The Ontario government is looking at new and improved ways to pay for transit, infrastructure expansion and looking to end the gridlock. Ideas from road tolls, increasing the gas tax and other forms of taxation have all been thrown around as possibilities to reduce the standstill. We are in the middle of a perfect opportunity to tell politicians how we want to pay for transit expansion. We can tell politicians how we want our infrastructure to look, handle traffic and where we want to see the expansion. I personally believe that people are sick and tired of seeing their hard earned money go into the general pot and be lost. People of this province would be unwilling to give anymore cash in the form of tolls, taxes or P3 funding if the money is just swallowed up. When the leaders of today ask us to start paying for the projects of tomorrow we need to be sure it will be safe and transparent. I believe that a dedicated fund where the money would go into is the best option available for the people of Ontario. A fund that would make it easy for residents to see how their money is being spent and show how it has impacted their lives. People are more then willing to invest and spend when it will help to make their lives a little bit easier. Ontarians know that we need to deal with the gridlock issue and that the less time we spend in traffic the increased quality of life we all will have. This is what I believe that we should do to pay for our transit and infrastructure expansion needs of the future.
I would like to see a dedicated fund to transit/infrastructure expansion be separated from any other government department budget. A dedicated fund would allow for money to be spent solely on the reason the fund was set up. My vision for the fund would allow the money to be spent on transit expansion, transit upgrading (shelters, buses, increasing routes) and repairing the road network we already have. I personally don’t agree with the expansion of road networks to address transit issues because I am of the belief that the car is in its slow demise. There also seems to be the issue where lanes have been added to roads to deal with traffic and it increased the level of traffic on the road. Making this fund available to repairs will allow us to make sure that the bridges we cross are safe and the roads are clear of potholes. This fund would take into account the way people in the 21st century get their information through the internet. The fund would be managed by the Ministry of Infrastructure the information, fund total and other information would be available on a interactive website. While this is a very basic view of the website this is what I would consider a good way to show off for the residents.
The total fund amount would rise and fall based on the collection of funding and fall based on the spending for projects. The cash would rise based on the estimated amount of funds collected to provide the public with a clear idea of how much money is available for municipalities. This would also give the public a clear breakdown of how their money is being collected and where the money is coming from. The amount would also fall when a payment was given for a project and a notice of reduction would be provided for the public. It is fairly easy to imagine for yourself on how each different area could break down to show the public how their money is being spent. Comment below for what you would like to see a fund like this show.
Its all fine and dandy to have a fund dedicated to transit expansion and infrastructure repair but without a funding source its useless. I believe that the gas tax is great funding source to start the fund off properly. It already serves this purpose but can get lost in the general pot as another tax levied against the public. Putting this funding source into the new transit/infrastructure fund would provide a specific and up front place for the money. Currently, the gas tax on Ontario drivers is 14.7% which provides a 15.4 million dollar income for different projects. This money is divided up by the municipalities for a number of different transit related projects. The issue with this fund is that it is unavailable to municipalities that don’t have a transit service. Their residents pay for the service but the funds aren’t available to them for use. There is a real push to make these funds available for all municipalities to use on other infrastructure related projects. This new fund could make these gas tax funds available to these communities as well but preference would be placed on transit expansions. The current level of funding may not be acceptable to really pay for the transit expansions that are necessary to relieve gridlock. With thousands of new Canadians moving to our biggest communities the problem will only get worse if we don’t act. I believe that using the gas tax as a revenue tool will push more people into transit and create the necessary funds to pay for new projects. I believe that the government should slowly increase the amount of tax on the price of gas to 20% by 2020. Pushing the amount to 15% in 2014 and then around 1% each year till 2020 will incrementally increase the money we bring in. A 20% tax on gasoline would bring in 21 million dollars annually on consumer based gasoline alone (2011 numbers). If the government even hopes to have a chance at selling this increase to the people they will need to prove to them the benefits. They wont want to hear the typical political spin but needs to see results and see where the money is going. This increase in the tax wont create the amount of money necessary to see expansion projects like the Downtown Relief Line paid for but it will be a start. This will be just one of the tools the government will bring to bear on gridlock.
Purchasing the transit vehicles is one of the most expensive parts of the entire project. When Toronto purchased its latest version of LRT’s they spent close to 700 million dollars on 300 vehicles. The HST from these purchases would have provided a huge income to the province of Ontario. I propose that the money would go into the transit/infrastructure fund. While the initial loss of money from the HST would hurt the province it would be regained in construction contracts, incomes taxes and other work related taxes. If the new LRT’s contract was part of this plan the HST would have added 140 million to the pot which could be used for other projects. While this amount of money would be inconsistent and would start off slow, it could continue to build on itself and in turn fund the entire base fund. Again, this money could be used by any municipality and for any project which repairs infrastructure and expands/deals with transit. Another option for helping to make transit purchases more cost effective would be to reduce or eliminate the HST on these types of purchases inside of Ontario. I don’t believe that this is a viable option because cities are having trouble collecting enough money to begin with. Putting the HST back into the fund would give the municipalities the money they need to pay for these projects. These 2 forms of income alone will not be enough to really deal with the gridlock issue; Toronto alone would suck it dry in seconds.
I believe that when the government has a surplus that they should set aside a certain % of that surplus to dealing with the debt, putting aside a rainy day fund and putting money aside for this fund. Fighting the debt and making sure that we don’t get into debt if we need a stimulus will be important for the financial future of this province. Putting aside a portion of money for this other specific fund will help to relieve transit users and the average ontarian from having to throw more tax money into the pot. Pushing everyone to pay a little more would make this fund more acceptable to the public and could instill a little more pride in the transit serve knowing they paid for this service. Again this income for the fund would be inconsistent and would be based on the preference of the government in power. The fund may not see a dollar from this revenue source if a government party doesn’t prefer this option or there is a problem with budgeting in that day. This may need to be mandated that a fund like this is paid for by a budget stimulus in order to keep it at a effective level. A 5% transfer from the surplus could provide major benefits for the fund and infrastructure/transit in Ontario while making only a small dent in the budgeting of Ontario. Transit riders and corporations will also need to give up some goodies to be able to fund the expansions they need to make them profitable.
It wouldn’t be fair of transit riders to reap the benefits of a expanded and better system without paying a little cash in order to make it happen. A 5 cent fee of all bus riders province wide would be necessary to add to the pot of money growing in this new fund. 705 million transit rides where provided in Ontario’s 15 largest cities in 2009. A 5 cent fee on these rides would provide the fund with a $35,250,000 annually and that number would only increase as more riders jump on board and transit expands. Together with the increase in the gas tax to 20% it would bring in over $56 million dollars annually for infrastructure/expansion. While the fee would cause some harm to lower income or fixed income people the benefits to the system seem to outweigh the negatives. A better bus system would allow them to get to places sooner and more effectively adding a positive in their life and increasing their quality of life. For most people a nickel is nothing to worry about and wouldn’t make a dent other then in addition to the fund.
I believe that corporations need to find a way to be a part of this process of paying for transit expansion. Small to big all benefit from a happy workforce, a world in where there is less gridlock and the productivity that good transit brings to the table. With the introduction of a presto card it may be interesting to have the company in which a person works. Everytime he swipes his card between normal working hours is a charge to that company that goes to the fund. A 15 to 20 cent charge could provide a huge boost to the fund without levying a new direct tax against the company. The more the workers use the system the more the transit can be expanded. Adding a fee to parking lot permits for the fund could also provide a source of revenue that helps to promote transit by making parking and the vehicle a foreign object in today’s world. Moving to a more sustainable community and making transit the #1 priority will benefit all communities to the greatest extent.
I believe that none of this is possible if the government can’t lay out its plan and get the acceptance of the people. The people need to be consulted and they need to have their opinions heard. For example it might not be feasible to charge a larger portion of tax on gas heading to first nations reserves where prices are already high. If the government doesn’t create a fund that stands alone and it loses the money in the general pot then people will not be happy. We need to get this right and we need to try and get the approval of as many as possible. We need the transit expansion as the gridlock facing our cities are smothering our growth. From the common worker to the biggest of corporations we will need to pay in order to get the transit service we expect. Any ideas or comments please put them below.
Sources of information:
288,257.3 Barrels Per Day -> 105,213,914.5 Barrels Per Day -> $15,466,445.358 Million dollars at 0.147% tax level <- consumer gas only
573,928.4 bbl/d -> 209,483,866 barrels per day -> $30,794,128.302 Millions per year at 0.147%