Winter officially behind us, we’re firmly ensconced in the season that follows. No, not spring – well, yes, spring – but more pressingly for drivers, pothole season.
Somewhere between snow-covered streets and the serious thaw, we’re in a no-man’s land of dodging craters and the occasionally spray of cold patch, awaiting the arrival of full-bore repairs and wondering where all the money goes – you know, the billions we shell out in gas taxes that are supposed to go back into the roads, but don’t.
While lower prices have taken some of the sting out of gasoline purchases – though the proposed merger between Suncor and Petro-Canada doesn’t bode well – we’ve long been told the taxes are supposed to cover some of the costs of our sins (I suppose that’s why gas taxes seem to be lumped in there with booze and cigarettes).
For Kevin Gaudet, Ontario director of the Canadian Taxpayers Federation, the split between what Ontario takes in through gas taxes and what it spends on roads is more than just a passing annoyance. He repeatedly calls for the province to put in place policies to guarantee 100 per cent of money raised through gas taxes and licensing fees goes back into roads.
“Many Ontario motorists feel they are being soaked at the pumps. Not only do many feel that big oil is generating huge profits at their expense, they also resent driving on roads and over bridges that are poorly maintained by their provincial and municipal governments,” he says.
The solution? Have Ontario adopt a Gas Tax Accountability Act, as have the NDP governments in Manitoba and Saskatchewan.
In Manitoba, over every four-year period 100 per cent of gas tax revenue must be reinvested into roads, bridges, highways and transportation.
A similar law in Ontario, says Gaudet, would provide an additional $2.2 billion a year for infrastructure projects. Currently, the government takes in about $4.2 billion in fuel taxes and licence revenues; only 47 per cent of the money goes back into road works.
“The idea is that if you’re putting gas into your vehicle, then that tax money should go back into things vehicles are using.”
In the absence of a reduction in the 14.7 cents per litre provincial gas tax, the money should go to fixing our roads, he argues. In fact, he would prefer to see the redistribution of the revenues rather than a tax cut, noting the federal government has much more flexibility to reduce gas taxes. Given that some 80 per cent of the roads belong to municipalities, accountability legislation would benefit local governments to the tune of $1.8 billion – much needed infrastructure money at the local level.
“If the province won’t reduce gas taxes, then it should implement a Gas Tax Accountability Act. Doing so would put approximately $2 billion more into filling potholes, fixing bridges and repairing highways.”
Removing gas taxes from general coffers would require the government to make an adjustment in its spending habits. The CTF, of course, argues we’re dramatically overtaxed: there are plenty of places to cut back in order to put the $4.2 billion where it belongs.
“I’m not convinced that that government, if it chose to make this a priority, couldn’t find the money to make it happen.”
Politicians, however, have traditionally paid little attention to long-term infrastructure needs, preferring program spending to make a re-election splash. Failing roads and bridges – along with sewers and a host of other infrastructure issues – are left for a future administration to tackle.
Chronically overtaxed, we’re getting less and less for our money. That the public is starting to perceive that issue perhaps bodes well for some pressure on our short-term-obsessed politicians.
That said, infrastructure spending is front and center now as both the federal and provincial governments look to stimulate the sagging economy. Roads and bridges are prime, old-school works programs that have the advantage of being ready to go – most municipalities have a long wish-list of projects – and of being highly visible, as politicians love for people to know they’re out there doing something. That is, of course, why there’s almost always a big, self-congratulatory sign telling you who’s behind the project that has traffic slowing to a crawl.
Stimulus spending will have the books bleeding red ink in both Ottawa and Queen’s Park. With taxpayers in no mood for additional taxes – please heed that, Dalton McGuinty, as you contemplated harmonizing the PST with the GST – the spate of infrastructure projects will require offsetting cuts elsewhere to maintain tax rates while eliminating today’s deficits and tomorrow’s long-term debts. At that point, we’ll probably have to learn to live a little longer with the potholes that will undoubtedly return.
