Frances Bula header image 2

Mayors turn to previously neglected revenue as potential source for TransLink funding: a .5 per cent sales tax

February 6th, 2013 · 45 Comments

As mayors continue to press the provincial government to come up with some kind of solution for funding that will allow TransLink to expand services, the chair of the mayors’ council sent out an open letter yesterday with suggestions for short-term and long-term funding solutions.

Short-term:

– 0.5 per cent sales tax, which would pull in $250 million a year

– a vehicle-registration levy, which at $38 average per vehicle would bring in $50 million a year

– a regional carbon tax (taxes on gas at the pump and in furnaces, machinery operation, etc.), which would bring in about $90 million

Long-term:

Road pricing.

My short story here and the letter appended below. Unfortunately, the transportation minister seems to have responded by saying the mayors need to develop a long-term plan for transit first. Guess she didn’t read the letter, where the mayors said the region has spent years developing exactly that plan, as well as doing extensive public consultation.

Letter to Minister Polak 2013-02-04-100042-2

 

Categories: Uncategorized

45 responses so far ↓

  • 1 boohoo // Feb 6, 2013 at 4:45 pm

    This is going absolutely nowhere until at least the next election.

  • 2 Richard // Feb 6, 2013 at 5:44 pm

    Rather ironic that provincial politicians think that supporting funding for transit is a political risk. It would be hard to make a case that the results would have been worse for the NDP if they had supported the vehicle levy 12 years ago instead of rejecting it. The BC Conservatives Axe the Tax campaign against the gas tax for the Evergreen Line really fizzled. And, while not connected directly to transit, the NDP’s Axe the Tax against the Carbon Tax may have actually lost them the election.

    Probably time that they stopped listen to just a few loud voices on talk radio. I actually think that supporting funding force expanded transit could be a winner if either leader was bold enough to do it.

  • 3 Richard // Feb 6, 2013 at 5:55 pm

    That would be “for” not “force”. Put a bunch of stuff in a river to block the flow you autocorrect.

  • 4 Andrew Browne // Feb 6, 2013 at 7:03 pm

    Just get on with it – tax is OK so long as it actually provides a benefit. If it takes a bit more tax to build expanded transit throughout Metro Vancouver, benefiting everyone, then let’s get to it.

  • 5 Richard // Feb 6, 2013 at 10:15 pm

    Well said Andrew!

  • 6 Andrew Browne // Feb 6, 2013 at 10:19 pm

    I would be very surprised if the current annual cost of congestion didn’t make the case itself for transit investment. Especially if you amortize over a 20-year period or something (and transit systems tend to last a lot longer than that).

  • 7 Richard // Feb 6, 2013 at 11:02 pm

    Well, there is also the Provicnce’s own Tranit Plan that basically say the same as the regional plan. The Minister could use that as guidance too.

  • 8 mezzanine // Feb 7, 2013 at 12:31 am

    I’m not sure the regional sales taxes and carbon taxes are good ideas (car tabs and road pricing IMO are better ideas).

    Among other issues, a regional sales/carbon tax without means-tested transfers is more regressive than other options. If people are relatively free to move in and out of metro, i’m not sure how you can get a simple system to account for this.

    http://www.uctc.net/access/36/access36_JustRoadPricing.shtml

    IMO, you don’t have to re-invent the wheel for sales/carbon tax funding, just commit more general revenue to transit. Road pricing while somewhat regressive are less so than a sales tax for TL and will help control demand for the road network.

  • 9 Setar // Feb 7, 2013 at 2:16 am

    “Unfortunately, the transportation minister seems to have responded by saying the mayors need to develop a long-term plan for transit first.”

    Well, of course not. It’s not a REAL plan if it will generate front-page “TAX GRAB” headlines in the Province with long screeds from Jordan Bateman’s ivory tower where middle income is somewhere around $150,000 and most people can afford to own property in Metro Vancouver. Not even when opinion polling disagrees strongly with the omniscient pronouncements of the Canadian (Rich) Taxpayers’ Federation.

    Unfortunately, it seems that these days the opinions and needs of the people of BC are determined not by the people of BC, but rather by the editorial boards at the Province and Vancouver Sun with a dash of help from the lovely (and totally unbiased, unlike those left-wingers at the Canadian Centre for Policy Alternatives) CTF and Fraser Institute.

  • 10 Roger Kemble // Feb 7, 2013 at 4:26 am

    Unfortunately, the transportation minister seems to have responded by saying the mayors need to develop a long-term plan for transit first.

    Why “unfortunateFrances? Are they incapable of rising to the occasion? Who introduced unfortunately anyway?

    . . . the oldest section of underground railway in the world . . . opened in 1863 . . .” (Wikipedia) That is the Central Line in London UK.

    In an perilously impecunious world why are we still agonizing over 150 year old technology which, BTW when last I used it, 2006, was dysfunctional?

    There is a better way . . .

    http://www.theyorkshirelad.ca/1yorkshirelad/vancouver.re-boot/Vancouver.re-boot.html

    . . . but our correspondents prefer to incessantly obsess on old habits: Paris, Melbourne etc.!

    Necessity is the mother of invention. Or not? Are we totally void of courage and creativity?

  • 11 IanS // Feb 7, 2013 at 6:16 am

    I rather think the current Liberal gov’t is pretty gun shy about introducing any new tax initiatives. Can’t imagine why.

    No doubt, the upcoming NDP gov’t will be a good deal less resistant, though they might prefer something less regressive.

    Personally, I have no objection to a new tax for transit, as long as the proceeds are actually used to fund transit and not just sucked into general revenue. I’d prefer to see a carbon tax or road pricing though.

  • 12 Chris Porter // Feb 7, 2013 at 8:50 am

    I think a combination of funding sources is probably the best option. Most sources have the benefit of reducing congestion and making transit cost competitive with driving (road pricing, vehicle registration levy, carbon tax), but they also drop as more people shift to transit. It’s a problem that’s been acutely experienced in the US where there’s a bigger reliance on fuel taxes to fund transit.

    A sales tax might seem like an odd source to transit, but it would be more stable as people’s transportation choices shifted.

  • 13 Andrew Browne // Feb 7, 2013 at 9:05 am

    @ Chris Porter #11

    A combination of sources is vital because it reduces overreliance on any one – we don’t want to create another declining money trap in road pricing, as gas taxes are turning out to be.

  • 14 Mark Bowen // Feb 7, 2013 at 10:51 am

    Agree with boohoo that there isn’t a chance the Libs will even come close to touching this with the election so close, and I doubt the NDP will weigh in either.

    Just going to have to wait until May to -hopefully- see some political leadership on this.

    There clearly are not many other options on the table at this point. Transit MUST be expanded for the good of the entire region, or we are going to choke ourselves to death with congestion.

  • 15 teririch // Feb 7, 2013 at 2:20 pm

    Thought I would share one of my recent experiences with transit (and I am not a car owner – at this point however the thought is crossing my mind more and more frequently) –

    Last Saturday evening I was travelling to Surrey to see some friends, we were doing a potluck dinner.

    I waited at W 4th and Vine to catch the #84 that runs to VVC Clark. The bus was scheduled to come at 5:31 pm. It was late, but as traffic along West 4th is a compelte gong show due to road work – thought okay, af few minutes….

    The bus doesn’t show up. The next #84 is to run at 5:46 pm – again a no show. Finally a #84 shows up at 5:59 pm.

    We start making our way to VVC Clark and the driver pulls over at the Cambie Street stop – tells us all that this bus is going out of service (guessing his shift was up) and we have to get off and wait for one of the buses coming up behind. Now, this bus was packed – standing room only. Granted a certain number of people get off – but there was a cluster of people waiting to get on as well. So I would say there were about 45 – 50 people standing at the stop waiting for the next#84 bus to come along, and I am thinking – what are the chances of getting on the next bus because I would guess it would be pretty busy already. So, now it is 6:17 pm. I call the people I am heading to see to tell them I am going to be late and to go ahead and start dinner and I would catch up at some point.

    I opt to head to the Canada Line to go to W. Broadway to catch a 99 to Commercial. I finally get to the Sytrain at 6:47 and to Surrey for shortly after 7:00 pm.

    And all the while I am wondering what % of my life I waste standing at bus stops waiting for tranist and start measuring that against the freedom of car ownership.

  • 16 Guest // Feb 7, 2013 at 2:38 pm

    At Cambie, you should have taken Canada Line from Olympic Village Station to Waterfront, transferred to Expo Line to Surrey. You would have probably saved 15 minutes getting to Commercial-Broadway.

    ********

    WRT a sales tax, I think it’s “fairer” as it doesn’t target drivers. It should be noted, however, that sales tax revenue can vary wildly with ups and downs in the economy. i.e. in 2010, Sound Transit (Seattle) sales tax revenues were down 25% due to the economy.

    http://www.soundtransit.org/About-Sound-Transit/News-and-events/News-releases/News-Archive/ST-long-term-revenue-forecasts

  • 17 Raingurl // Feb 7, 2013 at 2:48 pm

    Speaking of transit……..some of us are gonna have to lose inches just to get through the new fare gates. haha…..I can’t get through them with groceries. :P

  • 18 IanS // Feb 7, 2013 at 3:38 pm

    @teririch #14:

    “And all the while I am wondering what % of my life I waste standing at bus stops waiting for tranist…”

    Puts me in mind of my student days at UBC, when I would spend upwards of 2 1/2 hours a day in transit. That’s pretty much why I never take public transit now (with the exception of trips to the airport on the Canada Line).

  • 19 Helena Handcart // Feb 7, 2013 at 4:09 pm

    Well, the mayors are doing what they do best. Thinking up new taxes. Not a single idea as to how to manage within the current budget. Did none of them know how much dough was available when they rushed to get on the Translink mayors council? Meanwhile Mary Polecat does what she does best. Finds that it’s someone elses fault.
    No worries. The COV engineering department is in the final stages of its campaign to dig a hole in every street in the city. No more traffic problems then.

  • 20 Andrew Browne // Feb 7, 2013 at 5:05 pm

    @ Helena Handcart #19

    > Not a single idea as to how to manage within the current budget.

    Why is there the expectation that it should be possible to expand the transit service under the present budget? It’s not possible. If we want more, it costs more. Period.

  • 21 Agustin // Feb 7, 2013 at 5:50 pm

    My preference would be to increase the carbon tax provincially and apply those funds to public transit and active transportation. Additionally, if we stop spending many billions of dollars on highways and bridges, we’ll have more money for transit. But that won’t happen until there is leadership at the provincial government.

    In the meanwhile, a vehicle levy sounds good, as does a regional carbon tax. A regional sales tax would have to be well crafted so as to be progressive. (What items would be excepted? Would low-income people be able to file for a refund like they do with the GST?)

    Long term, we must have road pricing. And not just for the suburban bridges. Maybe a congestion charge à la London would work.

    @ Helena: do you have any suggestions?

  • 22 Bill Lee // Feb 7, 2013 at 6:00 pm

    @teririch // Feb 7, 2013 at 2:20 pm #15

    That is the shortest route 1 hour 20 minutes if all well.
    The Google co-ordinated transit direction finding on google.ca/maps shows going via Canada Line, looping through Delta in 2 hours and bit also.

    From east to west, one hour and 10 minutes from Boundary Road to UBC along Broadway. The first 20 minutes on regular (not 99-B) trolleys.
    Also suggested was to join the Skytrain at the Bus Rupert exchange, but the time across town is the same.
    See http://tripplanning.translink.ca/hiwire

    And 4th Avenue West is being torn up (slowing all traffic and buses) for the next six months for sewer renewal.
    I wondered if they could have sewers on 3rd and 5th instead, but the drains drop would be too much from 4th avenue and its legacy underground right-of-way.

    I tend to ride inside the Vancouver-Burnaby lump and know the routes and times. Going out to the suburbs is problematic to South of the Fraser and why they are asking for more service.
    Mayor Lois Jackson of Delta Municipality is starting their own senior service to fill in the gaps.

  • 23 Bill Lee // Feb 7, 2013 at 6:05 pm

    Remember Translink doesn’t only run the buses/skytrain (not Canada Line)/West Coast train, and those little things but also.
    [ from their corporate page ]
    “Roads and Bridges
    In partnership with the municipalities, TransLink is responsible for the Major Road Network (MRN). In general, ownership of and operational responsibility for the MRN remains with the respective municipalities. TransLink provides funding for the operations, maintenance and rehabilitation of the MRN, and shares in the cost of eligible capital improvements. TransLink owns and operates the Knight Street Bridge, Pattullo Bridge and Westham Island Bridge. The operations, maintenance and rehabilitation of the Golden Ears Bridge are contracted to the Golden Ears Crossing General Partnership until 2041.
    Under the SCBCTA Act, TransLink must develop and administer programs for certifying motor vehicle compliance regulations with respect to exhaust emission standards. TransLink’s subsidiary company, Pacific Vehicle Testing Technologies Ltd. (AirCare), manages this program. The inspection contractor for AirCare is Envirotest Canada.”

    And some fear that taxes will go to some silly bridge renewal, or Patullo replacement punching in Fraser River cities.

  • 24 Morven // Feb 7, 2013 at 10:34 pm

    In pantheon of unpopular options, why is tax increment financing not getting some examination ?

  • 25 Bill // Feb 8, 2013 at 9:20 am

    The mayors should stop dreaming up taxes that the Provincial government will get the blame for and if transit is to be funded from within the region they should include it in property taxes. It has the broadest base, not subject to economic cycles, cannot be avoided (like buying gas out of region), totally transparent to the taxpayer, and the collection mechanism is already in place so there is no additional cost of administration.

  • 26 Guest // Feb 8, 2013 at 12:13 pm

    Agreed on property taxes – but the mayors hate that option because they want to preserve room to increase property taxes for their own pet municipal projects.
    (Remember that municipalities budget backwards – they tally up their expenses and wish list, then adjust the mill rate (and property taxes) to generate enough revenue to meet their needs.)

  • 27 Warren // Feb 8, 2013 at 12:40 pm

    Comrade Dix will solve this problem. This is being seen as a .5% increase in sales tax, when really it could just be a diversion of the existing 7% PST, leaving 6.5% for general revenue.

    Adrian will increase corp taxes by $250M. Done and done!

  • 28 mezzanine // Feb 8, 2013 at 1:16 pm

    ^25-27 agree with these points. WRT provincial funding, all this talk of dedicating sales/carbon tax funding is just a re-shuffle of the deck. What’s stopping victoria from dedicating a new sales tax for transit and then reducing the TL operating grant from general revenue?

    redirecting money away from the carbon tax will mean that either the deficit will run higher, we cut other parts of the provincial budget to fund transit or we increase personal and corporate taxes. certainly, this is the decision that is to be made, we aren’t finding new money hidden away somewhere.

    that being said, road pricing and car tabs are a potential new source of funding. and aside from self-interest on the mayors’ part, i am unsure why prop taxes are so onerous.

  • 29 Helena Handcart // Feb 8, 2013 at 2:10 pm

    @Augustin 21
    >My preference would be to increase the carbon tax provincially and apply those funds to public transit and active transportation.>
    I’m sure that the good citizens of Gold Bridge will jump at the chance to pay more for their gas so that you can have a nice bike lane in Vancouver, or perhaps a bus every 10 minutes instead of 15.

  • 30 Bill // Feb 8, 2013 at 3:13 pm

    I was not in favour of a Carbon Tax because, apart from having no impact on climate, once Governments develop a revenue stream they never let it go and will divert the revenues away from the original cause for the tax. Already Dix is saying we have to keep the Carbon Tax in order to maintain funding of basic government services and the original intent to fight climate change will soon be long forgotten. Governments like a wide range of taxes buried as deep as possible because they fear taxpayers ever figuring out how much they are paying in total for all government provided services.

    We can not afford to let the Mayors get their wish for new revenue streams.

  • 31 Agustin // Feb 8, 2013 at 5:00 pm

    @ Helena, 29: That’s a “no” to suggestions, then?

    @Bill, 30: do you have a citation for the claim that the carbon tax is having no impact on climate?

    @mezzanine, 28: I’m not sure I follow your point about redirecting money away from the carbon tax. Are you assuming that the carbon tax rate would stay as it is?

    @Morven, 24: What is tax increment financing?

  • 32 Morven // Feb 8, 2013 at 5:51 pm

    @Agustin # 31

    TIF ?

    Slightly dated reference but still relevant

    http://www.straight.com/news/alan-herbert-tax-increment-financing-buys-transit

    -30-

  • 33 Bill // Feb 8, 2013 at 6:30 pm

    @Augustin #31

    I am not going to engage in a climate change debate so I will concede that I have no citation to support that the BC Carbon tax has no impact on climate much in the same way I cannot cite any authority to prove that if I pee in the ocean I will have no impact on the sea level.

  • 34 mezzanine // Feb 8, 2013 at 8:32 pm

    @agustin,

    as it stands now, the carbon tax funds an low-income tax credit to offset its regressiveness, a ~$200 credit to rural households, and rest goes to general revenue to offset reductions in personal and corporate taxes.

    http://www.fin.gov.bc.ca/tbs/tp/climate/A2.htm

    assuming you don’t increase the carbon tax and commit a percentage to transit, it means you would increase your deficit, raise corporate, personal and other taxes or cut budgets elsewhere anyway.

    ——-

    assuming that a govt is open to increasing the carbon tax:
    a) done regionally – how is this different than what we are currently seeing with the TL fuel tax? perhaps we might push even more diverse economic activity outside of metro and see a decline in regional carbon tax revenue in the longer term.

    b) done provincially – it would be hard to explain why a provincially collected tax should be used to fund infrastructure in metro. you could use it to fund regional transit initiatives , but victoria now has less flexibility, and you’ll risk having funding in search of a project. fort st john has transit system, but i am unsure if there is a need or demand to further expand it.

  • 35 mezzanine // Feb 8, 2013 at 8:52 pm

    no offense to fort st john. :-).

    http://www.alaskahighwaynews.ca/article/20111128/FORTSTJOHN0101/311289997/-1/fortstjohn/more-riders-on-the-bus

  • 36 brilliant // Feb 9, 2013 at 12:33 am

    Its always hilarious when Gregor gets out his begging bowl for transit while still moving forward with his plan to flush $100 million down the crapper to remove the viaducts.

  • 37 teririch // Feb 9, 2013 at 9:06 am

    @brilliant #36

    It was amusing watching him on Breakfast TV the other morning – talking about how he would help the Film Industry.

    Now, didn’t he speak out/vote against the HST?

  • 38 Everyman // Feb 9, 2013 at 10:28 am

    I’d prefer a $38 yearly vehicle levy that can be easily tracked and not just dumped into general revenue. Unfortunately Gordon Campbell brought tax fatigue to BC, first with the carbon tax and then the HST.

  • 39 boohoo // Feb 9, 2013 at 12:25 pm

    That’s the thing everyman, the tax increase, however they do it has to be tied directly to transit.

    The carbon tax in theory is good, but it’s worse than doing nothing as the revenue from the tax just goes to general revenue–where they spend it building more roads!

  • 40 Agustin // Feb 11, 2013 at 8:20 am

    @ Morven: thanks, I hadn’t heard of that mechanism.

    @ mezzanine: now I follow you. I like your option B. Has the TransLink fuel tax led to economic activity leaving Metro so far?

    @ Bill: OK.

  • 41 gman // Feb 11, 2013 at 12:26 pm

    Agustin #31
    I was wondering if I turn your question to Bill back at you, could you tell me what the reduction of warming would be under the BC carbon tax?These numbers seem rather elusive to me but I was able to find them for the entire country of Australia as there was a real hubbub about these numbers last year.What was found by Prof.Roger Jones of the IPCC was 0.0038 of a degree by 2100.And in my mind co2 emissions have continued to rise in spite of the carbon tax in this province one would have to conclude no matter what side of the fence your on it has had an immeasurable effect on temps. if any at all.Its an extremely regressive tax and effects people who can least afford it the most.

    http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/quggin_our_new_carbon_tax_commissar_admits_error_but_but_but/

  • 42 mezzanine // Feb 11, 2013 at 8:01 pm

    @agustin,

    to clarify IIRC the TL fuel tax taxes only vehicle fuel. And after increases in revenue, fuel tax revenue is down recently, meaning that people are driving less (good!) or buying fuel out of metro.

    http://www.surreyleader.com/news/146362365.html

    This is different to what the mayors are proposing, a carbon tax that is charged to homes and businesses. Would something like a foundry or a fabrication plant decide to move to the valley? i’m not sure, and i am unsure if what we are seeing with the TL fuel tax can be extrapolated.

  • 43 Agustin // Feb 15, 2013 at 2:35 pm

    @ gman – I don’t have one off hand, but I’d be interested in seeing some results. I believe we are due for some interim analysis of the BC climate change strategy. I’ll see if I can dig something up.

    @ mezzanine – fair point that the fuel tax is different than a carbon tax. Are foundries or fabrication plants leaving BC due to the carbon tax? I haven’t heard of any, but that doesn’t mean they haven’t.

  • 44 mezzanine // Feb 15, 2013 at 11:32 pm

    @agustin,

    With the carbon tax as it is now, it does its best to minimize its deadweight loss to the general economy with the CT revenue being used to offset lowering personal and corporate taxes (in addition to credits to low income and rural residents).

    http://blogs.ubc.ca/peterliu318/2013/02/07/what-can-we-learn-from-bcs-carbon-tax-policy/

    I am unaware of major industrial shifts so far, but change there is incremental, as we would see of consumer behaviour from the CT. Of note, the greenhouse industry successfully lobbied victoria last year to have grants to offset the cost of the CT.

    ———-

    Moving away from wonkishness, we do need more funding for transit, and i do support a carbon tax but i think you are forgetting about how potentially divisive a CT tax is, and IMO how shaky its support is. If victoria does change it, i hope they have a plan to marshal further support.

  • 45 mezzanine // Feb 15, 2013 at 11:47 pm

    @gman,

    Australia’s carbon tax also goes to fund personal income tax reductions, with the greatest reductions going to households making less than AUS$25,000 annually, offsetting its regressiveness.

Leave a Comment