The transit agency Metrolinx has tabled its preferred options for funding the next generation of expansion, sparking a regional and political debate that threatens to form the basis for the next provincial election campaign.
The possibility of a property-tax increase prompted quick opposition from the mayors of three major cities on the outskirts of Toronto, and the prospect of any extra payments borne by citizens caused Toronto Mayor Rob Ford to make a retching sound to reporters.
Premier Kathleen Wynne said she would be willing to fight an election on transit, setting the stage for a high-stakes showdown at Queen’s Park, where both opposition parties have dug in their heels.
“I’m prepared to go to an election at any point and have the importance of infrastructure be a central part of my campaign,” she said after touring a manufacturing facility in Eastern Ontario. “I’m quite prepared to say that it is necessary for us to build transit going forward, it’s necessary to do it in an incremental way and we need revenue streams in order to do that.”
On Tuesday, Metrolinx released a shortlist of fees, taxes, levies and development models to fund 1,200 kilometres of transit expansion over the next generation. The ambitious plan comes with a $50-billion price tag, only a third of which is currently funded.
The tools proposed by Metrolinx add up to far more than the $2-billion annually it wants for expansion. The list will be pared further, forming the basis for an official investment strategy expected next month. The provincial government will make the ultimate decision – but the political jousting did not wait.
Mr. Ford, long an opponent of what he calls “the war on the car,” made a vomiting noise to reporters at City Hall and insisted, “People aren’t ready for new taxes yet.” He continues to argue that the private sector has a role to play and said that revenues from a casino proposed for Toronto could pay for “a good amount” of the cost.
Transportation Minister Glen Murray has said previously that he does not see a logical link between casino revenues and transit needs, though. And casino revenues are projected at between $20-million and $100-million annually, which would not come close to paying for even the Downtown Relief Line, which is earmarked as one of the most important projects for Toronto, at an estimated cost of $7.4-billion.
At the levels projected by Metrolinx for illustrative purposes, the highest-producing revenue tools are levies on parking spaces, two different types of road tolling and a sales tax, each of which would produce about $1.5-billion annually. Increases to payroll and property taxes would each raise in the order of $700-million each year.
“Property taxes should not in any way be used for the capital costs,” insisted veteran Mississauga Mayor Hazel McCallion, whose opposition was echoed by Hamilton Mayor Bob Bratina and Oakville Mayor Rob Burton. “I will fight it tooth and nail.”
Other options – including transit fare increases, development charges and high-occupancy toll lanes – would raise relatively nominal sums. Metrolinx CEO Bruce McCuaig explained that some are included because they have policy benefits beyond revenue.
TTC Chair Karen Stintz, often touted as a future mayoral contender, said she would be “least amenable” to a fare increase, because the transit commission has traditionally used rider revenue for operational costs.
Long-time transit advocate Steve Munro argued that it is unfair to ding all regional transit passengers with a flat fee, which Metrolinx pegged at 15 cents, when that will hit TTC riders harder than many others.
“You want to talk about equity across the whole of the GTA … there is no equity if, on a percentage basis, the vast majority of the new revenue would be generated on the TTC,” he said.
In Hamilton, Mr. Bratina said that his residents still need to be consulted on the projects Metrolinx is proposing.
“Almost every American city that I’m aware of puts these transit issues to referendum,” he said. “I think that it would be dangerous for politicians to leave the public out of the decision making.”
The three 905 mayors – Mr. Bratina, Mr. Burton and Ms. McCallion – all believe that road tolls, long thought of as the third rail of Southern Ontario politics, may be acceptable to voters.
“There’s no God-given right to a free ride,” Mr. Burton argued. “We live in a sea of ignorance. There’s an unbelievable number of people [who] believe the gas tax is equal to the cost of the highways. The highways are built out of general revenue, the gas tax doesn’t begin to pay for all that.”
Metrolinx's preferred options for funding the next generation of transit expansion:
1. Parking space levy (including pay-for-parking for transit stations).
2. Payroll tax
3. Property tax
4. High-occupancy tolls
5. Vehicle kilometres travelled (VKT) fee
6. Highway tolls
7. Sales tax
8. Development charges
9. Transit fare increase
10. Fuel tax
11. Land value capture
Source: MetrolinxReport Typo/Error