Oakville is pulling the plug on a plan to electrify its bus fleet.
When grant money from the Investing in Canada Infrastructure Program (ICIP) runs out, the town will return to purchasing diesel buses.
That decision was made by town councillors at an October 24 budget meeting, based on a report from Oakville Transit director Adrian Kawun.
Grant money from the ICIP program will allow the town to electrify about half of its fleet by 2026, with the purchase of 27 mini- and 47 full-size battery electric buses.
Replacing the remainder of the town's diesel buses with battery electric vehicles would cost taxpayers about $963 million over the next 25 years.
Buying new diesel buses instead would cost about half as much, or $500 million.
Town councillors voted for the cheaper option, directing town staff to buy diesel once ICIP funding is exhausted.
An ambitious plan to go electric with Oakville Transit was launched in 2020, with the announcement of a joint $66 million investment by the federal, provincial and town governments.
But rapidly rising prices have plagued the transformation since then.
In 2023, the town received and began operating 15 electric mini-buses. The 20-foot vehicles are being used for Oakville Transit’s care-A-van, and Ride On-Demand services.
The first 15 full-size electric buses are set to be delivered over the coming month and go into operation early next year.
But the price of those 15 buses was $8.4 million more than the original budgeted price of $15.4 million.
Read more here: Electric buses cost millions more than budgeted
Kawun’s report adds that range limitations force the town to buy four electric buses to replace every three diesel buses. The e-buses also require new tools and costly additional training for mechanics and bus operators.
Long-term electrification contracts to cost $108.5 million
In 2023, the town signed long-term contracts to lease, install and operate charging infrastructure that will allow the operation of the electric buses.
Worth $108.5 million over 20 years, the contracts are with PowerON Energy, an Ontario Power Generation (OPG) company.
- A $58.1 million Energy Infrastructure Contract includes the procurement and installation of charging infrastructure and energy equipment for the Oakville Transit garage and the Uptown Terminal.
- A $50.4 million Energy Services Agreement includes the provision of energy services, associated operating costs, and energy infrastructure maintenance costs.
The town also inked a third contract with PowerON Energy.
That $18 million deal was to cover design and construction management services for an expansion of Oakville Transit’s Wyecroft Road facility. The renovation will allow space for 33 bus charging areas, as well as additional bus storage capacity to accommodate future growth.
But town councillors were recently forced to approve an additional $5 million to the budget for that design and construction work.
The rising costs led Ward 1 councillor Sean O’Meara to question why the town is not exploring alternatives to the expansion, including wireless charging options.
The politics of transit
Mayor Rob Burton, continues to promote the success of Oakville Transit’s ridership growth and green transformation, cheering in his recent State of the Town address that “transit has come back.”
In 2019, before the pandemic hit, Oakville Transit had 4.1 million riders, he noted.
That dropped to a low of 1.5 million in 2021 but has rebounded, with a record 4.7 million riders expected in 2024.
“Our free transit program for youth and seniors has clearly boosted transit's recovery,” he said. “Our community is more accessible to more people as a result.”
But with Oakville Transit costs set to make up more than nine per cent of the town’s operating budget and almost 17 per cent of its capital budget in the coming year, some councillors are questioning the price of that success.
Since May 2023, children, youth and seniors have ridden on Oakville buses for free. The initiative, championed by Burton despite opposition from Oakville Transit staff, squeaked through on an 8-7 town council vote.
Read more here: Council approves free transit for youth and seniors on an 8-7 vote
As a result of the program, the town has seen ridership increase by 230 per cent for youth under 19, and 170 per cent for seniors over 64.
But paid adult ridership increased only 21 per cent in 2024.
The town expects to offer 1.5 million free rides in 2024, compared to 1.75 million paid adult rides. The result is a town subsidy of $10.36 for each transit ride.
“The great news is that part of the goal of getting people to get on the bus is there but now the question is, how do you sustain the system?” asked Ward 3 councillor Janet Haslett-Theall.
Concerns about the “huge cost” of transit and its impact on property taxes were echoed by Ward 4 councillor Allan Elgar during the recent budget meeting.
He said he frequently hears residents complain about empty buses and suggest that instead of providing transit, the town should contract Uber to deliver riders to destinations.
“I would even think it would be a good idea to paint heads on every (bus) window, so it looks full as it goes by,” he joked.
The town recently hired consulting firm HDR Corporation, at a cost of $250,000, to develop a five-year business plan for Oakville Transit.
That plan provides a roadmap to guide Oakville Transit in the coming years.
One of its recommendations is that the town “re-evaluate the provision of free transit for youth and seniors to ensure that investments in transit deliver maximum community benefit.”
During last week’s recent budget meeting, Oakville’s community infrastructure commissioner Phoebe Fu first said that town staff would not be reviewing the free transit initiative as “exponential growth to our ridership” has benefit to the overall system.
Later, in response to questioning from Haslett-Theall, Fu said staff would be considering all the report’s recommended changes to both fare and non-fare revenue sources.
Town staff will also continue to look for grant money that might fund the future purchase of electric buses.