Ontario transit panel recommends 5-cent-per-litre gas tax hike
A government-appointed advisory panel is recommending a five-cent-per-litre hike in the gas tax and borrowing more money to help fund public transit expansion in the greater Toronto-Hamilton area.
Government sources confirm the report from the 13-member panel chaired by Ryerson University’s Anne Golden projects boosting the gas tax could raise about $800 million a year, and generate another $80 million through the HST.
The Canadian Press has learned the report will also recommend the government could increase the rate more than five cents a litre.
Ontario currently imposes a 14.7-cent-per-litre levy on unleaded gasoline, which hasn’t changed in more than 20 years.
The report, which will be released later today, will also recommend a dedicated trust fund so drivers know the extra tax they are paying can be used only for public transit improvements — something the Liberals have already said they plan to do.
Premier Kathleen Wynne appointed the panel earlier this year to examine proposals from the transit planning agency Metrolinx, which made many of the same recommendations.
RELATED:
Time has come for truth-based transit in the GTA: Hume
Metrolinx's Big Move is the wrong move, think tank says
Metrolinx proposed a five-cent-a-litre regional gas tax, a $350-million-a-year business parking levy, $100 million a year in development charges and an increase in the HST.
Metrolinx said a one per cent jump in the HST would generate $1.3 billion a year for the transit projects, but the federal government has told Ontario any changes in the sales tax must be done province-wide, not on a regional basis.
The panel rejected the HST proposal and Wynne has already ruled out the idea of increasing property taxes.
Government sources say the panel will also recommend greater use of debt to finance transit improvements, borrowing up to $2.50 for every $1 the province raises in taxes.
The Liberals have already said they will issue so-called “green bonds” next year to generate the billions of dollars needed to expand public transit.
History has shown that raising the gas tax isn’t a politically wise move. Former prime minister Joe Clark saw a quick defeat of his short Progressive Conservative government after proposing to raise the gas tax by four cents per litre in the 1979 election campaign.
Studies show people in the Toronto-Hamilton area spend an average of 82 minutes a day commuting, and it’s predicted that will jump to 109 minutes a day by 2031 if nothing is done.
The Ontario Chamber of Commerce says gridlock costs the economy about $6 billion a year in productivity.
