In order to cover a $30 million shortfall to fund Phase 2 transit projects, the provincial government has approved a 1.5 per cent increase in the gas tax.
Metro Vancouver’s TransLink Mayors’ Council approved the tax as part of funding the municipal government’s part of the $7-billion transit and transportation infrastructure deal that includes the Broadway subway line in Vancouver and Surrey light rail transit (LRT).
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The gas tax increase came as a surprise component of how municipalities will fund the 20 per cent of the overall bill it is on the hook for. Both the federal and provincial governments have committed 40 per cent each to fund the projects.
Mayors’ Council chair Derek Corrigan said he understands that some mayors see the increase as a big change, but that it was essential to ensure that the money from other sources was locked down.
“This is isn’t the perfect solution. But the time constraints are significant to get the monies that have been committed,” said Corrigan just before voting in favour of the plan.
“This is a back stop to know there is this 1.5 per cent we can use. There is nothing that says we have to use it.”
TransLink estimates that the gas tax increase would cost the average vehicle an additional $24 a year and would be applied starting in 2019. Corrigan says if the mayors figure out other ways to make up the shortfall, they won’t have to use the gas tax.
“If you have vision, you eventually have to pay for it,” said Corrigan. “If you are a good team player, once a decision is made you try to do the best for our team.”
The tax increase is just a small part of how municipalities will pay their share of Phase 2.
The mayors’ plan includes a TransLink fare increase of between 10 and 15 cents beginning in 2020, an average $5.50 property tax increase across Metro Vancouver starting in 2019, a three per cent parking tax increase and new Development Cost Charges.
But the gas tax stands out as the most controversial of those revenue streams.
“It’s an unfair tax when you get to people who are living outside the inner region and the further you move out the more they are going to have to pay for this even though they are the least recipient of any service from the plan,” said Port Moody mayor Mike Clay. “The fuel tax goes dis-proportionally to people who have to drive or are being forced to drive. It is one of those taxes that is least liked in the region.”
In the past Premier John Horgan has said that the provincial government has limited options when it comes to keeping gas prices down. Horgan has blamed gas companies and a lack of refining capacity for the reason why prices have gone up.
“This is really no one’s first choice,” said the minister responsible for TransLink Selina Robinson. “The mayors have need tools to help them close the gap.”
“We need to remember that this is the biggest infrastructure plan and our government has come in with 40 per cent of the capital.”
Canadian Taxpayers’ Federation BC spokesperson Kris Sims told CKNW’s Simi Sara that the increase is unfairly punishing drivers.
Metro Vancouver gas prices are the highest in North America and are expected to go up again this weekend.
“If we weren’t paying any taxes at the pump we would be paying a $1.10,” said Sims. “We voted against a tax increase in the referendum. And now these elected officials in Victoria and now the Mayors’ Council are all saying yes anyways.”