TORONTO, Ont. — As a result of stronger than expected revenues, the Ontario government was able to commit more than $1.2 billion in new spending on new transportation infrastructure projects according to Finance Minister Dwight Duncan’s recently unveiled first budget.
The projects, branded “Move Ontario,” include $838 million in one-time funding for public transit in the GTA and $400 million for municipal road and bridge maintenance and construction, principally in northern and rural communities.
OTA president David Bradley said the budget is a positive step in helping the infrastructure crisis facing the province’s transportation system.
“For years we’ve been asking for the provincial government to re-invest more the taxes that governments collect from transportation users back into the transportation system and we’re finally seeing some movement towards that kind of re-investment,” Bradley said.
This year Ontario will collect over $4 billion in direct taxes on transportation users (gas tax $2.3 billion, fuel tax $750 million, and vehicle registration fees $1 billion) compared to a $2 billion total budget for the Ministry of Transportation. The trucking industry alone pays in excess of $1.2 billion, equal to the entire average annual provincial highway construction and maintenance budget.
Bradley did say that he would have liked to see a greater emphasis on highways and local roads, but is pleased that the government has not cut funding for highways and has provided at least some relief for municipalities who have bridges and roads that are in need of repair. He said that traffic congestion in, around and through the GTA “is the single largest bottleneck in the provincial supply chain and is strangling the economy.”
“But whether all the new spending on transit will lead to reduced congestion and more efficient goods movement depends entirely on whether it gets more cars off the road. Only time will tell,” Bradley cautioned.
Bradley also welcomed the budget announcement that the government will accelerate the capital tax rate cut.
“It’s good news for trucking companies that the government has accelerated the timetable for eliminating the capital tax, which is just a dumb, investment killer,” he said.
Effective Jan. 1, 2007, the current capital tax rate will be cut by five per cent, a full two years earlier than originally promised and the government has pledged to completely eliminate the tax as early as 2010.
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