It’s “tough to sell” but GTA cities need a new tax to boost public transit and fight gridlock choking the economy and driving motorists crazy, Mississauga Mayor Hazel McCallion said after a meeting with Premier Dalton McGuinty.
The outspoken mayor made the pitch in a private meeting Thursday morning, warning “we’ve got to get a handle on congestion” and calling many roads “parking lots.”
McCallion said she urged the premier that “all options” be put on the table when the provincial transportation agency Metrolinx brings down a transit funding report next June on options for funding $50 billion in needed improvements over the next 25 years.
“Income tax, sales tax, (vehicle) registration tax . . . at this point I have no preference,” McCallion told reporters waiting outside the premier’s office.
“I just know we need it, and we need it quickly, and it’s going to be tough to sell it to the citizens. Because there are those that don’t want tax increases. If you don’t want tax increases you’re not going to get the service, it’s as simple as that.”
She ruled out tolls except on new roads like Highway 407.
McGuinty was not available for comment, but increasing taxes may prove politically fraught for him in a minority government. He reluctantly agreed to a new NDP wealth tax on incomes over $500,000 and has already been stung by opponents for raising other taxes, such as the health premium imposed in 2004.
“We haven’t given consideration to that at this point,” Finance Minister Dwight Duncan said on the question of new taxes. “I won’t have much to say until such time as we have the report and recommendation from Metrolinx.”
Transportation Minister Bob Chiarelli said he’s pleased that McCallion raised the issue because “I would like this issue to be discussed in the living rooms, dining rooms and coffee shops…. it’s certainly important for everybody who has to commute or drive to work.”
Progressive Conservative Leader Tim Hudak said families are paying enough in taxes already and New Democrat Leader Andrea Horwath said recent corporate tax reductions should be reversed to help pay for more public services.
McCallion said she and her GTA counterparts like Rob Ford — who recently scrapped Toronto’s vehicle registration tax — need to start having regular meetings and come up with a consensus to support any provincial moves toward new taxes for transit and gridlock.
“We got to get together and decide that we assist the province in selling the idea that there’s got to be additional revenue from some source in order to fund the $50 billion capital project,” said McCallion.
She recently returned from a trip to China where she saw first hand how the country is “heavily investing” in infrastructure like public transit to move citizens efficiently.
“I believe we can sell our people that there needs to be funding in order to relieve the congestion in the GTA that affects them daily,” McCallion added.
She slammed Prime Minister Stephen Harper for cutting the goods and services tax in recent years to curry favour with voters instead of giving municipalities one percentage point as a “sustainable” source of revenue.
Toronto Councillor Denzil Minnan-Wong, chair of public works, said there’s no doubt the city faces massive bills to fix aging roads and water pipes.
But he can’t see dinging residents with a retail tax on top of the HST.
“I also don’t see a city tax that is an additional burden and would make the City of Toronto uncompetitive, with other municipalities,” he said.
Minnan-Wong said he might be able to support congestion charges or road tolls if they are affordable and implemented across the GTA.
Under previous mayor David Miller, Toronto won additional taxing powers from the province. But the current council’s first act was to scrap the vehicle registration tax. Mayor Rob Ford is eager to also repeal the land transfer tax that pumps about $300 million a year into Toronto’s treasury.
The province has given Metrolinx until June 2013 to come up with an investment strategy to pay for its $50 billion regional transportation plan. Queen’s Park has committed about $11 billion of that, including $8.5 billion for new light rail lines in Toronto. But there’s no revenue to build the growing list of transit improvements that will be required to head off catastrophic gridlock as the city grows.
McCallion’s remarks come amidst a calls around the region for new taxes to fund transit. The Toronto Board of Trade and CivicAction Alliance are both lobbying for revenue tools to prevent the cost of gridlock, estimated to be about $6 billion annually in the Toronto area, from more than doubling in the next 20 years.
Other cities, including Vancouver, Los Angeles and London have implemented moneymakers ranging from a regional gas tax to road tolls.
But creating an investment plan for the Toronto region isn’t as simple as introducing a few tools like parking levies, a sales tax or gas tax, Metrolinx vice-president John Howe told a May transportation conference in Mississauga.
The revenue has to grow along with the economy, he warned. A gas tax, for example, could be vulnerable as fuel prices rise and drivers migrate to more efficient cars. Encouraging positive travel behaviour is also important, said Howe.
Some taxes are more difficult to implement. Overhead costs can take a 20 to 50 per cent bite out of road toll revenues, for example.