Transport Minister Geneviève Guilbault is urging transport companies to tighten their belts while they wait for future financial aid. Quebec estimates the industry’s cumulative deficit is expected to reach $2.5 billion over the next five years.
Posted at 2:01 p.m.
“If we calculate the total expected deficits of our ten largest transportation companies over the next five years, we arrive at a deficit of $2.5 billion. “That’s a lot of money,” the minister immediately said during a speech Thursday at the annual conference of the Quebec Urban Transport Association (ATUQ).
Ms. Guilbault’s calculation is more optimistic than that of the ATUQ, which last year calculated a cumulative deficit of 3.7 billion by 2027, with a deficit of 560 million in 2023, 650 million in 2024, 800 million in 2025 and 860 million in 2026 and 900 million in 2027.
In the minister’s office it is argued that the government figure takes into account the registration tax increased throughout the Greater Montreal area in April, but also the revenue that the Regional Metropolitan Transport Authority (ARTM) in particular will generate from the REM.
Still, the elected official says, the context requires that we be “realistic” and “find ways to absorb the deficit rather than increase it” at a time when ridership is gradually returning to pre-previous levels almost everywhere in Quebec reach pandemic.
The minister had been warning for several months about her intention to “rationalize” spending, but had committed to a five-year, recurring funding plan for the industry. Behind the scenes there are indications that negotiations still need to be held with the Ministry of Finance regarding the release of the available amounts. A two-stage scenario with new emergency aid and a subsequent five-year plan is therefore currently being considered.
“Above all, we want savings”
During her speech, which was highly anticipated by carriers still struggling to recover from the pandemic, Ms. Guilbault reiterated that she will be “the first to advocate for expanded service offerings.” “There are various scenarios on the table. I will announce my intentions and conclusions in the coming months,” she said cautiously.
While the minister claimed that she had heard the message of the 24 mayors of the Greater Montreal area, who called for a minimum annual increase of 7% in the supply of services, she reiterated that “in order to expand this supply, […] You have to be solvent first.”
Recall that in its version of the 2018-2023 sustainable mobility policy, the government set the target of an annual increase in service levels across Quebec at 5%. However, this goal has been undermined by COVID-19. The mayors are now calling for this target to be increased to 7%.
“We don’t just want temporary help, but above all savings and structural and lasting solutions,” replied Ms. Guilbault, emphasizing the importance of acting “with respect for everyone’s limits” in order to achieve “a lasting vision of financing transport companies to reach”. “.
A “Culture of Change”
At a minimum, the minister added, the industry must be able to “calculate its costs in order to obtain an efficient supply and invest an efficient dollar”. “An hour of service in the suburbs doesn’t cost the same as in Montreal. Even the train or bus doesn’t cost the same,” she explained.
He believes there is “a whole culture to change” when it comes to the way money is managed in public transport. “It’s a colossal project, but doable as long as we work together. I know you believe it. And I believe in it too,” she told the group of transporters.
Minister Guilbault’s entourage, which completed a consultation tour with public transport stakeholders this fall, confirms that about 18% of the cumulative deficit of 2.5 billion, which amounts to almost 450 million, is cyclical in nature, that is, the loss of tariff revenue.
The structural part of the deficit, about 2 billion, would be mainly due to the increase in operating expenses such as maintenance, service contracts and even salaries. These account for around 70% of the airline’s operating costs.
“In presenting to you these figures, which we collected following our consultations over the summer, my sole aim is to highlight the scale of the challenge we face,” the CAQ concluded.
Update on ridership
In Canada, average public transit ridership was 75% in July last year. In these waters, most companies are based in Quebec, although some are performing better. However, Canadian trucking companies’ revenues are performing slightly better: on average, they have recovered 83% of revenues compared to pre-pandemic levels.
