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Municipalities push for transit funds

Finance Minister reluctant to devote portion of gas-tax revenues to help commuters

Toronto Bureau Chief
Tuesday, June 6, 2000

London, Ont. — The Toronto region has little hope of tapping into federal gas-tax revenues to finance its large urban-transit needs, judging by comments made yesterday by Federal Finance Minister Paul Martin.

After a speech to the Canadian Federation of Municipalities in London, Ont., in which he extolled the virtues of a “green” agenda to improve the quality of life, Mr. Martin said the bulk of gas excise taxes are collected by the provinces.

However, he said that transit projects are “one of the essential components” of Ottawa’s new $2.6-billion infrastructure program. The money will be spent over the next five years.

Up to $500-million of the total could go to transit projects across the country over five years, according to Environment Minister David Anderson. The Toronto region alone estimates it needs to spend $800-million more a year than is now earmarked for roads and transit.

Earlier this year, transit and municipal officials unsuccessfully lobbied Mr. Martin before his budget to set aside a share of federal gas-tax revenues for transit and to give a tax break to transit commuters — such as the one already enjoyed by those who drive to work.

Toronto Councillor Jack Layton, first vice-president of the federation, listened to Mr. Martin’s remarks to reporters and then pledged to keep up the campaign for a share of the gas tax.

“The key focus has to be the gas tax,” he said, noting that municipal property taxes have not risen to cope with the effects of downloading of transit, housing and welfare. By contrast, he estimated, the provincial and federal governments have watched their tax revenues climb 40 per cent and 30 per cent respectively over the past 10 years.

“That is not sustainable while they pass down to municipalities the responsibility for housing, homelessness and the environment,” he said.

British Columbia and Alberta do share a portion of their gas excise revenues as well as car-related revenue such as parking and licensing fees.

The federation cites a 1996 study for the Greater Vancouver Regional District that calculates a one-cent-a-litre gas tax would generate $308-million for the country.

In addition, research by the federation says, the federal government earns $3.8-billion a year in revenue from taxes on fuels but spends less than $400-million on transportation.

Last March, the municipalities association recommended that Ottawa set aside three cents a litre to fund sustainable transportation across the country, with a matching commitment from the provinces.