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GO studies 5-cent surcharge to cover climbing fuel prices

Any possible fare increase would need the approval of the transit system’s board

By JENNIFER LEWINGTON
Wednesday, August 24, 2005 Page A8
CITY HALL BUREAU CHIEF

GO Transit is considering a five-cent hike in the price of each ride to blunt fast-rising fuel prices, a top official said yesterday.

Talk of a possible surcharge comes even though GO, which competes directly with private vehicles, has seen a modest rise in commuters switching to transit.

Rising fuel prices “are definitely a mixed blessing,” GO managing director Gary McNeil said.

He said a possible surcharge “is one of the things we would consider taking to the board” if the price of oil stays above $60 (U.S.) a barrel.

Any price hike would have to be approved by the GO board, which meets in early September.

For 2005-2006, the regional transit authority estimates its annual fuel bill of $22-million a year for trains and buses will be about $5-million over budget.

“We [had] assumed a fairly reasonable increase in gas prices,” Mr. McNeil said. “But then the unreasonableness came into it and prices went through the roof.”

The extra fee, if adopted, would echo practices in the airline industry.

“They [commuters] won’t enjoy the thought of a five-cent surcharge, but they would probably understand it,” he said, adding that the agency is taking steps to trim costs so that GO stays within its overall budget for the fiscal year.

Unlike GO, the Toronto Transit Commission has felt no impact yet from the gas price hike, but it is bracing for a shock in March.

The TTC locked in its fuel prices until March, 2006, under a contract signed in 2004.

Vince Rodo, TTC general secretary, estimates that if the TTC locked in prices today — about 35 cents a litre higher than the current contract — the agency would have to pay an extra $23-million on an annual basis.

“Come next April, we are staring at a brick wall,” said Mr. Rodo, who doubts there will be a sudden drop in oil prices any time soon. He said it is too early to say how the TTC would cover the added costs, though a fuel surcharge or fare increase would be among the options.

Transit officials say they have anecdotal evidence that rising prices at the pump are giving them a modest boost in ridership — GO more so than the TTC.

Until a sudden spike in gas prices a few weeks ago, Brampton resident Satinder Chera drove his premium-fuel car to work in Toronto for a 45-minute commute. Faced with paying $1.15 a litre at the pump — and $60-plus to fill the tank — he opted to commute with a $50 monthly GO pass.

“The convenience of saving money on the gas side is well worth it,” he said.

GO Transit marketing manager Mike Wolczyk said that preliminary reports on train ridership for the 12 months up to the end of July show a 6-per-cent increase over the same period in 2004.

But he cautions that factors other than gasoline prices, such as an unusually warm summer, have prompted suburban residents to ride GO into the city on weekends.




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