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Don't raise TTC fares, McGuinty warns

CITY HALL BUREAU CHIEF; With a report from Jill Mahoney

Premier Dalton McGuinty poured cold water yesterday on Toronto’s talk of a fare increase for transit riders next year.

“We’ve given them 81 million good reasons by way of the gas tax not to raise fares,” the Premier told reporters at Queen’s Park, a reference to Toronto’s expected share of gasoline tax revenues in 2005.

He noted that a fare hike usually turns riders away. “If your ridership increases, you’re going to get more of the gas tax,” he added. “So I’d be very careful about taking any steps that would result in fare increases.”

At City Hall, when asked about the Premier’s comments, Mayor David Miller replied: “I certainly hope we don’t have to raise TTC fares, but given the budget pressures, we may have to.”

He repeated his thanks for the gas tax money (one cent a litre to municipalities as of last October), but reiterated that it does not add up to net new money for the city.

That’s because the province gave Toronto $90-million last year for TTC operations, in effect sparing riders a fare increase. So far, the province has ruled out any extra funds for Toronto transit, over and above what’s slated from the gas tax.

The McGuinty government, which came under fire earlier this year for raising health-care premiums despite a no-tax-hike election pledge, is unwilling to take any heat for a possible fare increase by the Toronto Transit Commission. Last year, at the launch of the city budget, the Premier also spoke out against a fare increase.

A final decision on a fare hike is several months away.

In the meantime, the mayor and budget chief David Soknacki have asked TTC officials to sharpen their pencils to whittle down their budget request for additional operating and capital dollars next year.

Mr. McGuinty’s strong words on TTC fares are part of the annual ritual over the next three months to set Toronto’s budget, proposed at $7.2-billion, for 2005.

Yesterday’s comments by the Premier are seen as a less than veiled hint for the city to demonstrate it is making cuts and showing fiscal restraint before turning to Queen’s Park for an injection of cash before the budget debate wraps up in February.

In Toronto, transit funding is the tail wagging the city budget dog.

For next year, for example, the TTC has proposed a capital budget of $426.8-million, up from $283-million in 2004. However, despite a five-year, $1-billion deal announced earlier this year by the federal, provincial and city governments, the flow of dollars from senior governments next year is only a trickle.

For example, Ottawa will kick in $20-million, with $76-million from the province, leaving the city on the hook for $328-million.

The TTC operating budget is a different story. Riders pay for 80 per cent of costs through the fare box, leaving $298.7-million to be covered from other sources.

The provincial gas tax — worth $92-million in calendar year 2005 to the city ($81-million under the provincial fiscal year) — still means the city has to find about $207-million.

In effect, the TTC is asking for a $17-million boost to its operating budget, in part to hire more workers to expand service.

“What I am hearing from people in the suburban areas of Toronto is that they really want excellence in service,” Mr. Miller said. “They want to make sure there are buses in their neighbourhoods.”