Loss of transit tax a wait and see game for P.E.I.
The federal government is cutting the transit tax credit in the new budget, but investing in public transit
Transit operators on P.E.I. are waiting and seeing how transit news in the federal budget will affect their bottom line.
The federal government has committed $20.1 billion to public transitover 11 years through agreements with the provinces and territories.
The allocation of funds will be based 70 per cent on ridership and 30 per cent on population.
Mike Cassidy the owner of T3 transit said although what P.E.I. may get is still unclear, the possibility is exciting.
"At least we have money in place now for Prince Edward Island looking after transit capital needs for the next 11 years, and by that time we will definitely need new equipment," he said.
Tax credit cut
On the other side however, the budget cuts the transit tax credit that gave Canadians a 15 per cent non-refundable credit on the cost of public transit passes.
It will be phased out on July 1, and the cut is expected to save the federal government more than $200 million a year.
Cassidy said there is no way for his company to track how many of their riders used the credit, but it is slightly worrisome.
"As soon as I saw last night it last night in the budget, my question was, of the customers we have with passes, I hope this is not going to be a deterrent and they will not use transit because they do not have a tax credit," he said.
A hit to low-income earners
The cut also worries advocates for low-income Islanders.
"I'm a little puzzled by it, I think that it's a very small benefit to the government overall," said Ann Wheatley with the Cooper Institute and the P.E.I. Working Group for Livable Income.
"It's not going to make a difference between taking transit and not taking transit, because it's a small tax credit in the first place, but it would give people that little bit of extra return," she said.
"If you're not a person who has a car or is able to afford a private vehicle, public transit is really the affordable option."
Wheatley wishes the federal government would have looked at increasing corporate taxes or taxes that wouldn't affect those in the lower income brackets as much — rather than target the public transit credit.
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