Pandemic projected to cost city $254M in 2021

The City of Ottawa is expectingthe COVID-19 pandemicto placemore than a quarter-billion dollars of added pressure on its books in 2021, but those expenses should be almost entirely covered, finance staff said Tuesday.

Just three months into the current fiscal year, staff now peg this year's COVID-19-relatedcosts at $254 million. The revised projections represent a major jump from the $153-million pandemic-related deficitstaff calculatedlast fall while drafting the budget.

Despite the daunting figure, chief financial officer Wendy Stephansontold the city's finance and economic development committee Tuesday that Ottawa remains in "good shape," thanks in large part to millions in pandemicrelief flowingfrom upper levels of government since last summer.

The city has already received enough towipe out the $238 million in pandemic costs incurred in 2020. In fact, by pausing hiringand discretionary spending, the city finished 2020with a$17.6-million surplus overall,enough to help mitigate this year's burden.

As well, upper levels of government have made several funding announcementsto offset transit, social services andgeneralcosts, while OC Transpo has found an extra $5.5 million in savings from some bus routes.

That leaves a gap of just$13.5 million, and it's possible that the federal budget in two weeks could cover that remaining amount, Stephanson said.

Transit thebiggest burden

The extra pandemic pressure is mainly due to higher-than-expected losses incurred byOC Transpo.

Ridership simply hasn't recovered the way staff projected months ago. They based the 2021 budget on ridership starting the year at 30 per cent of pre-pandemic levelsand rising to 90 per cent by year end. But the majority of OC Transpo's customers federal employees and post-secondary studentshavenot returned to their offices and classrooms, leaving ridership in March at just27 per cent of normal levels.

• OC Transpo finances in 'very, very good shape,' says city
• OC Transpo to suspend some suburb-to-downtown routes

As a result, transit aloneis projected to face pandemic losses of up to $153 million in 2021, accounting formore than half of the city's COVID-19 costs this year.

Mayor Jim Watson said he's grateful for all the help from upper levels of government and is pleasedcity's reserves are healthy, but said he's is already thinking forward tonext year.

"We have to be very cautious of what 2022 will bring, because COVID and its repercussions will still be with us for some time after we defeat the virus itself," Watson said.

Staff said they would present another update halfway through the current fiscal year.