Over the last few months, the City of Toronto and the Ontario government have made some amazing announcement focused on green energy, infrastructure, and public transportation. The most recent announcement was made Tuesday: the Ontario government released $750 million in funding (in the form of a green bond) for environmentally friendly, low-carbon infrastructure projects, the majority of which would be dedicated to transit in the GTHA.
These investments are a good thing. A great thing, even. This city and this province must invest in infrastructure and transit. But, where is this money coming from?
A green bond is a great tool to raise capital for projects with environmental benefits, but eventually the bond holders need to be paid back. Investors provide funds for these projects and the government guarantees a return for each investor. When asked by Women’s Post if there was a plan to pay back these investors, this was the response given:
“Ontario’s Green Bonds rank equally with Ontario’s other bonds,” a spokesperson for the Ontario Minister of Finance said in a written statement. “Payments of principal and interest will be a charge on and payable out of the Consolidated Revenue Fund of Ontario and not tied to the revenues of any particular projects.”
Luckily, the maturity date for the green bond is in 2023, which means that the government has time to educate the public on the need to come up with the revenue for these investments. And it will be interesting to see what forms of repayment they create.
Tolling — while under both the provincial and municipal responsibility depending on the road — would be an ideal form of revenue. Ontario is starting a pilot project in the summer that will allow single-occupancy vehicles to use the High-Occupancy Vehicle lane meant for carpooling. Vehicle owners will be able to purchase a permit and pay a toll for its usage. This is the first time a responsible government has risked their positions to do the right thing. Toronto is a long way off, with only a handful of councillors willing to stand up for the revenue tools Toronto needs to pay for the capital projects the city has committed to.
The money collected from these tolls can be used to fund the the relief subway line which will provide an alternate east-west route to the Gardiner. Council has to make the bold move to call for other user fees – tolls, carbon tax, parking increase – so that property owners won’t carry the full burden of our capital deficit.
Both the city and the province are trying to find money in the budget — which amounts to shuffling through the same insufficient funds that caused our infrastructure deficit. Toronto councillors will need to show the bravery their province counterparts have demonstrated in committing to high occupancy toll lanes. The obvious solution is to use existing green projects such as tolling, congestion fees, or even a carbon-tax , to fund infrastructure investments.
The biggest problem facing all levels of government is that most Canadians want the infrastructure but they don’t want to pay for it. The province is doing an amazing job ensuring that transit and green infrastructure is built, but Canadians have to start doing our part.
Let’s support the use of tolls, congestion fees, carbon taxes – whatever our council might bravely suggest — and start investing in Toronto’s long-term future.