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Board of Trade: It’s Time to Pay for Transit

Business group calls for a regional sales tax and a parking levy, among other things, to raise money for transit.

Photo by seango, from the Torontoist Flickr Pool

Photo by seango, from the Torontoist Flickr Pool.

The Toronto Region Board of Trade handed municipal and provincial politicians a giant, bow-wrapped present today, in the form of a report which lays out the business case for investing in long-term transit infrastructure. It is specific—it recommends particular taxes and levies—and it is unequivocal. It includes comparisons to other leading North American cities, and assesses benefits ranging from labour mobility to productivity rates to quality of life. It is a comprehensive argument for the fiscally concerned, and it should provide all the cover any weak-kneed politician might need to come out in favour of actually raising money to build the transit we desperately need.

The four tools the Board of Trade is recommending:

  • Regional sales tax
    This would take the form of a regional add-on to the HST; at one per cent, it would raise $1-1.6 billion a year.
  • Parking space levy
    This would apply to non-residential parking spaces: commercial parking (like the spaces available at Home Depot) and Green P lots. At a rate of $1/day per space, and not including metered on-street parking, it is estimated this will raise $1.2-1.6 billion a year. In contrast to the sales tax, this is also a behaviour-modifying tool—one which increases the cost of driving and therefore is predicted to reduce the number of trips made by car.
  • Regional fuel tax
    The Board of Trade is recommending a flat rate per litre of fuel—at an additional 10 cents, this would raise $640-840 million.
  • High occupancy toll lanes
    This would involve converting existing high occupancy vehicle (HOV) lanes into tolled lanes, so that vehicles with single occupants could pay a toll and also use those lanes. (High occupancy vehicles would continue to use them for free.) This is a much smaller revenue generator: it’s estimated it would raise $25-45 million, at a toll rate of 30 cents per kilometre.

In deciding on these tools in particular, the Board of Trade prioritized the following criteria: revenue-generating capacity; equity and fairness across different segments of the population; public acceptance; economic impact; fiscal sustainability (how prone each tool is to economic ups and downs); impact on travel behaviour (such as encouraging increased transit use); the cost of implementation; and successful implementation in other jurisdictions.

The revenue estimates add up to considerably more than the $2 billion a year that Metrolinx (the provincial agency managing regional transit growth in the Greater Toronto and Hamilton Area) has estimated it needs for its next major wave of infrastructure projects. Among those projects: a new subway loop for Toronto, aka the Downtown Relief Line. Not included in Metrolinx budgeting is the cost of operating and maintaining those new transit lines, which is why many observers believe that this $2 billion a year is just the beginning of a conversation, but won’t actually get us all the way to a better transit system. (The Board of Trade didn’t go so far as to suggest, today, that we should talk about raising more than that $2 billion a year right now; their tools add up to more because they were providing some room for negotiation on specific tools, based on how they are received by the public and politicians.)

“Our message today is clear: we can no longer defer the tough decisions on how to address our region’s lack of mobility,” said Carol Wilding, president of the Board of Trade. “We’ve fallen so far behind that we need massive transit infrastructure expansion to catch up.” Her sentiments were echoed by a wide range of supporters who are publicly backing the call for dedicated revenue tools, including major developers; the presidents of George Brown, York, and Ryerson; several local environmental organizations (the Toronto Environmental Alliance, the Pembina Institute, the Toronto Atmospheric Fund); transit advocates; and the heads of many major corporations and business groups.

Making her remarks a bit more pointed, Wilding continued: “The debate is no longer if we need new revenue tools, but which ones. To succeed, all of us will have to contribute—all levels of government, the public, and the private sector. Talking about our congestion has become a regional obsession. So too has been avoiding real solutions.” And to those who, like Toronto mayor Rob Ford, are staunchly opposed to new taxes or levies, Wilding said “For those who disagree with our proposed recommendations, as a responsible stakeholder, we ask that you respond with an alternative. Saying ‘no’ is simply no longer an option. If you don’t participate, don’t complain.”

The path from today’s report to a political initiative which actually sees revenues tools (whether these or others) implemented, is almost certain to be rough. Many conservative politicians, including both Ford and provincial Progressive Conservative leader Tim Hudak, maintain that their governments’ first job must be to root out waste, that the public isn’t ready to contemplate new taxes, that the federal government should do more, and that private sector involvement can cover much of the cost of building. This Wilding rejected outright, telling reporters after her speech that “things like the federal government’s involvement, value capture [financing], the use of [public-private partnerships]—those are all tables stakes, they are all necessary and they need to be a part of the solution going forward, but in and of themselves they’re not going to raise the $40 billion that we need.”

Ontario’s newly installed premier, Kathleen Wynne, has made it clear that her government does back new revenue tools and will make them a priority; there are many city councillors in Toronto who feel the same way. Nonetheless, the sheer number of governments that need to be involved in any regional plan (including both the minority provincial government and all of the GTA municipalities), and the reluctance most politicians have thus far shown to risk voter wrath by making the case for increased taxes and levies, will make it a real challenge to move forward.

Today’s Board of Trade report is meant to help inform, among others, Toronto City Council, which will consider the question of revenue tools for transit later this spring. After that, Metrolinx will unveil an investment strategy for transit on May 27, 2013.

The Board of Trade’s full discussion paper explaining how it arrived at the recommended revenue tools is online [PDF]. The Board has also launched an online campaign in support of dedicated revenue tools for transit.


  • tomwest

    I don’t get the poitn of the high-occupency toll lanes. They will raise only a tiny amount of revenue compared with the other three, and they do nothing to reduce congestion.
    Personally, I think the express lanes on the 400 and 401 should be HOV only. More people per car = fewer cars = less congestion. (Some re-painting of lane markings in the collectors would be needed, plus enforcement measures, but the cost would still be peanuts).

    • Dinah Might

      No, the answer is to make all 400-series highways into casinos!!

  • vadimM

    Where is Rob Ford, you know – the “mayor”? Where are the ideas, proposals, suggestions? Is he is too busy defending himself in courts and coaching his football team to think about the city? The council needs to step up and make some important decisions to get this city moving forward.

    • Jojo

      He is in court because of lefties constantly sueing him and not letting him do his job.

      • milanista1

        Hahahaha. Hilarious.
        Thanks, I needed that. Tough day.

      • vampchick21

        You’re cute pito!

        • Glenn Storey


          • vampchick21

            Spanish affectionate diminuative, masculine. Ususally used in a loving manner (aka, I call my stepsons pito). In this particular case though, I’m being very sarcastic.

      • HotDang

        If he had done his job properly to begin with, he wouldn’t be having to constantly walk a razor’s edge in court. He shit his bed, now he has to sleep in it.

    • Walter Lis

      Rob Ford can’t see beyond the hood of his car. He thinks that using his car on the city streets is free, but those roads are actually paid through property taxes.

      Car users from the 905 have free use of Toronto’s streets. Gasoline taxes only pay for the province’s highways, not the Gardiner nor the Don Valley.

    • Joe McBlow

      He’s too busy trying to get the Board of Trade to get their buddies to pay for it. Earth to Rob, they don’t want to.

  • Brent

    re: TomWest — if all four measures were implemented, HOT lanes (tolled HOV lanes) would only raise 1.5% of the total. Largely symbolic. I suspect that they felt that full tolling of all 400-series highways would be too unpalatable. I agree that the 401 express-collector should be considered as part of any toll scenario (assuming tolls were not implemented more widely), although I would argue that the section on the 400 is too short.

    Not sure to what extent commercial parking fees would be a deterrent, at least for large commercial uses that don’t charge for it. I don’t see Home Depot charging its customers $1 to park. It might change development in the longer term, and in the shorter term you may see creative ways of “closing” spaces that are little used (e.g. claiming that they are used as storage, not parking).

    • tomwest

      A commerical parking levy is most useful if landowners are allowed to reduce the amount of parking. Currently, there are minimum amounts. Ideally, a landowner could poitn out that (say) 40% of people arrive by non-car, and thus get to reduce their parking by (up to) 40%…. and then build somethign profitable on teh now-vacant land. That would provide a major incentive for landowners to encourage customers to arrive by transit.

      • John Duncan

        That was my thought exactly. There’s some real issues with requiring a major retail development to build e.g. 800 parking spaces through your zoning by-law, and then turning around and charging them $365/year for each spot.
        If the market demands parking, then let’s write up some design guidelines for parking structures and let the market handle it instead of wasting precious land on surface parking.

        • tyrannosaurus_rek

          This I agree with. Perhaps wasteful surface parking should come with a higher levy than parking structure spaces.

      • tyrannosaurus_rek

        If landowners can reduce parking, the levy isn’t useful as a source of revenue. At $1b+/year, I’d argue we’re better off with the money the levy brings in than the people it takes out of cars and puts on transit.

        • tomwest

          HOT lanes, parking levies, and fuel taxes all raise revenue *and* seek to modify behaviour. Yes, if everyone switches to transit, then we loose the revenue – but is everyone’s switched to transit, then we’ve won!

  • James Boleris

    How come fare by distance is not talked about? most public transit systems in Europe do it. GO Transit does it.

    Why are the only options talked are the ones OTHERS pay for YOUR transit?

    Everyone pays their fare, no discounts due to whatever excuse. We can also stop making transit focus on downtown only.

    Why do people from Malvern need to focus on going downtown? Let’s create jobs in Malvern. I lived in Malvern for 20 years. I want to stay in Scarborough.

    • Lee Zamparo

      If memory serves, this concept is being discussed, but only after Presto is a go on the TTC.

    • vampchick21

      Ummm…cause the jobs that people do are downtown? Why don’t you call up all the corporations in the world who have a presence in downtown Toronto and tell them the great things about…..Malvern. Convince them to move to…..Malvern.

    • Kate Roberts

      Those transit users are also taxpayers and also pay for the transit you use, roads for instance. Don’t be so divisive – if we have proper transit where people need it, then EVERYONE’s lives get better – less people in front of you on the 401, less people cramming themselves onto trains at yonge and bloor, etc.

    • rich1299

      TTC fare zones are non-starter in my opinion since they punish those who can least afford to pay more for the TTC, face short trips won’t decrease in price, long trips will only be more expensive. The most transit options that’s closest to everything is only in the central city, admittedly for good reason since it has the density and jobs. But people with low paying jobs have been squeezed out to the edges of the city, have far worse, less frequent and less reliable transit options and have to travel the furthest by TTC, in many cases without even the comfort of a streetcar let alone subway. Haven’t we punished low income people enough already? Do we really need to make those least able to afford it pay extra for their only transportation option?

      Its bad enough low income workers spend far more of their day in transit away from their homes and families than the well paid who can afford to live downtown or those fortunate enough to get a rent geared to income apt. in the central city. Many people spend 4 hours or more per day in the TTC especially if they work multiple low wage jobs to make ends meet. Their lives are hard enough as is without making them pay more for worse transit. When people say just move closer to work their ignoring the financial reality that for too many closer too work is completely unaffordable. Apartments near a subway line are much more expensive than those poorly served areas which is all far too many can afford.

      We are all one city now and we should be treated as Torontonians, all of our property taxes go to fund the TTC so we should be treated equally. The TTC does have some zone fares already where they cross into neighbouring cities, that’s fair in my opinion since its serving a different city whose property taxes don’t support the TTC. There are many other ways we could increase fares and revenues such as charging those who can start their trips at a subway station more than those who start at bus or streetcar stops, we could charge more according to the amount of transit infrastructure and vehicles that service the area, why shouldn’t people pay more for more and better service? I don’t actually support any of those options either but I’m just pointing out there are more ways it could be done than to charge extra for those with the worst transit options who are the least able to pay more.

      Lets face it fares will not decrease for shorter trips, they only increase for longer trips which are enough of a misery as is. Does anyone really believe a cash strapped transit system would be willing to cut its much needed revenues by charging less for shorter trips? Its never going to happen.

      • Paul Kishimoto

        You’re absolutely right about low-income transit users, but I don’t think that automatically rules out zone fares.

        Others have mentioned extending discount Metropasses from students to *all* low-income riders. To adjust for the effects you describe, that subsidy could be increased through a number of methods—for instance, if zone fares begin after Presto is rolled out system-wide like Lee Zamparo says, then someone classified as low-income could pay a flat(ter) fare, or get free transfers, when swiping their card.

        But there needs to be budgetary room created for that kind of subsidy, and that’s exactly what these new revenue sources would provide.

        I think the bigger issue with zone fares is the differing fare regimes in neighbouring cities. Travelling across the Etobicoke-Mississauga border by bus and then making a transfer incurs two fares for two different system, but a trip of the same length entirely within Toronto costs less. In a zone fare regime that wouldn’t make any sense, though maybe it could be fixed with appropriate Presto rules.

  • Walter Lis

    The Toronto Board of Trade are business people. These business people are recommending four revenue tools for better transit in the GTA. Yet there are other business people (Rob Ford for one) who would be opposed. However, for a better Toronto who actually put some thought into their recommendations? The Board of Trade did.

    • Glenn Storey

      since when is rob ford a business person? i swear to christ, of all the bullshˆ† that ford nation puts out, this is the thing that makes me the craziest. he’s been on city council for 13 years. deco doesn’t want him anywhere near the company.

      • dsmithhfx

        He got their driveway fixed for free!

  • Mark Jull

    I vote for the regional sales tax. We already pay HST and bumping it up 1% wouldn’t make much difference on a day to day basis. Plus, having it dedicated to transit would make it a bit easier to accept. And though the HST is a regressive tax, there are already refunds in place for low income people.

  • Arealist

    People who use transit should pay for it period. People who have cars already spend enough on their own transportation, no one helps me with my payments. And we don’t need to give more money to a union hungry salary hogging TTC.

    • dsmithhfx

      Who do you think pays for the roads you drive on?