Are you prepared to pay a regional sales tax on top of the GST and PST? That’s essentially the question Metro Vancouverites will answer in a March referendum. TransLink’s cleverly marketed “congestion improvement tax” would add a half-percentage point to the PST and be precedent setting for Canada.
Mayor Gregor Robertson captures the Yes argument in an email sent a few days ago to solicit support: “With Metro Vancouver’s population growing by another one million people by 2040, we have to invest in more buses, better roads, and new rapid transit.”
On the surface, this sounds compelling. But there are several good reasons to think twice before casting a Yes.
First of all, TransLink is already well funded. It currently spends $1.4 billion a year, courtesy of the many taxes it collects such as property taxes and its 17 cent/litre gas tax. I agree with Mayor Robertson that population should be a significant driver of transportation spending, which is why I was curious to see how TransLink’s spending over the past number of years compares to population growth in the region.
The data shows TransLink increased its inflation-adjusted operating spending by 50 percent compared to the much more modest population growth in the region of 13 percent between 2005 and 2013. Does this look like an organization in need of more tax revenue?
Secondly, TransLink’s revenue will continue to grow without a new regional sales tax as population grows. A No vote is not a vote against transportation; it is a vote for a less aggressive approach to funding transportation. TransLink would have to prioritize, slow down some of its ambitious plans and maybe even find cost savings in its own budget.
This brings us to TransLink’s trust problem. TransLink does not have a great reputation for being fiscally responsible. The Canadian Taxpayers Federation has done a good job of pointing out small and big examples of waste from grossly inflated salaries to spending $30,000 on a poodle statue, apropos of nothing to do with transportation.
Is giving more money to a government agency that clearly has work to do in getting its own house in order a good idea?
TransLink’s trust issue with small business runs very deep, dating back to the last time they wanted more money and introduced a punitive “parking tax” on bike racks, truck turnarounds, and driveways. The tax was so boneheaded that the province had to step in and get rid of it. I have never seen small business owners as mad as they were about that tax. Then there was the terribly disrespectful way that small businesses along the Canada Line were treated during its construction.
As with its failed parking tax, TransLink seems pretty cavalier about the impact of the current tax on the wallets of families and the bottom lines of small businesses. A few hundred dollars a year may not seem like a lot to a well-paid TransLink executive but most families struggle to prioritize mortgage payments, ballet classes, and education and retirement savings.
Businesses worry about lost sales and the costs of resetting equipment and prices due to the tax change. And if the tax is introduced, how long would it be before it goes up?
We all want better transportation, better health care, more retirement savings, a nicer house or apartment, and more to spend on our kids. The upcoming referendum gives us a chance to think about these trade-offs and to remember, in the words of the Rolling Stones, “You can’t always get what you want, but if you try sometimes, well you just might find, you get what you need.”
TransLink wants more but does it really need it?