Premier Kathleen Wynne is flirting with the idea of raising taxes in Ontario.
Specifically, she is floating the idea of different ‘
revenue tools’ to finance both upgrades to existing infrastructure as well as Metrolinx’s proposed $50 billion transit expansion plan in the GTA. Instead of just committing to one ‘revenue tool,’ the premier is planning to impose a combination of taxes, tolls, and fees – while hoping the impact is so small that Ontario taxpayers won’t notice.
Premier Wynne is right to look for new solutions to Ontario’s ongoing transportation problems, but hammering drivers who already pay through the nose is not the answer. This government needs to restructure the way it collects roadway taxes, and allocate these funds directly to transportation upgrades and roads. Any new taxes levied should replace
gasoline tax dollar-for-dollar, not be tacked on top of existing taxes.
In 2012-13, the Ontario government collected $2.37 billion from the provincial Gasoline Tax, and another $1.49 billion in HST on gasoline. Because the HST is imposed after the provincial and federal excise taxes are calculated, about $316 million of that revenue comes from a tax on top of the initial tax. Motorists are paying taxes on their taxes when buying gasoline in this province!
These gasoline taxes generated a total of $3.86 billion for Ontario this year, or about $1,225 per year for the average two-car family in Ontario. Meanwhile, the government only spent $3.3 billion on provincial highways and other roadway spending.
Clearly, this government does not have a revenue problem; it has a spending problem and a management problem. Revenue generated from gasoline tax and related taxes should be tied directly to transportation infrastructure, and done so by law. Ontario should follow the lead of
Manitoba, who introduced a Gas Tax Accountability Act in 2004. This act dedicates fuel tax revenue to capital spending on transportation, most of it at the municipal level.
Gas taxes were introduced as a user fee on roads and bridges, and that is where the money should be spent. It should not be funneled into general revenue or to subsidize public transit systems that chronically lose money.
If Premier Wynne wants to make changes to this roadway taxation system, she should take steps to re-align how users pay for roads. Instead of a punitive gasoline tax, Ontario could introduce market mechanisms and lane pricing to reduce congestion and make more efficient use of road space.High
occupancy tolls, or HOT lanes, are used across California to allow single-occupancy vehicles the option of paying to drive in the carpool lane. This reduces congestion and also raises revenue for infrastructure.
Similarly, smart parking meters can also reduce congestion in urban areas, as concluded by
a UCLA study. The study found that drivers searching for curb parking in just one 15-block district in Los Angeles drove an additional 950,000 miles and produced 730 tons of carbon dioxide per year.
Smart parking meters, such as the
SF parks system in San Francisco, collects real-time information about parking availability and distributes this information online and through an app. Prices are raises and lowered constantly based on demand, and drivers can pay online using a credit or debit card to avoid parking fines.
New technologies and innovation can help to solve Ontario’s congestion and infrastructure problems, but they need to be managed properly. Premier Wynne should embrace these solutions and restructure the way we fund and build transportation infrastructure in this province. But new revenues must be tied by law to roadway spending, and they must replace existing taxes on motorists – not be tacked on top.
Candice Malcolm, Ontario Director
