Comment 89166

By arienc (registered) | Posted May 30, 2013 at 10:13:20 in reply to Comment 89162

Well said. A large part of the problem is that taxes and fees just haven't caught up with the costs. The expectation that many have that the taxes and fees that we pay cover the costs just isn't true anymore.

As recently as 2001/02, Ontario spent, between the municipal and provincial governments, about $3.53 billion a year on roads.

That same year, total fuel tax revenues collected totalled $2.49 bilion and license revenues totalled $0.99 billion, (total $3.48B) which means that these revenues paid for 98 percent of the cost of road construction and maintenance.

Fast forward to 2010/11. Total fuel tax revenues in Ontario actually declined - to $2.16B. Licence fee revenues were $1.1B, for a total revenue of $3.26B. But on the expenditure side, the province spent $4.02B on roads, and the municipalities $4.15B, for total road spending of $8.16B. Therefore as of 2010/11, taxes only covered 40% of expenditure on roads.

There is a gap of $4.9 billion a year, between where we are now and where we were 10 years ago. This gap has been filled in part by the property taxpayer, and in part by other general provincial tax revenues.

Closing HALF of that gap would provide enough revenue for the Big Move. Basically that means either spending significantly less on road construction and maintenance, or raising fuel tax rates.

To capture $2.5B annually, the Ontario fuel tax would have to rise from 14.7 cents a litre (where it has been since 1992) to 31.4 cents a litre - an increase of 16.7 cents/litre.

What I would propose is to gradually raise that over the next 4 years - by 4 cents annually. The additional tax would treated one of two ways. For GTA municipalities, it would be provided into a transit trust run by Metrolinx. For municipalities outside of the GTA, it would be paid to the municipality, which would be able to decide how the money should be used - either for infrastructure, or to return as a rebate to property taxpayers.

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