Premier Kathleen Wynne’s decision this week to name a top minister, Deb Matthews, to focus solely on deficit reduction is a sign that the Liberals recognize that their progressive mandate — which includes a new pension plan and billions for transit — is built on financial quicksand.

While the Liberal government’s budget looked appealing to voters, Wynne now has to explain how she’ll pay for those pledges. The budget plan relied on more borrowing and modest corporate tax hikes; the grumbling from Bay Street has already begun.

Matthews said she intends to focus on asset sales, wage concessions and operational efficiencies to balance the budget in three years. But if the Liberals truly want to fortify the provincial balance sheet, which includes $295 billion in accumulated debt, they should begin thinking seriously about new sources of revenue, and in particular dedicated levies, taxes and tolls meant to underwrite the cost of building the Big Move, the transit plan for Greater Toronto and Hamilton.

Before the election, Wynne earmarked $15 billion for transit in the GTHA. But as she knows from her stint as transportation minister, that figure is at least $20 billion short of what’s needed to finance Metrolinx’s 30-year plan, which includes subways, GO expansion, LRTs, BRTs and other projects.

Citing the multi-billion-dollar drag of severe congestion, business groups like the Toronto Region Board of Trade have urged Queen’s Park to establish a set of “revenue tools” that will produce the sort of steady, predictable funds required to build huge infrastructure projects, like subways.

Fortunately for Wynne, Matthews doesn’t need to plunge into a protracted policy evaluation exercise if she’s thinking about such measures. A year ago, Metrolinx released a $2-billion-a-year “investment strategy” that proposed hikes on the HST and the gas tax, as well as a parking levy and development charges.

Last fall, a transit investment task force headed by Anne Golden and Paul Bedford recommended an alternative solution, relying on a capped gas tax increase, and debt, raising $1.7 billion.

Both proposals have been thoroughly vetted by finance and transit experts.

When Wynne took over as premier, she called for an “adult conversation” about the true cost of fighting congestion. That remark seemed like a swipe at Toronto Mayor Rob Ford, who insists the fearsome cost of transit investment can be borne by business.

The premier now has an opportunity to make good on her promise of a mature debate; and given the prospect of structural deficits for the balance of her term and beyond, she also has a compelling financial reason to do so.

City-regions like London and Los Angeles have established dedicated revenues for new transit construction and operating costs in recognition of the reality that 21st-century urban economies can’t function without this kind of infrastructure.

Yes, there will be political pushback. But Wynne now heads a majority facing two confused opposition parties. Moreover, she can draw on three examples from recent Canadian history to provide resolve:

In 1991, Brian Mulroney imposed the Goods and Services Tax as a means of reforming the tax system and mitigating rising federal deficits.

In 2004, Dalton McGuinty, who promised not to hike taxes during the 2003 campaign, established a health-care levy, which has stabilized the province’s medical system and prepared it for the demands of an aging population.

And in 2008, David Miller pushed through a land transfer tax, which, despite grousing from realtors, has produced a growing source of revenue for a municipality hobbled by insistent budgetary pressures.

In all three cases, decisive leaders from very different points on the political spectrum made controversial but necessary policy moves. In fact, these taxes have all stood the test of time (though the GST has been controversially diminished). During the Ontario election, neither Tim Hudak nor Andrea Horwath said anything about the health levy.

The significant fiscal pressures facing Wynne present a rare opportunity to tackle the GTHA’s congestion crisis — a crisis, it must be said, that threatens the economy of Canada’s largest city-region as well as the quality of life of its 6 million residents.

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Leadership entails tough choices, as Wynne well knows. But she should know this, too: in her political career, there will never again be a better moment to act like an adult.

John Lorinc is an urban affairs journalist and author of The New City (Penguin).

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