Wynne rejects tax hike to pay for infrastructure

TORONTO Ontario’s Liberal government will not consider raising the provincial sales tax to pay for infrastructure projects in various municipalities, the premier said Tuesday.

Kathleen Wynne flatly rejected the proposal from the Association of Municipalities of Ontario, which said its members are facing a pressing lack of funds to both maintain and improve bridges, roads and transit.

The association issued what it described as a bold proposal at the beginning of its annual conference in Ottawa this week, saying Ontario should raise the provincial portion of the harmonized sales tax by one per cent.

Ontario residents already pay eight per cent in provincial sales tax and Wynne said she would not entertain raising that figure any higher.

“That’s not something that I’ll consider,” Wynne said before addressing the AMO conference. “We’re right now trying to help people get ahead ... People are having a hard time making ends meet, so this is not something that we would consider.”

Windsor Mayor Drew Dilkens, who isn’t attending the AMO conference, said that despite “huge, huge” infrastructure needs in Windsor, adding one per cent to the sales tax to help pay for it is “not the way to go.”

“I think it’s one of those things that sound good and sounds like it’s not that much, just one per cent, but at the end of the day I don’t have faith that one per cent would be dedicated exclusively to infrastructure projects for municipalities.”

Instead, he said, a change in government or a change in the province’s financial fortunes, could result in the one per cent revenue being scooped up for another cause.

“I’d much rather see the province guarantee some sort of dedicated, fair funding,” the mayor said, citing the way the gas tax is distributed to municipalities as a good example. How much each municipality gets is based on the ridership of its transit system using a fair formula. If a city improves its transit system so ridership rises, it can expect more money at the end of the year, and the municipality decides how best to spend it.

The AMO estimates municipal governments will face an annual shortfall of $4.9 billion to maintain current infrastructure and fill gaps where more is required.