Let me say this up front: I have enormous respect for Anne Golden and Paul Bedford. They both understand cities, and have progressive visions of what this particular city could and should become. Yet the fix on their panel’s report was in from the get-go, long before Bedford and Golden set up camp in a cramped suite of offices on the ground floor of the Mowat Block earlier in the fall.
It was always clear, by the panel’s very existence, that Premier Kathleen Wynne and transportation minister Glen Murray didn’t want to have anything to do with the capstone of the Metrolinx revenue tools recommendations — an increase in the HST — and for that reason, the policy analysts working on the Transit Investment Strategy Advisory Panel had their collective hands tied.
Metrolinx, recall, suggested an HST hike, HOV lanes, a parking levy and development charges. The agency’s officials, and its appointed board, knew that developers and the pension funds would hate the latter two suggestions. Yet Metrolinx didn’t come forward with a politically tone-deaf plan. The agency was realistic enough to dismiss contentious options, like highway tolls. Its officials also faced the facts: if we are to build transit, someone’s going to have to pay.
But if politics killed Metrolinx’s politically conscious solution, it seems strange that politics will almost surely kill its politically conscious successor – you know, the one that Murray said the government needs to “own.”
The panel’s analysis is sound, as far as it goes. The gas tax, they concluded, has a better chance to alter behaviour, causing people to drive less. But, as the report notes, a substantial portion of the revenues would be born by freight and transportation companies – “business,” as the report often says. The additional fuel tax won’t alter the behaviour of these firms, but it will almost certainly increase the amount of griping we hear from manufacturers and shippers.
An HST increase — which, as the panel notes, would be not just fair and equitable but decidedly lucrative — is unlikely to impact driver behaviour. True enough, but that was never the political reason for abandoning a form of taxation that has been used in regions like Los Angeles to underwrite transit expansion. Rather, look closely at the language in the report: the fuel tax hits “drivers and businesses” whereas an HST hike impacts “consumers.” Could it be that the policy rationale here is grounded in simple political arithmetic: there are more consumers than drivers, and the Liberals are looking to irritate the minimum number of voters.
Then there’s the notion of borrowing against the new revenue streams, at a ratio of 2.5 to 1, one of the panel’s recommendations. Okay, that’s an option, yet isn’t this idea simply a buy-now/pay-later approach? Indeed, there’s nothing to stop the province from just borrowing to pay for transit. That’s been an option all along.
Finally, there are a handful of apparent policy contradictions between the panel’s findings and the analysis produced last spring by AECOM/KPMG for Metrolinx. Looking at the prospect of a 0.5% corporate tax hike (worth about $190 million/year), that exhaustive 230-page assessment had this to say: “Although corporations benefit from the availability of the regional transportation system, there is no strict user benefit rationale for this tool (i.e. those who pay more income taxes do not necessarily derive greater benefit from the transportation system).” The panel acknowledges that corporate income taxes are not widely used to raise capital for transit, yet it dismissed development charges, which are. And, in a sop to the minister, the report urged the government to “capture” land value increases as a means of offsetting transit construction outlays.
That particular option — which is grounded in the belief that if you build it, the developers will come — was explicitly rejected by AECOM/KPMG as too uncertain. But Murray is enamoured by land value capture, possibly for the same reason Mayor Rob Ford loved to expectorate about having the private sector finance his subways for him: in both cases, the shell game involves selling the public on the notion that they won’t need to pay to solve the congestion problem.
In any event, I suspect there’s little risk of anyone paying for anything any time soon. As is becoming increasingly clear, we’re heading into a provincial election next spring. Do the Liberals — who are already hauling around so much political baggage it’s a miracle they can get from one day to the next – intend to run on a suit of policy changes that will make life more expensive for middle class families?
The question answers itself. It serves the Liberals’ purposes to appear to be choosing between policy options, even though they are actually choosing not to choose. Indeed, since the government established Metrolinx in 2006, they’ve had nothing but time to deal with problems that were as evident then as they are today. And look where we are, eight years on: with yet another report urging us to action.
My guess is that finance minister Charles Sousa will bring down a spring budget/election platform with a kinda-sorta-maybe partial downpayment for the [don’t insert euphemism here] Relief Line (goal: shore up Fortress Toronto), and, perhaps, a pledge to deputize a GTHA caucus committee to find ever more ways to own something they don’t actually wanted to own.
And so the Big Move will continue to morph inexorably into the Big Stall.