Ontario premier will pitch tax hikes, fees to fund transit expansion

Share

Premier Kathleen Wynne plans to come to the Legislature by next spring with a series of tax hikes to raise funds for an ambitious expansion of public transit in Southern Ontario.

Transit agency Metrolinx will release its report on recommended measures to fund its construction plans on Monday.

It will hinge upon a 1-per-cent sales tax increase, sources told The Globe and Mail, with a commercial parking levy, five-cent-per-litre gas tax and more charges to developers making up the rest.

Ms. Wynne will then consult with municipalities, business and community groups, bringing a final proposal to the Legislature no later than spring 2014, sources said.

The minority Liberals' plan to build more subways and rail lines will set the stage for negotiations with opposition parties at Queen's Park and a battle between Toronto, whose city council opposes most new sources of funds for transit, and the suburbs, which have been more active in supporting transit expansion. Ms. Wynne needs the support of at least one other party for her funding plan to pass.

If she cannot, the province could face a snap election on the issue.

For now, the Premier is keeping her powder dry.

"I've only seen the executive summary. I haven't seen the report," she said Sunday when asked about Metrolinx's ideas. "I know that there are a number of tools and recommendations that are made and we'll be taking it under advisory. I look forward to working with them."

The cash-strapped province has already put $16-billion toward added suburban commuter trains, four light rail lines in Toronto and rapid bus projects in Mississauga, Vaughan and Markham. Without new sources of money, Ms. Wynne maintains, there is no way to afford the other $34-billion needed to complete the plan. Future projects include LRTs in Mississauga and Hamilton, a subway extension to Richmond Hill and a new line from suburban Don Mills to downtown Toronto.

Metrolinx is expected to project that a sales tax would raise $1.4-billion annually; a levy for non-residential off-street parking, averaging out to 25 cents per space per day, would bring in $350-million; the gas tax would give the province about $330-million and a 15-per-cent hike in development charges would translate to $100-million. In all, the average household would pay a bit less than $10 per week.

The agency, sources said, will recommend different measures to make these levies more equitable, so that lower-income people and suburban business owners pay less, while downtown companies and higher-income citizens pay more. The parking charge could vary based on location in the city, for instance, and low-income people could be given a tax credit to offset the sales tax.

Ms. Wynne has also promised that only residents of the Greater Toronto and Hamilton Area will pay for transit expansion in the region.

Metrolinx's suggestions will rely heavily on ordinary residents to foot the bill, which will likely lead to an extended back-and-forth with the New Democratic Party, which wants to see more of the burden placed on corporations. The Progressive Conservatives have said they support a dedicated revenue stream to pay for transit, but argue the government must find more of the money by making cuts to spending.

While transit advocates and the business community have called for new revenue sources for transit for years, municipal politicians are sharply divided. Suburban mayors including Mississauga's Hazel McCallion, Vaughan's Maurizio Bevilacqua and Markham's Frank Scarpitti are on side; Toronto Mayor Rob Ford is against. A sales tax and development charges are the only measures Toronto council has not explicitly rejected.

If the Liberals cannot reach a deal with at least one other party, the province could be plunged into an election. Some sources say the transit plan would be a supply bill, since it involves raising and spending money, which would trigger a confidence vote. It could also be packaged with next year's budget.

But if the plan succeeds, it would represent the largest injection of cash for transit construction since the heyday of Toronto subway-building in the 1960s and 70s.

Since the 1980s, gridlock has become ever worse as the region has suffered from start-stop transit building. Liberal premier David Peterson at first refused to fund a TTC expansion plan before pitching one of his own shortly before losing the 1990 election. The NDP administration of Bob Rae laid out a strategy to build four different lines and began construction on two, on Sheppard and Eglinton avenues. When Progressive Conservative Mike Harris took power in 1995, he killed the Eglinton subway and land-filled the tunnel.

Four years into Dalton McGuinty's tenure, he began to dole out money for various projects. But the largest of these, a network of LRTs in Toronto, was delayed by wrangling with Mr. Ford.

With a report from May Warren