The Société de transport de Montréal (STM) released its 2026 budget Friday, detailing $1.8 billion in planned spending and $56.5 million in new recurring cost reductions aimed at meeting its financial framework while preserving current service levels.
The STM said the budget protects the overall kilometre-based service offering in 2026, keeping it at the same level as 2025, despite ongoing financial pressures.
At the same time, the agency published its 2026–2035 capital program, which identifies $24.1 billion in investment needs over 10 years, including $15.2 billion required for asset maintenance.
Operating budget capped, $100M reduction target reached
The STM said it is limiting the growth of operating expenses to 0.7 per cent in 2026, in line with requirements set by the Autorité régionale de transport métropolitain (ARTM). Without additional measures, normal expense growth would have reached 3.2 per cent.
“By 2026, the STM will have achieved the target of $100 million in recurring expense reductions that it set in 2023 over five years. All these efforts are being made with the goal of protecting our current mileage offering,” said STM chief executive Marie-Claude Léonard.
“Such optimizations over such a short period of time are always demanding for an organization, but we are doing it to continue to offer reliable, safe, and low-cost service to the entire Montreal community while ensuring sound management of public funds,” explained Marie-Claude Léonard, Executive Director of the STM,” she added.
Cost-cutting measures affect staffing and operations
The STM said the recurring reductions will be achieved through a series of optimization measures, including changes to paratransit operations, limits on hiring and overtime for support staff, and adjustments to maintenance practices for metro cars.
Other measures include extending the use of certain metro parts, purchasing lower-cost equivalent components, reducing the use of IT consultants and equipment, renegotiating fuel contracts, and cutting back on service vehicles used by STM employees.
The customer contact centre will close after 4:30 p.m. on weekdays and remain closed on weekends and holidays.
The STM said the measures will result in the elimination of about 300 positions over the coming months. Employees in occupied positions will be reassigned in accordance with collective agreements and existing policies.
“I would like to highlight the commitment, resilience, and professionalism of STM employees during this period of transformation. We are aware of the impact of these decisions and are putting the necessary mechanisms in place to support our staff throughout this period,” added Léonard.
Capital plan highlights growing asset maintenance shortfall
The 2026–2035 capital program underscores what the STM described as a significant lack of funding for asset maintenance, particularly in the metro system.
“Investments in asset maintenance have remained below requirements for several years, putting increasing pressure on infrastructure, particularly in the metro,” said STM board chair Aref Salem.
“The asset maintenance deficit is currently estimated at $7 billion and could reach $9 billion by 2030 if the trend continues. This situation is resulting in more frequent interventions in stations and longer phasing of certain projects,” Salem added.
Of the $15.2 billion required for asset maintenance over the next decade, only $2.8 billion has been confirmed so far, leaving 80 per cent of needs unfunded. An assessment of asset conditions indicates that 42 per cent are in poor or very poor condition.
Funding uncertainty affects internal capacity
The STM said the funding gap is also leading to a gradual loss of internal expertise and capacity. Workforce reductions in certain project offices began in 2025 and will continue over several months, increasing the importance of stable and predictable funding.
To address the situation, the STM is calling on the Quebec and federal governments to reach an agreement allowing the transfer of funds earmarked for public transit infrastructure through the Building Strong Communities Fund.
Slower bus electrification under review
The STM also said it intends to reassess the pace of its transition to a fully electric bus fleet. While full electrification would reduce Quebec’s greenhouse gas emissions by just 0.13 per cent, the agency said hybrid buses offer a proven and effective interim solution.
Hybrid buses reduce emissions during the transition period while providing greater operational reliability and more stable operating costs, the STM said. Unlike electric buses, they do not require technical modifications to transit garages, freeing up funding for other priorities such as asset maintenance.
“We are committed to providing our customers with reliable, safe, and efficient service, and to ensuring that every dollar invested generates maximum impact. It is in this spirit that the STM is strengthening its knowledge of the condition of its assets and rigorously prioritizing its investments. However, increased and predictable support from higher levels of government remains essential to ensure the sustainability of the network,” Salem said.
