STM warns of service cuts unless new funding is found

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Montreal’s transit authority will need to reduce service in 2022 unless new sources of funding are found, its chief executive said.

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“We know we received a lot of help during the pandemic,” Société de transport de Montréal CEO Luc Tremblay said in an interview on Friday. “Hundreds of millions of dollars were injected in 2020 and 2021. Now we hear that this support may disappear, and we are very concerned. For me, this will be problem number one by 2022. If we don’t get help, this will unfortunately result in outages. “

Any decision would be made after the November 7 municipal elections, Tremblay said. He was unable to estimate the magnitude of the cuts, saying only that he fears they could be “significant.”

STM buses and trains now operate at about 57 percent of pre-pandemic traffic, Tremblay said. Buses carry about 60 percent of 2019 passenger volume, compared to 53 percent for the metro system.

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“We find this encouraging,” said the CEO. “People are starting to move again, even though many employers have not brought their people to the office. The key is to maintain service, which will be challenging given our finances. The only way to attract people is to offer a service. I firmly believe in the motto “build it and they will come”. If there is no service offer, the frequency of the service is low, people will not return. “

To increase traffic and quell passenger fears of a possible COVID-19 transmission, STM officials recently introduced passenger-friendly features such as how-to videos and apps that reveal the bus occupancy rate.

“Our main challenge is getting people to take their first trip,” Tremblay said. “For that, we are going to need to reassure them and explain what we did. We are relatively sure that people will return, but we have to accompany them ”.

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Aside from ticket sales and advertising revenue, most of the STM’s funding comes from the Quebec government and the Autorité régionale de transport métropolitain.

ARTM, the agency that oversees the STM, estimates that it will need to find $ 800 million to maintain services at 2019 levels for the 2022-24 period, CEO Benoît Gendron said on Friday at an event organized by the Metropolitan Chamber of Commerce. from Montreal. That is in addition to the $ 1.2 billion Quebec provided for 2020-22 to cover a revenue shortfall.

COVID-19 “exacerbated a difficult financial situation” for the STM, Tremblay said. “We need to replace or renovate all of our assets and this costs a lot of money. We have made a lot of cuts over the years. If we lose funding, we won’t be able to find the missing money. That would force us to cut the service, which is something we don’t want. “

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The STM plans to invest $ 16 billion over the next 10 years. About three-quarters of that amount will go toward maintenance, Tremblay said.

“The metro is 55 years old and some of our assets are even older,” he said.

“Our financial model does not work. We cannot pay these expenses only with the sale of tickets. We will have to review our model, but it will not be easy. “

New sources of revenue for the STM could include employer contributions and higher provincial taxes on gasoline and vehicle registration, Tremblay said.

“These taxes have not been indexed since the early 1990s,” he said. “It’s never fun to raise taxes or fees, but public transportation is a collective choice. We have to do something.”

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