MONTREAL — Montreal-area transit service Exo is cutting dozens of jobs and is warning of future service reductions, as Quebec’s public transportation sector continues to struggle under a persistent funding shortfall.

Exo’s 2026 budget includes plans to cut its workforce by about 11 per cent, or 73 jobs, as it reduces its overall budget by 0.4 per cent compared to the previous year.

The agency operates suburban trains and buses in the region and the chair of its board of directors admits its services could be affected by cuts in the future.

Pierre Fortin said this week that the agency can’t meet its target of reducing spending by $100 million by 2028 without eventually impacting services.

"Despite the revision of its organizational structure and an already highly optimized model, Exo will not be able to achieve the target of $100 million in recurring savings by 2028 without altering the service," the agency said in an email. "Other measures will therefore need to be identified and implemented in the metropolitan area to ensure public transit funding."

Transit agencies in the greater Montreal area have faced persistent budget shortfalls in recent years as operating costs have increased faster than revenue. The transit agencies, including Exo and the STM, reached a funding agreement with the province in 2024 that included targets for reducing their recurring expenses by hundreds of millions of dollars each year over the next few years.

While ridership in Montreal is gradually recovering from the drops experienced in networks across Canada during the COVID-19 pandemic, and sometimes exceeding pre-pandemic ridership, transit agencies say those numbers won’t close the gap.

Montreal’s main transit agency, the Société de transport de Montréal, also announced earlier this month that it was cutting about 300 jobs as it unveiled its 2026 budget.

The $1.8 billion budget includes what the STM said were recurring savings of $56.5 million. In all, spending went up 0.7 per cent, despite hefty salary increases stemming from the renewal of unionized collective agreements. The agency also said it would reach its target of reducing recurring expenses by $100 million by 2026, two years ahead of schedule.

However, the agency said it is facing growing "external pressures," including the need for more security, an increase in resource-intensive paratransit trips, and inflation.

There is also the need to maintain and upgrade existing fleets, some of which are dozens of years old.

"Investments in asset maintenance have remained below the needs for several years, putting increasing pressure on infrastructure, particularly in the metro," said Aref Salem, the chairman of the STM’s board of directors. "The asset maintenance shortfall is currently estimated at $7 billion and could reach $9 billion by 2030 if the trend continues."

According to the Montreal-area regional transit authority, the Autorité régionale de transport métropolitain, transit users only finance about 20 per cent of the cost of services, compared to nearly 70 per cent from municipalities and other governments. Drivers pay for about 11 per cent through gas taxes, registration fees and a recent $150 per year fee for those in the Montreal area.

On Wednesday, groups representing transit users and municipalities joined voices to denounce a $200 million cut to a provincial program aimed at helping to develop public transit.

Philippe Jacques, a spokesperson for the transit user advocacy group Trajectoire Québec, claims that the province’s transport investments are disproportionately skewed toward roads.

"Quebec must stop imposing cuts on transportation companies and transport organizing authorities and finance public transit at the same level as roads, which currently benefit from 70 per cent of the investments," he said in a statement denouncing the Exo cuts.

Trajectoire Québec and Alliance Transit recently submitted a memo at the Quebec legislature that claims Ontario is investing the equivalent of $3,753 per person in public transit over the next 10 years, while Quebec is investing only $1,607.

Retired Université de Montréal urbanism professor Paul Lewis says transit in Quebec is underfunded, compared to the needs.

He says the budget shortfalls appear in many ways, including a lack of maintenance of stations and infrastructure, fleets not being upgraded and departing employees not replaced. While services haven’t been greatly reduced so far, he believes it will start happening.

"I understand that we’re getting to a point where it will be difficult to maintain the same level of service we’re used to, a little bit everywhere, if we continue to make cuts," he said.

"And on the other hand, if we really want to develop public transit in the Montreal region we can’t just maintain the services we have; we have to develop them in a way that people have more options to get around and reduce their travels by car."

This report by The Canadian Press was first published Jan. 28, 2026.

– With files from Stéphane Blais

Morgan Lowrie, The Canadian Press