British Columbia

Metro Vancouver mayors approve gas-tax increase of 1.5 cents a litre to fund transit plan

Metro Vancouver mayors have approved an ambitious $7-billion transit and transportation infrastructure deal — but it comes with a surprise increase to the gas tax.

Tax was last-minute addition to $7B funding plan for transit upgrades

Transportation mega-projects will get a funding boost under the Mayors' Council's 10-year plan. (CBC)

Metro Vancouver mayors have voted to raise the gas tax by 1.5 cents per litre to help fund the next phase of the region's transportation plan.

The tax was approved this morning to make up for a $30-million annual shortfall in the $7-billion transit and transportation infrastructure plan, which includes rapid transit projects in Vancouver and Surrey. 

The increase in tax, which will take effect in spring 2019, will raise the fuel tax within Metro Vancouver from 17 cents a litre to 18.5 cents.

TransLink estimates the fuel tax increase will cost the average vehicle an additional $24 a year. 

"This is a last-minute and noteworthy addition to the plan," said Derek Corrigan, chair of the mayors' council, which approved the increase on Thursday morning.

"I know some will see this as a surprising or a big change, but we have been talking about this for a long time."

Gas tax not part of original plan

The broad details of the plan, and how it would be paid for, were first announced by mayors and the provincial government in March.

It includes a two per cent increase to all transit fares over two years, beginning in 2020, a $5.50-a-year increase in property taxes per average household, beginning in 2019, and an additional $300-$600 fee per unit for new residential developments.

The plan includes the construction of a light rail system in Surrey, the extension of the Millennium Line along Broadway in Vancouver, upgrades to the existing Expo and Millennium SkyTrain lines to expand passenger capacity, and improvements to sidewalks, bikeways, multi-use pathways and roadways.

However, the March plan made no mention of a fuel tax increase. Corrigan said the government began informally notifying mayors last Friday that an increase to the gas tax was their option for meeting the funding shortfall, with a formal notice only coming the day before their meeting. 

'Is it perfect? No'

On Thursday, only the mayors of Port Moody, Anmore, the Township of Langley and Maple Ridge, and the chief of the Tsawwassen First Nation opposed the plan as presented.

"It's not really fair and equitable across the region, it's a tax that everybody hates, we're at record high gas prices as it is. You just can't keep piling on," said Port Moody Mayor Mike Clay, who said he would have voted for the plan if not for the additional tax. 

Other mayors said they struggled with approving the fuel tax increase, but said that overall it was necessary for TransLink to go ahead with its plan while billions in federal and provincial dollars were still on the table. 

"Is it perfect? No. Have we developed all the perfect funding sources, and does that perfect situation exist? I'm not fully sure," said New Westminster Mayor Jonathan Coté.

"I would hate to see opposition over a 1.5 cent-per-litre tax delay the plan another year or two, and the $7-billion transit plan becomes an $8- or $9-billion transit plan."

Corrigan said that local governments and TransLink would continue to work with the provincial government to find a different source of long-term funding they could use, and said he wished the government would have decided to fund the $30-million shortfall from its general revenue.

But overall, he said this was a funding model worth celebrating.

"Certainly, I think there will be a reaction from people, as there would have been with any choice," he said.

"But I do want to confirm that we can go ahead now, and that was the most important factor for all of us."

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