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Toronto’s business community calls for taxes and fees to expand transit

One of the TTC's new Bombardier streetcars gets a late-night test March 13, 2013.

Toronto Transit Commission

Toronto's business community has thrown its support behind broad-based new taxes and fees to expand transit, a shot in the arm for plans to ease regional congestion over the next generation.

But the Toronto Region Board of Trade proposals immediately sparked criticism from those who believe that the private sector should play a bigger role, instead of citizens being asked to pay more. And the mayor of Hamilton, one of the biggest cities in the region, is unsure whether his community will want to participate in the transit plans.

Regional transit agency Metrolinx has proposed a slate of expansion possibilities across the broader Toronto and Hamilton area, part of a long-term plan dubbed the Big Move. The plan is budgeted at $50-billion, only $16-billion of which is currently funded. How to raise the remainder of the money has sparked vigorous debate and will be the focus of the agency's investment strategy, due at the end of May.

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"We must act; the cost of doing nothing is much more expensive," Toronto Region Board of Trade president Carol Wilding warned Monday. "We are falling behind our competitors."

She identified four ways to raise money that she said were balanced, fair and economically responsible: a regional sales tax; a daily levy on non-residential parking spots; a regional fuel tax; and high-occupancy lanes that solo drivers could use if they pay a toll.

The board has considered a number of levels for each option and Monday provided revenue potentials for what it described as the middle of the range. Pegging the sales tax at 1 per cent, the parking levy at $1 per day, the fuel tax at 10 cents per litre and the toll at 30 cents per kilometre would generate more than the $2-billion a year Metrolinx is seeking, giving decision-makers the chance to mix and match from the proposals.

Finance Minister Charles Sousa said the government would take the suggestions under consideration. But the minority Liberals could have a tough time implementing any new measures to pay for transit. On Monday, New Democratic Leader Andrea Horwath rejected outright a sales tax, gas tax and road tolls.

"Taxes and tolls that hurt everyday families are something that we don't think is the right solution and we're looking at other possibilities," she said. She argued that the government should eliminate some corporate tax credits and find savings elsewhere in the budget to put toward transit.

Another dissenting voice was Hamilton Mayor Bob Bratina, who has concerns in spite of what he called "sound" proposals from the board. He noted that his community wants to use transit to spur development, which could lead others to believe that their needs are less important than congestion-reducing projects in Toronto. And he does not want there to be the sense that Hamiltonians are paying for Toronto's transit expansion.

"I think we still need to have the discussion here in Hamilton about the extent of our participation, depending on how our needs are going to be met under the Metrolinx plan," he said by phone. "Would we, in taking part in this funding strategy, see a return right away, or would there be kind of a prioritized list?"

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Support by Ms. Wilding's group for new revenue tools dedicated to transit comes amid increasing business concerns about the cost of congestion. According to one estimate, traffic problems cost the region $6-billion annually. But there remains much debate over what to do about it.

In response to the board's recommendations, Toronto Councillor Doug Ford, the brother of the mayor, said they should "exhaust the private sector" before going to the taxpayer. "We have to open the doors to the private sector, see what the market will bear, look at [public-private partnerships]," he said. "It reduces the initial cost. Let's take advantage of the private sector … "

But fellow Councillor Karen Stintz, who chairs the Toronto Transit Commission and is often mentioned as a potential mayoral candidate, said the board of trade's recommendations showed that "there is no free money."

"I certainly do think it puts the notion to bed that the private sector is somehow going to miraculously pay for our transit infrastructure," she said. "When the business community itself is saying that these projects need to be funded, I think that's an important lesson that we need to listen to."

With reports from Adrian Morrow and Elizabeth Church

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About the Author

Oliver Moore joined the Globe and Mail's web newsroom in 2000 as an editor and then moved into reporting. A native Torontonian, he served four years as Atlantic Bureau Chief and has worked also in Afghanistan, Grenada, France, Spain and the United States. More

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