Item - 2025.TTC6.7

The TTC Board:

1. Approved the 2025 Capital Budget in-year budget adjustments to offset projects that have had accelerated spending by $100.0 million with projects that have experienced delays and lower spending by $100.0 million, with no debt impact, as outlined in Appendix 4 of this report.

2. Authorized the recommended budget adjustments noted in Recommendation 1 above, and in the TTC’s 2025-2034 Capital Budget and Plan, to be included in the TTC’s Capital Variance Report submission for the four months ended April 30, 2025, for City Council consideration and approval.

3. Adopted the action taken in-camera and authorize that the information remain confidential as its subject to solicitor-client privilege.

This report sets out the operating and capital financial results for TTC Conventional and Wheel-Trans services and provides a status update of the TTC’s major capital projects for the period ended April 26, 2025. Financial projections to year-end 2025 are also provided. This is the first of four quarterly financial updates provided annually to the TTC Board for the fiscal year and subsequently submitted to the City of Toronto for consolidation with their financial variance reporting to City Council.

For the period ended April 26, 2025, operating results indicated a net year-to-date unfavourable variance of $5.5 million, which includes an unfavourable revenue variance of $11.7 million and an under-expenditure of $6.2 million. The unfavourable revenue variance was primarily driven by lower TTC Conventional passenger revenues due to lower-than-anticipated ridership levels. This is partially offset by favourable ancillary revenue due to the timing of third-party recoveries, which will normalize by year-end. The under-expenditures were primarily due to the delayed timing of planned expenditures for IT software implementation, materials and services.

For the full year, the TTC’s 2025 Operating Budget of $2.819 billion gross and $1.387 billion net, is projected to be overspent by $30.0 million net. Expenditures are projected to be $12.3 million below budget, primarily due to diesel cost savings resulting from the removal of the Federal carbon tax, effective April 1, 2025. This is partially offset by higher Wheel-Trans operating costs due to higher than budgeted Wheel-Trans passenger ridership. Revenues are projected to be $42.3 million below budget, primarily due to the continued trend of lower passenger revenue than budgeted for the remainder of the year, and Line 5 and Line 6 bus operating costs that are ineligible for Provincial Funding reimbursement under the New Deal. This is partially offset by higher Wheel-Trans passenger revenue than expected, due to higher Wheel-Trans ridership demand. Senior staff are taking action to mitigate the projected budget shortfall of $30 million.

For the period ended April 26, 2025, the TTC’s capital expenditures totalled $363.8 million, representing a spending rate of 105% when compared to the year-to-date planned (calendarized) budget of $346.7 million. Of the total capital expenditures incurred to date, $361.4 million or 105% of the base capital program’s planned budget of $344.5 million was spent and $2.4 million or 106% of the $2.2 million planned budget for transit expansion-related projects was spent.

When comparing year-to-date spending to the total approved 2025 Capital Budget, 22% was spent to the end of Period 4 for the TTC base capital program and 3% for transit-expansion-related projects resulting in an overall spending rate of 21% for the four-month period.

By year-end, the TTC’s capital spending is projected to be in the order of $1.610 billion, representing an overall 93% spending rate, with the TTC’s base capital program projected to expend $1.536 billion or 93% and transit expansion-related capital expenditures projected to reach $73.6 million or 97%. The year-to-date results and year-end projections reflect the recommended adjustments to the 2025 Capital Budget and future year cash flows in the 10-Year Capital Plan, as outlined in Appendix 4 of this report. This accounts for projects that have had accelerated spending and projects that have experienced some delays and, therefore, lower spending. These adjustments result from the ongoing monitoring of capital delivery and spending by TTC staff to ensure capital funding is maximized during the year.