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TransLink says cash gap forcing $90M/year in 'efficiencies'

"These are the only cards we have left to play," TransLink CEO Kevin Quinn told the mayors.
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SkyTrain on the move in Surrey.

TransLink is undertaking an "ambitious" $90 million-per-year campaign to reduce corporate costs, reduce staffing and pursue "added revenue generating measures" to help ease the impact of a more than $600 million shortage in funding, TransLink CEO Kevin Quinn told the Lower Mainland mayors' council Thursday in Burnaby.

"These are the only cards we have left to play," Quinn told the mayors. "We will move on it immediately."

"We're facing a significant structural deficit that is driven in large part by a funding gap in the order of $600 million per year just to maintain the transit service that we have today," he said. 

This followed a presentation of an independent efficiency review by Ernst & Young concerning cutting costs without reducing transit service, which Quinn characterized as "a deep dive into every aspect of our business."

Quinn noted these cuts will only "partially address" an anticipated yearly funding gap (of more than $600 million) as of 2026, when provincial government relief funding "runs out."

These measures include eliminating 35 unfilled corporate positions and "deferring" others, cutting back on third-party contractors and doing more work in-house, reducing research grants, leadership training courses and projects related to mobility innovations, and reducing ridership development and community initiatives, increasing fare-evasion enforcement, "optimizing" debt management strategy and reducing IT software and hardware expenses.

"We are going beyond the recommendations of the review and taking significant actions to reduce costs," Quinn said. "The urgency of solving this crisis cannot be understated as we will be forced to look at significant service reductions at the end of 2025 should a solution not be found for our broken funding model. While these were not easy decisions we've made them to preserve and protect transit service for our customers for as long as possible while we work with the provincial and federal governments and this mayors' council to find longer-term solutions."

In January, Metro mayors staged a press conference outside Surrey Central SkyTrain Station urging the public to pressure the federal and provincial governments for more cash for transit expansion. Surrey Mayor Brenda Locke said the transit system can't keep up with the region's demand "as it grows at a record pace, putting further pressures on affordability."

During a mayors' council on Oct. 26, 2023 TransLink disclosed its "daunting" $4.7 billion deficit.

On Thursday, Locke said while she's pleased to see TransLink embark on this "efficiency journey," she added "I think it does have significant implications for Surrey and the South Fraser generally, and maybe even other growth communities.

Locke said TransLink "needs to make that solid case for increased funding" from the federal and provincial governments. 

Quinn said it will implement "opportunities" contained in the efficiency review report "that do not entail reducing transit service to our customers" but added that there are "very limited opportunities to reduce costs without cutting service" as 85 per cent of TransLink's expenses are directly tied to "frontline transit service" and the remaining 15 per cent are "back-end support services which we have been keeping as low as possible."

That 15 per cent, Quinn said, is "already below" average administrative costs for Canadian and U.S transit agencies "which stand at 17 and 20 per cent respectively."

 

 

 

 



About the Author: Tom Zytaruk

I write unvarnished opinion columns and unbiased news reports for the Surrey Now-Leader.
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