08/01/2011

Permanent Provincial Gas Tax for Transit Funding Needed, an AMO Backgrounder for the Ontario Provincial Election 2011.
Municipalities across Ontario operate local transit systems to help people get to go to work, go shopping, and visit their friends and families. Each trip on public transit eliminates the need to drive, buy and burn fuel and reduces greenhouse gas and other emissions that can damage our environment and air quality. Transit use can also help to reduce traffic congestion on local roads.

Each year municipalities spend approximately $564 million to operate our transit systems. Municipal governments need to invest an additional $1billion each year to pay for maintenance and to keep up with increased demand arising from population and economic growth. 

To support municipal transit expansion and operations, since 2004, the provincial government has been investing in municipal transit systems. This funding was phased in and  is now equal to 2-cents per litre of the province’s gasoline tax revenues. This translates into approximately $318 million per year in funding from the province to support 89 municipal transit systems.

The Provincial Gas Tax for Transit funds has supported critical investments in municipal transit services that benefit our communities. AMO believes this funding should be made permanent to ensure that municipalities operating transit systems have a dedicated, predictable source of funding available to plan future transit projects and services for the benefit of their local businesses, workers and families.

AMO has long advocated for dedicated, long-term, sustainable infrastructure funding programs from the Federal and Provincial Governments.  A permanent stream of revenue from provincial gas tax would be an important step in the right direction.

Municipal roads and bridges account for nearly half of the $60 billion municipal infrastructure gap. In areas of the province where municipalities do not operate transit systems, funding is also needed to support municipal roads and bridges, especially in municipalities that have limited tax bases to support sustainable investments in these systems.

Long-term, dedicated support from the province for municipal roads and bridges is needed to ensure vital transportation links continue to serve the businesses and citizens of these areas.