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STM Under Threat: Collective Transport Models Deemed Unviable

Simone Bélanger

Editor-in-Chief



Photo via Montréal Gazette


Collective transport has been yielding deficits since the COVID-19 pandemic. The STM deficit was projected at $2.5 billion for the next 5 years, suggesting that public transport’s business models have a long way to go. For the year 2024 only, the deficit was assessed at $532 million. Faced with these significant shortfalls, Quebec’s urban transport companies are urging the Prime Minister to “have more ambition in terms of collective transport.” This critical issue does not solely affect the Société de transport de Montréal (STM), as other municipalities fear that their services will be crippled as well. 

 

On October 27th, the Minister of Transport and Sustainable Mobility, Geneviève Guilbault, announced the CAQ government’s intention to absorb 20% of transport operators’ deficit by 2028 with an aid of just over $500 million. In that case, cities would have to assume the remainder of the cumulative deficit: the infamous $2.5 billion over 5 years. This decision was not favourably welcomed by public transport users, worried about the reduction in services forecasted by the STM, notably the subway closure at 11 p.m., which would affect thousands of workers and students. Other measures, such as the metro opening at 9 a.m. on the weekends, a decrease in subway train and bus numbers, a 33% decrease in frequency of passage for night buses, and an increase of the target number of users per bus by 10, were also likely to be deployed. Guilbault responded to the rising discontent at a press conference, claiming that the provincial government was still discussing with municipalities.

 

Soon after, collective transport organizations’ presidents voiced their thoughts on Quebec’s decision, deeming it outrageous. “Today, we are calling on the Prime Minister of Quebec and [Eric] Girard, Minister of Finance,” stated the president of the Réseau de transport de la Capitale, Maude Mercier Larouche during a media scrum held in Quebec. “For us, it is unthinkable to think about cuts in service. We do not want to level down,” she insisted, recalling that “85%, even 90%” of the operating costs of transport companies are linked to providing services to the population. “If we cut, it is necessarily a bit like saying that we are sawing off the branch that supports us.” 

 

Facing massive backlash, the CAQ’s government decided to reconsider, and released their final offer on November 3rd, when Guilbault declared that Quebec would absorb 70% of public transport companies’ deficit in 2024. The mayors of the Metropolitan Community of Montreal (CMM) manifested their appreciation for Quebec’s commitment in taking on 70% of the shortage. However, they urge the government to base its calculations on real deficits, values which remain largely disputed. Nevertheless, it becomes increasingly obvious that Quebec will cease providing if the deficits are not curbed throughout the next few years. Guilbault indeed asserted: “We can’t just put endless money into these deficits. We need to look at ourselves, restructure financing and find ways to save at source.”

 

But why the deficits? The principal source of these shortfalls is the drop in ridership assessments. Following the pandemic, multiple professionals adopted telework, depleting the demand for public transportation. In the fall of 2022, the STM had regained 70% of its pre-2020 ridership, a value nonetheless insufficient for the company to generate profits. 2023 data has yet to be published, but the lingering of teleworking, however, has meant that ridership in downtown Montreal remains lower than the network average, and that pre-pandemic targets are far from concretization.

 

Furthermore, the need to rethink public transport enterprises’ business model is crystal-clear. STM executive director Marie-Claude Léonard agrees; their financing strategy must be reviewed. “The model no longer works,” she said in an interview with Radio-Canada this May. “Expenses are piling up faster than revenues, and we must review the financial framework with our partners to achieve our ambitions regarding public transportation.” The CAQ government is also planning on investigating transport companies’ management, and intends to impose performance audits on the 10 transport companies as to reduce their structural deficits.

 

The salary of STM executives is an additional matter of debate. General administrators receive between $310,000 and $415,000 yearly, including benefits and pension plans. In 2022, Léonard’s salary was $415,000, a much greater amount than that of all other municipal functions. For instance, Mayor Valérie Plante’s salary was $194,372 in 2022. Despite the funding crisis, critical deficit, and decrease in ridership, transport companies have offered major remuneration increases to their senior executives between 2019 and 2022. Within the STM, increases ranged from 1.6% to 15.5% in 2022—a questionable tendency, especially when knowing that without provincial aid, collective transport would crumble. 

 

As of now, the measures that the STM will implement are yet to be determined. The situation is most likely to unravel throughout the following weeks. Ultimately, it remains crucial to critically evaluate the internal management practices of collective transport companies, no matter how tempting it is to blindly point a finger at the CAQ government for not entirely absorbing the deficits. 


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