Panel recommends gas tax hike of 5 cents per litre or more to fund transit

TORONTO—An advisory panel appointed by the Ontario government is recommending a five-cent-per-litre hike in the gas tax to help fund public transit expansion in the greater Toronto-Hamilton area (GTHA).

Government sources confirm the report from the 13-member panel chaired by Ryerson University’s Anne Golden projects boosting the gas tax could raise about $800 million a year, and generate another $80 million through the HST.

The Canadian Press has learned the report will also recommend the government could increase the rate above five cents a litre.

Ontario currently imposes a 14.7-cent-per-litre levy on unleaded gasoline.

The report, which will be released later today, will also recommend a dedicated trust fund so drivers know the extra tax they are paying can be used only for public transit improvements.

Premier Kathleen Wynne appointed the panel earlier this year to examine proposals from the transit planning agency Metrolinx, which had proposed an increase in the HST, an idea that was rejected.

Government sources say the panel will also recommend greater use of debt to finance transit improvements, borrowing up to $2.50 for every $1 the province raises in taxes.

Studies show people in the Toronto-Hamilton area spend an average of 82 minutes a day commuting, and predict that will jump to 109 minutes a day by 2031 if nothing is done.

The Ontario Chamber of Commerce says gridlock costs the economy about $6 billion a year in productivity.