Only a modernization of Winnipeg's public transportation system will save it from a dependency on annual fare hikes, Transit director Rick Borland says.

Borland said continual fare increase — like the five-cent hike approved by city hall yesterday — will become a thing of the past if Manitoba's capital upgrades its system with busways and light rail.

"Our position is if we're going to fundamentally affect the way people choose to travel in this city, we need to make an investment in the transit system," Borland told The Sun.

Council voted 8-7 yesterday to boost adult fares to $1.75 from $1.70 effective Jan. 1.

Mayor Glen Murray, who voted for the fare hike, said he hopes a new funding partnership with the province provides a fix to the ongoing problem. Murray said he's been approached by Premier Gary Doer about a long-term deal "and we're really going to take the premier up on that."

Ridership is expected to drop by a million this year to about 38 million.

Although the city gives Transit more than $30 million annually, it's projecting a year-end deficit of $2 million. The latest price hike is aimed at bringing the bus service another $1.2 million next year.

"I can't see us 12 months from now trying to do this again," Murray warned. "There just isn't room. We've reached the saturation point for how much we can raise with transit fares."

Coun. John Angus (St. Norbert) said the city can't continue running near-empty buses on many routes unless fares go up.

"There's no free lunch," Angus told councillors. "There's not even a coffee service."

Regular monthly passes will rise by $1.90 New Year's Day, while student passes will jump by $1.50 per month.

Even cities "considerably smaller" than Winnipeg, such as Kitchener-Waterloo, Ont., are looking at rapid rail transit, Borland said.

"This city is about the only one in the country that has not made that kind of investment in its transit system."