Winnipeg bus riders may have to deal with fare hikes and service cuts down the road.

A new report to the city’s finance committee says the transit department is facing a $10.6 million gap.

It says the majority of the shortfall is attributed to frozen funding levels from the province for transit.

The report says the budgetary shortfall from the province will persist for years. It pegs the amount this year at $8.1 million.

The report says additional fare increases and reduced service levels needs to be contemplated.

It also blames a decrease in fare revenue for the deficit.

A corresponding report says this is impacting the city’s overall bottom line and deficit.

It's asking council to use money from the city’s rainy day fund that would drain it down below recommended levels.