Metrolinx $55 Billion Plan

[kEiThZ]

If they were stepping aside, they would not have announced a GST reduction, but a transfer from GST to the province -- with individual announcements by the province as to what they will do with the new tax (drop it or roll it into their standard PST).

That's politics. What's wrong with the feds getting some credit for cutting taxes? The provinces could have announced a simultaneous increase in their PST rates and taken up the room and the wrath of citizens. If you want to raise taxes you should be held to account by your citizens.

Instead, the conservative feds followed up with media in several different provinces indicating that the provincial taxation was too high and that the province needs to make reductions for economic growth. Ontario was not the only province to receive these.

It wasn't the wisest comments on their part, but it's not really relevant to this topic. The government of Ontario is an independent entity. It did not have to follow the federal government's advice.

 

[rbt]

That's politics. What's wrong with the feds getting some credit for cutting taxes? The provinces could have announced a simultaneous increase in their PST rates and taken up the room and the wrath of citizens. If you want to raise taxes you should be held to account by your citizens.

Who said there was anything wrong with it? The tax cuts (Conservative and Liberal before that) have always been controlled in such a way that it would be political suicide for a province to adjust their tax rates simultaneously. Both federal governments did this quite purposefully.

Liberals were far better at this game than the Conservatives. They managed to dramatically reduce taxation at federal level, while making it very difficult for provinces to not follow suit (see various funding contracts), while pushing a good chunk of their expenses down to the provincial level.

In other words, they came out golden and made the provinces look like the bad guys.

Job #1 is to get reelected. This often means appearances



I don't mind tax cuts. They target my income group quite specifically and leaves money in my pocket. When infrastructure and everything else starts falling apart, I can pretty easily pickup and leave -- including registering my business elsewhere.

Recently assisted in helping one of my employers leave Canada for Anguilla (tax-free for personal income). Including the time to build the new house it only took about 9 months.


Tax cuts won't keep me here. Having a superior quality of life in Canada compared to other places in the world does.

It wasn't the wisest comments on their part, but it's not really relevant to this topic. The government of Ontario is an independent entity. It did not have to follow the federal government's advice.

Have you ever read the contracts (strings) tied to federal funding? You either follow their advice or you don't get funding. Heck, it's how they enforce huge sections of legislation, to think party policies don't slip into things like the recent infrastructure agreement between Ontario and the feds is silly.

Why do you think it takes years to negotiate the damn things? Read a few. They're not as public as they should be but your reps (province and federal) can get you copies of the complete agreement instead of the cleaner summaries typically made public.

 

[kEiThZ]

In other words, they came out golden and made the provinces look like the bad guys.

A practice since the founding of our country. So what? If McGuinty had no problem selling a health surtax, I doubt that he would have suffered tremendously if he had raise the PST by a point or two. Indeed, I have often heard people say that the 2% cut wasn't noticeable (until they buy a new car or dishwasher) and that they have a tough time calculating 13% and that 15% was so much better to work with....there's an angle!

Job #1 is to get reelected. This often means appearances

You say that and then criticize the feds for carrying out the GST cut to make them popular. They ran on that platform and they were in precarious minority. If they transferred tax points instead of cutting it, they would have been criticized from both the right and the left for not keeping their promises. We can debate whether it was wise to make that promise (I dont think it was) but I doubt its defensible to say that they should have carried it out once in office....that's exactly what makes people so cynical about politics these days.

Tax cuts won't keep me here. Having a superior quality of life in Canada compared to other places in the world does.

Agreed. But nobody here is arguing for Bush style tax cuts. The federal government was running huge surpluses. It could afford the cuts. And there is an opportunity here for the provinces to raise the PST and fulfill the revenue gap caused by downloading, to help maintain the same quality of services.

Have you ever read the contracts (strings) tied to federal funding? You either follow their advice or you don't get funding. Heck, it's how they enforce huge sections of legislation, to think party policies don't slip into things like the recent infrastructure agreement between Ontario and the feds is silly.

Why do you think it takes years to negotiate the damn things? Read a few. They're not as public as they should be but your reps (province and federal) can get you copies of the complete agreement instead of the cleaner summaries typically made public.

We are talking about reducing taxes here. AFAIK there is no agreement committing the provinces to reduce or maintain their level of taxation. And there was no agreement committing the provinces to not raise the PST while the GST was being cut. The Conservatives applied public pressure so that they would gain some political mileage out of the cut. Conversely, the provinces could have bitten the bullet and gone after the revenue they claim they so desperately need. I respect McGuinty for at least being honest enough to raise income taxes. It would have been better if he scraped the surtax and raised the PST instead.

 

[nfitz]

If McGuinty had no problem selling a health surtax, I doubt that he would have suffered tremendously if he had raise the PST by a point or two.

If he had no problem perhaps, but don't see the relevance given how much damage it did him. You did see what it did to him in the polls for the next couple of years, right? And it was about the only thing the Tories could get their teeth into during the last election.

If he started increasing sales tax rates as well, I think he would have kissed his re-election goodbye.

 

[cacruden]

Yeah but what he is referring to isnt so much maintenance as it is major recapitalization, which is almost akin to building new.

I would have no problem with allowing Metrolinx to issue 90 billion dollars worth of bonds to fund their plans and then being allowed to levy a regional property tax and collect road tolls to fund its program.

"Recapitalization" means that they failed to properly "maintain" the system. Part of maintenance is always setting aside enough to replace worn out parts etc. (sort of akin to what they require condo's to do with reserve funds). So if it was already mismanaged once, my guess is it will be mismanaged again.

 

[rbt]

"Recapitalization" means that they failed to properly "maintain" the system. Part of maintenance is always setting aside enough to replace worn out parts etc. (sort of akin to what they require condo's to do with reserve funds). So if it was already mismanaged once, my guess is it will be mismanaged again.

Yup. When you're going cap in hand for replacement rolling stock which has a very very predictable lifespan, unable to do street maintenance, unable to keep hospitals maintained, unable to keep schools maintained, unable to replace broken military equipment...

None of these things are surprises. They all have very predictable lifespans.

Canadians need to make the decision that we want to have X and know it will cost Y in 10 years. So, start packing away a little under Y/10 per year to pay for it -- concurrently as we pay off existing debt.


IMO, Canada hasn't run a surplus in a long time. Most municipalities have record infrastructure deficits from deferring work for 10+ years. Those annual infrastructure deficits add up to something far larger than the federal surplus.

2015 through 2030 are going to be extremely expensive when all that crap from the 60's starts to break and require overhauls.

 

[kEiThZ]

If he started increasing sales tax rates as well, I think he would have kissed his re-election goodbye.

Personally I thought the health surtax was the coward's way out. It's not like the tax is dedicated towards health care. He should have raised income taxes or raised the PST. That way he could have addressed many more problems than health care.

Regardless, the point still stands, Torontonians shouldn't be blaming the feds for poor transit. They should look at city council and provincial downloading first....

"Recapitalization" means that they failed to properly "maintain" the system. Part of maintenance is always setting aside enough to replace worn out parts etc. (sort of akin to what they require condo's to do with reserve funds). So if it was already mismanaged once, my guess is it will be mismanaged again.

It's not quite maintenance. Buying new subway cars for example is not maintenance, its recapitalization. That's more akin to replacing your car instead of fixing it. And much of what Metrolinx is dealing with isn't even recapitalization, its the construction of new infrastructure. Financing their plans is going to require new taxes and tolls, and the sooner they impose them, the better.

 

[lordmandeep]

Regardless, the point still stands, Toronto shouldn't be blaming the feds for poor transit. They should look at city council and provincial downloading first....

truth is Dalton has done way more for the city then the Tories would ever done if they stayed on for another half century.

Well I may be pulling crap out of my ass, but that is perception that the Tories get here and they cannot win then with this perception.

Dalton will not raise taxes, he will just keep a steady boat and he is very surprised that with a slow economy he is more popular then ever. The whole stunt he pulled off about the Provincial Budget really boasted his popularity. He knows that Tory will try to run again and knows he win an election.


He is loosing support in Northern Ontario and Hamilton area really.

 

[kEiThZ]

^ I like the guy. I voted for him, and I believe this is one promise he should keep. It would put every struggling municipality back on its feet. He might have to raise taxes, but at least the province has more tools available than the club labelled property tax that the municipalities use.

Now the question here is, how will we pay for Metrolinx's grand plans? Cash-strapped cities can't do it. And if the province can't fund more than the MO2020 portion, this plan will end up on a dusty shelf like others before it.

 

[RedRocket191]

Now the question here is, how will we pay for Metrolinx's grand plans? Cash-strapped cities can't do it. And if the province can't fund more than the MO2020 portion, this plan will end up on a dusty shelf like others before it.

The plan was always supposed to be timed to be released at the same time as the investment strategy, giving us a clear view of options available to pay for this grand plan. The coordinated release was supposed to fend off "this is a pipe dream", "we'll never afford it" comments, and that's perhaps the greatest failure to arise from the "leak".

Government grants are one part of it, but I'm certain we will see some innovative solutions proposed when the investment strategy comes out.

 

[DavidH]

The plan was always supposed to be timed to be released at the same time as the investment strategy, giving us a clear view of options available to pay for this grand plan. The coordinated release was supposed to fend off "this is a pipe dream", "we'll never afford it" comments, and that's perhaps the greatest failure to arise from the "leak".

Not quite true. The original schedule had the draft RTP arriving a month or two ahead of the investment strategy. The initial delay to the RTP was to achieve a coordinated release. Of course, this lead to a further delay in the RTP when the IS was delayed in June.

But you're absolutely right that the intent is to show how it will be paid for at the time of the release.

 

[doady]

If higher levels of government continue download their costs onto lower levels then eventually all the responsibility (and the blame) will be on the municipalities. If you don't see anything wrong with this, then whatever...

I should also point out that Canada is the only G8 nation that does not have any legislation that provides regular funding for public transit.

 

[W. K. Lis]

If higher levels of government continue download their costs onto lower levels then eventually all the responsibility (and the blame) will be on the municipalities. If you don't see anything wrong with this, then whatever...

I should also point out that Canada is the only G8 nation that does not have any legislation that provides regular funding for public transit.

The question to each federal party should be: will you provide regular funding for public transit, like every other G8 nation? Not one time funding, but regular funding.

 

[kEiThZ]

If higher levels of government continue download their costs onto lower levels then eventually all the responsibility (and the blame) will be on the municipalities. If you don't see anything wrong with this, then whatever...

I see plenty wrong with this. As I have pointed out repeatedly, downloading should be reversed. If the downloading of social services were reversed, the city would have enough revenue to fund Transit City on its own without anyone's help.

I should also point out that Canada is the only G8 nation that does not have any legislation that provides regular funding for public transit.

The question to each federal party should be: will you provide regular funding for public transit, like every other G8 nation? Not one time funding, but regular funding.

As W.K. Lis points out below it needs to be regular funding not one off for each project. Doing projects on a case by case basis is what allows higher levels of government to pick political favourites. That's why there is funding for a rail line from Peterborough when there are many other priorities that should have gone first. But I would go one step further. Get the federal government out of the road and rails (transit) business and allow cities to levy their own taxes to fund their own programs. We don't need federal involvement, we just need funding. Free the cities to raise their own revenue and they will do it.

 

[Whoaccio]

If higher levels of government continue download their costs onto lower levels then eventually all the responsibility (and the blame) will be on the municipalities. If you don't see anything wrong with this, then whatever...

I actually think that is a good thing. What I am more concerned about is that taxing power hasn't been downloaded. I think cities should be largely responsible for themselves, and downloading services is a part of this. The thing that puzzles me though is that downloading the appropriate taxing powers is seen as some kind of cash grab. It is absurd. Cities should account for at least 25% of national spending, not 7%.