OC Transpo will be running a deficit of $12.35 million by the end of the calendar year, according to staff projections set to be tabled at the Tuesday, Sept. 1, meeting of the finance and corporate services committee.
That number is significantly less than the $52 million deficit OC Transpo posted in 2025, but the 2026 projections also come with 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 that could be re-allocated to other transit priorities.
But Kitchissippi Coun. Jeff Leiper, who is challenging Sutcliffe in the mayoral race and who serves on both the transit committee and the finance and corporate services committee, cautioned that any provincial windfall would likely be “swallowed up” by other operational gaps.
The report cites the memorandum of understanding signed by Ontario Transportation Minister Prabmeet Sarkaria in April that “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 the ownership and control of Metrolinx — the agency that runs most of the commuter rail service in southern Ontario — which would bring its “scale, leverage and experience” to Ottawa.
Gower said there is no firm timeline on when the upload could be finalized, however, and he said in April that a time frame of 12 to 18 months would be a “safe bet.”
An OC Transpo LRT train makes its way along Line 1 on Monday, Aug. 31, 2026.
Sutcliffe said the upload is 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.”
Leiper pointed to several other items in the staff report that underscore “structural gaps” at OC Transpo that would need to be “backfilled” by any funding the City of Ottawa receives from the province.
“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.”
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 of Line 1 to Orléans. When the east extension is finally completed, the city should expect to add that difference of $18.7 million to the deficit, Leiper said.
The report also highlighted a deficit of $14.8 million with bus and Para Transpo operations through the first six months of the year.
“So we have a really significant deficit in bus operations, a significant shortfall in rider revenue (and) a very significant savings because we’re not running the eastern extension, which, fingers crossed, should hopefully open within months,” Leiper said.
At a recent campaign event unveiling his transit plan, Sutcliffe pointed to the $85 million annual savings from the provincial upload and said he would use some of the savings to offer a monthly bus pass for $95 — a significant discount from the current $138.50 monthly pass.
“I’m going to take 10 per cent of that upload dividend, which is about $8 million to $10 million a year, and put it towards affordability by reducing the cost of a monthly bus pass to $95,” Sutcliffe said on Aug. 17.
“I’m going to take the other 90 per cent and reinvest that in better public transit — the express routes, more reliable service, more frequent service, building bus rapid transit lines and improving the system overall.”
On Monday, Leiper said it is “precarious, at best, to make promises about increasing service, acquiring bus fleets or reducing fares on the back of the MetroLinx upload.
“The MetroLinx upload may never happen, and when it does, we’re going to be backfilling a large structural deficit in our transit budget,” he said. “If the value of the upload is $85 million, in a best-case scenario, most of that is going to be tied up with simply addressing the structural deficit in our transit budget.”
OC Transpo posted a $7.2 million deficit through the first quarter of 2026 and a deficit of $8.9 million in the second quarter from April to June.
The city’s transit system “continues to face financial challenges related to ridership recovery, fare revenue and Para Transpo service demand,” according to the staff report.
“However, the province’s commitment to upload the LRT demonstrates that the costs associated with the O-Train network represent a significant step toward improving the long-term financial sustainability of transit in Ottawa.”
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