Ontario drivers paying up to 90 per cent of road infrastructure costs: study
Published Thursday, October 17, 2013 6:35AM EDT
Last Updated Thursday, October 17, 2013 3:42PM EDT
TORONTO -- Ontario drivers are covering most of the costs of road infrastructure, while those in the Toronto-Hamilton area are paying far more than their share, a new study has found.
The report released Thursday found Ontario road users driving cars, minivans, SUVs and light pickup trucks are paying 70 to 90 per cent of the costs of the road through fuel taxes, vehicle registration fees and tolls, to the tune of $7.5 billion a year.
But those in the GTHA are paying about $1 billion more in fees and taxes than the annual cost of construction, maintenance and policing, according to the study by the Conference Board of Canada.
"Motorists in Ontario meet at least a large portion of the costs that they impose on the road infrastructure -- and in major urban areas probably much more than those costs," it said.
"If we look at the total cost of driving, including vehicle costs, cost recovery will tend to be closer to 100 per cent."
The study, which was initiated and paid for by the Canadian Automobile Association, looked at figures from 2008 to 2010 -- the most recent year for which data was available, the Conference Board said.
It notes that municipalities that own and maintain a large part of the infrastructure collect a relatively small portion of the revenues.
The CAA said the study sheds new light on the common misconception that road users are heavily subsidized by taxpayers, as the debate heats up over new levies to relieve congestion in the Toronto-Hamilton area.
"Before any decisions can be made about new revenue tools (tolls, taxes and increased fees), it is essential to understand who pays for our road network," Theresa Di Felice, a director at CAA South Central Ontario, said in a statement.
The findings of the report don't remove policy options like congestion charges, but it does challenge conventional thinking about who pays for road infrastructure, Conference Board director Vijay Gill said in a release.
Ontario Premier Kathleen Wynne insists the province will have to charge new fees to bring in the $2 billion a year that's needed to upgrade public transit in the Toronto-Hamilton area.
Metrolinx, the transit planning agency, estimates the average household in the region will end up paying $477 more a year in taxes to shave five minutes off the current average daily commute.
It's recommended a hike in the harmonized sales tax, a five-cent-a-litre regional gas tax, a $350-million-a-year business parking levy and $100 million a year in development charges.
Transportation Minister Glen Murray said the study is useful, but doesn't include all the costs, such as lost productivity from congestion.
New levies are still needed to expand public transit to reduce household transportation costs by giving people a less expensive option for commuting, he said.
"The only way you can do that is by actually giving people who don't have options of transit right now those choices," Murray said.
"That will mean less cars. But you have to spend some money to get transit."
But the opposition parties say the Liberals' argument for new fees doesn't hold water.
Investments must be made in public transit, but not on the backs of already overburdened workers who can't afford to pay more, said NDP critic Gilles Bisson.
"To go back, yet again, to citizens and say, here, we want you to pay more taxes or user fees or whatever, is just beyond the pale," he said.
"The public has had enough," Bisson said, particularly since the Liberals are wasting about a billion dollars for cancelling two gas plants ahead of the 2011 election.
"They see this gas plant debacle and they say, 'And you want to come and tax me after you've just done that?"' he said.
The Liberals should cut back spending and find the $2 billion in their $128-billion budget, but they refuse to do that, said the Progressive Conservatives, who oppose any new fees.
"They just said, 'Oh no, we won't do anything like that at all, we're not going to try to make any cuts or any changes ... we're just going to jack taxes,"' said government accountability critic Doug Holyday, a former Toronto city councillor and deputy mayor.
"That's always the Liberal answer. And it's always wrong."
But the Tories are still supporting a multibillion-dollar plan to build a subway in Toronto's east end that requires the city to hike property taxes.
Holyday started a petition supporting the city's preferred subway route, which will be longer and more expensive than the path the Liberals want, even though the province is kicking in the lion's share of the cost.
The governing Liberals have promised $1.4 billion for the shorter line in Scarborough, while the federal government has promised $660 million.
Toronto property taxes will rise a total of 1.6 per cent over the next three years to pay for the project, or about $40 annually for the average home owner.