Other “investment tools”

The increase in Harmonized Sales Tax, as proposed by Metrolinx, will raise the lion’s share of the money. Unlike the gas tax and parking levy, it will do nothing to encourage transit use or discourage driving. Indeed, it will have a small but significant adverse impact on GTHA retailers, and will encourage more purchases to be made in ways that avoid the tax. U.S. retailers are already advertising their lower sales taxes on Toronto radio stations.

The increase in the HST is likely to be controversial. Before going ahead with such a move, Metrolinx needs to be able to demonstrate that transit operators are already making good use of the money they are spending now, and that transit users are making a reasonable contribution to the cost of the services. This is not the case.

While there is brief mention of service and fare integration,[1] there is no recognition of the potential of using smarter fares to raise higher revenues while encouraging additional ridership. There is also no discussion of operational efficiency. GO and TTC lose money in part because of inefficient operating practices. These issues are discussed below.


Notes
[1] See Metrolinx Investment Strategy, part 6.32.