Over the years most Federal and Provincial budgets have carried huge promises, with little actual substance. The same funding sources get reused and regurgitated under different names, to make it look like the politicians are actually doing something. But while the 2015 Ontario Budget has issued some big promises, it surprisingly backs up those promises with real funding streams.
Over the past century Ontario has lacked a Finance Minister with the courage to create a dedicated fund for transit and transportation, primarily because it allows the public to see the actual funds that exist for transit expansion, to evaluate, calculate and understand what is truly available – and question the validity of campaign promises.
Finance Minister Charles Sousa has set up the Trillium Trust, making him the first Minister of Finance in Ontario to create a dedicated and transparent transit fund. This not only an historic event but a significant leap forward for transit in Ontario. By creating a transparent dedicated transit fund, the Wynne government has taken a crucial step towards setting up a credible and reliable process for funding transit infrastructure expansion. The next step is to create a dedicated funding stream and they have addressed this, albeit in a small way. By dedicating the estimated $100 million per year beer tax to the Trillium Trust, they are sowing the seeds to creating the dedicated transit funding that Ontario so desperately needs to fund the projects promised in this budget.
Ontario is struggling to come up with the funds needed to pay for the $52.5 billion, 25 year Big Move plan launched in 2008. With little additional revenues put in place over the years to fund the Big Move, and shovels in the ground on projects like the Eglinton-Crosstown ($5.3 billion) the immediate need for funding is crucial.
By selling shares in General Motors and Hydro-One and combining this with additional funds from the beer tax, the Wynne government has found a way to raise approximately $5.3 billion to cover the estimated cost of the Eglinton-Crosstown.
Metrolinx will need an extra $3.4 billion a year over 10 years to meet the additional project funding requirements that the Wynne government is promising to spend in this budget on transit projects. Add this to the $50 billion already committed over 25 years for the Big Move, ($2 billion/year) and the total annual investment the Wynne government is promising is approximately $5.4 billion per year over the next 10 years. It’s a significant investment with its first year of funding covered by the sale of assets mentioned above. But where will the funding come from for the following 9 years? Will it get pulled from Education and Healthcare or will Wynne demonstrate her strength to stand up for the dedicated transit funding Ontario needs? (We are waiting on a response from the Ministry of Finance).
That said, the fact that this budget also addresses the need to electrify the GO lines, clearly outlined in Mayor Tory’s Smart Track proposal – specifically mentioning Smart Track – demonstrates a strong desire to work collaboratively with Mayor Tory. Minister of Transit Steven Del Duca explained Friday that working collaboratively “with partners” is important to the Wynne government.
The key to building the transit (roads, bridges and rail) that Ontario needs to remain competitive on the world stage is dedicated transit funding and by setting up the Trillium Trust and dedicating the new beer tax to it, the Wynne government has taken a major step inbuilding our communities. The next step is to secure a basket of revenue tools dedicated to this fund to generate the $5 billion annually needed to fund the commitments made in this budget. Tolls, high occupancy toll lanes, sales tax, carbon tax, congestion charges, and parking levies are all tools used in other jurisdictions. A strong campaign designed to educate Ontario residents on the value they receive (positive economic impact/jobs) from infrastructure expansion is crucial to gaining support for the dedicated transit funding needed over the next decade. The 2015 Ontario budget is the right, reasonable and responsible approach to moving Ontario forward.