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It's Time for an Ontario Gas Tax Accountability Act

Author: Kevin Gaudet 2007/05/28

  • Another $2.197 billion for Ontario roads
  • $1.758 billion of it for municipal roads

If the Ontario government won't provide motorists some relief by reducing the 14.7 cents a litre provincial tax on gas, then the least they can do is dedicate the revenue to fixing our roads.

Many Ontario motorists feel they are being soaked at the pumps as gasoline prices hover around the $1.10 a litre mark. 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. Ontario's poorly maintained roads are the result of governments more concerned with program spending than long-term investments in infrastructure. To address this problem, Premier McGuinty should follow the lead of the NDP governments in Manitoba and Saskatchewan and introduce a Gas Tax Accountability Act which would dedicate fuel tax revenue to capital spending on transportation, most of it at the municipal level.

Since the Manitoba government passed their Gas Tax Accountability Act in 2004 spending on transport capital has never fallen below the amount generated in gas tax revenues and fees from licensing. This is because it is now law that over every four year period 100% of gas tax revenue must be reinvested into roads, bridges, highways, and transportation. Further, the accounting for this money must be disclosed in the pubic accounts. Manitoba's example is being followed in Saskatchewan where the government has introduced similar legislation. To date, Saskatchewan has been spending only between 50% to 65% of its gas tax revenues on transport capital; not a great record until you look at Ontario.

For 2007-2008 Ontario transport capital spending is projected to reach only 47% of the projected $4.174 billion in fuel tax and license revenue. The rest goes into general revenue. With a Gas Tax Accountability Act this amount would rise to 100% - an increase of $2.197 billion for transport capitol spending per year. Such an increase would, in part, direct funds to municipalities so they can properly invest in crumbling road infrastructure.

In 1997-1998 the province transferred responsibility for over 5,000 km of roadways to municipalities. This puts added pressure on lower levels of government to maintain the infrastructure. As well, reports show a deterioration of rural roads as well. With increased agricultural yields and manufacturing moving into rural areas, rural roads and bridges are requiring increased attention. Stable, transparent funding, as may be provided by a Gas Tax Accountability Act, would provide capital to ensure Ontarians are driving on well-maintained roads and tax dollars better dedicated to services they were meant for.

Assuming 80% of Ontario roads are municipally managed, cities should expect to see an increase in transfers for transport capitol of approximately $1.758 billion. Cities would need only to auditably demonstrate that this increased transport revenue goes to transport capital and is not used for general revenue. The table below shows how some municipalities transport and infrastructure budgets would benefit.


This Summer families will drive to and from their vacation over roads, highways and bridge sorely in need or repair. They will return home just before a Fall election. That would be a good time to ask politicians from all parties for A Gas Tax Accountability Act. It would deliver motorists better roads in Ontario.


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