TTC fares: moving faster than inflation since 2000

TTC fares have increased by twice the rate of inflation since 2000.

With TTC officials asking the City to let it hike fares, transit riders will once again face a stark reality: the cost of using public transportation in Toronto is growing faster than both their wages and other services they purchase. The hike – which was supposed to be debated on Monday but has been postponed until Wednesday – would be the eighth increase since 2000, bringing the cost of a token to $2.65, a 56% increase in the average fare.

Overall, fares have grown by about 4% annually.

Yet, inflation has grown at about half that pace – or 2.1% – over the same time period. In short, the cost of using the TTC is outpacing the cost of most other goods and services.

Why are fares rising so rapidly? The average hourly wage and benefits per TTC operator has grown 52% between 2000 and 2012 (the most recent year for annual data), or about 4% annually. And the operating expense per kilometre – or how much it costs to move each transit user over that distance – has grown about 67% during that time, or slightly more than 5% annually.

While the TTC proudly trumpets its recent annual record for transit riders – 414 million used the TTC in 2012 – that amounts to a 25% increase since 2000, but just 11% percent higher than in 1988.

So, on one hand we have ridership and inflation growing by about 2% every year, whereas the cost to pay TTC operators to move those riders is growing at about double that amount.

The TTC, then, has to hike fares because the cost to move each rider is growing faster than the overall number of new riders. It has to make up that difference by raising fares.

In its report to the City, the TTC is also quick to highlight that the subsidy per rider has fallen in the last couple of years – the subsidy per rider in 2014 will be about 15 percent lower than in 2009.

But that only tells half of the story, as the subsidy per steadily increased since 2000 and peaked in 2009, if we use data from the TTC’s annual reports. Looking back to 2000, the subsidy per passenger trip has grown from 27 cents to 75 cents (in 2012) – or 170%.

All figures are taken from the TTC’s annual reports.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or at (416) 964-9223 ext 236.