Carleton Place favours an HST increase to support infrastructure

Posted on: January 24, 2018

Matthew Behrens

According to the new Local Share initiative of the Association of Municipalities of Ontario (AMO), the ability of Ontario communities to deliver existing services while closing the infrastructure gap will require an addition $4.9 billion annually for the next decade.

A report presented to the Carleton Place community issues committee by Deputy Mayor Jerry Flynn, who had attended a Local Share conference in Brockville, explained that the multi-billion dollar commitment is on top of inflationary increases to property taxes and user fees. It also assumes the pre-existing federal and provincial cost-sharing and infrastructure commitments are fulfilled.

But where the money will come from is a point of contention, with the favoured option being a one per cent HST increase. While the AMO considered potential tax hikes including income, land transfer, fuel, alcohol, vehicle registration, only the HST, a municipal fuel tax, and an increase to income taxes were deemed sufficient to meet the long-term need.

A municipal sales tax increase would help fund roads, bridges, and transit while slowing the upward pressure on property tax bills and diversify local community funding models. It would also provide a more reliable alternative to hoping Queen’s Park will provide additional financial support when it faces a $341 billion debt.

Under the Local Share plan, the one per cent tax increase would generate $2.5 billion in new annual funding that could be distributed to municipalities based on a per-capita funding formula that would see an additional $5.33 million available for Lanark County municipalities. Having those monies available would decrease municipal vulnerability to federal and provincial policy changes, allow for more predictable long-term infrastructure planning and financing at the local level, help diversify municipal revenues, and help keep property taxes in line.

Last year, the community issues committee had voted in favour of a motion supporting the AMO’s campaign to create the new source of revenue.