The TTC is proposing to hike fares by more than a nickel in the new year, to raise an extra $36.5 million toward the costs of operating the system.

The nickel increase on the price of a token would be applied proportionally to other fares, including the Metropass.

In addition, a staff report that will go before the board next week recommends one of the following options:

A 25-cent increase on the $3 cash fare, which is used by about 10 per cent of riders.

Or an additional increase in the Metropass, used by about half of riders, so that its cost is the equivalent of 49.5 tokens rather than today’s 48.5.

Although the price of a Metropass has increased with inflation since 2010, the effective cost per ride has actually dropped because pass users are riding an average of 74 times on their passes rather than 70, says the report.

The 5-cent recommended fare rise for 2014 would take the cost of the adult Metropass to $131 a month from the current $128.50. If the board decides to add a trip to the pass formula, it will be $133.50. In 2010, a Metropass cost $121.

With the available federal tax credit, “(the Metropass) is still a pretty good deal, but it’s not sustainable,” said TTC spokesman Brad Ross.

It’s been three years since the TTC raised its cash fares.

The city manager has also agreed to an increase in the TTC’s operating subsidy, which has been flatlined at $411 million on its $1.5 billion operating budget for the past two years. As part of Toronto’s overall budget, that subsidy increase must still be passed by city council.

This year, the TTC is looking for a subsidy of $428 million to serve its expanding ridership.

Transit officials expect the system to carry 540 million riders next year, up 2.3 per cent from 528 million this year. Since it recovers only about two-thirds of its operating revenue through fares, however, the more riders, the more money it generally loses.

The TTC’s subsidy is 78 cents per rider — the lowest in North America. In New York City, the subsidy is $1.03; in Montreal $1.16. Closer to home, Mississauga provides $2.21 per rider and York Region’s subsidy is $4.49 per rider.

Day-to-day expenses are expected to increase by $59.6 million next year. The ridership increase alone will cost the system an additional $16.6 million to provide the same level of service, according to the report.

Even the subsidy increase and fare hike won’t be enough to balance the operating budget. There is still a $6 million shortfall, a gap the TTC is confident it can recover from efficiencies.

But if the board declines to increase the trip multiplier on the Metropass or increase the cash fare by a quarter, the shortfall rises to $14 million, and that’s a more difficult problem, he said.

Loading... Loading... Loading... Loading... Loading... Loading...

In addition, the TTC is looking at a $2.7-billion capital shortfall over the next 10 years. That’s the money it needs to keep the existing system running safely and efficiently, as well as any improvements to stations and other infrastructure.

The TTC plans to form a task force to lobby senior governments for more funding, consisting of CEO Andy Byford, the chair of the TTC board, TTC chief financial officer Vince Rodo, city manager Joe Pennachetti and the city’s chief financial officer.