Higher fares or less service — that’s the choice the Toronto Transit Commission confronts when it considers a 5-cent fare hike proposal for next year, says TTC chair Karen Stintz.

Without the price increase, it’s likely that service cuts would be unavoidable, she said. Even with outsourcing unionized jobs, transit officials face a $30 million gap in the 2013 operating budget.

The fare rise, which translates into about $30 a year for Metropass users, would cover about $18 million of that, Stintz said. “Without a fare increase, if our subsidy stays flat, we would then go back to reducing service. Even with all the cost-cutting measures we’re taking, we won’t be able to close that gap.”

The fare discussion is part of a budget report to be released Wednesday in advance of the TTC board meeting Thursday. The TTC depends on about a $500 million subsidy from the city to balance its $1.5 billion annual operating budget.

Last year, the city councillors on the TTC board approved in principle a 10-cent annual fare increase through 2015. But Stintz said the board is aware higher transit fares affect vulnerable residents most.

“The commission is mindful that fare increases do impact those at the lower end of the income spectrum,” she said.

The commission will keep on refining its budget, including potential diesel savings, to cover off the remaining $12 million gap, Stintz said. But contracting-out bus cleaning has already been factored in.

The loss of about 159 jobs — current workers will be absorbed into other TTC areas — is in addition to about 30 washroom-cleaning positions already outsourced this year, said Bob Kinnear, president of the transit workers’ union.

“The timing of the proposed increase is to try to drum up animosity among the riders. At the same time, they’re contracting out to suggest it’s the employees that are the problem,” Kinnear said.

About 60 workers picketed the TTC’s Davisville headquarters on Tuesday.

Kinnear released a list of 19 areas he says are being considered for outsourcing, from gatehouse attendants to bus maintenance workers and subway and streetcar cleaners. “They’re going to peg them off one by one,” he said.

The union says the TTC is over-estimating the potential savings of outsourcing. Its estimates do not include the cost of implementing and administering the contracts or handling contractual disputes. The union reports that a detailed wage proposal that would have saved the TTC $4.13 million over two years by reclassifying many of the cleaning jobs was rejected.

The TTC claims it will save $4.29 million from contracting-out bus cleaning. But that amount won’t be realized until all eight garages are affected, and the TTC is expected to approve outsourcing at only two of them for the time being — a total of 44 jobs.

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