TransLink balances 2021 budget after a difficult year

A senior government bailout, deferred projects and organizational cutbacks have helped TransLink deliver a balanced budget for 2021, despite significant financial losses due to COVID-19.

However, Metro Vancouver's transit authority will have to deal with a long-term funding gap when crafting its next investment plan.

TransLink CEO Kevin Desmond told the authority's board on Thursday the budget is the culmination of work that began in the summer.

“COVID- 19 has created well-documented havoc on our finances, just like transit agencies throughout the world that continue to struggle with depressed ridership and revenues,” Desmond said. “Over many months, our team created multiple financial scenarios, took a detailed look at our entire budget, and worked closely with our government partners.”

TransLink's ridership, along with the fare revenue it provides, has taken a major hit during the pandemic, and it is expected to remain well below normal next year.

Planned fare increases have been curtailed — this year's was eliminated altogether.

Fuel tax, parking rights taxes and development cost charges have also suffered. Fuel tax is expected to recover, but the other budget items are expected to remain low.

It is forecast that TransLink's revenue losses for 2020 will be $426 million, less $107 million in savings from organizational cutbacks. That leaves a net loss of $319 million, which will be covered by $644 million in federal and provincial government one-time operating funding relief. Most of the balance ($281 million) will make up for lost revenue in 2021, and $44 million will cover lower fare increases for four years.

The transit authority believes the money, along with “healthy liquidity,” will help it maintain service levels through 2021.

TransLink's chief financial officer, Christine Dacre, said the relief funding “really saved the day” and kept the organization from having to dip deeply into its reserves. She is confident TransLink will be able to weather the next year.

“The 2021 new capital program will keep our assets in a state of good repair, and this budget manages the near-term pressures and uncertainties brought on by COVID-19. But our structural revenue losses will be addressed in the next investment plan,” she said.

Total revenues for 2021 are budgeted to be $2 billion, which is about $56 million lower than anticipated last year. Expenses for 2021 are budgeted for $2 billion, which is $23 million higher than this year. TransLink managed to reduce 2021 expenses by making $63 million in cutbacks.