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New Transit Funding Sources

I figure without an HST increase, we will be getting 1 billion a year instead of 2 billion. Plus we have the political problem that we can't spend a disproportionate amount of the money in Toronto proper, which only has about 40% of the population, so suppose Toronto proper gets 400 million per year. The DRL will suck up a huge amount of money leaving no money for anything else. Hence, with a smaller tax increase, the only way to get enough money to build the DRL is to kill other projects. With a larger tax increase we would have money to build several subway lines and GO expansion, with a small tax increase we are limited.
 
andrewpmk said:
I figure without an HST increase, we will be getting 1 billion a year instead of 2 billion. Plus we have the political problem that we can't spend a disproportionate amount of the money in Toronto proper, which only has about 40% of the population, so suppose Toronto proper gets 400 million per year. The DRL will suck up a huge amount of money leaving no money for anything else. Hence, with a smaller tax increase, the only way to get enough money to build the DRL is to kill other projects. With a larger tax increase we would have money to build several subway lines and GO expansion, with a small tax increase we are limited.
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The HST is going to have to go up. So is a gas tax.
 
I thought that Anne Golden's panel has ruled out an HST hike. It is too controversial, the Liberals are trying to make the transit tax increase palatable to the NDP so they can get it passed quickly. Obviously this means the transit taxes will produce less revenue, unless the gas tax is raised by an absurd amount.

So I figure that Toronto's share of this tax will generate enough to pay for one section of the downtown relief line but nothing else. Cancelling remnants of the David Miller administration like the Sheppard East LRT will generate more money to build the DRL more quickly and increase its length.
 
The plan is to swap the HST hike with a proportionate hike in corporate tax hike, meaning that there is no lost revenue

a disproportionate amount is being spent outside of Toronto already. "Only" around $8.5 billion is expected to be spent in Toronto, about 25% of the total amount ($34 billion)

The rest is going to GO upgrades, suburban LRTs, and BRTs.
 
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denfromoakvillemilton said:
The plan becomes slightly weaker without road tolls.
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I guess it would be too much to tax motorist through gas tax and road tolls at the same time.

I think gas tax should be for transit operation costs only. Hopefully corporate tax and land-value capture is enough for capital costs. And hopefully, the provincial and federal governments still contribute to capital costs too.
 
doady said:
I guess it would be too much to tax motorist through gas tax and road tolls at the same time.

I think gas tax should be for transit operation costs only. Hopefully corporate tax and land-value capture is enough for capital costs. And hopefully, the provincial and federal governments still contribute to capital costs too.
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Agree 100 percent. This halfway stuff is why we are where we are.
 
innsertnamehere said:
The plan is to swap the HST hike with a proportionate hike in corporate tax hike, meaning that there is no lost revenue

a disproportionate amount is being spent outside of Toronto already. "Only" around $8.5 billion is expected to be spent in Toronto, about 25% of the total amount ($34 billion)

The rest is going to GO upgrades, suburban LRTs, and BRTs.
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The article in the Toronto Star was vague, I guess we will see when they actually release the plan. Somehow I think that the size of a corporate tax hike needed to offset an HST hike would be massive, so I figured that the plan was a tax hike generating significantly less than $2 billion a year.

If we actually do have $2 billion a year, there will be plenty of money and I think there will be strong pressure from Norm Kelly and others to build the Sheppard subway. The thing is I think that the main reason that the Eglinton/Sheppard subways were rejected is that Rob Ford made a fool of himself, not because those subways were without merit. If we only have $1 billion a year or so, we will be short on money to build the DRL and killing other projects to fund it would seem likely.
 
innsertnamehere said:
norm kelly has no power over the money, this is provincial.
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I mean that I think that Norm Kelly, who is now de facto mayor, will probably try to get city council to change its minds again regarding Sheppard if more funding appears. Since the province just seems to give in to city council every time it changes its mind, this could easily happen.

Toronto certainly could raise residential property tax rates (please do not raise commercial!) but this seems unlikely.
 
denfromoakvillemilton said:
Have people considered property taxes? Toronto has the lowest in the GTA.
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The downloading of federal and provincial governments have already increase the burden on property taxes dramatically since the 90s as that is main tax revenue for municipalities. So the municipalities think there should not be any more burden, and that is true.
 
I presume the province, being the one paying for it, would be the one making the decisions on what gets built. and what money could you rearrange for it? cancelling the DRL is the only option Toronto would have, and that isn't going to happen. The only way Sheppard is going to happen is if the PCs win power, but even than it is a big if.

Its not like this money hasn't already been assigned projects, the $34 billion has been assigned to different projects across the GTA. You can't just shift $3 billion from one project to another, thats a big chunk of funding.




Den, this tax is GTA wide, and hiking just Torontos property taxes isn't going to fix it. Toronto may try to do that to pay for more projects like the Queens Quay East Streetcar though. (NOT the subway, as that would be a $3 billion hike, three times as much as what was needed for the Scarborough subway.
 
Toronto doesn't actually has the lowest property tax rate in GTA in any case. Toronto has the lowest residential but the highest commercial property tax rate, and possibly industrial too.
 
Toronto is currently in the process of lowering Commercial rates so that they are the same as the suburbs. They have basically frozen commercial rates until 2017 or something like that to allow for inflation to play catch-up. Today those rates are higher, but in 5-10 years they won't be.
 
The corporate tax may very well be less, but maybe what the Province will do is ask municipalities to cover part of the costs themselves. By having municipalities introduce revenue tools as well, it shifts some of the political unpopularity from the Province to the municipalities.

The message from the Province could basically be this: "We're going to cover X% of the transit costs through revenue tools. If you want more, enact more tools yourself."
 
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