Following confirmation of its compensation from the Autorité régionale de transport métropolitain (ARTM), the Société de transport de Montréal (STM) tabled its final budget for 2024 which includes $85.6 million in spending reductions, while maintaining its level of service. These are colossal efforts that will impact the company's ability to maintain the quality of the overall customer experience. This level of effort cannot be sustained over the next few years, without jeopardizing the company's ability to maintain its service offering.
The $1.77 billion budget maintains bus and métro service at 2023 levels and increases paratransit service by 29.5% to reach 2019 levels, despite funding challenges.
“The STM is committed to finding potential savings but cannot single-handedly resolve the entire public transit funding problem. It is essential that we maintain the level of service and even endeavour to increase it to continue to be an attractive mode of transportation for our current and future customers. It would be unfortunate to break the momentum of the public transit resurgence at such a pivotal point,” says Éric Alan Caldwell, Chair of the STM Board of Directors.
Reduce spending on a recurring basis
The STM is set on doing its fair share in a challenging financial context and has made considerable efforts to control its expenditures in recent years.
“In 2022 and 2023, we secured one-time savings of more than $18 million and $52 million, respectively. In 2024, we’re moving away from one-time savings and toward recurrent measures, in particular by reducing payroll for non-operations employees and managers and decreasing the budget for goods and services. These measures will have long-term effects, which marks a major turning point for the STM,” explains Marie-Claude Léonard, CEO of the STM.
Despire these efforts, the STM is completing its budget planning exercise for 2024 with a financial risk of $45.95 million. This amount includes an expenditure optimization target in the form of a risk that we hope to recover of $35.6 million and an amount of $10.3 million for which actions must be identified to maintain service. The STM is continuing discussions with its partners to find renewed and viable solutions for the 2024 fiscal year and the long term.
Regarding the risk to be recovered of $35.6 million, the STM intends to:
- Reduce its payroll by 4% more than the 1% already achieved on positions not related to service delivery: $24 million
- Reduce its expenditures for goods and services (e.g., professional and technical services, supplies, leasing): $9 million
- Adjust the special operating budget for specific projects: $3 million
In addition to the actions currently being taken, the STM has also committed, for the next five years, to generating a recurring reduction in spending of $100 million, without impacting service to customers. To achieve this, the STM must be able to rely on sustainable and predictable sources of revenue.
Network upgrades: increased performance and capacity
For public transit to continue offering its expected benefits, despite the challenging financial context, the STM must continue upgrading and developing its networks. By 2030, 93% of STM infrastructure will be more than 40 years into its useful life. In light of this, the 2024-2033 Capital Expenditures Program amounts to $21.1 billion, up $0.7 billion compared with 2023.
These investments make it possible to optimize the use of existing assets, increase the capability to provide services, improve métro accessibility and sustain the appeal of public transit, without the need to build new equipment.
In French only: Budget 2024
In French only: PI 2024-2033