All signs point to a New Year's fare hike for TTC riders, now that the Toronto Transit Commission has moved up its monthly November meeting to talk about operating costs.

Originally scheduled for the end of the month, it will take place Nov. 17, with the TTC's 2010 operating budget expected to be the key agenda item.

That gives the nine city councillors on the commission just a little over the six weeks the TTC requires to prepare for a fare increase.

It's not clear how big a fare hike is being contemplated, but an increase of about 25 cents per ride raises about $45 million in revenue for the transit system.

For the past decade the TTC has raised fares about 10 cents per ride annually, which brings in about $20 million in operating revenue. But this year Mayor David Miller pledged a price freeze to help recession-weary riders.

Chair Adam Giambrone has already rejected the idea of service cuts, and both the city and province are predicting dire financial straits for the foreseeable future, making subsidy increases look unlikely. The TTC is nevertheless expected to ask for an increase of about $80 million in operating subsidies for 2010.

There is going to be about a $100 million shortfall on next year's operating budget, Giambrone said Tuesday. That reflects higher costs across the board, 2 to 3 per cent inflation, diesel prices and rising accident claims.

There are three ways for the TTC to raise operating revenue: Cut service, increased subsidies from government and fare hikes.

"All three options will be before the commission for consideration," said Giambrone. "I am not prepared to cut service."

TTC vice-chair Joe Mihevc said, "The bottom line is the deficit for the TTC is huge," referring to the shortfall in operating revenue generated at the fare box, where the transit system recovers only about 71 per cent of its costs.

"You cannot talk about the deficit without talking about fares," he conceded. A 10-cent increase usually means a loss of about 2 million rides a year.

The TTC is only just recovering from the loss of ridership in the 1990s, when it cut service and increased fares.

"It has taken us a generation to get that ridership back," said Mihevc.

TTC surveys consistently show that service cuts are the last thing riders want.

The transit system received about $394 million in city subsidies on its $1.3 billion operating budget this year.

That was up from $317 million in 2008 – making another increase look unlikely for 2010, said city budget committee chair Shelley Carroll, who pointed out that if the TTC wants to raise fares in January it is in the awkward position of having to do so before the budget committee does its review.

"We're going to wait to see their submission," she said.

But with new Transit City streetcar lines rolling out in a couple of years, operating costs for the TTC will continue to be a problem.

Asked if it would get more money next year, she said, "Without any hesitation, with what I know of the early operating outlook, the answer is no."

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The TTC last week announced it had reduced its 10-year capital plan, which includes new vehicles and facilities, by $538 million. That's $300 million less than the $838 million the city asked it to cut.

The TTC is already projecting a $22 million shortfall on its 2009 operating budget, in part because the transferable monthly Metropass has been appealing to riders.

Instead of collecting $1.80 per ride, the TTC has been averaging only about $1.78 – an amount that adds up when multiplied by about 1.5 million rides a day, according to transit officials.