Changes to the provincial gas tax funding formula are having an impact on the projected bottom line at Transit Windsor.
Council was told during Monday's meeting that the city's third-quarter variance report is projecting a year-end budget deficit of $5,453,000 for the city bus service.
Two main factors are being cited: a revenue shortfall of $1,186,000 because of the provincial government revaluating the allocation and methodology of the Gas Tax Program and a projected revenue shortfall of $3,460,000 because of lower-than-expected post-secondary student transit revenue due to a drop in international students being allowed to study in Canada.
Gas tax revenue that the province provides to municipalities is based on ridership figures, with Windsor receiving $4,462,356 for the 2024-2025 fiscal year.
The city budgeted for an increase in funding, but in April the province announced the formula would remain status quo based on 2023-2024 figures as it evaluated the formula, which means the city did not see the incremental increase that was expected.
Windsor's Commissioner of Finance and Treasurer, Janice Guthrie, says they had estimated that, consistent with prior years, it would be based upon ridership.
"It has been frozen in a year where we did not have the same level of ridership. We are advocating for change, but that's kind of a theme that we're seeing, where there is provincial funding allocated to municipalities that's based on a formula," she says.
Guthrie says this is not a reflection of the operations at Transit Windsor.
"They are working very hard in trying to right-size the operations, but it's external factors that we really can't control and are really upper-level-of-government driven," she says.
The city is advocating for stable funding that reflects the increase in ridership.
There's no timeline for when the provincial review of the funding formula will be completed.