OC Transpo posts $7 million deficit in first 3 months of 2026 due to lower ridership

An OC Transpo bus is pictured in this Jan. 10, 2026 image. (Josh Marano/CTV News Ottawa)

OC Transpo posted a multi-million-dollar budget deficit in the first three months of the year due to low ridership, maintenance for its aging bus fleet and rising diesel fuel prices.

A report for the finance and corporate services committee shows OC Transpo ran a $7.2 million budget deficit in the January-March period.

Staff say lower ridership resulted in a $9.8 million shortfall in revenues.

While expenditures were $2.7 million below budget, due to the delayed opening of the O-Train East Extension and performance deductions for the O-Train, the savings were offset by higher costs for bus fleet maintenance, diesel fuel and compensation.

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OC Transpo saw 17.4 million passenger trips during the first three months of the year, down from 19 million passenger trips during the January-March period in 2025.

The drop in ridership came as OC Transpo cancelled thousands of bus trips due to an aging bus fleet requiring maintenance, fewer buses available due to a maintenance backlog and a delay in the delivery of new electric buses. OC Transpo has also been running single-car service on the O-Train since January after a spalling issue discovered on the cartridge bearing assemblies resulted in a 100,000 km limit imposed on train axles.

The 2026 OC Transpo budget includes a $46 million placeholder for provincial funding to support OC Transpo, but no funding has been announced.

OC Transpo posted a $52 million deficit in 2025 due to fewer passengers using the system and no funding from upper levels of government.

Snowfall buries City of Ottawa budget

Mother Nature has buried the City of Ottawa’s operating budget so far in 2026.

The report shows the city posted a $28.7 million budget deficit during the first three months of the year.

“The first quarter deficit is largely driven by a higher-than anticipated volume of winter events early in the year, which increased demand on Roads winter operations,” staff said in the report for the finance and corporate services committee meeting on June 2.

“Mitigation measures, including a discretionary spending freeze and a pause in non-essential hiring, remain in place to manage the financial impact of these unforeseen pressures.”

The Public Works department posted a $29.4 million budget deficit in the January-March period due to what the city said was a “significant number of winter maintenance activities.”

The report says the city experienced the highest number of snow events in the past 60 years, with 174 centimetres of snow over 48 days.

“These conditions resulted in increased deployment levels, leading to higher compensation and overtime costs, greater reliance on external contractors for snow removal, and increased salt usage,” staff said. “Salt was procured at premium rates due to a province-wide shortage, further contributing to cost pressures.”

Diesel costs

Despite rising diesel costs this year, the City of Ottawa says it saved $1.9 million in the first quarter through its fuel hedging program.

“During the quarter, global diesel prices spiked due to geopolitical disruptions, but the City’s diesel hedging program played a critical role in mitigating this risk,” staff said.

“Despite higher than forecast prices and consumption, hedging actions reduced the City’s diesel costs by approximately $1.9 million in Q1, reducing the budget impact.”

The report says the city expects to save $580,000 due to the temporary suspension of the federal fuel excise tax this summer, but diesel price volatility “remains an ongoing financial risk” to the city’s budget.

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