Public transportation | The financial situation is “untenable”

Despite the government’s recent lifeline, the Regional Metropolitan Transport Authority (ARTM) is launching a new appeal for help, anticipating a shortfall of half a billion. Nearly four years after the arrival of COVID-19, more than one user in five has still not boarded public transit, which raises the specter of major cutbacks in the coming years.

“The financial situation is untenable in terms of public transport. We are going to need a solution where everyone contributes, because the amount is so large that no one alone will be able to absorb it,” admits the general director of the ARTM, Benoît Gendron, in an interview with The Press.

In a pre-budget document prepared by the Authority, which will be made public in the coming days, we immediately learn that the use of the four main transport networks in the metropolitan region – Montreal, Laval, Longueuil and exo sur les Couronnes – currently stands at around 77%.

In 2023, this figure averaged 74.6%. It dropped to 46% in 2020, in the midst of the pandemic, then to 44% in 2021, before gradually rising to 63% in 2022. That said, in the evenings and on weekends, average ridership climbs to 90%. The Réseau express métropolitain (REM) is not included in this data.

In short, the number of users is stagnating, which means that the financial challenge will be immense.

Without the effects of the pandemic on ridership, the ARTM’s fare revenues “would be around 1.2 billion in 2025, while they will only be 891 million,” writes the organization in its report. These revenues will reach more than 1.3 billion, but only in 2040, according to current projections.

“It’s a new reality. It is estimated that there will be a growth in ridership of 1 to 2% per year if we do not take action. On the other hand, if we invest in new services, for each percentage increase in service offering, we will get half of the new traffic,” says Mr. Gendron.

Falling income

The situation has indeed changed a lot. In 2019, fare revenue represented 31% of the financing of ARTM expenditure, whereas it only represents 20% today. The ARTM’s anticipated shortfall will therefore be 561.3 million in 2025, a marked increase compared to 2024. Over a period of four years, until 2029, it is estimated that this deficit could reach up to 700 million.

In the short term, Mr. Gendron estimates that his group will therefore need government “transitional assistance” of 421 million next year. The rest, or $140 million, would come from the municipalities of Greater Montreal. “We are all going to have to make an effort. We must get out of this impasse,” summarizes the Authority’s CEO.

Cuts of around 50 million will meanwhile be made by transport companies in 2026, then 100 million in 2027, and 150 million per year from 2028. These cuts would not affect the service; we first aim to “pool” certain services to save money.

“The reality is that we are misusing the resources on the territory. The fact that we cannot take on customers when we change territory means that we do not optimize the use of vehicles,” explains Benoît Gendron. According to him, the information technology resources of the region’s carriers would also benefit from being pooled.

At the Société de transport de Montréal (STM), President Éric Alan Caldwell believes that it is “justified to work on the control and efficiency of our expenses”. “However, this exercise should not overshadow the other part of the budgetary equation, revenues. We will have the service that we collectively decide to pay for, while ensuring substantial income. Adequate funding is needed to preserve service levels,” he judges, adding that “sooner or later, public transportation will have to obtain new sources of revenue.”

All this comes as new negotiations will soon begin with a view to establishing a “recurring and predictable” funding framework over five years for public transit.

Earlier this week, on Wednesday, the Quebec Urban Transport Association asked Quebec for $622 million in aid for the province’s 10 transportation companies. Last year, discussions for 2024 ended abruptly after weeks of negotiations in the public arena. Government aid for 2024 was 265 million, including 238 million for Greater Montreal.

Read “Time for choices for public transportation”


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