CTV News has learned that the STM is planning to hike monthly transit passes by 3.1 per cent as of January 2013.

In an interview with CTV Montreal, Marvin Rotrand, vice-chair of the Société de transport de Montréal said that apart from government funding, the STM needs predictable, indexed cash flow.

“We want to go from 405 million riders in 2011 to 540 million in 2020, and that takes cash,” he said. “We've got to get the money from somewhere. We've asked city council for more money and clearly we will be asking riders for some more money.”

Sources tell CTV Montreal the increase will be 3.1. per cent for a monthly pass, bringing it to about $77.75, up from the current $75.50.

The increase is expected to be announced at the end of October.

The hike is higher than the standard cost of living increase in Quebec, which hovers around 1.9 per cent.

In the past ten years, the price of a monthly pass has steadily climbed from $50 in 2002, to $65 in 2007. In 2010, the price was hiked to $70 per month.

Some fares will likely be maintained, including the $4 unlimited night pass.

Rotrand said there’s good reason for the hike.

“Gas goes up, the price of maintenance goes up, our agreements with our unions go up, and clearly we've got to absorb those costs,” he said. “And on top of that, we've very conscious that people want more services.”

Over the next three years, the STM plans to buy more hybrid buses, add more bus and express lanes, and create real-time passenger information, among other initiatives.

Still, fare increases need to be justified or the STM will risk losing passengers, said McGill University urban planning professor Ahmed El-Geneidy.

“What really affects the demand for transit is the quality of service. When you start providing bad service, this is when people are going to leave the system and go away from the transit,” he said.

This story has been updated. A previous version of the report erroneously stated that the current monthly pass is $70. It is $75.50. The current version reflects this change.