Sousa wants transit funding meeting with Flaherty

Ontario's Finance Minister is calling for a meeting with his federal counterpart to discuss public transit funding in the province.
The Toronto Region Board of Trade says traffic congestion costs $6 billion each year, a number it says will grow to $15 billion by 2030. (Kevin Frayer/Canadian Press)

Ontario's Finance Minister is calling for a meeting with his federal counterpart to urgently discuss public transit funding in the province.

Charles Sousa has written to Jim Flaherty asking Ottawa to participate in a discussion on how to best fund and support much-needed transit expansion in the province, particularly in the congested Greater Toronto and Hamilton Area.

Sousa's letter on Sunday came in response to correspondence from Flaherty on Thursday in which the federal finance minister warned against making changes to the Harmonized Sales Tax.

Metrolinx, Ontario's transportation agency, recently proposed a number of measures to raise the $2 billion a year needed to fund transit, including a one percentage point hike in the HST for residents in the GTHA.

Flaherty has flatly rejected the idea of a regional tax hike, saying it would not be accepted by the federal government, which administers the HST.

But Sousa points out that Ontario has not asked the federal government for any changes to the HST as it continues to examine the Metrolinx proposals.

"We've made it clear that these are just recommendations. We've made it clear that we're going to have engagement and discussions and we're going to assess what this means," Sousa told The Canadian Press in an interview.

"Let's sit down and talk about the funding and what it is the federal government is going to do to support Ontario."

Ontario's Liberals have said they will be consulting the public and the opposition parties before making any final decisions.

They need the support of at least one opposition party to pass any legislation to bring in new fees and both the New Democrats and Progressive Conservatives say they oppose new levies.

Metrolinx has said a regional increase in the HST to 14 per cent would bring in $1.3 billion a year from taxpayers in the GTHA.

But a province-wide hike may be necessary because of the way the tax is administered. If that happens, Ontario should direct the revenue from outside the GTHA to priority projects in those other municipalities, Metrolinx has said.

Flaherty has made it clear that a regional HST hike would go against an agreement Ontario signed with Ottawa.

But Ontario is allowed to change the rate of the provincial portion of the HST once a year.

"We recognize there is a concern about finding appropriate funding," Sousa on Sunday. "We recognize that we need to have this discussion and I want to have that discussion with the minister."

In his letter to Flaherty, Sousa touted what he described as Ontario's fiscal efficiencies and highlighted the benefits of the province and Ottawa working together.

"This is a shared priority and we need you and your government to work with us, as well as contribute more funding to these critical investments for the benefit of Ontario's and Canada's future competitiveness," he wrote.

"This is not only an economic, social and environmental imperative, it is also an urgent obligation of national importance."