CUTA’s 2023 Industry Highlights paints a picture of a public transit sector grappling with the lingering effects of the pandemic while striving to adapt to new realities. Based on data from the 2023 CUTA Factbook, the report underscores the resilience of transit systems across the country as they respond to shifting mobility trends, financial pressures, and infrastructure challenges. Despite these hurdles, the industry has shown remarkable ingenuity and adaptability.

Ridership Recovery: A Gradual Climb

In 2023, Canadian transit systems reported 1.76 billion linked trips, reflecting a steady recovery in ridership. While these numbers demonstrate significant progress since the pandemic, they remain below pre-2019 levels. This gap highlights the ongoing challenges faced by transit agencies in encouraging passengers to return to public transit, particularly in urban centers where hybrid and remote work models have become entrenched.

Interestingly, smaller communities have outpaced larger metropolitan areas in ridership recovery, exceeding pre-pandemic levels by 3%. This growth aligns with broader population shifts, as rising housing costs and the increased flexibility of remote work have driven many Canadians to relocate to smaller cities. To address changing patterns of mobility, transit systems have introduced innovative services, such as on-demand transit and microtransit, designed to meet evolving rider needs.

Financial Challenges and the Revenue Gap

The financial health of Canadian transit systems remains a significant concern. The Revenue-Cost (RC) ratio—a critical metric indicating the proportion of operating costs covered by operating revenues—has dropped from 51% in 2019 to 35% in 2023. While passenger revenue has rebounded to 85% of pre-pandemic levels, operating expenses have risen by 21% over the same period, creating a substantial financial gap.

To attract riders back to transit, agencies have implemented a variety of strategies, including more affordable and flexible fare options. While these measures have encouraged some growth in ridership, they have further constrained revenue streams, leaving agencies to navigate a delicate balance between affordability and financial sustainability.

Aging Fleets and Infrastructure Challenges

Another pressing issue is the aging transit fleet. During the pandemic, supply chain disruptions severely delayed vehicle refurbishments and replacements, resulting in a steady increase in the average age of transit buses—from 8.3 years in 2020 to 9.5 years in 2023. Older vehicles demand more frequent and costly maintenance, adding to the financial pressures already faced by transit agencies.

This issue not only impacts operating budgets but also underscores the urgent need for modernization. Without timely investments in fleet upgrades, transit systems risk falling behind in their ability to deliver reliable and efficient service.

Navigating the Road Ahead

Canada’s public transit sector stands at a pivotal moment. The challenges it faces are undeniable, from adapting to new ridership patterns to addressing financial and infrastructure constraints. However, these challenges also present opportunities for innovation. By focusing on modernizing fleets, enhancing customer experiences, and tailoring services to meet shifting demands, the industry has the potential to redefine urban mobility in a way that aligns with the needs of a changing population.

Efforts to secure sustainable funding and prioritize investments in critical infrastructure will be vital in ensuring the long-term viability of public transit. As transit systems continue to recover, they serve as a reminder of the critical role public transit plays in fostering sustainable, connected, and inclusive communities across Canada.

Read the full 2023 Industry Highlights document.

Request the 2023 CUTA Fact Book.