If all goes according to plan, Ottawa’s LRT will be back on the rails in mid-August and the transit system will gradually be heading for normalcy.
By that time, transit users will have endured four weeks of long commutes, crowded buses and frustration.
Here’s what is known so far — and what is not.
Q: Why doesn’t the city just give transit users free fares for a month?
A: There’s a range of possibilities, from free ridership for everyone for a given period of time to no compensation at all.
The question is what is fair, and whether there should be “blanket” compensation for everyone. Some transit users were late to work and were docked pay, for example. Others incurred extra daycare costs because they were late to pick up their children.
But it would be hard to create a mechanism that separates transit users according to how much inconvenience each one experienced.
“A lot of people won’t be affected by this,” said Barrhaven East Coun. Wilson Lo, a member of the transit commission. He’s open to hearing ideas about how to compensate people, but he’s not in favour of blanket compensation.
River Ward Coun. Riley Brockington, also a member of the city’s transit commission, believes that if there is compensation, it will be global in nature. In the meantime, if people have evidence that they have been out-of-pocket because of the shutdown, OC Transpo will listen, he said.
A: It’s one option. The estimated cost of free fares in 2021 was $7.2 million, with the money coming from funds the city was withholding from RTG in the wake of the derailments.
But the financial context is much different now, said Glen Gower, the chair of the city’s transit commission. Tops on the list of constraints is the $39 million deficit in the transit budget this spring. With a financial hole that big, there’s not a lot of wiggle room.
“The concern is that we have built a budget with a $39 million deficit, and we’re talking about a fare reduction. That’s not free,” said River Ward Coun. Laine Johnson.
Q: Where will the money to cover the $39 million deficit come from?
A: That’s also unclear. The city was hoping for funding from the province or the federal government, but there was no money for Ottawa transit deficits in either the provincial or the federal budget this year.
“We have an ongoing request to other levels of government. They’re very aware of the deficit situation,” said Gower.
There are other concerns including hidden deferred costs, such as not buying new buses to replace ageing vehicles. How that has strained the budget will only become obvious when they become inconvenient and costly, said Kari Glynes Elliott, one of the founders of Ottawa Transit Riders.
Q: How much would the city lose if transit were free for a month?
A: Revenue from transit fares comes to about $7 to $8 million a month. When the LRT isn’t running, the city isn’t paying $4 to $5 million a month to the Rideau Transit Group (RTG), which has the contract for maintaining the LRT system.
Subtract the RTG payment from lost fare revenue and that suggests it would only cost around $3 million to give riders free fares for a month. But the equation is not as simple as that, said Gower. There are costs behind some of the measures taken to replace train service, including overtime, customer service workers and signage.
“It will give us the framework. We’re proceeding with an open mind and a lot of caution, given the strain we’re under financially.”
There is also the question of whether savings from this past month — if there are any — would be better spent on improvIng service on busy routes and investing in ParaTranspo.
“Perhaps the best compensation would be to double down on the commitment to ensure OC Transpo is a reliable service,” said Gower.
Q: Does compensation money have to come from the city transit budget?
A: Not necessarily. There are other options, but none of them are an easy source of money to fund compensation for riders. Budgets in all city departments are already stretched, said Gower. There’s also a general reserve fund, but it’s not well-advised to pull money from that fund because the money is held for emergencies such as tornado response.
Q: What about adding the cost to municipal tax bills?
A: There’s a reluctance to raise taxes. In July 2021, a consultant’s report concluded that free transit would cost the owner of a home valued at $415,000 an extra $482 a year in property taxes. Both former mayor Jim Watson and current Mayor Mark Sutcliffe, then a mayoral candidate, balked at the idea of free transit.
But others argue that reliable free transit should be seen as a public good, like libraries and emergency services.
Free Transit Ottawa is advocating for free fares for everyone, starting with those on social assistance.
Nick Grover, a member of the group’s executive, argues that public transit can be both free and good. “If more was spent on the system, it would attract more users.”
If taxes were increased by $400 to $500, free transit would replace $1,200 spent annually on a bus pass or $10,000 in car expenses, he said.
Anecdotally at least, more people are commuting by car because of glitches in public transit. Once people start driving, it’s hard to stop. And that has a cost to everyone as roadways become congested and no one can travel conveniently, said Johnson.
“It’s all connected. The alternative is a disaster,” she said.
Q: Will free or reduced fares win back the confidence of transit users?
“Most of our members have been blunt that they want transit that works, and they’re willing to pay for it,” said Elliott. “Free transit that doesn’t work doesn’t serve us.”
A financial incentive might help to take the sting out of it, but users may not even return to transit, even if it is free, said Brockington.
“We will never be regarded as a reliable transit service until we provide a consistent service,” said Brockington, who believes it will take at least a year, including winter.
People might appreciate the gesture, but it won’t increase trust, said Lo.
“The best advertising for transit is word-of-mouth.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Companies in this story: (TSX:TRZ)
The Canadian Press. All rights reserved.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
Companies in this story: (TSX:DOL)
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
Companies in this story: (TSX:TD)
The Canadian Press. All rights reserved.
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