The four key elements for the Metrolinx Big move funding plan which it hopes to utilize to raise $34 Billion for public transit; are a one per cent increase in HST, a five cent increase in gas taxes, a levy on parking and increased development charges. When Metrolinx was developing its rationale for the funding tools, it set out some guiding principles for the scheme. One was public fairness. Metrolinx wrote: The costs and benefits of the Investment Strategy should be distributed fairly across all population groups in all parts of the GTHA. Tools should be selected so that no one group pays too much or benefits too little. Leading up to the development of its funding recommendations Metrolinx held a number of public town hall meetings to get various stakeholder views on how the transit scheme should be funded.

met

A recurring theme from respondents was that the motorized vehicle sector ought to pay the lion’s share of the cost of transit. (This despite a presentation from a bicycle advocate who pointed out that 80 per cent of cyclists are also motorists, at least part of the time) Even under Metrolinx’s fairness premise the funding tools recommended still draw heavily on the motorized public. The sales tax affects all Ontarians, but most Ontario households have at least one and more likely two motorists. The gas tax increase and the parking levy are direct costs that single out motorists. The increase in development charges is intended to make the development community pay more for urban sprawl, but the cost will be passed onto householders who overwhelmingly use the car to get to and from homes in suburbs. In all, the new taxes will raise the $2 Billion a year that Metrolinx says it needs to fund the Big Move, and arguably a big portion of that cost will be borne either directly or indirectly by motorists. Given the potential impact of the proposed new taxes on motorists, the Bay Observer wondered what portion of the current provincial transportation budget is recovered from motorists. The 2013 provincial budget reveals that gasoline tax and automobile licences and permits together bring in about $3.6 Billion annually.

The entire Ministry of Transportation budget, including capital expenditures (but not Metrolinx capital) is estimated for the current year at $2.5 Billion. That means roughly $1.1 Billion collected directly from motorists is available for either transit or general government purposes. But motorists contribute more than just gasoline tax and license fees. It is estimated that vehicle sales in the current year in Ontario will top $21 Billion, yielding another $1.7 Billion as the provincial share of the HST. In all, the motor vehicle sector adds close to $3Billion a year to provincial coffers above the entire operating and highway construction cost of the Ministry of Transportation.

Providing a Fresh Perspective for Burlington and Hamilton.

One Comment to: So-called congestion culprits are already paying

  1. Art Vandelai

    October 4th, 2013

    The numbers shown here are very flawed.

    Firstly, they only show the provincial expenditure on roads. Most of the expenditure occurs at the municipal level.

    While I don’t have stats for Ontario, in Canada, governments collected $15.5 billion a year for gas taxes and licence fees (at all levels). At the same time, the 3 levels of government combined spent $29 billion on roads (source: Table G5 http://www.tc.gc.ca/eng/policy/anre-menu-3045.htm).

    Also, the sales tax thing is a red herring. If you don’t spend money on an automobile, surely you will spend that money elsewhere in the economy, or you will save it for future expenditures. The government will collect the sales taxes whether you spend it on driving or something else.

    The way taxes in Canada are structured, the act of driving a car is massively subsidized – to the tune of $13.5 billion at latest count (and rising). Which in part explains why we have so many more people driving cars than choosing the alternatives. It’s simple supply and demand – lower the price and you increase demand, thereby increasing congestion.

    Reply

Leave a Reply

  • (not be published)