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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.

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