Ontario Government Suggests Higher Fuel Taxes

TORONTO— A most recent suggestion by the Transit Investment Strategy Advisory Panel could result in many Ontario truckers paying higher fuel taxes.

As the predominant user of diesel fuel, the trucking industry is being asked to take on a major new cost burden, says David Bradley, president of the Ontario Trucking Association.

“We want to know a lot more about how the proposed investment trust fund will work and we want assurances that roads, highways and bridges will get their fair share of the dollars available net of the GTHA transit fund,” Bradley says.

The Transit Investment Strategy Advisory Panel was appointed by Ontario Premier Kathleen Wynne. The proposed raise in fuel taxes is part of a series of measures to get the $2 billion they need annually to fund the Metrolinx Big Move plan for dealing with traffic gridlock in the Greater Toronto and Hamilton Area (GTHA).

Of the money raised from the new measures, 75 percent would go directly to transit.

The measures include a 0.5 percent increase in general corporate income tax, a redeployment of the GTHA portion of the province’s HST on gasoline and fuel taxes and the primary recommendation: a phased increase in gasoline and fuel taxes starting with a 3-cent per litre hike in 2015. The 2015 fuel hike is not where it ends, though because it will be followed by an annual increase of 1 cent per litre for up to 10 cents over the next seven years.

The tax increases would apply on a provincial basis and would go into “a dedicated, transparent and accountable trust fund.”

The current report does not clearly state how the money will be invested, but the panel’s members have since said that 54 percent of the fund will pay for transit in the GTHA. The remaining 46 percent will fund infrastructure improvements, which may or may not include roads, in the rest of the province.

The panel does not recommend the introduction of tolls at this time. The provincial diesel fuel tax, which currently sits at 14.3 cents per litre, was last raised in 1992.

“We would much rather see our fuel tax dollars go into a dedicated fund specifically set up for roads, highways and bridges – the infrastructure truckers use. You can’t move goods via transit,” Bradley says.

It’s up to the provincial government to adopt any of the panel’s recommendations, but Wynne has made congestion reduction one of her top priorities and is prepared to fight an election on the issue.

Transportation Minister Glen Murray says his ministry will review the panel recommendations and will decide which path to take by spring 2014.

“For us, it’s an economic issue – will the increased taxes actually take cars off the road and improve, or at least not make the situation worse in the future, as it pertains to goods movement? It sounds nice in theory but the industry will need to be convinced,” Bradley says.

If carriers must pay more, a province-wide fuel tax is fairer and a more efficient way of getting all truckers, regardless of where in Ontario they come from to pay their fair share as opposed to a regional tax as Metrolinx originally proposed, Bradley says, explaining that regional taxes would create a distortion in the marketplace.

He also says the province needs to close a loophole in the Highway Traffic Act that exempts thousands of specialty trucks such as sucker/pumper trucks, crane trucks and so on, from having to be plated and from paying fuel tax.

“These trucks use the infrastructure the same as every other truck and they should be expected to pay their fair share as well.”

Bradley says the province is probably losing about $60 million a year in registration fees and fuel taxes from these trucks.

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