Metrolinx proposes HST, gas tax, parking levies to fund GTHA expanded transit

Metrolinx proposes new taxes and fees of about $500 for an average household to raise the $2 billion required to solve gridlock
Metrolinx needs to raise $2 billion to fund GTHA expanded transit. (Metrolinx)

Ontario's transportation agency is recommending new fees that will total about $500 for an average household to raise $2-billion annually to fund public transit in the Greater Toronto and Hamilton Area, a project called The Big Move.

The proposals to fix what Metrolinx  calls a "gridlock crisis" are getting mixed reaction from local politicians and community leaders.

The four main proposals contained in a report released today are:

  • a one per cent increase on HST
  • a five cent per litre increased of gas tax
  • a business parking levy
  • a 15 per cent increase to development cost charges

Metrolinx estimates the HST increase will raise $1.3 billion annually in the GTHA. An increased gas tax is expected to raise $330 million, the business parking levy $350 million and the development cost charges $100 million per year.

What will it cost you:

  • A household of five with two cars, commuting 20,000 km/year: $977/year.
  • A senior who drives little and uses transit often: $140/year.
  • Average household: $477/year.

"The Greater Toronto and Hamilton Area (GTHA) is facing a gridlock crisis that is costing our economy an estimated $6 billion a year and is compromising the quality of life for residents," said Ontario transportation minister Glen Murray in a statement. "If not addressed, this problem will continue to grow as our population increases and further burden our economy."

Murray said the Ontario government "accepts the guiding principles of the Metrolinx funding strategy."

What it means for Hamilton

Coun. Brian McHattie attended Monday morning's meeting and liked what he heard.

"Hamilton city council had concerns about the ability to pay for those who are on a low income, and it really seems like [Metrolinx] was paying attention," McHattie said.

The Mobility Tax Credit, a $105 million annual credit presented in Monday's report, will assist low-income passengers pay for fares. "They also stepped up with the business parking levy and development tax," he said. "These tools directly cost businesses as opposed to individual taxpayers."

Household impact

The report also outlines how these proposals will affect Ontario households.

If you are a family of five with two cars who travels 20,000 km a year, the annual increase $977, or $18.79 per week. A senior who drives little and takes transit often will expect to see a $140 a year tax increase.

An "average" household can expect a $477 tax increase.

'Flawed process'

It is these tax increases that Hamilton city councillor Sam Merulla strongly disagrees with.

"It's a flawed process," Merulla told CBC Hamilton. "The fact that the province is even remotely looking at new taxes to compound the already over-burdened municipal tax payer, I think, is truly unacceptable."

And Merulla said increased taxes will have a "catastrophic impact" on affordability, for households and local businesses.

But if Hamilton wants expanded transit, some increased taxes is the price the city will have to pay, McHattie said.

"The important thing to focus on is we need LRT and expanded transit, and they money needs to come from somewhere," he said. "If not from these tools, then where?"

Business opportunities

From an economic and transportation stand point, one local business leader said the Metolinx plan is also an investment strategy.

"This is all opportunity for Hamilton," said Richard Koroscil, interim CEO of the Hamilton Chamber of Commerce and Metrolinx board member. "You look anywhere around the world that has a good transit system and a good transportation system, they are a strong economy."

With transit development comes economic developments, Koroscil said. He used Toronto's Eglington West Street LRT installation as an example. As soon as that expansion was confirmed, condominium developers and businesses started in fill in available spots along the street.

"These kinds of public investments drive private sector investments where there is an opportunity to drive intensification, combine commercial and residential activity, and really start to change the look of the community."

Metrolinx also proposes three additional items that won't raise large amounts of money, but will have "positive policy benefits."

They include: high-occupancy toll lanes, paying for parking at transit stations and land value capture, meaning contributions from land owners whose property values increase with new transit.

Premier Kathleen Wynne will use the report to determine which levies she'll choose to raise the billions of dollars needed to fund The Big Move.

Metrolinx says all the revenues would be dedicated to public transit projects, with 25 per cent carved out for municipalities in the area to spend on local transit and transportation projects.

Metrolinx's regional transit expansion plan is projected to cost $50 billion over 25 years.

With files from CBC's Mike Crawley, Julia Chapman and The Canadian Press