Today saw an exchange in the Ontario Legislature showing the true colours of the provincial government when it comes to an informed, intelligent discussion of fare integration in the GTHA. The full exchange is below lest anyone accuse me of quoting them out of context.
Ms. Andrea Horwath: My question is for the Acting Premier.
Throughout its history, TTC fares in Toronto have been based on the simple principle that every Torontonian deserves equal access to their transit system regardless of their income and regardless of where they live.
But now Metrolinx is quietly working on a fare integration plan that could force people living in Scarborough, Etobicoke and North York to pay a higher fare for a subway ride than people living downtown. Will the Liberal government guarantee that Metrolinx will not force people living in Scarborough to pay more to ride the subway?
Hon. Charles Sousa: Minister of Transportation.
Hon. Steven Del Duca: I want to thank the leader of the NDP for the question. Of course, as everyone should know by now, the folks at Metrolinx, who are doing an exceptional job, are working hard to liaise with all of our municipal transit systems around the greater Toronto and Hamilton area to make sure that, collectively, we can deliver on fare integration for this region.
I think anyone who moves around the greater Toronto and Hamilton area would recognize—and certainly I hear it loud and clear from my own constituents in York region—that we need to make sure, in order to support the unprecedented transit investments that this government is making, that we need a fare integration system across this entire region that works seamlessly, that makes transit more accessible, more affordable, more reliable and more dependable for the people of the entire region. That’s the work that Metrolinx is embarking upon in conjunction with all of our municipal transit systems. They will keep working hard, Speaker, to make sure that we can get it right.
The Speaker (Hon. Dave Levac): Supplementary?
Ms. Andrea Horwath: Speaker, in fact, what Metrolinx has been quietly doing is designing a fare integration plan that could force the TTC to become a zone-based system that divides Torontonians based on where they live. So years from now, people in Scarborough might get a new subway but then find out that they can only afford to ride the bus.
Will the Liberal government guarantee that there will be no fare zones within Toronto, and that Metrolinx will not force the TTC to charge higher fares for subway riders?
Hon. Steven Del Duca: I guess only the leader of Ontario’s NDP would think somehow that after months of open conversations, after months in which every single board meeting has a public portion, only the leader of Ontario’s NDP would think that this is somehow hidden. It’s a conversation that’s been ongoing.
It’s part of my mandate letter which, of course, she should know. For the first time in Ontario’s history our mandate letters were posted publicly at the time that we received them, Speaker.
I think what’s also, perhaps, the reason that the leader of the NDP is mistaken about how supposedly hidden this effort is, Speaker, is that because while we are investing in transit through budget after budget after budget, that leader and the NDP caucus continue to vote against them. They are obviously more focused on petty partisan politics in Scarborough instead of being focused on making sure that they support the transit investments needed to deliver the seamless integrated transit network the people of this region and the people of Scarborough deserve.
Let’s get the historical inaccuracy in Horwath’s question out of the way first. The pre-Metro Toronto Transportation Commission used a single fare within the old City of Toronto, and supplementary fares beyond in what were then separate municipalities where the TTC provided some services. Some suburban bus routes were operated by private companies which charged their own fares. After the creation of Metro in 1954, the Toronto Transit Commission had fare zones roughly based on the old city and everything else, but these were abandoned in 1973 as part of the political deal for suburban municipalities helping to finance transit expansion through their Metro taxes.
I am no fan of Andrea Horwath, but she asks a legitimate question.
The Minister’s response is pure political hot air talking about the wonderful work at Metrolinx, and the wonderful spending on transit construction now underway, but utterly avoiding the issue of separate fares either for zones or classes of service within Toronto. Instead, he turns the question into one of “petty partisan politics” and fails to address the matter of whether Scarborough riders will pay more to ride their new subway whenever it opens.
One might ask the same question about the Minister’s constituents in York Region who will be heavily subsidized by Toronto Taxpayers to ride the Spadina extension to Vaughan.
Those are actually separate questions. You could have mode-neutral fare zones, and you could have a higher fare for the subway without fare zones.
I also find it weird that Andrea Horwath complains about one group of transit riders possibly being charged a higher fare for riding (local) transit, when another group already does.
Fairness is a concept that can be manipulated by politicians. In this case it seems to mean that a person who pays less rent and chooses to live in York Region should be treated “fairly” by paying the same as someone paying more rent in Toronto. It seems to mean that transit with 50% subsidy (or more) should be “fairly” priced at an equal level to transit with a 35% (or less) subsidy. Perhaps fairness should mean an equal subsidy for all transit across the region and service and fares that make up the difference. Under that kind of fairness, it would pay to live in the amalgamated City of Toronto – even in the inner suburbs.
Then there is “fairness” based on demand. Should a bus route with 15 passengers per bus get more service versus one with 60 onboard and more left behind. What about a transit system (as in York) that provides trunk service at high frequency for middle class commuters but half hour service for those dependent on transit (no car at home.) Doubtless the politicians are speaking to the middle class York commuters who live in (comparative) mansions compared to those left in the cold outside their Scarborough apartments.
It’s all very complicated. Question period seems to suggest that not a lot of thought has gone into the complexity.
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I think that if GO wants to lower its fares in Toronto, raising fares on longer TTC trips is pretty much inevitable. Presto makes it a lot easier to do this. Undoubtedly people in areas like Scarborough will complain, but those same Scarborough residents will get much lower fares at Scarborough, Eglinton, Guildwood, Rouge Hill, Kennedy, Agincourt and Millken GO stations and on GO buses in Scarborough.
Steve, thank you for this. I hope that you will campaign against the Kathleen Wynne government for the next election and the campaigning should start now if we are to succeed in getting rid of this shameful government. Steve, you have hundreds and possibly thousands of readers and that’s some real political capital and perhaps you may consider running yourself.
Steve: First off, I am much more valuable as a journalist/blogger than as a politician where I would have to sing from the party songbook, and could not even be guaranteed a seat at the “transit table”.
Second, I am torn because I have little faith in any of the parties. The NDP talked a good line about transit, but their sample budgets included pennies for real improvement. They are very focused on construction of new facilities as this benefits their usual base in the construction industry, but operating subsidies are quite another matter. They have also run appalling campaigns at three levels of government now, and richly deserve to spend time in the outer darkness of opposition. What the party will look like, say, two elections from now, I can only guess.
The Tories are a lost cause, and I regard them as a bunch of knuckle-dragging Visigoths who would sell their grandmothers if they thought they could reduce taxes with the proceeds. The Liberals will say whatever is needed to get votes. Wynne has been a huge disappointment for me.
Unbelievable, except that Steve provided the actual words said by the Minister of Transportation Del Duca in reply to a legitimate question, which is of real concern to Toronto transit users. His diatribe about there being no hidden agenda, rather than answering the question even a smidge, proves that there is a hidden agenda! Yes, now I have totally lost all confidence in the government.
Now Steve, that comment is totally unfair. The Visigoths were not knuckle draggers. Del Duca should have paraphrased MacKenzie King from WWII. Not necessarily fare zones but fare zones if necessary.
I rode the SunRail commuter system in Orlando last month. It uses Bombardier bi-levels. They have 13 cab cars, 7 coaches and 7 locomotives. They run 2 car trains base and 3 car trains sometimes in the rush hour. They put an extra cab car in front of the existing one. Their fares system is by county. You pay $4.00 to ride in one county and an extra $2.00 for each additional county. You can ride 2 stops and pay $6.00 or all the way across one county for $4.00. Not exactly fair but their ridership is only 3700 per day. Just an example of how other systems do it. The US is really big on counties as that is usually more important that towns and cities.
Steve, I think a lot of where the Tories will come out on transit is heavily dependent on the leader and what is accepted the time, and just how much financial trouble the province gets itself into. The post NDP period was not a good measure, and the leader in the previous election was simply pandering.
The expansion of government without clear goals does need to stop, as this is consuming the real fiscal capacity of the province. Allowing the notion of clear, focused, and carefully rolled out transit expansion can appeal to even the very fiscally conservative. I know I generally am, and do not have a hard time seeing how this could be engineered to be an overall revenue positive process, if it was sequenced properly, while not being silly ambitious.
The problem for transit in Toronto for the last couple of decades, is that plans have either been side tracked by stupid local politics, are overly ambitious in specific scope, or are seen to be ineffectual. The LRT plan, was right in the sweet spot, effectual, highly supportive of development, especially increased density, while not requiring substantial increases in operating monies, but offering substantial increases in coverage and potential ridership.
The most fiscally conservative, realist, should be behind East Bayfront and its ilk, but it is hard to back Scarborough (SSE) or TYSSE.
Steve: The problem is that most “conservatives” only believe in lining their own pockets with tax cuts or handouts to friendly companies. True fiscal conservatism that recognizes the value of investment and ownership where this can be best accomplished by the private and public sectors is unheard of today.
Once again, the Minister’s response demonstrates why it is called Question Period and not Answer Period. 😉
Yes, they did an “exceptional” job on Union-Pearson Express and no doubt they will also do an “exceptional” job with whatever they tackle. NOT
Steve said that if he runs for a seat, then he might not even have a say on the transit file but that may be true at the federal and provincial levels but it’s not true at the municipal level where the likes if Downtown councillors like Josh Matlow and also formerly Adam Vaughan have had too much say in dictating Scarborough’s transit policies.
Steve: Just as Scarborough pols have a hand in blocking improvements to transit serving downtown, even though riders from all over the city would benefit.
Before most of you gleefully run Kathleen out of town, remember that, for the past 35 years, the Ontario Liberals have been the only friends of GO.
Steve: This is my conundrum. The Tories would cut back on transit support generally, and the NDP cannot be counted on for significant improvements, especially to operating subsidies, based on their past focus on capital spending.
I think the issue, is Steve, that the very loud politics of the last few years have hidden them from view. However, I beg to differ, they are not “unheard of today” merely unheard from lately. The current drift, and the issues within the Liberals, and the look for new mission federally for that party will likely bring them slowly to the fore again. They are not gone, merely been resting for a bit.
With all due respect. Scarborough pols made be as idiotic as any other but they have much more of a right to block until we see some type of fair, properly integrated transit BUILT in Scarborough. Even the latest mediocre (although improved over McGuinty’s crap) transit proposal under Tory/Keesmat hasn’t been fully approved financially or conceptually. It’s either Scarborough takes a couple of hacked in LRT lines or becomes the Political pawn again.
The DRL brings along a great financial benefit for development to areas not in Scarborough & it only helps Scarborough commuters that are forced to take the 2nd & 3rd rate transit system infrastructure we currently have.
Sorry Steve but that is reality. Build a fair, properly integrated network throughout the City or don’t expect support from those left with scraps.
If zone fares are added out here in Scarborough it will give the Provincial & Downtown Liberals will have more “facts” why not to build properly integrated transit in Scarborough because it’s just another deterrent making public transit less palatable.
Yes, however, Joe, what makes sense, and thus really fair needs to be considered in terms of length of line, ridership and other services delivered. It would not be fair to maintain twice as much roadway per resident would it? Fair needs to consider more than a single dimension or service. Also – the biggest obstacle to delivery of new services to Scarborough, has been Scarborough politicians. The press to constantly extend only subway as the only possibility has meant that a broader more effective and inclusive (very large area – relatively low density) solutions are dismissed. Yes, the province should never have cut off the ends of the Crosstown, that made no sense, but the stupid drive to subway, was a big part of that.
Wow….that’s like the one of the most opaque answers to a very simple, short and direct question (asked twice!) that I’ve seen. The Transport minister should get a medal in the obfuscated deflected speech discipline at the politicians’ olympics, if there were such a thing.
Btw, Steve, what is the Green Party of Ontario’s stance on public transit? Yes, I know they’ll be in government only after hell first freezes, then boils over (barring a change in the electoral system), but please tell me there is at least one party with potential >5% support that has a sensible transit policy in their platform.
Steve: I don’t know what the Green’s policy is these days, and consider them irrelevant as a political force. If it were not for Elizabeth May, I don’t think they would have any media profile at all. Transit policy is not simple because it requires a different approach in different parts of the province, and a level of nuance, of understanding how a one-size-fits-all scheme simply will not work. No party seems willing to address this problem including the fact that a lot of money will be spent in populous Southern Ontario, especially the GTHA.
I share your disappointment with Kathleen Wynne. I really liked her when she won and was excited about our prospects. I thought that she would be a breath of fresh air after McGuinty and silly pandering to special interests (such as ill in formed NIMBYs protesting gas plants) would end. And then a by-election came along in Scarborough and Wynne wasted a billion dollars or so of our money to make sure her candidate would win.
However, pandering is part of politics and we have to live with it all the time. The fundamental problem with Wynne is that she is a coward – afraid to implement her own policies which will inevitably cost money. She talks like a progressive, but when it comes to taxes she uses euphemisms such as “Revenue Tools” and then is afraid to implement these tax increases even after they are disguised.
The cacophony about how Ontario is the most indebted subnational jurisdiction in the world (which may or may not be true) has taken over the agenda. The real question is whether Ontario has the wherewithal to pay for the infrastructure and services we want and the answer is that we do. However, with a cowardly government that is unwilling to show the benefits of its policies and is unable to find the courage to demand the tax income to fund them, the result is debt. It is true that we cannot continue to incur debt endlessly.
However, what we have to do is decide whether we want to live in a crumbling society with Louisiana taxes or in a progressive modern society and pay the freight. I thought, when we voted for Wynne we chose the latter. It is a shame she lacks the courage to deliver.
As for the next election, I agree with your descriptions of the alternatives. I am planning to once again follow that age old tradition. Hold your nose and vote Liberal.
Please re-elect the Liberals with a majority in 2018 if you want the Downtown Relief Line and the Scarborough subway and lower electricity prices. Only the Liberal Premier Kathleen Wynne has the leadership skills to deliver on these promises.
Steve: I am not sure it is “Leadership Skills” as much as the likelihood that the Tories would trash as much of Wynne’s promises as possible.
For the past 30 years, the Ontario electorate has given the bounce to, or driven into early retirement, every premier we’ve had. We never stop to consider the fact that we were the fools who elected them in the first place. We appear to be an ungovernable lot who insist upon a first class infrastructure and no taxes. Given those circumstances, I wouldn’t call Kathleen a coward.
I’d say that you don’t watch too much ‘Chamber TV’. As a start try the non-response of Paul Calandra about Nigel Wright.
Question Period in its current form is little more than theatre. I would prefer something along the lines of MPs or MPPs having a quota of various urgency/detail response to questions (say 4hr/24hr/72hr/168hr and verbal/written one-page/written multi-page) for each session and the Government obligated to respond in full.
The GPO received 2.92% of the popular vote in 2011 and 4.84% in 2014. They peaked in 2007 with 8.02%. They were the only other party to run a full slate of candidates.
Their policy is congestion charges with net proceeds to local public transit and to electrify GO ASAP.
What is the cost of maintenance on a two lane road over a 4 lane road? Likely negligible in the big picture. Most potholes occur along the curb side, The cost of pavement/labour differential is minimal when you factor in the costs to procure a contract or just the setup cost for a contractor to be working in a specific area. Bit of a stretch. The issue is Scarborough doesn’t have a fair network to make accurate ridership predictions & those numbers will change depending on how well we connect the network and also how it’s priced in. I would say the zone fare discussion needs to be delayed until a full network is built. Only then can we truly judge travel patterns and add addition cost on quality transit on longer commutes.
The Eglinton LRT/SMLRT line makes a ton of sense and it’s the only Scarborough LRT line in Transit City which actually did. Astonishing it was the line taken off the radar. But If we are seriously continuing to look for excuses to avoid building transit of the same technology to connect key areas of Scarborough, it says a lot about the Political problems this City faces and the people who want to leave that legacy.
Joe, we are not just talking about width of road, but also its length per resident. However, most costs are best expressed in terms of lane miles. Snow clearing and repair are issues in outside lane and inside, and those six lane separated roads have twice as many curbs as most downtown (don’t forget the ones in the middle, where water also collects, and significant repairs are required).
Technology, as everywhere else depends on conditions one of which is density. Should Sheppard have been built as subway – no that was goofy, however, the major issue with transfers is not their existence, but how they are handled. So STC to Kennedy as LRT is fine as long as it is a cross platform transfer, and the focus is on frequency at least as much as capacity (ie run twice as often as the current RT- to a subway with a headway not above 200 seconds most of the time). Transfers are an issue when poorly done, or between infrequent poorly managed services.
The real issue I would have with much of transit city – would be the concern that it would be no better managed than much of the rest of transit. If you have spotty headway, the TTC uses 3 car trains every 10 minutes instead of 1 car trains every 3, well there are huge issues. So far as looking at the plan – I think it was better than you give credit, as far as how I think it might have ended, based on the surface fleet management the TTC has displayed – well then you have a point.
However, this same issue exists in much of the downtown away from subway. The real case against LRT is how long it took the TTC and the city to address issue along St Clair and by the waterfront in terms of operating conditions. This approach would result in 3 car trains with a declared headway of 10 minutes, but a realistic one of somewhere between 3 and 33 minutes.
I beg to differ. In the US, there are long term studies showing that people regularly elect politicians more conservative than themselves in aggregate.
I believe the same phenomenon has been at work in Canada to some extent recently. I know a lot of true fiscal conservatives, and know none that believe in lining their own pockets with tax cuts for its own sake. The exception are a small group of relatively successful politicians.
There are plenty of fiscal conservatives who believe in building public transit. They just don’t have good voting options in Ontario. It’s anyone’s guess who they’ll support in the next election. I don’t like losing progress on transit, but nothing in my book justifies supporting the corrupt, incompetent, rotten group currently occupying Queen’s Park.
This has been true since at least 1992, when Ontario Hydro and its successors are included. Since it lacks its own currency, Ontario’s credit rating is entirely based on the speculation that Canada would backstop Ontario’s debt. This is part of the so-called ‘moral hazard’ that allows Ontario to drive up its debt with relative impunity. It would be unity-stressing for Canada to bailout any province with a credit crisis, but it’s hard to see the country having any choice in the case of Ontario, a province that is too big to fail.
Ontario comes nowhere close to Louisiana taxes. We now have the opposite. Our new combined tax rates now rival some of the more redistributive social democracies in Europe, without the commensurate benefits. Ontario is a spendthrift, with outrageous costs in some ministries given our scale, and a runaway public sector deeply embedded in the ruling party funding apparatus. If you want more spending for your priorities, find the money.
Mike Harris is the exception to your rule. He’s one of the few premiers of any province to retire on his own terms.
We do not insist on no taxes. Our top tax bracket is now 54%. Starting in 2016, for families with two children, the marginal tax rate peaks at an income of $67,000, topping 72%! These are not world records, but they are highly confiscatory tax levels by any rational definition.
The US is much more religious and evangelical. You can’t do an apples-to-apples comparison.
That’s what Steve said. Harper ran deficits. Harris was a slasher. Ford was a populist. John Tory is probably the closest we have to a “fiscal conservative” or if you prefer a “Red Tory”/”Blue Liberal”. I group myself into this category, and I continue to support the OLP as the “least worst” option. Unless someone else comes along, they are the least corrupt, incompetent, rotten group of the current choices to occupy Queen’s Park.
You obviously either don’t understand taxes or are intentionally misrepresenting the situation. Is it your contention that a family of 4 that earns $67,000 has a take-home pay of $1563.33 a month?
Without looking at all the specific numbers, but with a comparable family of 3 on $75,000, it comes out under 38% all-in.
Steve: In Ross’ defense, I think he is talking about the marginal tax rate. There are various situations under which someone who pays normally at a lower overall rate can be hit with a high marginal rate (including the effect of step-rate changes in specific taxes and clawbacks) for additional income earned above a certain level. It is a strong disincentive to earn a little more because so much vanishes in tax. The incentive is to earn a LOT more to counteract the effect, but that option is not always available.
Maybe one of the benefits of doing ones taxes by hand on the paper form is seeing for yourself the different tax rates. I have the 2015 forms right in front of me. I don’t want to derail the discussion, but Russ’ claims above are simply not borne out by what I see.
The Ontario income tax rate is 5.05% under about $41,000, and 9.15% up to about $82,000.
The federal income tax rate is 15% under about $45,000 and 22% up to about $89,000.
A household with a single earner earning $67,000 won’t be paying more than 34% on income above ~$42,000. Never mind a family with two children!
The effective income tax rate will be lower, of course, because there are lots of tax credits that come to everyone, like basic exemptions and working reductions. And a famlily with children, well off you go.
The Ontario health charge is another few percent.
If you consider EI a tax (and I can see the point), it’s maybe 2% on income up to about $50,000.
I don’t consider CPP contributions to be a tax; of course a twenty-something reader of Ayn Rand may so deem it, but whatever.
Property tax (which has nothing to do with marginal tax rates) might be as much as 10% of this household’s income — though that would be a relatively large dwelling.
It’s obvious that this supposed “marginal tax rate” of 72% on an income of $67,000 is a fantasy. Well, unless all the disposable income was spent on highly-taxed items such as cigarettes and booze.
Note that the top tax bracket for federal income tax is 29% on income over $139,000, and the top tax bracket for Ontario income tax is 13.16% on income over $220,000. There is also an Ontario surtax, which I can’t be bothered to try to calculate. Nevertheless, it would have to essentially double the Ontario tax rate to reach anywhere close to 57% for the “top tax bracket”. And again, keep in mind that this is with absolutely no tax credits or deductions applied.
The “Ontario taxes are confiscatory” story sounds plausible until you actually look at the numbers.
Mike Harris did not retire on his own terms. He threw his buddy Ernie under the bus, when the Ontario electorate finally realized that Harris’ philosophy was to abandon any pretense of infrastructure maintenance. The polls fell, and Mike ran for it.
This is patently untrue. Ontario will not fail because Ontario has the taxing power to pay any debts that may come due. Our politicians are afraid to raise taxes due to the “cacophony” that I mentioned before. However, if Ontario raised HST to 15% that would raise about 5 billion dollars a year. That and a little growth in the economy would balance the budget. We would not be paupers at 15% HST as we were there for many years before.
Based on our current situation Ontario is nowhere near insolvency. The continued building up of debt – a bad thing that I agree with Ross about – is entirely due to the fact that our government refuses to tax us at a level that will pay for our services.
I have a strong preference to maintain our services – and personally pay more tax – but the alternative is cutting services (drastically) to match our services to our income. I believe that outcome would, in fact, be similar to Louisiana.
We remain rich – very rich. We have to decide what we want. If we want to continue with the same service level we have no trouble affording to do so.
As for Hydro – electricity is an expensive (and polluting) commodity. We need to grow up and pay for it. When we don’t, the debt can pile up quickly. (Re self interest. I have electric heat. My hydro bill in February is “legendary”.)
Steve, it’s a few days old, but I found this article on Presto fees out of Ottawa: http://www.cbc.ca/news/canada/ottawa/metrolinx-presto-fee-increase-ottawa-mayor-oc-transpo-1.3577574
It seems to me that even a 5% cut of Toronto’s fare revenues would represent a pretty massive hole in the TTC’s budget, but ISTR the budget only allocating a few tens of millions to Presto costs (mostly fare gates). Adding Presto costs of that magnitude on top of “fare integration” could hit Toronto commuters pretty hard…
I know you put a lot of time into your analyses, and you have a queue of them planned to get to, but do you think it would be possible to at least try to get some low/medium/high scenario numbers for (various) typical Toronto resident monthly transit costs? (If you want to try crowd-sourcing the number-crunching, I’d be happy to help; I just don’t know where to start.)
Steve: The 5% fee to the TTC is based on its current cost of fare collection and the premise that this should not be increased by converting to Presto. The problem is that the TTC has not yet identified the 5% saving in its budget that Presto will bring, at least for the short term when the two systems will co-exist. There is also the question, as yet unanswered, of how much it will cost to have roving staff as info agents at stations, not to mention fare enforcement.
The City’s budget projections already shows a net cost increase for 2017 thanks to Presto.
As for the implications of new fares, that gets really messy depending on what fare scheme the TTC and Metrolinx settle on, and how much Toronto Council decides to stiff riders with as opposed to paying through subsidy.
Yes, however, we must keep an eye, on the impact of excessively marginal rates, in the long term on marginal decisions. The decision to base a medical practice in Michigan, versus Ontario, could hinge on the difference between a 44% marginal rate and a 54% marginal rate. We have in the past fallen into the trap of comparing the US federal rate, to the Ontario/Canada combined rate – which is a false comparison. We have been very competitive for those comparing Great Lake Region investments, and for decisions surrounding careers. We do not need to match, but 50% is a magic point, that people start to think about. It will have little impact on people well into their careers, but for people just starting out, new investments, and doctors setting up practice – the decision at the margin, may come at least in part to that – because once we are again above 50% it is not clear where the next point is.
The impact of these choices, is not immediate but cumulative. It is not a question of if we need to invest in infrastructure or not, or whether we need services or not, but how effective we are in building infrastructure and providing services. We need to ensure that we recognize there are real limits and then spend well. We are at the point that when we say we need to tax the rich to pay, those rich are us, and well, what increase in taxes will you support – on yourself. You will not have an effect on the economy this year, or even next with increases in taxes, but will have a gradual effect on total factor productivity, and hence wealth over time – as per many OECD studies on the issue. The issue takes a decade or more, to really start being seen, however, if you were say a doctor setting up a new practice, and the difference in tax meant an extra 5 years of work, and a lower lifestyle, and you had yet to fully commit to Ontario – would you at least think about it?
The problem, is that the impact is so slow and insidious – it creates a situation where nothing happens. It is not the big explosion fear mongers make out, rather the slow erosion, that you never see that should concern you.
Steve: Similarly the lack of investment, the idea that we can make do, and then when we do spend, concentrate more on political than economic profit, does not in one stroke ruin the transit system and the region’s attractiveness. It is the cumulative effect, and the sense that Toronto, to the degree it spends at all, would rather spend on baubles than on what the city actually needs.
Yes, it is exactly the same thing, and if we want to think in terms of taxes and baubles, the special tax breaks are exactly the same thing. We design tax code to create incentives for odd things, and the cost to revenue is huge, and often the actual incentive effect for all is negative. To my mind the tax code should be simple, and maintain a reasonable highest marginal tax rate (ie below 50%, but does not need to be crazy below it) better that the highest payers have an incentive to earn more, than an incentive to sculpt their earnings to avoid tax.
I strongly agree that the damage is very similar to what is being done with transit. The extensions of subway, are the expensive loopholes we add, look great, cost the treasury lots, but hurt the overall economy and operating budgets. I think the special child tax credits, were very much like the extension to Vaughan – little benefit to the economy, lots of expense, and long term a drag on the ability to do the right thing. Much like poorly designed tax structures, the mistake that is low impact high cost transit extension, is in what you cannot afford to do, that would have been high impact low cost. The cost of TYSSE would have paid for a subway to York U, an LRT to Vaughan, an extension of a Finch West LRT to the Airport and to Yonge Street, and left money to do more. I suspect the cost of operating this subway, would similarly cover the cost of a much more extensive LRT network – a very expensive bauble.
Spending wisely is really important, because I would note, that at some point, congestion also acts as a debilitating tax, on doing business or residing, in, around or through Toronto, and thus Ontario as a whole. This too threatens our future ability to pay to fix it. We need to focus on how we spend (and tax) but $2-3 billion per year is affordable, especially since a good transit plan, and greatly improved planning, also act as a large part of a good environmental plan.