Public wary of fees and tax increases for transit

While Metrolinx believes tax increases and new fees are the best way to pay for public transit, the public remains largely unconvinced.

While the provincially run transit agency Metrolinx believes higher taxes and fees is the best way to pay for its $50 billion transportation plan, the public – particularly those with lower incomes – remains largely unconvinced.

In a new poll by Forum Research, just 43 percent of respondents agreed new taxes and fees are needed to build transit and transportation infrastructure in the Greater Toronto Area (GTA), while 38 percent disagreed.

Yet, even those respondents who do favour fees and taxes, said road tolls and a downtown congestion charge are a more appropriate way – than sales and property taxes – to raise money for new transit.

A downtown congestion charge was the most popular option, according to the Forum poll, with 26 percent of respondents selecting it as the “fairest” way to pay for new transportation infrastructure. Road tolls ranked as the second most popular option, garnering 23% support.

A regional property tax increase and a hike in HST, on the other hand, received backing of just 13% and 10%, respectively.

Middle to lower income individuals – or those earning below $40,000 annually – were particularly put off by the idea of higher sales and property taxes. Just 6% of those respondents earning between $20,000 and $40,000 annually felt an increase in property taxes was the fairest way to pay for new transit. In that income group, only 8% supported an increase in sales taxes.

Metrolinx, which earlier this year tabled a plan to raise money for transportation, is not considering either road tolls or a congestion charge as a way to pay for its massive infrastructure plan. Instead, it wants the province to raise the current sales tax by one percentage point to 14%, place a 5-cent tax on each litre of gasoline sold, apply a levy on all off-street, non-residential parking spaces and hike development charges on all new construction in the GTA by 15%. Metrolinx estimates that, taken together, this amounts to just under $500 a year per household.

A poll in May in the wake of that announcement immediately highlighted public resistance to such tax increases. The poll, again done by Forum Research, showed that 68% of those surveyed disapproved of a 1% increase in sales taxes, while 69% were opposed to a 5-cent-per-litre tax on fuel sales.

Again, middle to low income individuals were particularly turned off by an increase in sales taxes, with 73% percent saying they disapproved of such a move. An increase in gas taxes also proved unpopular, with 78% of respondents in that income group disapproving of such a move.

The public, it appears, has spoken: leave the taxes to the side and instead focus on initiatives that have proven to ease congestion and done so fairly.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or at (416) 964-9223 ext 236.