TTCriders take on the Transit Advisory Panel’s Report on How to Fund Transit Expansion

TTCriders take on the Transit Advisory Panel’s Report on How to Fund Transit Expansion

This morning, the Wynne Government’s Transit Investment Strategy Advisory Panel released its recommendations for how the Province should raise revenue to pay for transit expansion.

We at TTCriders are pleasantly surprised by the report’s contents. We want to draw attention to two key recommendations.

1. Local immediate transit improvements. 

The Panel recommended up to 25% of the total money raised be dedicated to immediate local transit improvements in the Greater Toronto Hamilton Area (GTHA).  That amounts to about $137 million in 2015-2016, and moves up to about $438 million from 2022 onwards.  In addition, the Panel also recommended the establishment of a $300 million Kickstarter fund to provide a quick injection of funds for immediate transit projects in the GTHA.

We like these two programs because they open up the opportunity for critical funding going to the TTC.  We expect the TTC will get a big chunk of this funding, given that it’s the region’s biggest public transit system, responsible for carrying more than one million riders from around the GTHA every day.

Public transit expansion projects are crucial and visionary, but Torontonians don't want to wait a decade or more for our transit crisis to be fixed.  We’re into instant gratification. To address the grind of gridlock and transit overcrowding today we need to properly fund the TTC immediately so service can be increased and fares made more affordable.

We have three concerns with this recommendation to direct funds to local transit improvements.

First, it’s not enough.  Ultimately we need at least $700 million a year from the province to go to the TTC, and this Panel is recommending a much smaller amount.

Second, the Panel recommended that all funds going to local transit improvements be contingent upon the city or municipality contributing additional funding as well. Now, it would be nice to have the city contribute more money to the TTC but we don’t think the province should only cough up if the city contributes more.  The city already pays over $400 million of the TTC’s costs every year already, and the province hasn’t contributed reliable and steady funding to the TTC for years.  It seems a bit rich to ask the city to contribute more in order to lure the province back to shouldering its rightful responsibilities.

Third, this funding is dedicated to providing funding to roads and highways as well, and it’s not clear what percentage of funds are going to immediate public transit improvements.

2. Dedicated revenue streams that don’t further hurt riders.

Come January 1, 2014, TTC users will be shouldering another 5 cent fare increase per ride, and Metropass holders will be paying an extra $63 million a year.  We were already paying too much, and soon we’ll be paying even more.   The Centre for Policy Alternatives cites fare hikes as the most inequitable and regressive way to generate revenue for transit as poorer people use the TTC more frequently than wealthier people.

Everyone benefits from public transit, including businesses and car drivers. We are therefore pleased the panel recommended a more equitable cost-sharing arrangement.

TTCriders supports revenue tools that are progressive and equitable and that promote environmental sustainability.   TTCriders is also supportive of tools that that are financially effective, meaning they raise the amount of money that is actually required and the process of collecting the revenue is not too onerous.

As a result, TTCriders is supportive of the panel’s recommendations to raise revenue by partially reversing recent corporate tax cuts and increasing the gas tax.  These revenues are relatively easy to collect as a system is already in place to collect these taxes.

That said, TTCriders believes that a greater proportion of funds should be raised through corporate tax increases and by raising taxes on high income earners.

Simply reversing corporate taxes to 2007 levels would raise an additional $4 billion, which would amply pay for transit improvements in Toronto and Ontario, and still leave change for funding other crucial public services, like childcare and schools.   And raising the income tax rate by between 1 and 5% on personal incomes over $110,000 would generate $1.3 billion annually.

Read the Transit Investment Strategy Advisory Panel’s Report for yourself and tell us what you think: http://transitpanel.ca/.

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