Agenda

This Special meeting of the TTC Board will be conducted with members participating in-person and remotely.

Special Assistance for Members of the Public:
TTC staff can arrange for special assistance with some advance notice. If you need special assistance, please call 416-393-3744 or e-mail commissionservices@ttc.ca

Closed Meeting Requirements:
If the TTC Board wants to meet in closed session (privately) a Member of the Board must make a motion to do so and give the reason why the Board has to meet privately. (Section 29 of the TTC By-law and Section 190 of the City of Toronto Act, 2006)

Notice to people writing or making presentations to the TTC Board:
The City of Toronto Act, 2006 and the Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1900, authorize the TTC to collect any personal information in your communication or presentation to the TTC Board. The TTC collects this information to enable it to make informed decisions on the relevant issue(s). If you are submitting letters, faxes, e-mails, presentations or other communications to the TTC, you should be aware that your name and the fact that you communicated with the TTC will become part of the public record and will appear online.

The TTC makes a video record of its Board meetings. If you make a presentation to the Board, the TTC will be video-recording you and the video record is available to the public. Board Meetings are also live-streamed on the official TTC YouTube channel.

If you want to learn more about why and how the TTC collects your information, write to the Commission Services Office, Toronto Transit Commission, 1900 Yonge Street, Toronto, Ontario M4S 1Z2.

Land Acknowledgement

Declarations of Interest under the Municipal Conflict of Interest Act

It is recommended that the TTC Board:

1. Approve the recommended 2026 Operating Budget totalling $3.028 billion in gross expenditures, $1.547 billion in revenues and a net funding requirement of $1.481 billion for the TTC comprising the following services, as summarized in Appendix A of this report:

a. 2026 TTC Conventional Operating Service Budget of $2.826 billion in gross expenditures, $1.537 billion in revenues and a net funding requirement of $1.289 billion; and,

b. 2026 Wheel-Trans Operating Budget of $201.6 million in gross expenditures, $10.3 million in revenues and a net funding requirement of $191.4 million.

2. Approve a 2026 year-end Operating workforce complement of 15,299 positions.

3. Approve the implementation of monthly fare capping through PRESTO, effective September 1, 2026, whereby customers who pay per trip will not be charged for additional trips after completing 47 paid rides within a calendar month, consistent with the equivalent value of a Monthly Pass.

4. Approve the related fare policy and product changes outlined in Appendix E of this report that are required to support monthly fare capping, including:

a. Aligning pass products with the new capped structure; and

b. Phasing out or restructuring any products that duplicate benefits of the cap.

5. Direct the Chief Executive Officer to undertake all activities necessary to implement monthly fare capping in collaboration with Metrolinx, including system configuration, customer-facing materials, operational readiness, and communications.

6. Direct staff to report back to the TTC Board following the first year of monthly fare capping with an assessment of impacts on ridership, revenue, equity outcomes, customer experience, and any recommended fare policy adjustments.

7. Reaffirm requests to the Federal and Provincial Governments for a tri-partite development of a sustainable, long-term funding model for public transit capital and operation's needs.

8. Delegate authority to the Chief Executive Officer to execute any transfer payment and/or contribution agreements required with the Province of Ontario and/or the Government of Canada to receive intergovernmental funding for priority projects and programs, subject to terms and conditions satisfactory to the TTC’s General Counsel.

9. Forward this report to the City Budget Committee and the City Manager as the official 2026 Operating Budget submission for the Toronto Transit Commission.

The recommended 2026 Operating Budget outlines the funding required to deliver Toronto Transit Commission (TTC) Conventional and Wheel-Trans services. The budget reflects current service needs, ridership trends, financial performance, economic conditions, and available funding. It also aligns with the Board’s priorities and the TTC 2024–2028 Corporate Plan.

The recommended 2026 Operating Budget is $3.028 billion, supported by $1.547 billion in revenues, resulting in a net City funding requirement of $1.481 billion, as illustrated in Table 1.

Table 1 Recommended 2026 Operating Budget

A key focus of the 2026 Operating Budget is maintaining and enhancing affordability for customers while preserving and building on recent service enhancements. Building on the TTC’s commitment to fare stability, the budget freezes fares for the third consecutive year and introduces fare capping effective September 1, 2026. Fare capping will limit a customer’s monthly fares, providing frequent riders with predictable and lower transit expenses. This initiative marks the start of a multi-year approach to improving affordability and access to transit.

To maintain affordability, reliability and accessibility, the 2026 Operating Budget:

• Freezes fares for the third consecutive year, ensuring affordability for TTC riders.
• Introduces fare capping, eliminating upfront costs and reducing costs for customers by limiting monthly fares after 47 trips.
• Increases service hours by 2.0%, for a total of 9.9 million hours, to address congestion, adapt to changing travel patterns, deliver world-class service during the FIFA World Cup, and achieve 426.4 million rides in 2026.
• Sustains prior year service enhancements, including peak capacity increases on Lines 1 and 2, safety and security measures, and extending cleanliness and reliability pilots.
• Supports the first full year of operations for Line 5 Eglinton and Line 6 Finch West, with costs fully offset by Provincial funding under the Ontario–Toronto New Deal Agreement.
• Expands Wheel-Trans service to deliver an estimated 4.4 million rides, reflecting an 8.7% increase in demand over the 2025 Budget.
• Delivers $87.3 million in cost savings through expenditure reviews and efficiency measures that do not impact customers, supplemented by a $35.0 million draw from the TTC Stabilization Reserve Fund.

These measures allow the TTC to enhance affordability for riders, sustain service levels, manage inflationary pressures and slower-than-expected ridership growth in 2025 and ongoing operating challenges.

TTC Conventional Service represents $2.826 billion or approximately 93% of gross expenditures, while Wheel-Trans represents the remaining 7% of gross expenditures or $201.6 million. About 42% of the Operating Budget is funded through TTC own source revenues, including approximately 39% from passenger fare and ancillary revenues and 3% from TTC Stabilization Reserve and TTC Long-Term Liability Reserve funding. Provincial Funding contributions make up approximately 9% of the budget, reflecting the third year of the Ontario-Toronto New Deal Agreement. The remaining 49% is supported by the City’s property tax base. Chart 1 illustrates how the 2026 Operating Budget is allocated to fund TTC Conventional Service and Wheel–Trans Service.

Recommended 2026 Operating Budget

To deliver transit services and meet the objectives outlined above, the 2026 Operating Budget includes $3.028 billion in gross expenditures and $1.481 billion in net expenditures. The net funding requirement from the City of Toronto has increased by $93.8 million, which represents a 6.8% change from 2025.

Table 5
TTC Conventional and Wheel-Trans 2026 Operating Funding

Note: 2025 approved funding includes in-year budget adjustments of $38.7 million gross and $0.0 net in accordance with the implementation of PS 3400 – Revenue Standard in 2025, to reflect costs that are recoverable through the billing of a third party, to be budgeted and recognized at the gross revenue and gross expense level.

Cost to Maintain Current Service Levels

Prior Year Impacts
The 2026 Operating Budget includes $49.4 million to address prior-year commitments. This amount includes $28.1 million for annualized service improvements introduced in spring and fall 2025, ensuring those enhancements are funded for the full year. It also includes $6.3 million for workforce additions made last year, including 69 positions for the Fare Compliance program. In addition, the budget reflects a $15.0 million reversal of the one-time reserve draw applied in 2025. These adjustments ensure 2025 service levels are maintained.

Economic Factors
Inflation and cost escalation are significant factors in the 2026 Operating Budget. A total of $26.7 million is required to manage inflationary impacts. Rising health and dental benefit costs, driven by both inflation and higher utilization, account for $11.2 million of this increase. Hydro and utility costs are projected to grow by approximately 5.7%, adding a further $7.9 million in cost pressures. Contract pricing has also increased by $7.6 million, affecting faregate maintenance, Wheel-Trans service agreements, vehicle parts and IT subscriptions. These increases are partially offset by expected reductions in diesel prices in 2026, which help mitigate overall inflationary impacts.

Salary Changes
The 2026 TTC Operating Budget reflects the financial impact of recent collective bargaining agreements. $76.2 million has been allocated to cover cost-of-living adjustments for all unions with active agreements and for staff. This figure does not include any potential costs that may arise after current union agreements expire in 2026.

Operating Impacts of Capital Projects
The 2026 Operating Budget includes $9.3 million gross and $6.3 million net to support ongoing maintenance and operating requirements of completed capital project. This includes:

• eBus Program: $2.0 million gross ($1.0 million net) and 26 positions to accommodate the delivery of 146 eBuses originally scheduled for 2025. Funding covers maintenance of additional charging systems and temporary operational adjustments. These costs are partially offset by fuel savings and carbon credit revenue as eBuses replace older diesel vehicles.
• Maintenance and Infrastructure: $7.3 million gross and net with 26 positions, including:
  o $2.5 million and 12 positions for maintenance of 60 new streetcars delivered over the past three years, with added focus on repairs for older vehicles coming out of warranty.
  • $4.2 million and one position to sustain completed IT projects, including licensing and maintenance for SAP, VISION, IT Service Management, Office 365 and digitization initiatives.
  • $0.6 million and 13 positions for other operating impacts, including adjustments at Greenwood Yard due to construction and maintenance of public address and passenger intercom systems.
• Pattison Digital: $2.0 million in additonal revenue from Pattison Advertising as a result of capital investments in digital advertising signage.

Other Net Base Changes
Changes in legislation and calendar adjustments reduce the 2026 Operating Budget by $19.0 million net. The removal of the Federal Carbon Tax on April 1, 2025, accounts for $20.7 million in savings, while a permanent reduction in the Ontario Fuel Rebate adds another $1.9 million. These savings are partly offset by an increase of $3.1 million to cover higher Canada Pension Plan (CPP) and Employment Insurance (EI) contribution requirements.

In addition to the major budget drivers detailed above, other base changes in 2026 require $14.8 million net and 49 positions to fund and support the following changes:

• $8.1 million revenue decrease due to the expiry of a major lease at 800 Kipling Avenue at the end of 2025 and the reversal of anticipated funding for the General Body Repairperson apprenticeship program after the Skills Development Fund provincial funding application was unsuccessful.
• $1.1 million expenditure increase along with nine positions to continue investments made in 2025 to address bunching and gapping on the 10 most problematic routes.
• $0.6 million expenditure and six positions to support expected increases in call volume for fare evasion, loitering and lam handling as well as support for City crisis workers.
• $0.5 million expenditure increase along with 28 positions to support the opening of a new Wheel-Trans satellite location at 800 Kipling Avenue, which will enable more efficient fleet deployment through geographically balanced service.
• A further $0.3 million expenditure increase along with three positions to continue investments and progress made on the Station Cleanliness Pilot project implemented in 2025, with a focus on 6 key stations, bringing the total investment to $1.2 million and 12 positions dedicated to this initiative.

Customer Demand and Reliability Drive Service Hours for 2026

To maintain reliable service amid changing travel patterns, traffic congestion, operational needs and growing Wheel-Trans ridership, the 2026 Operating Budget includes $25.0 million net for additional service hours.

TTC Conventional Service Demand
Service improvements introduced in 2025 restored capacity and enhanced reliability. Last year, service hours grew by 1.7% to address congestion and construction-related delays, followed by an additional 2.2% increase to improve midday, evening, and weekend bus service and reduce wait times on streetcar and subway networks.
 

Aligned with ridership, 2026 Customer demand (boardings) is expected to increase modestly over 2025 levels with weekly customer demand projected to grow from an average of 16.0 million in the fourth quarter of 2025 to an average of 16.2 million in the fourth quarter of 2026, as depicted above in Chart 2. This forecast serves as the foundation for the TTC’s Annual Service Plan.

In 2026, base service hours will increase by 2.0% compared to Fall 2025 and is intended to:

• Respond to Operational Needs: Maintain service levels while integrating additional eBuses, managing the retirement of articulated vehicles and increasing temporary overnight streetcar service due to vehicle storage constraints.
• Adjust for traffic congestion and construction impacts: Reduce delays caused by traffic congestion and city-wide construction projects.
• Respond to changing travel patterns: Adapt to shifts in customer behavior, including the impact of return-to-office mandates and evolving travel patterns during peak periods.

An additional $7.5 million and 28 positions are dedicated to service during the 2026 FIFA World Cup in Toronto. This funding supports enhanced service and operational readiness for six match days and fan fest events. Costs are expected to be fully offset by $5.0 million in additional passenger revenue and $2.5 million in funding from the City’s FIFA Secretariat. These measures ensure the TTC is positioned to provide continued reliable service to customers in 2026.

Wheel-Trans Service Demand
Wheel-Trans ridership grew steadily in 2025, ending the year 3% above budget and 15% higher than 2024. This increase was driven by more new registrant and higher trip frequency per registrant. Ridership growth is expected to continue in 2026, but at a more moderate pace. Ridership is forecast to increase by 6% over 2025 year-end projection, outpacing growth in conventional transit. This trend reflects demographic shifts, including an aging population, and signals a noticable change in travel patterns as shown in Chart 3.

The 2026 Wheel-Trans Operating Budget provides funding and workforce complement to support 4.37 million rides, representing an 8.7% increase from the 4.02 million rides budgeted in 2025.

2026 Conventional Ridership and Passenger Revenue Budget

The 2026 Operating Budget for Conventional Service reflects an estimated 426.4 million rides, representing a 3.0% increase over the projected full-year 2025 ridership of 414.0 million, as of the end of October (Period 10).

Fares remain frozen at 2023 levels to maintain accessibility and reduce financial pressure on riders given current economic conditions. The increase in ridership is expected to generate $24.5 million (2.4%) in additional TTC Conventional passenger revenue compared to the 2025 forecast as of Period 10, resulting in a 2026 Conventional passenger revenue budget of $1,044.9 million ($997.0 million net of PRESTO fees).

The ridership forecast incorporates observed travel patterns and seasonal behaviors and is based on the following assumptions:

• Economic Outlook: Toronto’s softer economic environment in 2025 is expected to persist. However, the 2026 GDP growth forecast of 1.6% and employment growth of 0.4% (Conference Board of Canada, September 2025) is projected to add 2.6 million rides, generating $6.3 million in revenue.
• Return-to-Office Trends: Despite employer policy changes in Fall 2025 requiring more in-office workdays, no significant ridership increase has been observed. In fact, Fall 2025 ridership slightly declined versus expectations:
  • September–October averaged 94% of budget (vs. 95% year-to-date as of period 10) and 98% of prior year (vs. 99% year-to-date as of period 10).

This suggests any positive impact from policy changes may be offset by employment declines, non-compliance, or alternative commuting choices. No additional ridership growth from these policies is assumed for 2026.

• Post-Secondary Ridership: A sharp decline in international student permits reduced post-secondary ridership in Fall 2025, with pass sales at 50% of prior-year levels. 2026 ridership for this segment is expected to remain at Fall 2025 levels.
• Special Events: FIFA World Cup matches in Toronto (June–July 2026) are expected to add 2 million rides and $5.0 million in revenue. Other discretionary travel is assumed to remain similar to 2025.
• Service Enhancements:
  • Line 5 and Line 6 Openings: Revenue service for Line 6 began in December 2025 and for budgeting purposes, Line 5 is assumed to begin in January 2026 (actual date subject to Metrolinx confirmation). Combined, these are expected to add 3.1 million rides and $7.8 million in revenue:
    • Line 6: 0.7 million rides ($1.8 million)
    • Line 5: 2.4 million rides ($6.0 million)
  • Priority Transit Lanes: The implementation of new priority bus lanes on Dufferin Street and streetcar lanes on Bathurst Street (effective June 2026) are projected to add 0.6 million rides, generating $1.7 million in revenue.
• Fare Compliance: Fare compliance levels in 2026 are expected to remain consistent with 2025, as the passenger revenue budget is based on actual 2025 performance. At the time of finalizing the 2026 budget, no new fare compliance strategies had been confirmed; therefore, no incremental revenue from additional compliance measures has been included in the 2026 passenger revenue forecast.
• Fare Capping: The implementation of fare capping on September 1, 2026, with riders paying for a maximum of 47 rides per month, will result in an estimated $3.1 million decrease in fare revenue and an estimated increase of 2.1 million net new free rides in 2026.
• Average Fare: The 2026 Operating Budget assumes an average fare of $2.45, a decrease from the 2025 average fare of $2.47 due to the net new free rides brought on through fare capping. The average increase from $2.43 in 2024 to $2.47 in 2025 reflects a shift toward single-fare usage, driven by:
  • Declining monthly pass sales (October 2025: 86.5k vs. October 2024: 103k, a 16% drop).
  • Increased adoption of Open Payments (16.5% of rides at end of 2024 vs. 19.2% at Period 10, 2025).

Other Revenue Changes
Other revenue changes reflect a $0.5 million net increase, primarily due to:

• $3.0 million increase in revenue related to in-tunnel advertising signage, to be installed in time for the 2026 FIFA World Cup
• $1.0 million increase in advertising revenue, reflecting the Minimum Annual Guarantee (MAG) payable by Pattison under the current advertising agreement.

Partially offset by:

• $1.8 million decrease in interest income, driven by lower interest rates throughout 2025, which are expected to remain low in 2026.
• $1.5 million decrease in third-party revenue recoveries, resulting from reduced work demands on TTC staff for external projects.
• $0.3 million decrease in commuter parking revenue, based on recent ridership trends and lower-than-anticipated ridership levels in 2025.

Affordability Measures Reduce Base Operating Cost Pressures

TTC has identified $122.5 million in affordability measures and balancing actions to help offset base operating pressures and achieve. This includes $77.3 million in expenditure reductions, achieved through cost efficiencies and expenditure reduction based on matching to actual experience. Details of these measures are provided in Table 6. With these actions, total cumulative savings since 2019 will reach $320.0 million, reflecting ongoing efforts to reduce costs and improve efficiency.

Table 6 Affordability Measures

Expenditure Review

Line-by-Line Review
Actual spending is monitored throughout the fiscal year to identify cost-saving opportunities. Based on this analysis, $11.5 million in expenditure reductions have been incorporated into the 2026 Operating Budget. These savings were primarily driven by lower IT spending, reduced water consumption, and lower material and contract costs in vehicle maintenance during 2025.

Diesel Hedging
Through hedging strategies executed in 2025, TTC secured pricing for 20% of diesel volume at $0.94 per litre. This approach provides greater budget certainty and helps protect against significant price fluctuations in 2026.

Workplace Safety Insurance (WSIB) and Long-Term Disability (LTD) Funding Treatment
The TTC provides post-employment benefits through long-term disability (LTD) and WSIB plans, covering all related payments such as income replacement, healthcare costs, and administrative fees. Prior to 2025, TTC expenses and funding for WSIB and LTD were based on an accrual methodology in accordance with Public Sector Accounting Standards (PSAS), which factored in both current payments to administer benefits and changes in the actuarial liability for future payments. Beginning in 2025, the TTC adopted a change in the funding treatment for WSIB and LTD to ensure consistency and align with the funding treatment for post-retirement medical and dental benefits, where annual funding is limited for current payments only.

In 2025, the TTC recorded a funding adjustment (reduction) of $21.3 million to account for the change in WSIB and LTD funding treatment. For 2026, TTC is continuing this strategy by applying an additional $13.0 million funding adjustment (reduction) to further align budgeted costs with current payments only.

Depreciation Expense Funding Treatment
The TTC currently allocates $28.9 million in operating funding to cover internal depreciation expenses for assets with a useful life of less than 10 years, primarily IT equipment, non-revenue vehicles and other support assets not funded by other governments. Historically, this depreciation charge in the operating budget was used to fund the future replacement of these assets, ensuring resources were available when they reached the end of their useful life.

Beginning in 2026, the TTC will change its accounting treatment by discontinuing the use of internal depreciation as a capital funding source. Going forward, these expenditures will be funded through the Capital Budget rather than the Operating Budget, which reduce the operating budget by approximately $29.0 million per year.

Corporate Wide Budget Reduction
As part of an extensive expenditure review, in the 2026 Operating Budget, a corporate wide budget reduction of $21.9 million has been applied proportionally across all departments. This adjustment reflects observed underspending trends from prior years, ensuring the budget more accurately aligns with anticipated spending patterns while maintaining service commitments.

Efficiency Measures
Budget efficiencies are actions that reduce costs or optimize resources without impacting service levels or quality—essentially achieving the same outcomes with fewer resources. For 2026, TTC has identified $10.0 million in efficiency savings, including initiatives recommended by the Auditor General, through the following measures:

• RapidTO - Priority Lanes on Bathurst and Dufferin ($2.6 million): In July 2025, City Council approved RapidTO Transit Priority measures to install streetcar priority lanes on Bathurst Street and bus priority lanes on Dufferin Street. These changes are designed to improve transit speed and reliability and support the City’s evolving transportation needs. As a result, operating costs will decrease by $0.9 million due to fewer service hours required, and ridership growth is expected to generate an additional $1.7 million in revenue.
• ITS Efficiencies: ($0.6 million): Savings have been identified by reducing reliance on professional services, optimizing software licensing through Microsoft 365 implementation and streamlining communication infrastructure by transitioning to MS Teams for internal collaboration.
• LRV Apprentice Program ($0.9 million): An apprenticeship program was introduced to address challenges in hiring Light Rail Vehicle (LRV) technicians and build a skilled workforce for future needs. As the program matures, TTC has reviewed staffing requirements and converted positions to permanent roles supporting capital projects, resulting in a reduction of seven positions.
• Transition to In-House Training ($0.1 million): Specialized training for Special Constables, Fare Inspectors, and Protective Services Guards will transition from external vendors to TTC instructors certified by the Ontario Police College. This change enables more frequent, cost-effective training while improving quality and consistency under TTC standards.
• LED Lighting Retrofit Program ($0.3 million): As part of facility modernization and sustainability efforts, TTC is retrofitting LED lighting at the Harvey Shop Building and Malvern Garage. These upgrades improve lighting quality, reduce energy consumption, and lower hydro costs.
• Gas Detection Project ($0.1 million): TTC is upgrading the gas detection system at Mount Dennis Bus Garage to enhance safety and operational efficiency. The modernized system improves hazardous gas monitoring and optimizes ventilation and heating controls, reducing utility costs and improving environmental performance.
• Fleet Renewal – Diesel Savings ($3.0 million): Hybrid bus deliveries in 2023 and 2024 replaced older diesel buses, significantly reducing fuel consumption in 2025. These savings are now reflected in the 2026 budget, contributing to sustained cost reductions and improved operational efficiency.
• Other Efficiencies: ($2.2 million): A targeted review of operator-related expenditures identified savings through reduced late-in overtime, streamlined new-hire training processes, and optimized spareboard usage, improving resource allocation and lowering costs.
• Aftermarket Warranties ($0.2 million): Continued implementation of the Auditor General’s recommendation to use aftermarket part warranties will generate an additional $0.2 million in savings in 2026. To date, this initiative has delivered $2.7 million in cumulative savings.

Balancing Actions

The 2026 Operating budget incorporates a $35.0 million withdrawal from the Stabilization Reserve Fund to help offset reduced passenger revenues and maintain fare affordability. The budget also includes $0.2 million for a one-time freeze on all non-essential staff travel.

It is important to note that reliance on the Stabilization Reserve creates a significant funding pressure for 2027. Future budgets will need to incorporate measures to offset this reserve withdrawal and ensure ongoing financial stability.

Transit Expansion: Budgets for Lines 5 and 6 Service Based on Full-Year Operations in 2026

The 2026 Operating Budget includes $179.5 million net for the operation and maintenance of Line 5 Eglinton and Line 6 Finch West, representing a $78.0 million increase over the 2025 budget. This increase consists of $52.2 million for Line 5 and $26.0 million for Line 6. All related costs in 2026 are fully offset by provincial funding secured under the Ontario-Toronto New Deal agreement, ensuring financial support for these expansion projects through March 31, 2027.

For budgeting purposes, the 2026 Operating Budget assumes a January 2026 revenue service start date for Line 5 (subject to final confirmation by Metrolinx), while revenue service for Line 6 began in December 2025. These new lines will add approximately 0.6% to total service hours delivered to TTC customers. Budgeted expenditures for Lines 5 and 6 are summarized in Table 7 below.

Table 7 Lines 5 and 6 Total Cost & Funding Summary

Fare Capping Implementation

Beginning September 1, 2026, adult, youth, and senior riders will pay for a maximum of 47 rides per month, after which additional trips are free. Beginning September 1, 2027, the cap will be reduced to 40 rides per month. This change simplifies fare payment, eliminates the need for upfront monthly pass purchases, and improves equity by reducing cost barriers for low-income and transit-dependent riders. Monthly passes for adults, youth, and seniors will be phased out, while the Adult 12-Month Pass and Post-Secondary Monthly Pass will remain available. Fare capping also supports modernization by enabling open payment users to benefit from monthly pricing and aligns with fare integration initiatives such as the One Fare program.

For TTC Conventional service, the estimated revenue reduction for a cap of 47 rides is $3.1 million in 2026, increasing to $18.5 million in 2027 and $36.6 million annually from 2028 onward as the cap is lowered to 40 rides. If this fare policy change is approved, more precise financial impacts will be calculated during each year’s budget process.

Ridership is expected to grow significantly, with 2.1 million net new free rides in 2026, rising to 21.3 million annually by 2028.

Table 8 Fare Capping Financial and Ridership Impact

2026 Operating Complement

Consistent with the initiatives outlined in this report, the approved operating complement will increase by 383 positions to 15,299 positions, as summarized in Table 9 below:

Table 9 2026 Operating Complement Change

This increase reflects staffing requirements to support service delivery and major initiatives. Specifically, the 2026 Operating Budget adds 52 positions to sustain completed capital projects, 120 positions for TTC Conventional service to address travel patterns, manage congestion, respond to operational needs and restore peak service on Line 1 and Line 2, 30 positions for Wheel-Trans to accommodate growing demand, 28 positions for the 2026 FIFA World Cup, 100 positions to support operating plans for Line 5 and Line 6, and 10 positions for the expansion of the Eglinton East LRT. These additions are partially offset by a reduction of six positions resulting from recommended efficiency measures.

Further details on changes to the approved operating complement are provided in Appendix B.

2027 and 2028 Outlook – Incremental Cost Pressures Highlight Ongoing Need for Sustainable Operating Funding Model

The Outlooks for 2027 and 2028 forecast cost pressures of $147.7 million and $95.9 million, respectively, driven by prior commitments, service adjustments, and changes in external funding.

Table 10 details these projected cost pressures. These figures represent minimum funding requirements and highlight the financial challenges facing the TTC over the next two years. While planning efforts will continue to mitigate these pressures, a sustainable operating funding model will be critical to avoid service erosion when the Ontario–Toronto New Deal Agreement expires in 2027.

Table 10 TTC Outlook 2027 and 2028: Incremental Funding Requirements

Note: Future year estimates do not include provisions for wage increases or benefit improvements beyond the expiry of current Collective Agreements. Line 5 and 6 costs to be reviewed after one full year of service to understand the impact of inflation, collective bargaining, service and provincial funding.

It is recommended that the TTC Board:

1. Endorse the TTC 2026-2040 Capital Investment Plan of $53.994 billion, as outlined in Attachment 1 of this report;

2. Endorse the TTC 2026-2040 Real Estate Investment Plan Update, including the implementation timeline, as outlined in Attachment 2 of this report;

3. Approve a 2026 Capital Budget of $1.635 billion and future year planned estimates of $15.022 billion for a total TTC 2026-2035 Capital Budget and Plan of $16.657 billion, comprising the following, as outlined in Appendix B of this report:

a. A 2026 Capital Budget of $1.606 billion and future year planned estimates of $14.916 billion, for a total TTC 2026-2035 Base Capital Budget and Plan of $16.522 billion; and

b. A 2026 Capital Budget of $28.7 million and future year planned estimates of $106.3 million, for a total TTC 2026-2035 Capital Budget and Plan of $135.0 million for Transit-Expansion-Related Projects.

4. Approve a 2026 year-end capital workforce complement of 3,345 positions, reflecting an increase of 60 capital positions, as summarized in Appendix D;

5. Reaffirm requests to the Federal and Provincial Governments for a tri-partite discussion on the development of a sustainable, long-term funding model for public transit capital and operations needs;

6. Delegate authority to the Chief Executive Officer to execute any transfer payment and/or contribution agreements required with the Province of Ontario and/or Government of Canada to receive intergovernmental funding for priority projects and programs and amend the 2026-2035 Capital Budget and Plan to include the funding, subject to terms and conditions satisfactory to the TTC’s General Counsel; and;

7. Forward this report to the City Budget Committee and the City Manager as the official 2026-2035 Capital Budget and Plan submission for the Toronto Transit Commission.

This report presents the recommended 2026-2035 Capital Budget and Plan for the TTC. It seeks the Board’s approval of a 2026 Capital Budget and 2027-2035 planned estimates to fund the acquisition, rehabilitation and renewal of the TTC’s assets required to deliver transit service in Toronto. This report also seeks the Board’s endorsement of the TTC’s updated 2026-2040 Capital Investment Plan and companion 2026-2040 Real Estate Investment Plan.

2026-2035 Capital Budget and Plan Highlights

The 2026-2035 Capital Budget and Plan totals $16.657 billion, including a 2026 Capital Budget of $1.635 billion. This 10-year Capital Plan allocates 63% toward maintaining transit in a state of good repair, 4% for safety and legislated requirements, and 33% for service improvement and growth-related projects.

The prioritization of funding within the 2026-2035 Capital Budget and Plan has been developed in alignment with the Prioritizing TTC Asset State of Good Repair to Keep the System Moving Reliably: Outlook for Capital Budget 2026 report, presented at the Strategic Planning Committee meeting on September 4, 2025. In this report, the most immediate five-year needs for Health and Safety, Legislative, and State of Good Repair were identified, with the most critical items including:

The recommended 2026-2035 Capital Budget and Plan therefore adds $1.736 billion in incremental funding to address outstanding needs, with $1.362 billion (or 79%) being dedicated to crucial State of Good Repair, and Safety and Legislative needs, including:

• $302.8 million for subway, bus, and streetcar vehicle overhaul programs
• $168.8 million for crucial subway and surface track replacement
• $253.4 million for traction power, signaling, communications and power distribution asset replacement/rehabilitation
• $141.6 million for facility rehabilitation/modifications

Addressing State of Good Repair (SOGR) is essential for service reliability, which is why the TTC continues to place the highest priority on meeting health and safety, legislative and state-of-good-repair needs first. However, the scale of SOGR investment still required is crowding out the opportunity to advance needed capacity enhancement investments to keep up with population growth and capture more ridership long term.

While progress has been made in addressing the TTC’s unfunded capital priorities, sustained and predictable funding is still critical to address the remaining capital needs constraints. The Capital Investment Plan (CIP), which lays out the TTC’s capital needs over a 15-year period, is $53.994 billion or $616 million higher than the $53.378 billion identified in the 2025 CIP. Of the $53.994 billion CIP, unfunded capital investments amount to $37.336 billion over the 15-year planning horizon, highlighting a significant gap in long-term financial support.

Emphasis must continue to be placed on the requirement for a tri-partite approach to developing a sustainable public transit funding model that is predictable and supports the long-term viability of the TTC.

2026-2040 Capital Investment Plan
The 2026-2040 CIP identifies a total of $53.994 billion in investment required, of which $37.336 billion is unfunded. The TTC CIP organizes projects by category and mode/portfolio, which are summarized in Chart 4 and table below.

Table 13: 2026-2040 Capital Investment Plan ($ Millions)

For a full breakdown of the 2026-2040 Capital Investment Plan, refer to Attachment 1 of this report.

Real Estate Investment Plan (REIP) Update

As a companion document to the CIP, the REIP sets out the strategic direction for the planning and management of the TTC’s real estate assets and the 15-year priorities in support of TTC’s capital programs and operational needs. The 2026 update to the REIP includes initiatives focused around TTC’s recently acquired Kipling Lands, which will support new facilities in the city’s west end and adds more TTC priorities to advance accessibility throughout the network. The update also identifies a number of City of Toronto building initiatives involving TTC’s real estate, which focus development around TTC’s transit stations.

Attachment 2 provides an overview of TTC’s updated Real Estate Investment Plan

2026-2035 Capital Budget and Plan

The recommended 2026-2035 Capital Budget and Plan totals $16.657 billion. A total of $16.522 billion of the recommended 10-Year Capital Plan is allocated to the TTC’s base capital program and $135.0 million to transit-expansion-related projects, as summarized in Table 14 below:

Table 14: 2026-2035 Capital Budget and Plan Base vs Expansion

In addition to the base capital program and transit-expansion-related project summary, the TTC maintains two views of its capital projects – one categorized according to project type and a second based on strategically grouping all its capital project needs, combining conventional SOGR, Service Improvement, and Growth projects within six distinct portfolios. Chart 5 outlines the funding breakdown by both the project category and portfolio views.

For a full breakdown of the 2026-2035 Capital Budget and Plan, refer to Appendix B.

2026 Capital Budget

Representing the first year of the TTC's 10-Year Capital Plan, the proposed Capital Budget for 2026 is $1.635 billion. Chart 6 provides an overview of how the recommended 2026 Capital Budget is allocated by project category and portfolio.

Capital Funding Sources

Capital projects are financed through various sources, including funds secured from all three orders of government. However, the City of Toronto is the primary funder of TTC capital needs at an approximate two-thirds share of total funding. The TTC’s capital funding sources over the 10-year period are summarized in Table 15 below and further in Appendix C:

Table 15: 2026-2035 Capital Plan by Funding Source

Operating Impacts of Completed Capital Projects

Costs and benefits (savings) to be realized from the completion of capital projects have been identified over the 10-year period, including, but not limited to, costs related to Streetcar Infrastructure and Purchase programs and Information Technology Systems as well as projected savings related to the procurement of all-electric buses. The completion of these capital projects will result in estimated net expenses of $16.1 million to be realized over the 10-year planning period and an operating impact of $6.3 million in 2026, which has been incorporated in the recommended 2026 Operating Budget.

Table 16: Operating Impacts of Capital

Economic Impact of Investing in the TTC

Using the economic model established in partnership with the University of Toronto’s Mobility Network, approval of the 2026-2035 Capital Budget and Plan is estimated to contribute $17.0 billion in gross domestic product, $41.3 billion in economic activity and almost 250,000 jobs.

In 2026 alone, approval of the recommended 2026 Capital Budget is estimated to generate $4.3 billion in economic activity and nearly 26,000 jobs across Canada.