Panel recommends gas tax hike to fund public transit

WATCH: Provincial panel recommends a hike in the gas tax to pay for public transit. Alan Carter reports.

TORONTO – Residents of the Greater Toronto and Hamilton area could pay between 3 and 10 cents more for a litre of gas and businesses could pay up to one per cent more in tax as the province seeks to pay for expanding public transit in the region.

The report from the 13-member panel appointed by Premier Kathleen Wynne projects a hike in the gas tax could raise approximately $800 million annually while generating an additional $80 million through the HST.

The gas hike could be either three cents a litre (increasing one cent annually to 10 cents a litre) or five cent a litre with a further 0.5 per cent increase to the HST.

Ontario has a 14.7 cents per litre tax on unleaded gasoline.

Anne Golden, the chairperson of the panel, said no one group of commuters is being asked to contribute more than its fair share.

“Rider will pay through fares,” she said. “Drivers are going to be asked to give through a very carefully graduated increase in gas and fuel taxes.”

The planned increase in the gas tax could cost the average household approximately $80 in the first year and $260 annually once the tax increases to 10 cents a litre, the report said, estimating that sitting in traffic for an additional 32 minutes a day (the estimated amount of time that would be added to the average commute if transit is not expanded) would cost a driver close to $700 annually.

Infographic: How much will the increased gas tax cost you at the pump? 

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But the report is just a recommendation; the Liberal government has yet to commit to any of the options.

Finance Minister Charles Sousa said Thursday the Liberal government hasn’t decided whether to raise the gas tax or borrow money to pay for about $50-billion in transit projects. He also noted gridlock in the Toronto region costs the economy approximately $6 billion a year (though some reports suggest it could be close to $11 billion a year).

READ MORE: Top 10 most expensive cities to buy gas in North America

Toronto city councillor Doug Ford (whose brother Rob Ford had earlier expressed his disgust with revenue tools) said the government should look for cuts before hiking taxes.

“Out of a $128 billion budget they can’t find 2.5 per cent?” he told CP24, adding that a higher gas tax will raise prices everywhere. “You’re going to be paying more right across the board.”

Ford didn’t say what he thinks the province should cut.

Watch the video below: What do you think of the proposed revenue tools? Mark Carcasole reports. 

Meanwhile, Progressive Conservative leader Tim Hudak says hiking the gas tax will do nothing to create jobs in the province. He compared it to a “sin tax” on tobacco and alcohol and suggested the Liberals are trying to stop Ontarians from driving.

The panel was appointed earlier this year to study ways to pay for The Big Move – a multi-decade, multi-billion dollar plan to ease gridlock in the region – after Metrolinx came up with its own money-raising recommendations.

The report also urges the government to “build trust” in transit planning by introducing legislation that will allow new revenue to be dedicated to transit.

With files from The Canadian Press