OC Transpo faces $12.35M deficit this year despite $47M provincial funding hope

OC Transpo is projecting a deficit of $12.35 million by the end of 2026, staff reports set to be tabled at Tuesday's finance and corporate services committee meeting show. The figure is significantly lower than the $52 million deficit the transit authority posted in 2025, but it comes alongside an "anticipated" windfall of about $47 million from the expected provincial upload of the city's LRT system to Metrolinx.

Mayor Mark Sutcliffe has repeatedly called the deal a "game-changer" for Ottawa taxpayers that would save $85 million per year and free up money for other transit priorities. But Kitchissippi Coun. Jeff Leiper, who serves on both the transit and finance committees and is challenging Sutcliffe in the mayoral race, cautioned that any provincial windfall would likely be "swallowed up" by other operational gaps.

Leiper pointed to several items in the staff report that underscore what he calls "structural gaps" at OC Transpo that would need to be "backfilled" by any provincial funding. The city budgeted $83.5 million in expenditures for transit service delivery and rail operations but has only spent $64.8 million so far this year. Leiper said that gap is due to the delayed construction of the LRT's east extension to Orléans. When that extension is finally completed, the city should expect to add the difference of $18.7 million to the deficit. The report also highlighted a deficit of $14.8 million with bus and Para Transpo operations through the first six months of 2026.

"I don't think any reasonable observer believes that the deal will be finalized by the end of the year," Leiper said in an interview Monday. "It's highly uncertain as to when that deal might be signed, and it is uncertain as to what the value of that will be. Right now, we have an agreement with the province to talk about an agreement — and that's all."

A memorandum of understanding signed by Ontario Transportation Minister Prabmeet Sarkaria in April "re-affirmed" the province's commitment to take on the LRT's operating and maintenance costs. Stittsville Coun. Glen Gower, who chairs the transit committee, said at the time that the upload would put the LRT under Metrolinx — the agency that runs most of the commuter rail service in southern Ontario — which would bring its "scale, leverage and experience" to Ottawa. However, Gower said there is no firm timeline for finalization, and he suggested in April that 12 to 18 months would be a "safe bet."

Sutcliffe described the upload as a "complicated" transaction with the province and declined to provide a firmer timeline when asked by reporters in mid-August. "I don't want to put a timeline on it … the important thing is that it gets done," he said. According to the recent staff report, the budgeted $47 million in provincial funding "continues to be in scope to be received within 2026." Council increased its funding allocation from the tax stabilization reserve to $47 million in 2026 from $36 million in 2025 "in recognition of the continued uncertainty surrounding fare revenue recovery and future funding commitments from senior levels of government."