One-percentage-point HST hike, 5-cent rise in gas tax proposed to pay for transit

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The regional transit agency Metrolinx has formally unveiled its plan for paying for the next generation of expansion.

The core of the plan is a 1-percentage-point raise in the HST, with a tax credit that would protect lower-income residents. The rise would probably have to be applied province-wide, though only money raised within the Toronto area should be used for transit here, the agency said.

As reported in The Globe over the weekend, the tax increase would be coupled with a 5-cent rise in the gas tax, a non-residential parking levy averaging 25 cents a space per day and a 15-per-cent increase in development charges.

"We need to have stable funding ... funding that's dedicated to transit and transportation," Metrolinx CEO Bruce McCuaig told a special board meeting Monday morning. "Our transportation system has been holding us back."

The board unanimously approved the proposals, which now go to the province for consideration.

Mississauga Mayor Hazel McCallion cheered Metrolinx's proposals. If residents want better transit, they must be willing to pay for it, she said.

"We have two choices: do nothing and let the gridlock grow, or do something and help pick up the tab," she said. "I think this plan that they've come up with is an excellent plan."

Ms. McCallion is just one of numerous municipal politicians from across the GTA – others include Markham's Frank Scarpitti and Burlington's Rick Goldring – who have lined up behind the province's transit-building plans.

Ms. McCallion is just one of numerous municipal politicians from across the GTA – others include Markham's Frank Scarpitti and Burlington's Rick Goldring – who have lined up behind the province's transit-building plans.

But Premier Kathleen Wynne will have a tougher time getting the plan past the two opposition parties at Queen's Park.

The Progressive Conservatives categorically rejected Metrolinx's ideas.

"I'm sorry: nice brochure, nice talk, no more taxes," MPP Frank Klees said.

New Democratic Party Leader Andrea Horwath, meanwhile, said she favours putting a heavier burden on corporations to pony up the money needed to expand the network.

"The sense that I get from Ontarians is that they're having a tough time making ends meet," she said.

Transportation Minister Glen Murray slammed the Tories for dismissing the Metrolinx report out of hand.

"All of us in the legislature [should] show enough respect to people who are struggling with commute times, who came out to town hall meetings, to at least read the report and listen to our constituents a bit," he said.

However, he expressed hope that he could still reach agreement with the opposition parties to implement a plan.

"I'm hoping that my friends in the Conservative Party will press the pause button on this and open up their ears and listen to Ontarians about what they want," he said. "This summer, the NDP have a huge opportunity to critique what Metrolinx has done. To support what they may want to support and to come up with credible alternatives and alternative financing. I would invite them to be part of that. We've had a good relationship with them, it's been a constructive dialogue, it's led to some positive change that we've been able to agree on and there's an opportunity to do that again."

Ms. McCallion, meanwhile, said voters must pressure the opposition parties to get on board with transit expansion.

"I think it's up to the public. It's going to take the citizens to tell Queen's Park to get on with the job," she said.

Metrolinx's proposed charges would cost the average family $477 per year, the agency says, though the actual cost would vary dramatically depending on individual circumstances.

The Metrolinx report comes after heated debate within the region. In a nod to the divisions, the agency is recommending that municipalities get the chance to appoint up to six members on the board.

Metrolinx was mandated to provide the province its recommendations for raising $34-billion for its so-called "next wave" of transit development. They have identified 10 projects designed to put the vast majority of residents within walking distance of higher-order transit, a line separated from traffic.