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Toronto to get $705.3-million over five years from gas tax

Friday, June 17, 2005 Page A11

In a deal that sees both big cities and small communities get what they want, Prime Minister Paul Martin will announce today how millions of federal gas tax dollars will flow to Ontario over the next five years.

The announcement, to be made in Richmond Hill, marks the first time that municipalities will tap federal gas tax revenues for public transit and other “environmentally sustainable” local projects.

In another first, negotiations on the allocation formula were worked out directly between federal and municipal officials, with the Ontario government, by choice, on the side.

The gas tax money flows from two separate commitments: the February federal budget pledging $5-billion over five years across Canada, and a post-budget deal between Mr. Martin and NDP Leader Jack Layton that tied one cent of the gas tax to transit over the next two years.

The initial budget commitment, based on a per capita formula, works out to $1.8-billion over five years for Ontario, with Toronto receiving $407.3-million.

But the postbudget add-on secured in May — a deal that ensured the survival of the Liberal government — sweetens the pot for transit-dependent cities like Toronto.

The “public transit” add-on is based on ridership, not population. Thus, of the $155-million that flows to Ontario in each of the next two years, $99-million goes to Toronto, which accounts for 60 per cent of transit riders in the province. So the city will get a total $705.3-million.

Mayor David Miller praised the deal as “a very strong and positive result for Toronto,” but declined to provide specific financial details.

The deal is “very significant,” he added, not only because his officials were directly at the table but because of the direct federal funding for transit.

“That’s what we’ve been fighting for all along,” he said.

Mr. Miller will be on hand for the announcement, along with Ontario Municipal Affairs Minister John Gerretsen and Roger Anderson, the president of the Association of Municipalities of Ontario.

The City of Toronto dealt directly with Ottawa as did AMO officials. Toronto withdrew from the association last year, citing differences over the formula.

The two-part nature of the announcement means that both Toronto and smaller communities represented by AMO come away with much of what they want.

For example, the federal government eased its definition of projects eligible for gas-tax funding to include a wide array of big-ticket local projects, including roads, bridges, water, sewers and garbage.

Both the initial federal budget measure and subsequent add-on have received first reading in Parliament, but still need final approval before they become law.

In contrast to the initial gas tax measure, which ultimately increases to five cents a litre by the fifth year, the add-on only runs for two years, subject to the federal government continuing to run a surplus.

Even so, Mr. Miller and other big city mayors are hopeful that the extra cent a litre negotiated in the Layton-Martin deal could set the stage for a permanent national fund for transit.

Gas money

Here’s how the sharing of federal gasoline-tax revenues breaks down for the province and Toronto, in millions of dollars.


                            Year 1 Year 2 Year 3 Year 4 Year 5
Martin budget                223.9  223.9  298.5  373.1  746.2
Layton-Martin budget add on  155    155         
Total                        378.9  378.9  298.5  373.1  746.2


                            Year 1 Year 2 Year 3 Year 4 Year 5
Martin budget                 48.9   48.9   65.2   81.4  162.9
Layton-Martin budget add on   99     99         
Total                        147.9  147.9   65.2   81.4  162.9