Last week, the Premier of Ontarioâ€™s Transit Panel â€” comprising 13 citizens from across the region and the political spectrum â€” unanimously recommended a strategy to fund transit in the Greater Toronto and Hamilton Area. The reportâ€™s title, Making the Move: Choices and Consequences, highlights the urgency of investing in transit expansion today, failing which there will be severe consequences tomorrow.
Road congestion and transit crowding in the GTHA have already reached a tipping point. With 2.5 million people and one million more cars expected to come into the GTHA in the next 18 years, the existing severe state of congestion will become intolerable.
We have come up with a revenue plan that works. Our recommendations call for a fair and balanced contribution from all stakeholders, without asking too much of any one group. Because new transit infrastructure benefits all of society, costs should be shared â€” by business, drivers, and transit users. Since riders contribute through fares that rise regularly with inflation, the panel chose not to ask more of them. We have asked the government to redeploy the HST revenue it earns on gas and fuel taxes.
As for the tools, our report outlines two variations on a new funding model. The first combines a phased increase of gasoline and fuel taxes starting with 3 cents per litre in year one, a modest increase of 0.5 per cent to the general corporate income tax, and a redeployment of the GTHA portion of the HST charged on gasoline and fuel taxes. The second option is almost the same, but proposes less from gas and fuel, and more from HST.
Taken together, the combined increases would raise between $1.7 billion and $1.8 billion annually for transit in the GTHA. This revenue stream would then lever the additional borrowing to build three-quarters of the Next Wave sooner than expected. People would see the benefits from this investment, thereby generating support for The Big Move in its entirety. This revenue strategy also provides enough money to pay for local transportation improvements and to retire the debt over time.
We researched the possible options rigorously. We favour the gas and fuel taxes because they match usage, affect travel behaviour, are simple to administer, raise a lot of money, and havenâ€™t been raised in more than 20 years. Even with the increase, the GTHA would be below Montreal or consistent with Vancouver.
The impact on households is very tolerable â€” about $80 per household in year one, just $260 per household after eight years. Compare that to the cost of the gasoline wasted due to stop-and-start commuting for 32 minutes on a daily round trip if we donâ€™t remedy the situation. This amounts to $16 every week or $700 per year. The choice is obvious.
The most common and forceful message that emerged from all of our public meetings and consultations is that the public has very little trust in how transit decisions are made, how money is managed, and how projects are delivered. When it comes to funding transit, the public told us: â€œDedicate it or forget it.â€
We address these concerns head-on. Our recommendations, when enacted, will ensure that new revenue will be held in a segregated Fund to be spent solely on transit expansion in the GTHA. And they will guarantee accountability and transparency for how funds are spent and reported on.
We emphasize the importance of comprehensive, publicly available business case analysis prior to project approvals. We cannot afford to waste billions of dollars on projects that result in low ridership and huge operating subsidies.
We also cannot afford more congestion and more gridlock. We cannot afford continued losses in productivity and missed opportunities to create more jobs. We cannot afford more pollution and commuting stress. Above all, we cannot afford to wait.