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Katz eyes gas tax to fund rapid transit

Three other Canadian cities already impose levies

Hey there, time traveller!
This article was published 6/4/2012 (1962 days ago), so information in it may no longer be current.

A gasoline tax is the most sensible to way to fund rapid transit in Winnipeg, Mayor Sam Katz says as the city prepares to open the first phase of the Southwest Transitway.

Starting Sunday, buses travelling between southwest Winnipeg and the centre of the city will utilize the first phase of the Southwest Transitway, a bus corridor built by all three levels of government at a cost of $138 million.

A rapid-transit bus enters the Osborne Street Station on the new Southwest  Transitway  Thursday.  The new system officially opens Sunday.


A rapid-transit bus enters the Osborne Street Station on the new Southwest Transitway Thursday. The new system officially opens Sunday.

The first phase runs 3.6 kilometres between Queen Elizabeth Way near The Forks and Jubilee Avenue at Pembina Highway. Katz and Manitoba Premier Greg Selinger have been at odds over how to fund the second phase, a six-kilometre extension to the University of Manitoba, which comes with a $275-million price tag.

While Katz has repeatedly asked the premier for a share of existing provincial revenues, the mayor said he is willing to look at a brand-new gasoline tax to pay for transit infrastructure.

"What makes more sense to use gas tax, existing or whatever, to fund rapid transit than the exact thing that's destroying the infrastructure, which is automobiles?" Katz said in an interview this week.

Currently, three Canadian cities levy their own gas taxes to pay for roads and rapid-transit infrastructure. Montreal has a three per cent gas tax, Victoria, B.C., charges 3.5 per cent, and Vancouver recently increased its levy to nine per cent to extend SkyTrain, its light rail service.

Winnipeg, which routinely has among the lowest gas prices at the pump among all Canadian cities outside Alberta, has plenty of room to increase gas taxes, said sustainability consultant Ken Klassen.

In 2011, the average price of a litre of gas in Winnipeg was $1.14 including taxes, 10 cents less than the Canadian average of $1.24 a litre.

Since gasoline sales are directly related to the use of the city's road system, it makes far more sense to use gas taxes to fund infrastructure than, say, a share of provincial sales taxes, Klassen said.

"Every single penny could go to infrastructure -- 50 per cent to fix existing roads and 50 per cent to rapid transit," he said. "This would be very transparent and very visible. Government would be accountable. The money could not disappear into general revenues."

Such a move would require provincial approval. Selinger said Thursday the idea is on the table, but declined to comment further.

"That's part of our discussions, so I'm not prepared to talk about it," said the premier, referring to city-provincial talks about funding the second phase of the Southwest Transitway.

Selinger said the province is already committed to paying one-third of the $275-million tab. Ottawa may also come through with infrastructure funds in 2014, said Charleswood-St. James-Assiniboia MP Steven Fletcher.

Katz said the city still needs some form of consumption tax to fund future rapid-transit development, insisting the city cannot afford to borrow more money to conduct the work. The city has borrowed $90 million to pay for the first phase of the Southwest Transitway and does not expect to recoup any funds until new developments along the line, such as Fort Rouge Yards housing project, begin generating property taxes.

At a Thursday ceremony to mark the completion of the first phase, Selinger joked he and Katz will "probably have some fun" before they reach a funding deal for the second phase.

"It's not going to be an easy task, securing the funding," said the mayor. "You know how long this (phase) took."

Winnipeg has been discussing rapid transit since 1959, when a subway plan was first suggested. The Southwest Transitway was first conceived as a busway in 1976.

Although the bus corridor opens Sunday, Winnipeg Transit service-development manager Bill Menzies said he's eager to see how well the transitway operates after the four-day Easter long weekend is over.

"Tuesday will be the big test," said Menzies, who's been working on this project for 32 years.

The city has two route options for completing the second phase of the transitway: parallel to Pembina Highway or in an L-shaped dogleg through Fort Garry residential neighbourhoods. Using either option, the line could conclude at Bison Drive or at Investors Group Field, the new football stadium at the University of Manitoba, Menzies said.

Katz and Selinger said they will leave the route decision up to transit experts.





Room to move

AVERAGE 2011 prices for a litre of gasoline, including taxes, in selected Canadian cities:

  • Calgary: $1.11
  • Winnipeg: $1.14
  • Charlottetown: $1.19
  • Regina: $1.22
  • St. John, N.B.: $1.22
  • Toronto: $1.24
  • Canadian average: $1.24
  • Halifax: $1.26 St. John's, N.L.: $1.29
  • Montreal: $1.31
  • Vancouver: $1.32


Gas taxes at work

Canadian metropolitan areas with gas taxes that support infrastructure:

  • Vancouver: 9.0 per cent taxes on both gasoline and diesel fuel.
  • Victoria: 3.5 per cent taxes on both gasoline and diesel fuel.
  • Montreal: 3.0 per cent tax on gasoline.


-- source: National Resources Canada


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Updated on Saturday, April 7, 2012 at 8:54 AM CDT: Adds video

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