The Federal Government, through Finance Minister Jim Flaherty, has announced that it will not allow the Ontario Government to increase the provincial portion of the HST by 1% on a regional basis to fund transit expansion.
An increase of 1% to the HST in the Greater Toronto and Hamilton Area (GTHA) would have netted the province approximately $1.3 billion per year.
While the province could certainly ask for, and presumably get permission, to increase the HST by 1% province wide, it is interesting how the province has not made any decision on the recent recommendations proposed by Metrolinx to fund transit improvement. The HST increase is only one option, but is the single largest source of revenue on Metrolinx’s list.
Metrolinx has recommended that if a 1% HST increase was applied province wide that the funds from outside the GTHA would go to ‘priority’ projects in those areas. This would presumably allow other cities with transit agencies, such as Windsor, London, Niagara Falls, Belleville, Kingston, and Ottawa to also increase their transit systems.
It will be interesting to see what decision Ontario makes with regards to a 1% HST increase, and how the Federal Government will react. I would recommend going with a 1% increase to the HST province wide, thus enabling the province to help improve transit in areas other then just the GTHA. Let’s hope everything works out and the GTHA sees a huge improvement to its transit infrastructure (and province wide for that matter!)