Raise HST by one percentage point to fix roads, bridges, says municipalities group
AMO calls for 1 per cent HST hike to improve roads and bridges but Ontario quickly says no.

TheStar.com
Aug. 14, 2017
Rob Ferguson

Ontarians should pay an extra percentage point on the HST, raising $2.5 billion a year to keep local roads, bridges, arenas and other infrastructure in better repair, says the Association of Municipalities of Ontario.

The lobby group representing hundreds of local governments called on Premier Kathleen Wynne to boost the sales tax to 14 per cent from 13 per cent and launched a public relations campaign at www.thelocalshare.ca.

“Municipalities cannot possibly make ends meet on property taxes alone,” AMO president Lynn Dollin told councillors from across the province at the association’s annual convention in Ottawa.

She acknowledged the request is “something very bold” but said the group’s polling suggests about three-quarters of Ontarians support such a levy.

“Is the public ready? Yeah, I think so,” she told the crowd on Monday. “They like it more than higher property taxes. They like it more than deep cuts.”

With less than a year until the provincial election next June 7, however, a decision to raise the HST one per cent would be politically dangerous for Wynne’s Liberal government.

Finance Minister Charles Sousa’s office quickly shot down the AMO idea as Wynne prepared to speak at the convention Tuesday.

“We will not be increasing the HST,” Sousa spokesperson Jessica Martin said in a statement, saying Ontario has a “strong track record” of supporting municipalities with $4 billion a year, up from $1.1 billion when the Liberals took power in 2003.

The province is also doubling gas tax revenues to municipalities beginning in 2019 and has embarked on a $190-billion, 13-year infrastructure program to build new public transit, hospitals, schools and more, Martin added.

Dollin said the AMO’s research found retail sales tax increase is the fairest way to go, spreading the cost more widely as municipalities face cash crunches as their own infrastructure ages and crumbles.

She noted that 25 U.S. states and a number of countries, such as France and Spain, have similar arrangements to help local governments, which in Canada own two-thirds of the infrastructure — more than the federal or provincial governments.

Existing federal and provincial infrastructure programs don’t come close to meeting the need, Dollin added, putting the annual funding gap at $4.9 billion annually for the next 10 years.

Closing that gap would require municipalities to raise property taxes 8 per cent a year, she told the convention, a must-attend annual gathering for politicos including the premier, cabinet ministers, opposition party leaders and MPPs.

“Can that be done? Should that be done? How high does the Ontario government want property taxes to go?” said Dollin, deputy mayor of the Town of Innisfil, north of Toronto.

She also made a pitch to local councillors whose political beliefs may cause them to blanch at pressing for an HST increase, urging them to come on side.

“Going alone, there is little we can achieve.”

Wynne told AMO’s annual convention in Windsor last summer that municipalities need to consult constituents before they ask the province for increased taxation powers or new “revenue tools.”

“We’ve risen to that challenge,” Dollin replied Monday, calling a one per cent local share of the HST “a 21st century revenue tool.”

Toronto is now the only municipality in the province with the power to raise revenue with new levies, such as vehicle registration taxes and the land transfer tax, but it is prohibited from introducing sales taxes or income taxes.

Last winter, Wynne’s government blocked Toronto Mayor John Tory’s plan to toll the Don Valley Parkway and Gardiner Expressway, which is when her government promised to double the share of the two-cents-a-litre gasoline tax earmarked for municipalities.

Wynne had initially appeared receptive to the tolls but did a U-turn after a surge of dissent from cabinet ministers and Liberal MPPs with the party trailing in the polls and next year’s election looming.

“Any leader who doesn’t listen to those voices, doesn’t listen to the team . . . s isn’t actually leading,” the premier said in January.

Tory has also pressed the province to allow Toronto to impose a hotel tax.