Metrolinx Gets It Right With New Investment Strategy
By John Brodhead, Executive Director, Evergreen CityWorks
This week, Metrolinx released its Investment Strategy, which included recommendations on how to bankroll the remaining $34 billion needed over the next 25 years to complete the Big Move. The strategy is now handed over to the Province to make a decision.
Metrolinx recommended the following major tools to raise the $2 billion per year needed:
- 1% sales tax increase in the GTHA (would raise $1.3 billion a year)
- 5 cent per litre increase in the gas tax in the GTHA ($330 million a year)
- 25 cent per space per day levy on non-residential parking in the region ($350 million annually)
- $100 million a year from development charges
A couple of other policy levers are recommended, including high-occupancy toll lanes, paid parking at transit stations and land value capture around transit stations. All are important moves but do not raise money on the scale of the “big four.”
The strategy offers a balanced approach for determining who will pay, with everyone chipping in to build out the plan—consumers (HST, parking levy), drivers (gas tax), businesses (through development charges), and transit riders (paid parking at transit stations). It’s transparent about how much it will cost the average household in the region ($477 per year), as well as the hidden costs of congestion that could stunt the region’s future ($1,600 per family per year).
Anticipating any concerns that tax increases for transit could go into general government revenues and never be seen again, Metrolinx created a separate trust that nicely lances that boil, and they also recommended a tax credit for low-income consumers to offset increases. Finally, the strategy recognizes that a sales tax increase—which at 1% may seem low, especially with its reduction by the feds a few years back—is impossible to collect at just a regional level, and that money collected outside the GTHA will go to the needs of residents in those communities for transportation infrastructure, such as roads and bridges.
Of course, there are still many challenges to overcome: the sheer number of tools required to get to $2 billion a year means that everyone will feel the pinch in some way. There is no mention of phasing in any of these tools over a few years as projects get up and running, which would help the transition to new tools. Although not including road tolls is understandable for political reasons, that omission could be an issue, since the biggest tool Metrolinx is recommending has no immediate positive impact on reducing gridlock—without those immediate results, people may at first feel that they are paying more just to be stuck in the same traffic.
All in all, it’s a very savvy document—not surprising considering the political acuity of Metrolinx’s Board Chair, Rob Prichard, and its CEO, Bruce McCuaig. It puts a clear choice in the hands of decision-makers and citizens.
Now let’s hope for a vibrant and informed debate over the coming months considering the pros and cons of implementing this strategy.
We need to get beyond the simple fear-mongering of traditional “tax increase” debates and into a more thoughtful conversation about what this region will look like with or without these tools, as well as the transit that can be built as a result of their implementation.