London Transit riders may have to shell out more money to take the bus next year.
A staff report going to the London Transit Commission's (LTC) Wednesday meeting calls for an across the board fare increase between 18 and 20 per cent in 2024.
The proposed hike is being put forward in the draft multi-year budget (2024-2027) submission as one of the ways to maintain current services levels.
"A fare increase has been included in 2024, which is targeted to increase transportation revenues by approximately $3.3 million," the report states.
If approved, cash fares would go from $3 to as high as $3.75. A weekly pass would jump from $81 to $97 and income-related passes would go from $61 to $73. Any increase would not be applied to tuition pass programs for post-secondary students as they are under contract.
LTC staff do not recommend a fare hike above the 20 per cent threshold.
"Increases of that magnitude would be expected to result in ridership losses in the 5 per cent to 10 per cent range based on industry experience," the report states. "Losses in ridership ultimately result in reductions to the annual Provincial Gas Tax allocation received by London given the allocation formula is based primarily on total ridership. Any losses in Provincial Gas Tax funding would need to be made up by an additional fare increase, increased City of London investment, or reductions in service."
Bus fares were last increased in 2020 by 15 per cent.
According to the submission, in order to maintain the status quo of service in London, the LTC requires a 7.7 per cent increase in its operating budget in 2024. That would bring its total budget to $109.9 million.
Special funding provided post-pandemic by the federal and provincial governments ended at the end of last year. As such, the LTC had to tap into reserve funds offset a $6.9 million shortfall in the 2023 budget.
"Given the status of the Commission’s remaining reserves and reserve funds projected at December 31, 2023, there is no opportunity to continue the approach of utilizing reserves to offset inflationary pressures and decreased transportation revenue going forward," the report states.
Items driving up the budget include a projected 45 per cent increase in diesel fuel costs, a 48 per cent rise in insurance, and a 37 per cent jump in bus/ancillary equipment costs.
