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The Toronto Transit Commission is asking for a larger subsidy from the city for its 2026 budget, which freezes fares and introduces fare capping, as its CEO warns the transit agency is becoming increasingly reliant on help from Toronto.
The TTC’s proposed $3-billion operating budget requires $1.48 billion from the city to work, an increase of about $94 million compared to 2025, the TTC board heard Wednesday.
While Torontonians will get their first look at the city’s proposed budget Thursday, the mayor already announced fare capping and the fare freeze in late 2025 as part of her affordability plans.
The board voted to send its proposal to the city budget committee as its official 2026 submission.
While the city subsidy would represent almost half of the budget, the TTC would also drain $35 million from its reserves to keep fares down — nearly half of that pot of money. Only about a third of the budget would be covered by fare revenue.
“I must be candid about the challenges we face,” said Mandeep Lali, who is presiding over his first budget as TTC CEO, at the board meeting.
“The TTC continues to experience a structural fiscal imbalance, driven by rising costs, lower than expected fare revenue and slower ridership growth,” Lali said. “We are increasingly reliant on the city subsidy and reserve funds.”
WATCH | Toronto mayor wants to make TTC free after 47 rides a month:
Toronto mayor wants to make TTC free after 47 rides a month
Mayor Olivia Chow wants Toronto transit riders to be able to board for free after a certain number of rides per month. Lane Harrison explains.
The TTC struggled to draw in riders in 2025, ending the year with fare revenue that was lower than projected.
“Return-to-office trends have not delivered the boost we anticipated,” John Montagnese, the TTC’s interim chief financial officer, told the board.
Student pass sales were also down due to a decline in international student permits. But the transit agency anticipates the 2026 FIFA World Cup will help boost ridership this year, Montagnese said.
Coun. Jamaal Myers, chair of the TTC board, said the transit agency needs an overhauled ridership growth strategy to deal with the issue.
“The commute, nine to five, Monday to Friday, that commute is not the gold standard anymore,” Myers said to reporters outside the meeting. People want to use the TTC on the weekends or during the day, if they work from home, Myers said.
“The challenge now is to change the transit service to actually meet those needs,” he said. “We can’t just run the service on the expectation that everyone’s in the office.”
Fare capping could cost $3M first year, $17.2M by 2028
Among the biggest wins for transit advocates in the proposed TTC budget is the introduction of fare capping, a system which would allow people to automatically ride for free for the rest of the month after taking 47 trips.
The program would start in September and mean riders wouldn’t have to pay for a monthly pass up front, which costs $156 (about 47 fares).
The first year of the program would cost the TTC about $3 million. But the transit agency wants to drop the number of rides to 40 in 2027, meaning if someone takes the TTC to and from work every weekday for a month, their weekend rides would be free.
That proposal, which would start Sept. 1, 2027, would cost $14.7 million in 2027. In 2028, when the 40-ride cap would be in place all year, it would cost the TTC $17.2 million.
