Ontario’s Liberal government has created a legal loophole that would allow it to divert money away from transit construction.
During the June election, Premier Kathleen Wynne repeatedly promised to sell off government assets – such as buildings, land and parts of government-owned electricity companies – and put the money into the Trillium Trust, a new fund dedicated to paying for transit.
But the legislation governing the Trillium Trust gives Ms. Wynne’s cabinet and Treasury Board the executive power to decide how much revenue from asset sales, if any, is actually put in the Trust. This allows the government to choose to redirect the money away from transit and into other spending files.
In an interview, Finance Minister Charles Sousa suggested asset sales are too complicated to handle with a single hard-and-fast law. For instance, some asset-sale proceeds must be used for other purposes, such as to pay transaction costs, and cannot be put into the Trust. Mr. Sousa said handling such things is best left up to cabinet.
“Most everything that we sell as an asset goes to the Trillium Trust; that’s the intent,” he said.
But critics charge the law still gives cabinet too much freedom to do what it wants with the money. And the cash-strapped government could be tempted to use some of the funds to erase its $12.5-billion deficit instead of building transit.
“The law is certainly not open and transparent,” Progressive Conservative MPP Vic Fedeli said. “It’s going to be very tempting for them to use asset sales to balance the budget.”
Last summer, Mr. Fedeli tried to amend the legislation to make sure all asset-sale dollars go straight to the Trillium Trust. He also proposed having the auditor-general automatically look into every asset sale and report back within 90 days on what happened to the money. The Liberals used their majority to vote down both measures.
Building $34-billion worth of subways, commuter rail and other transportation projects over the next decade was a centrepiece of the Liberals’ re-election platform. Ms. Wynne promised to create a regular stream of funding for transit, something that experts have long demanded.
On top of asset sales, Ms. Wynne also promised to divert 7.5 cents per litre of the gas tax to transit.
It is not clear, however, how this will work. Mr. Sousa said the gas tax is not going into the Trillium Trust, and he was vague on what mechanism the province will use to ensure it gets put toward transit.
“That’s at our discretion already,” he said. “We put it in the budget, we made clear what it is that we’re dedicating.”
That didn’t sit well with NDP MPP Catherine Fife. She argued there should be clear and strict rules spelling out exactly how the money the government is promising for transit is allocated to it.
“The government talks about transparency and accountability, and yet there’s a whole grey area here around … where that money’s going to go,” she said.
While Liberal insiders insist the government has every intention of directing the money to transit, it’s easy to see why some people are wary. The province has a history of reneging on or changing transit plans at will. Three years ago, for instance, the Liberals cancelled the planned Finch West and Sheppard East LRT lines to please Toronto Mayor Rob Ford and then resurrected them the following year at the behest of city council.
It has led transit proponents to take all provincial pronouncements with a grain of salt.
“I don’t treat any ‘policies’ from Queen’s Park as being written in stone,” veteran Toronto transit advocate Steve Munro wrote in an e-mail. “They have torn up so many over the years that whatever money comes our way for which project is very ad hoc.”Report Typo/Error