Published on: 17/12/2013

On December 12, 2013, the Transit Investment Strategy Advisory Panel (TISAP) published its final report entitled Making the Move: Choices and Consequences on how to fund “The Big Move,â€Â￾ the Metrolinx transit plan for the Greater Toronto and Hamilton Area (GTHA). There were two primary funding strategies proposed (both quite similar) which centred around province-wide tax increases on the Gas Tax, Corporate Income Tax, and Harmonized Sales Tax (HST). Depending on the approach, it is estimated that $3-$3.3 billion would be raised annually from these increases with $1.6-$1.8 billion dedicated to Toronto transit development. The Ministry of Infrastructure is now considering the options as presented and is expected to include a final funding plan for transit in Budget 2014.

TISAP was formed by Premier Kathleen Wynne in September 2013 to review the Metrolinx Investment Strategy and advise on how to move forward on funding transit infrastructure development. Based on their review, TISAP has made two primary proposals for creating dedicated revenue: the first proposes a gradual Gas Tax hike of 10 cents per litre, a corporate income tax increase of 0.5%, and a dedicated portion of HST from local gas and fuel sales to be dedicated to transit development; the second is largely the same, only proposing a lower cap on the Gas Tax accompanied by a hike in HST.

They have also urged the government to hold all new revenue in a dedicated stand-alone fund to allow all projects to be tracked against spending. This approach would require new legislation, which TISAP notes will require a high degree of transparency and accountability to assure taxpayers that increasing their tax burden is a worthwhile investment. Recognizing that these tax increases are also province-wide, funds not collected in/allocated to the GTHA would be spent outside the region to support local infrastructure needs, broadly defined.

They have also urged the government to hold all new revenue in a dedicated stand-alone fund to allow all projects to be tracked against spending. This approach would require new legislation, which TISAP notes will require a high degree of transparency and accountability to assure taxpayers that increasing their tax burden is a worthwhile investment. Recognizing that these tax increases are also province-wide, funds not collected in/allocated to the GTHA would be spent outside the region to support local infrastructure needs, broadly defined.

Although some of the recommendations are less than desirable, the plan seeks to create a dedicated infrastructure tax for the province. This is important because it will create a larger funding base for infrastructure development and rehabilitation across the province, with $1.3 of the $3 billion raised dedicated to infrastructure outside the GTHA. Ultimately, the more money dedicated to core infrastructure in the province, the better shape our industry will be over the long term.

To review the full TISAP report, please visit www.transitpanel.ca

If you have any questions about the TISAP recommendations or the ongoing transit funding debate, please feel free to contact Patrick at OSWCA at 905-629-8819 or Patrick.mcmanus@oswca.org.

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