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New home buyers may pay extra levy for GO Transit

Regional treasurers want cash for expansion from Toronto purchasers, province, Ottawa

Toronto Bureau Chief
Saturday, May 27, 2000

New home buyers across the Greater Toronto region could face an extra bill in future to help pay for the proposed $1.8-billion expansion of GO Transit over the next decade.

A decision to levy the charge of possibly $200-300 a house depends on a couple of key conditions. First, that local municipalities choose to impose the fee and second, that they succeed in persuading the federal and provincial governments to pick up some responsibility for funding for urban transit.

Yesterday, the Greater Toronto Services Board — the agency now responsible for GO Transit — heard that treasurers from the City of Toronto and the four surrounding regions have reached an agreement on how to levy the development charges, as they are called, to finance the future capital projects (such as new trains and buses and rail track) of the regional commuter rail and bus system.

The agreement by the treasurers assumes that local property taxes could pay $825-million of the capital requirements over the next decade.

However, the balance of $983-million would be financed from local development charges as well as by contributions from federal and provincial governments. While municipalities already levy development charges for expansion of their local transit facilities, they have never set such charges for GO transit.

In effect, each level of government would contribute about one-third each to make up the $983-million portion of the $1.8-billion bill.

Political approval of the treasurers’ agreement, a hard-fought negotiation that took place over the past three months, is scheduled for the next full meeting of the GTSB in late June.

“There is still ground to be covered before they can establish a development charge,” cautioned GO Transit chairman Eldred King. However, he was pleased at the potential access to a new tool to finance the expansion of the GO system.

But a spokesman for developers warned of the danger of financing GO capital expansion from a levy on new homeowners.

“This [provincial] government seems to have forgotten that in order to reap the benefits of an expanded economy you have to spend dollars on infrastructure,” said Stephen Kaiser, president of the Urban Development Institute. “We are in disagreement with the capital cost side of GO Transit being added to the cost of a new home in the Greater Toronto Area.”

In the absence of the provincial and federal governments providing any financial support for urban transit, he conceded, “the municipal side is between a rock and a hard place, so I don’t have a bone to pick with them.”

His group is joining forces with municipalities in the Toronto region and elsewhere to lobby the senior levels of government to get back on board and help pay for transit as a necessary investment in the economy.

At yesterday’s GTSB meeting, local politicians received a consultant’s report on the economic value of GO Transit to the province and the federal government.

The study by Hemson Associates, prepared for the GTSB, estimates Ontario and the federal government would reap $60-million a year in health care and environment savings if GO’s capital expansion goes through, luring people to transit from cars.

As it is, another 40 per cent more people are expected to live in the GTA over the next 20 years, with an estimated 55-per-cent increase in GO Transit ridership, which hit 38 million last year.

As well, the two senior governments would avoid an estimated $33-million a year in costs related to the 400-series highways across the province if the commuter rail system were reinforced.

The one bitter note at yesterday’s meeting came from Brampton mayor Peter Robertson, who complained that GO Transit’s capital expansion does not include extension of all-day service to Brampton.

However, Mr. King argued later that the relative cost of adding trains through the day to Brampton would eat up about one-third of GO’s capital program when there is no business case to justify it.

Discussions about the future of transit and transportation will come to a head at the services board late next month as municipal politicians put the final touches on a document, Removing Roadblocks, that attempts to spell out the region’s future requirements for moving people and goods.

At yesterday’s meeting, some local politicians who serve on the GTSB’s transportation committee expressed frustration at the slow progress. For example, the Removing Roadblocks document — an effort to forge a consensus across the GTA on how to solve growing traffic congestion — will not have details on timetables and budgets for action.

But Oakville mayor Anne Mulvale said the report is a key first step. “We’re creating public pressure for the funding [from the federal and provincial governments] to be there.” TRANSPORTATION FUNDING

Transportation funding sources for the Greater Toronto Area and Hamilton-Wentworth, in comparison to other jurisdications:

                        GTA and     GTA and 
                       Hamilton-   Hamilton-   Montreal    U.S.
                       Wentworth   Wentworth      &        jurisdications
Funding Source           1995*      1999**     Vancouver
Property Tax              ++         ++          ++           ++
Development charges       ++         ++          ++           ++
Prov./State grants/
  programs                ++                     ++           ++
Federal grants programs                                       ++
Revenue sharing                                  ++           ++
Taxing ability                                                ++

-*Before offloading by province
-**After offloading by province

Source: Hemson Associates