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Facing serious shortfall, TransLink cutting staff, costs

EV adoption beginning to eat into TransLink's revenues from fuel taxes
skytrain-translink-credit-translink
TransLink, which operates the SkyTrain system, says fare increases have not kept pace with inflation.

TransLink will implement cost cutting measures, including staff cuts, in an attempt to buy time to deal with a looming funding gap of $600 million.

TransLink operates the Lower Mainland's bus service, SkyTrain, SeaBus and West Coast Express.

Interestingly, the success of one green transportation initiative – subsidizing electric vehicle adoption – is having an impact on another: public transit.

The B.C. government’s attempts to get more people driving EVs has been so successful that it has resulted in a sudden drop in TransLink revenue from motor fuel taxes.

Last year, TransLink collected $34 million less in revenue from the fuel taxes than in 2022, the Crown corporation says in a news release. Those losses are only expected to continue to widen, as more British Columbians switch from gasoline powered cars and trucks to EVs.

TransLink's funding gap has also widened as a result of fare increases not keeping pace with inflation, and ridership levels that are lower than they were pre-pandemic.

In 2020, public transit fares, which had been scheduled to increase, were frozen, and have not caught up to inflation.

“With no fare increase in 2020 and 2.3 per cent increases in all subsequent years, TransLink’s costs have risen faster than fare prices have increased,” TransLink notes.

Inflation has also increased the cost of construction, labour, fuel maintenance and new vehicles “at unprecedented rates.”

“Additional operating costs for expanding bus service and for new expansion projects like the Broadway Subway Project and Surrey–Langley SkyTrain which will require significant funding to operate once complete.”

TransLink plans to implement cost cutting measures, including staff reductions, that will shave $90 million a year off its budget.

That will only buy it a few years, however, as it faces a major $600 million funding gap in 2026, when provincial government relief funding runs out.

“TransLink’s cost-cutting measures include corporate cost reductions and reduced staffing,” the Crown corporation says in a press release.

“It does not include any cuts to transit services for customers and is instead structured to safeguard transit service for as long as possible.

“The plan also identifies additional revenues and optimization of debt management.”

In an efficiency review that TransLink commissioned EY to undertake, EY warns that TransLink faces a total funding gap of $5.3 billion between 2026 and 2033.

"To close the gap starting in 2026, TransLink will need approximately $670 million per year in additional revenues and/or cost reductions," the review estimates.

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