TTC Seeks Increased City Funding for 2026 Budget Amid Fare Freeze

The Toronto Transit Commission (TTC) is requesting additional funding from the city as it prepares its budget for 2026, which includes a fare freeze and the introduction of fare capping. The proposed operating budget totals $3 billion and requires a subsidy of $1.48 billion from the city, representing an increase of approximately $94 million compared to the previous year. This request highlights the transit agency’s growing dependence on city support, according to TTC officials.

During a board meeting, TTC CEO Mandeep Lali discussed the challenges ahead. He emphasized that the TTC is facing a persistent structural fiscal imbalance. Factors contributing to this situation include rising operational costs, lower-than-anticipated fare revenue, and slower growth in ridership. Lali stated, “We are increasingly reliant on the city subsidy and reserve funds.” The board is set to vote on whether to advance its budget proposal to the city’s budget committee for official consideration.

The city of Toronto is expected to unveil its budget plans on Thursday. However, in late 2025, Mayor Olivia Chow had already announced the fare freeze along with the fare capping initiative as part of her affordability strategy. Under this plan, riders will not need to pay for a monthly pass upfront, which is currently priced at $156, equating to around 47 fares.

Fare Capping and Revenue Challenges

The fare capping initiative is anticipated to be beneficial for transit users. Riders who take 47 trips in a month will no longer be charged for additional rides thereafter. The program is slated to begin in September 2026 and is expected to cost the TTC approximately $3 million in its first year. The TTC aims to reduce the threshold to 40 rides by 2027, allowing commuters who travel to and from work daily to enjoy free rides on weekends. This adjustment would incur costs of $14.7 million in 2027, escalating to $17.2 million in 2028 when the 40 ride cap is fully implemented.

The TTC has faced difficulties attracting riders in 2025, concluding the year with fare revenue lower than expected. Interim Chief Financial Officer John Montagnese explained that anticipated boosts from return-to-office trends did not materialize. Furthermore, a drop in international student permits has led to decreased sales of student passes.

Despite these challenges, there is optimism regarding an increase in ridership due to the upcoming 2026 FIFA World Cup, which is expected to generate a surge in transit use. The TTC remains hopeful that this international event will provide a much-needed boost to its fare revenue.

As the TTC navigates financial complexities, its reliance on city funding and reserve drawdowns continues to grow. With fare capping and a fare freeze on the table, the agency aims to balance operational sustainability while promoting accessibility for Torontonians. The outcome of the budget proposal will significantly influence the future of public transit in Toronto.