Free Transit Is a Bad Idea

One feature of the CIV331 (Transport 1) course is its "Position presentation", a project where you need to argue for or against one of eight statements. For this project, Jonathan Tang and I chose to argue against transit being fare-free in the City of Toronto. For information purposes, I am displaying an outline of our points here. These points may not be the most well-reinforced, as I did not have much time to look into research for this project. This page is one of opinion, not of the same rigour as my major projects. I hope to expand this page as time permits during the Winter term.

Ramifications of a Lack of Fare Revenue

All sources of transit revenue are not inherently reliable. Government priorities may change after an election. Fares may decline due to economic or other reasons. However, fares have one advantage over government funding: They correlate well with ridership demand. For example, even though transit agencies had to scale back during the COVID-19 pandemic, the routes themselves were experiencing lower ridership so crowding never got worse (though due to the pandemic, excess government funding may have been necessary to ensure distancing).

Government priorities, however, do not correlate as strongly with ridership. This results in much worse impacts on the quality of transit for riders. While I am aware of cuts by the Mike Harris provincial government in the '90s, I chose to focus on cuts made during the early 2010s by the City of Toronto. At the time, the City and the TTC had a budget shortfall . In the end, this resulted in major service cuts, a fare increase, and modified crowding standards allowing vehicles to be more crowded than previously before service could be improved. Such cuts would have been much worse had the TTC exclusively relied on government funding. Such cuts may come again in the next few years, as the TTC faces budget problems and will use half its reserves to prevent a fare increase in 2026.

A Left Turn Right Turn (LTRT) study for the City of Burlington notes that transit agencies can not increase service as easily when unexpected ridership increases occur as such riders would not be paying a fare. I know some agencies (such as York Region Transit) have contingency funds for events like this, but such contingency funds will need to be bigger without fare revenue. With fare revenue, the most overcrowded routes (i.e. those with more ridership) tend to do the best financially (some even turn a profit), limiting the amount of money lost when additional trips are added.

On Affordability

This part was primarily a response to the primary criticism of transit fares: They can be unaffordable for poorer residents. I personally think the above is a much bigger issue than this, particularly when there are other ways of dealing with affordability problems. Apart from better social programs to help, the TTC's Fair Pass already exists, showing you can charge lower fares for low-income residents if needed. Could this be done better and without telling the TTC directly? Yes. Transit being free for individuals below a certain income threshold is also something I did not argue against. Exactly how the Fair Pass program (and similar programs in other jurisdictions) could be something to be discussed, but such programs should preclude making transit free over affordability.

Other Points

As noted in this 2017 Santiago study, people do not get out of their cars much when transit is free. I think this conclusion is expected due to the higher upfront costs of driving and drivers' relative financial security compared to transit users, I should look into more studies to back up this point more. This was primarily in response to a claim in the LTRT report stating that a lack of fares would increase public support for transit due to more people using it.

The TTC's fare revenue was expected to be over $1.3 billion in 2024. That's a lot of money for a government to need to spend, and a Kansas City study done by a group supporting fare-free transit claimed it would boost the area's GDP by a mere $18 million at best. While KC is smaller than Toronto, even accounting for the size difference the GDP growth will be less than the existing fare revenue in the TTC's case (and not all of GDP goes in the government's pocket). Like with the Santiago study, I hope to find more research on this in the winter term as time permits.

Not included in the presentation was a literature review from Prof. Eric Miller which found that fare changes have less impact on ridership as fares decrease. Thus, there is little ridership benefit from decreasing fares from a low level to free. The TTC already has a lower fare than other GTHA agencies, so it is probably at a fine level for encouraging ridership.

Last updated: 12/19/2025