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40 Comments

cityscape

Metrolinx Releases Proposal for New Transit Funding

Regional transit agency unveils its strategy to pay for the next waves of transit construction.

After months of anticipation Metrolinx, the regional agency in charge of transit planning, has released its proposal [PDF] for a mix of new taxes and fees—revenue sources that would, collectively, yield just over the approximately two billion it estimates we need to build a major new round of transit infrastructure. That set of projects is called The Big Move; it includes, among many other things, a new subway line for Toronto.

A summary of the proposal:

Proposed Rate Expected Revenue
Sales Tax 1% increase $1.3 billion
Parking Levy Variable based on property value; average of 25 cents per day per spot; would apply to all off-street non-residential parking $350 million
Fuel Tax 5 cents per litre $330 million
Development Charge 15% increase $100 million

If you’re wondering what, concretely, this would mean for you, here is how the numbers break down:

  • For the average student: $117 a year
  • For a two-car, five-person family: $977 a year
  • For an average senior: $140 a year
  • For the overall average household: $477 a year
  • The average annual per capita cost: $179

And this, says Metrolinx compares to:

  • Average cost of congestion per household: $1619 a year

Metrolinx’s proposal also includes a mobility tax credit, “to help ensure the proposed HST increase does not disproportionately burden those with lower incomes.” That would be paid for out of the revenue produced by these new taxes and fees as well.

Among the Big Move’s projects: a new subway line for Toronto, the very tentative route of which is shown here. Map courtesy of the TTC.

Speaking to reporters today, Metrolinx CEO Bruce McCuaig said that “In my mind it’s all about stable and dedicated funding. One of the things that set this region apart from others…is that we rely almost 100 per cent on traditional government transfers.” That is why, he said, Metrolinx is calling for the creation of a Transportation Trust Fund: the revenue would be sequestered in a separate account, essentially, to assure the public that the money was being allocated to the promised transit projects.

This will be a major talking point going forward: Metrolinx needs both the public and the NDP convinced that the province can spend the money it collects responsibly if these proposals are to gain traction and be passed at Queen’s Park. (Progressive Conservative leader Tim Hudak has already said we should only be looking at new revenue tools after all government waste has been eliminated; if transit funding proposals are to pass through the Legislature, therefore, it will be with the help of the New Democrats.)

In explaining how it arrived at this set of four tools, Metrolinx pointed to the experiences of other cities and regions that have implemented transit revenue tools, including Hong Kong, London, Vancouver, and Montreal. Those experiences teach that “there is no silver bullet” that will solve the transit funding question in a single move. Using a suite of taxes and fees helps mitigate against any fluctuations in the revenue a single tool might bring in, and also helps distribute the impact rather than focusing on a particular group (like businesses or drivers).

Formally, Metrolinx’s proposal only counts as advice to the province. It will now be up to Kathleen Wynne and the minority Liberal government to decide how to proceed. A round of public consultations is expected in the coming months; after that Wynne will need to begin talks with the NDP to see what the parties can agree to. In an interview with Torontoist last month, the premier indicated that she would not necessarily be limiting herself to the recommendations put forward by Metrolinx. The NDP very much wants to pay for transit, at least in part, by closing corporate tax loopholes and/or rolling back corporate tax cuts; though those measures are not included in Metrolinx’s proposal Wynne could, at least in theory, add them into the mix to help reach an agreement on the issue.

It is expected that the provincial government will bring their final proposal for transit funding to the Legislature sometime in the next year, though it is not yet clear whether they will do so as part of the 2014 buudget or attempt to pass it before then.

Comments

  • https://paul.kishimoto.name/ Paul Kishimoto

    Metrolinx provides specific, credible estimates of how much each revenue stream will bring in.

    The Liberals and NDP (and Conservatives, if they decide they would like to be relevant) can tinker all they like based on what they hear from their constituents, but I hope the media won’t fail to hold them to the same evidentiary standard.

    That is, make politicians specify the tax loopholes to be closed, or the change in the corporate tax rate. Demand an equally credible estimate of how much these will raise. If they won’t give on, or their changes lower the total below $2b/year, let it be loudly & repeatedly asked why they are proposing to shortchange the whole region.

    • Marc

      That’s because evidence doesn’t get parities and their policies elected. Toronto is ever-becoming a populist state. Good luck with your taxes.

      • https://paul.kishimoto.name/ Paul Kishimoto

        Which is “because…” etc.?

        • Marc

          Because as with most progressive projects, the success of this scheme will likely end with the idea. There is an ever growing inventory of campaigns and launch-parities (Big Move, One cent now campaign, Transit City, plastic bag fees, recycling, carbon schemes, endless transit “public-engagement” projects) that have stopped short of providing any concrete deliverables. Even if there are measurable successes, the communications of these results on a digestable-scale are severely lacking.

          In my opinion, this is what is tiring people and have turned them bitter towards any new projects that require additional funding.

          • https://paul.kishimoto.name/ Paul Kishimoto

            I (1) made a statement about Metrolinx and (2) expressed a hope/suggestion for the actions of the media.

            Whichever one of these you meant by the word “that” in your initial reply, it doesn’t parse. It wasn’t actually a reply at all, just an unconnected, pessimistic remark meant to look like one.

          • Marc

            And then it gets personal. Like most Torontonians and Canadians, you can’t take criticism without getting incredibly defensive.

            I’m not disagreeing with Metrolinx or their numbers or the need for more revenue streams. Perhaps I should’ve started-off by saying that I’m on the same page as you, that we’d make good friends and if you’re gay, we’d make good lovers. Maybe me apologising for whatever I did will draw down your defenses and snark a little bit.

            The problem is that even though Metrolinx has done a good job with their research and reporting, the results speak at a level that is nearly incomprehensible to many in Toronto. Unlikely you and I, who are seemingly post-secondary educated English-speaking individuals, many in Toronto don’t have time to read the report, much less translate it themselves. What they see is zero progress, yet rising taxes.

            The media do not feel the need to explain a report, as it would be perceived as propaganda, but instead provide editorial. It is the job of governments to clearly explain their policies, not the job of private media.

            My pessimism isn’t unfounded, I assure you.

          • https://paul.kishimoto.name/ Paul Kishimoto

            I reacted to the snark in “bye-bye” and the personal in “good luck with YOUR taxes.” You’ve only now provided actual criticism.

            The article indicates there will be further consultations. How about an idea, or two, on how the proposals can be communicated? How to improve on the way Metrolinx did so in the last round? If we believe the success of new funding would be a good thing, then that’s a better mental effort than airing worries.

            Torontoist, at least, seems able and willing to separate explanation from advocacy—but I know it’s small, and maybe it just knows its readership. I’m not going to be surprised if the major dailies don’t rise the the occasion, but I thought it was worthwhile to point out what they ought to do. Also, the CBC are *public* media—shouldn’t this be part of their job?

  • HotDang

    It’s really nice to hear some good constructive news about the city.

    The funny thing here is that the bulk of the new fundage will be basically the same as Miller’s One Cent Now plan. It was always a great idea. I still wear the pin.

  • Marc

    They are comparing real cash to opportunity cost. It won’t stand. Bye-bye Metrolinx and bye-bye OLP.

    • vampchick21

      I’m getting really sick and tired of this attitude. We want improvements in transit. That costs money. Real money. Not fairy dust, unicorn farts and magic casinos. I, for one, do not object in the least to the revenue streams listed above, I do not object to providing a bit more money here and there for something we all need.

      • XXX

        Ontario Opportunities Fund: Knock yourself out. If you and your friends want to spend every last dime of your income on a government that likes to start bonfires with it, have at it. Oh you want to take my cash? Then your going to need to convince me that a) transit needs improvement because it’s working just fine for me, b) that the same government that has had endless scandals, broken promises and just pathetically bad management is remotely capable of building out this project without massively f’ing it up…

        • Dinah Might

          What the heck transit are you using that works “just fine”? Seriously, let us know, because I sure haven’t found it. My underservicing, overcrowded transit keeps breaking.

          • XXX

            I take the subway from Dundas West to St Andrew everyday, always room to stand, occasionally get a seat. Usually door to door in 20 minutes…

          • Dinah Might

            Thereby avoiding the Yonge line altogether, which is the most overpacked subway line. Count yourself lucky that your commute is an oasis amongst the madness. :-)

          • vampchick21

            Wish mine was. 501 Queen. Twice daily during rush hour. Mon-Fri. I’m starting to develop claustophobia! And let’s not get me started on the traffic snarl that seems to occur between Yonge and University.

          • Chris

            Well, as long as YOU’RE able to get to work just fine, then we’re good. Especially since I’m sure that you were paying taxes back in the early 60′s to help pay to build the subways you’re taking each morning. Everyone else can just go fuck themselves, right? As long as you have yours, I mean.

          • XXX

            I’m sensing sarcasm, aka the default position of a politically left of centre individual who can’t articulate a cogent argument. Let me assure I’m concerned about the plight of my fellow citizens. My issue is that the Liberal party will not be able to complete this project anywhere close to on time or on budget or for that matter on scale. I’d estimate that an 100% cost overrun as a default: making the hit to taxpayers more like $1000-$2000 / year (probably more), I also expect either inflation or interest rates or both to rise making the hit to families particularly front loaded…

          • vampchick21

            And the current incarnation of the Tories won’t do a damn thing, leaving us all stuck in the goddamn lurch again.

        • tyrannosaurus_rek

          “Oh you want to take my cash? Then your going to need to convince me…”

          Actually nobody has to convince you, they just have to convince one of your neighbours. Welcome to democracy and the commonwealth principle. Polls have shown numerous times that people are on board with funding transit and transit expansion to combat congestion, but the test will be in seeing if that support endures the next election.

          • XXX

            From spacing.ca today, “With Metrolinx releasing its long-awaited investment strategy today, an exclusive Spacing poll shows that scarcely more than a quarter of GTHA residents are prepared to back a regional sales tax hike to raise funds to pay for a generation’s worth of transit and congestion-busting investments across the region.”

            A forum research poll not that long ago showed 52% against additional taxes for transit expansion. My neighbors seem as unconvinced as I am.

          • tyrannosaurus_rek

            It was just released today, it remains to be seen how it will be sold to people or what effect that will have. (I’m cynical enough to imagine Wynne “fighting” the more unsavoury parts in order to make it more appealing.)

            One thing is clear though: “I pay enough already” and “they should fix transit and congestion” cannot coexist indefinitely.

      • Marc

        I’m not disagreeing with you: real money is needed. The problem is no matter how “sick and tired” you are of this attitude, more and more Torontonians believe in the narrative that they are abused by “new taxes” and “wasteful spending”. Until one government can actually deliver a successful program or project without significant delays and cost over-runs, the addition of new revenue streams will be met with significant opposition.

        • Dinah Might

          Who has ever taken on a project at a city-building scale and NOT had significant delays and cost overruns? Heck, you’re lucky if your kitchen reno doesn’t have any delays or overruns.

          • Marc

            The difference is that individuals have control of their kitchen renos and can blame no-one but themselves.

            In this scenario, they would blame the government and vote them out.

            Governments and Metrolinx need to build trust before asking for money. That exercise, unfortunately, has yet to happen.

          • dsmithhfx

            The choice is clear and stark: elect governments that don’t “ask for money”, don’t build anything, and let infrastructure continue to crumble (passing the buck to future generations). We’ve all seen how well that works. Or, start repairing and building the stuff today that we know we need today and tomorrow. That takes real money, yours and mine. I get that you hate taxes and government. Fine, move to some lawless frontier where such things don’t exist, because you have nothing to contribute here.

        • vampchick21

          Listen, we all know that government is evil, horrible, lazy, spendy, whatever negative adjective you want to use. But barring anarchy or selling our public souls to corporations wholesale, government is what we have. We elect them. They do their job for the most part. Deal with it.

    • Marc

      You might say the extra $179 in taxes/fees would represent the lost opportunity of spending that money elsewhere. This is how economic alternatives are calculated and compared.

      • dsmithhfx

        Tell you what: give yours directly to OLG, it sounds like they could really use it.

      • Patrick_Metzger

        That’s not really opportunity cost, in my experience. If they were taking existing dollars and re-purposing them for transit, you’d lose the opportunity of investing those dollars in something that might have a higher rate of return and you could factor that into the business case. However, since it’s new dedicated revenue that’s being proposed, opportunity cost doesn’t apply at the project level.

  • Astin44

    1% PST increase isn’t going to be popular. Especially since sales taxes are generally seen as the most harmful to low-income residents. More info on this mobility tax credit would be good.

    5 cent gas tax will piss off the frequent drivers. It’s not a huge deal for those who only drive occasionally though.

    I’d also like more info on the parking levy. Does this mean shopping malls, restaurants, plazas, hotels, etc., will have to start charging for parking to cover this? Will they pass this on to the tenants, increasing rent and therefore prices? Or does it only apply to paid lots, so the price will increase?

    And of course a 15% increase in development charges will be passed on to the buyers. Seeing as most development in the city is condos, that’s an automatic 15% increase in new condo prices, right?

    Yah, transit needs money to build and maintain, and I’m not necessarily against any of these measures, but there has to be STRICT accountability on these funds. They need to be specifically directed to transit, by law. They need to be tracked and audited and accounted for regularly. Because those against it will point to that $977 ($1000) number every time they talk about it. And while those in downtown Toronto might not consider a 2 car 5-person family the norm, they’re pretty common everywhere else in the province (+/- 1 family member).

    Which is the other thing – how do you sell this to non-urban areas? There’s a lot of sparsely-populated province that won’t directly see anything from these. The GTA benefits, but what about Durham region? Is Ottawa seeing anything from this plan? Or is this localized? Will I pass Mississauga and see gas prices drop 5 cents and sales tax drop 1%? Will free parking still be free in Oshawa? Will it be cheaper to build an office building on one side of Major Mac than the other?

    The reality is that this is going to be very hard to push provincially. Sure, the GTA could probably be convinced to support this despite the talking points regularly seen against it municipally. But telling the residents of Thunder Bay that easing congestion in Toronto over the next 20 years will really help the overall economy isn’t going to be an easy sell.

    • tomwest

      “5 cent gas tax will piss off the frequent drivers.”

      I’ve seen gas prices chnage by more 5 cents/litre in a week. In the course of a year, no-one will even notice. Even you drive twice as much as an average person, you’ll only pay $42/year extra. (You could probably save more than that by switching to a slightly more fuel-efficient car).

      • Astin44

        Sure, it’s only $3 for a 60L fill, but I think “tax” adds a psychological component to the pricing. It’s a permanent nickle, not a “oh, that will come back down later” mentality. After all, the portion of the gas price that is taxes is frequently brought up as prices rise. The real numbers aren’t particularly significant, but the reaction may be, especially if those against these ideas jump all over it.

        • tomwest

          True, it’s mostly psycological – Ontario drivers already pay 24.7c/litre in provnical and federal gas tax without moaning (much).
          It should be phased in 0.1c extra each week over the course of a year…

          • tyrannosaurus_rek

            They “already” pay that much but it doesn’t stop them complaining about the state of roads and highways. Perhaps because it isn’t enough.

  • http://www.facebook.com/people/Walter-Lis/571716919 Walter Lis

    Hybrids, electric cars, and future cars that will be legislated to have double the current mileage makes the gas tax increases of little consequence.

    Parking levies should be implemented, to end “free” parking, but minimum parking requirements should be eliminated all together.

    Sales tax increase of 1% is what many U.S. cities and regions have already implemented, so it would be of no surprise to see it implemented here.

    • https://paul.kishimoto.name/ Paul Kishimoto

      “Little consequence”—sure, as the things you mention slowly take effect,* it will bring in gradually less each year. It’s also obviously not aimed at changing driving behaviour (5¢/litre is tenths of a cent per kilometre or less, much less than the tolls that were discussed). What we can build with ~$330m/year, though, will certainly be “consequential.”

      *Even if all new vehicles sold have high fuel economy (they don’t), only a fraction of all vehicles are replaced each year, so the average fuel economy improves more slowly.

  • treptower

    Let the arguing and petty infighting begin! (and the do nothing continue)

    • tyrannosaurus_rek

      Begin? Continue.

  • Suicide Boi

    I’ve already given up on the city and you should too. Death to us all!

  • Mishoj

    Metrolink is necessary, while corrupt politicians are not – get the stolen taxpayers money back, toss the crocked idiots into Harpers new prisons, take all their property, money hidden in banks – massive fines…what goes around comes around – DON’T get MAD – just get EVEN!

    Nothing like a mandatory 25 years in jail to put a stop to todays overpaid thieves!