Fare Increases to Pay for New Transit in Toronto
Written by: Brenda Thomspon
Punishing those who can least afford to pay
Metrolinx, the Greater Toronto Area’s regional transit authority, has released a short list of revenue tools that they will consider using to help pay for new public transit in the Greater Toronto Hamilton Area. Projects like the Eglinton, Scarborough, Sheppard and Finch light rapid transit lines (LRTs) will need $2-billion a year from sources other than existing government revenue. Options that made it to their short list were: development charges, employee payroll tax, gas tax, high occupancy toll lanes, highway tolls, land value capture, parking space levy, property tax, sales tax, transit fare increase and vehicle kilometres travelled.
It is almost unbelievable that transit fare increases are still an option. Paying more for transit at the fare box actually discourages transit use by punishing those who can least afford to pay and it doesn’t even generate very much revenue ($45-million). Employee payroll taxes target working-class people through regressive taxation, and property taxes are also highly regressive.
With Toronto second only to Calgary in income inequality, it is crucial that public transit be affordable and accessible to transit users and low income residents across the city. Congestion, smog, stress, long commute times, increased respiratory illness and fare increases, are the result of decades of underinvestment and downloading by provincial and federal governments. They must play a much bigger role in funding existing public transit operations. We need more frequent service and more connectivity between neighbourhoods now. Even with new Light Rail Transit (LRTs), it will still take four transfers to go from Morningside to the Beaches along Kingston Road, and that’s not convenient enough to get people out of their cars.
National Transit Strategy?
Canada is the only G8 country without a National Transit Strategy. There is no federal money specifically for urban transit. In 2007, when the province first announced plans to expand transit infrastructure, they expected the federal government would contribute $6.3-billion toward the $18-billion price tag. To date, they have only received $300-million. The recent 2013 federal budget reveals a stubborn refusal to address the urgent need for public transit in Canada’s cities. With a cut of $1-billion to federal transfers that could go toward public transit for 2014-15, the Harper government has failed to make public transit a priority.
From the early 1980s the TTC has had to cover at least 68 per cent of the operating costs through fares (the highest fare box ratio in North America) while the provincial subsidy has steadily dropped from around 16 per cent down to a mere 6 per cent in gas tax funding.
Too often TTC Commissioners choose to raise fares to meet the funding shortfall left by downloading. Perhaps they find it easier than holding the provincial, federal or even their own municipal government, accountable. Last year, $22-million was generated from overcrowding due to service cuts, as part of a larger right-wing assault on a host of city services and municipal worker wages and benefits. This money could have been used to avoid another five cent fare increase in 2013. Instead it was funnelled back into City coffers. The majority on City Council fail to recognize the importance of adequately funding this “essential service.” With ridership increasing every year, we should be expanding. Instead we abandon the “Ridership Growth Strategy” and punish transit users with fare increases and service cuts, ignoring the fact that many can no longer afford to use the TTC.
If more service and lower fares in Toronto’s outer areas are needed now, what will happen when new LRTs are up and running? How will the TTC meet this new demand unless higher levels of government provide a stable, adequate subsidy? If the province agreed to properly fund operations, they could use a gas tax, highway tolls, high occupancy toll lanes or a parking space levy to encourage residents to leave the car at home and switch to public transit. This revenue could then be used to offset subsidy costs.
Should we be surprised that corporate and personal income tax on the wealthy, did not make it onto Metrolinx’s short list? Not if this is a government that thinks lowering corporate taxes while 255,000 manufacturing jobs disappear in Ontario is a good idea. Since 2004, the rate has gone from 14 per cent down to 10 per cent. Originally intended to facilitate economic investment, it has had little effect. Instead Canadian corporations have accumulated almost $600-billion which they refuse to put toward anything but bigger bonuses for their CEOs.
According to Joseph Stiglitz, Nobel Prize-winning former chief economist of the World Bank, a three per cent tax increase on higher income Canadians would generate $2-billion whereas the same tax increase on incomes under $30,000 would only generate $154-million. With such a high return, why do we avoid taxing the wealthy and corporations? Does it make sense for them not to have to make a contribution when they will reap most of the benefits from higher productivity that new transit service will bring?
Even a sales tax in combination with fare reductions, free transit for seniors, social assistance recipients, the unemployed or during extreme weather alerts, would significantly increase public revenue ($1.6B) without reducing accessibility.
Transportation for the Community
It is also apparent that many of the revenue tools necessary to pay for major new capital investments involved in The Big Move, are similar to those needed to pay for the maintenance, operation and improvement of the public transit system in the city of Toronto. Any plan to expand the system regionally, must take into account the needs of the TTC and the people that rely on it. The vast sums needed to pay for all of this must come from sources which rely on progressive forms of taxation, higher levels of government – as mobility and urban infrastructure are key elements of social justice and public health – as well as instruments which reduce the use of private vehicles and fossil fuels.
So far, the discussion about public transit expansion and how to pay for it, has been dominated by business concerns around traffic congestion, commuting times and lost productivity, with little regard for basic issues of mobility. The purposes of public transit go beyond getting to and from jobs (themselves structured around the needs of private capital). Transit provides for the needs of everyday living, shopping, social interaction and the way our communities look. If it is to replace the use of private cars as much as possible, we must also consider the needs of everyday transit riders or those disqualified from accessing transit, due to low income or mobility issues. If we truly care about the future of Toronto, they should be our main concern. We don’t charge user fees for public health care, schools, libraries and highways so let’s stop punishing people who improve our air quality by choosing to take the bus. Let’s make sure chronic underfunding from higher levels of government and rising inequality are addressed, before we turn to the fare box, or punishing workers earning low wages. •