How Ontario’s public transit system is funded
Ontario has an extensive public transit system, serviced by 106 municipal transit authorities and two provincial transit authorities, funded by revenues from fares and subsidies from municipal, provincial, and federal governments. In 2024, the Financial Accountability Office of Ontario published a report entitled “Ontario’s Public Transit Agencies: Ridership, Finances and Operating Subsidies,” which examines the province’s municipal and provincial transit agencies’ ridership and finances, and their sources of funding.
Data from the report reveal that the operating expenses of all transit authorities in Ontario totaled just over $6 billion in 2022, with two-thirds covered by government subsidies. While government subsidies have always been a critical source of funding for Ontario’s transit authorities, the pandemic made them even more dependent on them to cover increasing operating expenses. In 2018, 54% of revenues came from own-source revenues, such as fares, declining to 32% in 2022.
The overwhelming majority of transit authorities rely on government subsidies to cover the bulk of their operating expenses. Only five transit authorities — North Perth, Mamora and Lake, Niagara Falls, Renfrew, and the Ontario Northland Transportation Commission — had less than half of their operating expenses covered by government subsidies.
The revenue mix varies greatly across transit authorities. Among the top ten transit authorities by ridership, the Toronto Transit Commission (TTC) received just over $1.4 billion, the most in dollar terms, from various levels of government, covering 64.1% of its operating expenses in 2022. That places them in the middle of the pack in terms of share of expenses covered by subsidies. Meanwhile, Ottawa’s OC Transpo had the highest share of revenues from subsidies at 81%.
While ridership on Ontario’s major transit systems is recovering, many are still operating below pre-pandemic levels which continues to add financial strain to province’s transit authorities.
