A leading business group is joining Premier Kathleen Wynne in calling on the federal government to pony up more Toronto area transit funding now that federal Finance Minister Jim Flaherty has rejected any regional increase to Ontario’s 13 per cent HST.

Flaherty sent Queen’s Park a letter Thursday dismissing Metrolinx’s recommendation for a 1 per cent regional HST hike to raise $1.3 billion annually toward the Big Move regional transportation plan.

“I really hope that since Minister Flaherty has taken an interest in building transit that he’ll be open to a discussion,” the premier told reporters in Sarnia Friday.

She noted that Flaherty’s letter to his Ontario counterpart Charles Sousa, pre-empts any provincial decision to pursue a regional HST.

“We haven’t asked the federal government for any changes to the tax regime,” said Wynne. “We’ve asked for dedicated infrastructure dollars for building transit.”

The letter, touting a federal $70 billion, 10-year infrastructure fund, leaves the door open to a province-wide HST increase as “ultimately your prerogative.” But, it adds, “I believe Ontarians pay enough taxes.”

If the provincial HST were raised, both Wynne and Metrolinx officials have been clear that the $1.7 billion it would generate in other areas would be spent on infrastructure priorities in those places. It would not pay for Toronto-area transit.

Flaherty’s letter “opens the door for a much more significant discussion of what is the federal contribution,” said Toronto Region Board of Trade president and CEO Carol Wilding, citing the estimated cost of productivity lost to regional road congestion.

“Flaherty certainly understands the cost of $6 billion economically to the region on an annual basis,” she said, adding that the board has requested a meeting with the federal minister to discussion the challenge.

A former Ontario finance minister, Flaherty is married to Ontario Progressive Conservative deputy leader Christine Elliott. Opposition parties at Queen’s Park have rejected new taxes on ordinary Ontarians, with the Conservatives calling for savings to be found in current spending and the NDP advocating higher corporate taxes.

The transit tax discussion may be Flaherty’s way of deflecting attention from the Senate spending scandal in Ottawa, said Ryerson University transportation and planning expert Matti Siemiatycki.

“This is changing the channel back to the (Conservatives’) core message that they really are anti-tax and protect working Canadians,” he said.

Siemiatycki notes that Metrolinx’s HST proposal had broad consensus from business and community leaders and has been used elsewhere.

Increasingly, he said, “we’ll see the creaks in this very old arrangement,” where municipal governments are struggling to raise the kind of transit funds they need and the federal government, that raises large amounts of tax, takes only an ad hoc role in funding transit.

Loading... Loading... Loading... Loading... Loading... Loading...

Ottawa says it has invested about $2.2 billion in Toronto transit since 2006. Metrolinx’s investment strategy says the federal government has provided about 15 per cent of capital for Toronto area transit expansion in the last decade.

It wants Ottawa to pay a third of the $34 billion cost of 13 transit projects, including a Toronto relief subway and a Mississauga LRT. The resulting economic growth will generate $12 billion for the federal government. It is also recommending a 5-cent a litre gas tax, a commercial parking tax and development charges.

Read more about: