Could a Gas Tax Hike Pay for Toronto's "Big Move"?

"Toronto-area drivers should pay for most of an ambitious transit expansion through a sharply higher gas tax, a government-appointed panel is recommending, but the promised sweetener is that motorists can expect to come out ahead by preventing even worse congestion," report Oliver Moore and Adrian Morrow. 

"The comprehensive report from a panel headed by Anne Golden landed Thursday. It lays out ways for the province to pay for the so-called Big Move – which proposes a network of transit lines intended to tackle congestion currently estimated to cost the Toronto area $6-billion annually – and suggests gradually increasing the gas tax by as much as 10 cents a litre, which would cost the average household $260 per year."

"The panel lays out two options, both of which use gas taxes to fund the bulk of transit," Moore and Morrow explain. "Each option would raise money across the province, with only the funds generated locally being used in the Toronto area. Money raised elsewhere will be spent in those communities."

An alternative financing plan released by the Toronto region's transportation agency in May relied on an increase in the provincial sales tax (HST), in combination with a more modest gas tax increase, parking levy, and increased developer fees, to pay for the project.