are going to want to demand better service, and would appreciate that discount from the City,” he said during Tuesday’s budget discussions when his motion was dealt with.
The request, some of Tedjo’s council colleagues say, comes at a bad time.
High inflation, lingering economic repercussions of COVID-19 and the looming impacts of the PC government’s Bill 23 have left municipal finance staff scrambling to make difficult decisions.
This week, elected officials have continued grappling with the City of Mississauga’s proposed 2023 budget presented by staff.
With all the financial headwinds, free transit dominated deliberations inside City Council chambers Tuesday as members questioned the idea of cutting ridership revenue while money is so tight.
“I think in a year where we have a $52 million deficit, this is not the year we do this pilot, I can't bring myself to support it,” Mayor Bonnie Crombie said. “You've already told us that won't increase ridership and the risk of fare evasion is quite large. You're either going to pay at the fare box or you're going to pay on the tax bill but you're going to pay, it's not free. It comes back and I worry about the risk on the fare evasion side.
“This is great to give politically to seniors, to children and hope that it builds ridership… but it's not great policy, particularly in a year that we're facing huge shortages.”
While the majority of council members supported a one-year pilot program to determine if the free and reduced fares should be permanently implemented, there was plenty of skepticism.
Ward 1 Councillor Stephen Dasko said his concern was that seniors utilizing transit in the city only account for three percent of ridership, while 100 percent of seniors who own their homes will be paying property taxes to help subsidize revenue losses from the fare reductions, describing the move as “a tax hit to the bottom line of people.
“This is essentially a tax increase on seniors that don't take the bus as far as I can see and also on some families that might have some food insecurity in that because not everybody does take the bus,” he said. “So for people that are trying to put gas in their car or trying to put food in their children's mouths, we're now looking to subsidize all of this and so I really am very nervous about this.
“I think the overall intention is fantastic, this is where we should be moving. We're doing a ton of investment in transit and trying to get people to where they need to get to as economically and as efficiently as possible. But at the same time, I'm absolutely dead set against having the entire population help finance this if it's not going to hit the right metrics.”
Transit discounts for various age demographics differ across municipalities in the Greater Toronto Hamilton Area.
(Alexis Wright/The Pointer)
Ward 4 Councillor John Kovac implored staff to make sure residents understand the program is only a pilot, but he voiced concern over the expectations it will create.
“If we go forward with this, I really think we're gonna have a hard time taking the candy away from the baby afterwards,” he said. “The majority of people who take transit in our city, I strongly believe, take it not because they want to, but because they have to and if we're going to make it free for a large batch, there's going to have to be offsetting.”
The transit-fare decision comes as many other new plans are being postponed.
Mississauga’s proposed 2023 financial blueprint recommends austere spending on new initiatives for the growing city and instead focuses on maintaining and replacing existing assets that could cause significant problems if they continue to be ignored. For 2023, staff are proposing a three percent tax increase on the City’s share of the overall bill for residential property owners to help fund $634.5 million in operating costs — a $51.1 million (8.2 percent) increase from 2022 — and a $391 million capital budget.
Transit is a large piece of Mississauga’s 2023 budget, with the City proposing $168.3 million (or 35 percent) for transit improvement—the largest commitment in the City’s proposed 2023 capital budget. The majority of spending is focused on the greening of the City’s transit fleet ($83.8 million for hybrid vehicles and infrastructure) and the refurbishment or replacement of major components of other buses that remain in the fleet.
Dania Ciampini, manager of customer experience for Mississauga’s MiWay transit system, noted that although the proposed operating budget shows an increase of $15.8 million, it is not for any new service or proposed initiatives, but merely to maintain current service levels. This is largely due to factors like higher diesel costs, labour adjustments and a Presto commission increase from seven to nine percent — which will be partly offset by a proposed fair rate increase of 10 cents on youth and adult fares starting in the spring.
In 2019, MiWay made $41.2 million in ridership revenue, which translated to 136,000 rides on an average weekday, Ciampini outlined, while showing council members where the system stands coming out of the pandemic. When comparing December 2022 ridership levels to December 2019, she noted ridership recovery was at 101 percent but that it has not been equal across the network as there are some routes that are performing well above pre-pandemic levels while others are still below them.
Geoff Wright, commissioner of transportation and works, said the City has recovered two years sooner than staff had anticipated, noting they thought the recovery from COVID for MiWay was going to take another two years — a recovery timeline that is still projected by other transit systems in the GTA.
“Although there's a budget increase, it is not for new service growth, or new proposed initiatives, it is just to maintain existing service levels,” Ciampini said. “We are one of only two transit agencies in the GTA to be at 100 percent or more ridership recovery, Brampton transit being the other. So this is a very exciting time for transit and Mississauga overall as we move forward to being a transit-oriented city.”
To help with this, the City of Mississauga has been making moves to electrify its transit fleet. In early 2022, MiWay announced it would no longer purchase any new diesel buses. The City also received a commitment of more than $675 million in federal and provincial funding for much-needed transit infrastructure including the purchase of 358 hybrid buses “to replace the existing diesel vehicles, reduce greenhouse gas emissions and improve the quality and reliability of transit in Mississauga.” Those funds will also go to the construction of the Dundas Bus Rapid Transit corridor and upgrades to existing bus routes.
“Given all the pressures, we did not add any additional service and cost in 2023. Our strategy for 2023 is really to move resources around to the best of our ability to give us the best results on the road,” Wright explained. “We're in a situation where we're gonna have to make some painful decisions to move resources where the ridership is low, to move them where the ridership is exceeding our ability to deliver through this year. But given the budget pressures that we're facing, there is just really no other alternative.”
Despite indications from staff on the severity of this year’s budget pressures, along with reservations expressed by several of the city’s elected officials, they voted 7-4 in favour of the motion for a one-year pilot to offer free fares for children ages six to 12 and expand the current $1 seniors program to all day during weekdays starting May 1, a move that staff project will result in a direct revenue loss of $1.8 million and a further indirect loss of $2.4 million anticipated as a result of fare evasion from changes to these two categories. An increase of $4.2 million would be required to offset the revenue loss in response to these fare changes according to the report brought forward on Tuesday.
Mississauga City staff project a revenue shortfall of $4.2 million for fare adjustments to the City’s current MiWay transit system.
(Mississauga staff report)
MiWay staff completed a survey with various Greater Toronto and Hamilton Area (GTHA) transit systems that offer free fares for children or seniors, to better understand the benefits and challenges they encountered with their programs. The survey of child fares found Mississauga, Brampton and York Region currently offer discounted fares, while Oakville and Hamilton are currently testing out free Presto fare pilot programs into 2023; while Durham and Burlington offer free fares to both demographics. Brampton offers free fares for all seniors that are residents while other municipalities in the GTHA offer fares at discounted rates or free during specific times/days.
The report noted children 12 and under account for 0.3 percent of MiWay’s total riders. The current MiWay child fare is discounted at $1.75 and children under five are free. Providing free fares for children aged six to twelve would result in a direct revenue loss of $0.4 million annually. MiWay also estimates a revenue loss from fraudulent use of the free child PRESTO card of $1.7 million. Staff noted adult ridership may increase from the initiative as younger children are often accompanied, but these gains would not offset losses due to misuse.
Seniors account for 3.5 percent of MiWay riders. Currently, they pay a $1 fare on weekdays between 8:30 a.m. to 3:30 p.m. and 7 p.m. to 5:59 a.m. and all day on weekends and holidays. A discounted fare of $2.10 is available to seniors using Presto between 8:30 a.m. and 3:30 p.m. on weekdays. Introducing a $1 all-day seniors fare would result in a direct revenue loss of $1.4 million annually. Staff also estimate there would be an additional revenue loss of $1.1 million from fraudulent use of free senior fares. Fare evasion estimates were based on experience in other GTHA transit systems offering free fares, the report notes.
Based on conversations with other GTHA transit systems, staff cited several challenges that would stem from offering free child fares and expanding discounted senior rates, including fare evasion, additional investments in staff resources and transit service to minimize overcrowding and service overload, and increased conflicts for transit operations that may require the attendance of enforcement officers or route supervision to support drivers.
“The experience of offering free fares, based on a survey of other transit systems, indicates there are costs and challenges to the delivery and administration of a free fare program,” staff noted in the report. “Further resources would be required to support the program including fare enforcement, administration staff and it would have potential service impacts such as overcrowding requiring extra service as well as elevated health and safety concerns due to stress for our transit operators.”
An adjustment in MiWay fares for children under 12 and seniors likely won’t result in an uptake in ridership, City staff told council during budget discussions on Tuesday.
(The Pointer files)
While the implementation of either of these fare policy changes will require an adjustment to the MiWay revenue budget for 2023 and an offsetting cost reduction or tax increase would be needed, the committee voted the budget adjustment be taken into account for the 2024 budget cycle based on financial reporting at the six-month point in the pilot.
Even with all the information transparently presented, some councillors were still opposed to the motion as the City faces a billion dollar infrastructure deficit. They also cited concerns about fare evasion, enforcement and the inability to make up for losses by increasing ridership.
Wright confirmed that although the $1 senior fare during certain times has been in place for years, it hasn’t changed travel patterns and the City has not seen senior ridership increase. He also noted that senior ridership has not recovered from the pandemic, and the expansion of discounted fare likely won’t generate much additional activity.
“These are our best estimates. We don't have any real data. We know what the usage is today, but we have no idea what the fraud is. We will see as it becomes lived experience, but this is our best guess based on talking to others that have stepped in the steps before us,” he explained. “Based on talking to other transit agencies, we've given an estimate of what we think the fare evasion could be. But of course, that's an estimate at this time, it's not specific to Mississauga.”
Wright said, ultimately, the decision before council was to determine how much they want certain riders to pay (many of whom are particularly challenged by current economic pressures) versus how much they want the general taxpayer to pay. He said if the pilot’s losses are not covered by taxpayers, adult fares could be increased even higher to make up for the lost revenue.
But he said that would also be a difficult decision for council members, because many people who use transit in the city have no other choice.
The final budget document will go to council for approval on February 2.
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