Gas tax hike could cover funding gap for Surrey LRT, other transit expansions

How transit projects will cost Metro Vancouverites An historic agreement announced Thursday means a green light for transit megaprojects. Here's how it'll cost Metro Vancouverites.

Metro Vancouver's mayors have voted to go ahead with a $7.3-billion transit expansion plan, which includes a controversial source of funding.

The province has increased the limit on the regional gas tax by 1.5 cents per litre to fill a funding gap in the portion of the budget to be footed by municipal governments.

Mayors' Council Chair Derek Corrigan announced the move Thursday, which means the regional fuel tax can now be as high as 18.5 cents per litre. The increase is expected to cost the average household about $22 a year.

Corrigan said he only heard from the province in a letter sent Wednesday night, so the mayors began their discussion of the controversial last-minute change Thursday morning.

The increased tax will raise $30 million a year, reducing the gap in funding for phase two of a 10-year transportation plan that includes an extended Millennium Line, light-rail transit in Surrey and hundreds of new buses. Also part of phase two are new or replacement SkyTrain cars, and $125 million in roads, cycling and walking path upgrades.

"This is an ambitious and forward-looking plan," Corrigan said.

It's a plan Metro Vancouver's mayors have been talking about for half a decade, turned down until now because they didn't have the money to pay the region's share. The biggest setback was when voters rejected a 0.5 per cent sales tax in 2015.

There's no sales tax in the plan approved Thursday, but there are several other taxes and fees to help fill funding gaps.

In addition to the fuel tax, some of the regional funding could come from fare increases planned for 2020 and 2021, estimated to be about five to 15 cents on a single fare, and $1 on a monthly pass. TransLink and the mayors say about $1.6 billion will come through increased revenue as a result of growth of ridership as service expands.

Also proposed to the Mayors' Council are a property tax increase of about $5.50 per household and a 3 per cent increase to the parking tax, both of which would start next year if approved.

Development cost charges of about $300 to $600 per unit, commercial revenues from businesses around SkyTrain stations and a new regional funding capacity enabled by the province would also help cover the costs.

Municipalities are responsible for $2.7 billion, while the province is chipping in $2.5 billion and Ottawa will contribute another $2 billion.

The plan to meet the $2.7 billion target was approved Thursday, but not before several mayors voiced criticism.

West Vancouver Mayor Michael Smith slammed the gas tax, saying, "We already have the highest gas tax in the country… It's unfair and it leads to people purchasing gas outside Metro Vancouver."

And Port Moody Mayor Mike Clay said he was on board with the plan until he learned about the sudden gas tax hike.

"I don't think a letter we received last night is the way to move forward," he said.

"It’s not fair and equitable. It's a tax that everyone hates. It's record-high gas prices."

The mayor of the Township of Langley called the tax increase "disturbing," and said it might cause the plan to falter.

"We had a deal, a great deal, and the 11th hour reneging by the province is a problem," Jack Froese said.

But Vancouver Mayor Gregor Robertson said that while the plan isn't perfect, the municipalities need to move forward with the expansion plan.

Smith said he was heartened by Robertson's comments, and that "We can't send it back (to TransLink staff). We can't go through this schmozzle again."

Maple Ridge Mayor Nicole Read said she thinks those who drive from the eastern parts of the region will be hit hardest, and while that the increase itself is small, she likened it to "death by 1,000 cuts."

Still, she said she didn't want to vote against it or refer it back to staff for further consultation.

The sentiment was echoed by Surrey Mayor Linda Hepner, who said she wasn't happy with the plan, but didn't want to delay action. She said she was willing to have the conversation at the next stage of the process instead of pushing things back this week.

Ultimately, the plan was passed, with Froese, Clay, Read, Anmore Mayor John McEwen and Tsawassen Chief Bryce Williams voting against it.

In a statement, TransLink CEO Kevin Desmond said the massive transit expansion wouldn't be possible without co-operation from all three levels of government.

"Already we've seen the benefits that come when you add more service. You reduce crowding and make transit more convenient and enjoyable. By making transit a better experience, ridership grows and the benefits continue to add up for everyone across the region," he said.

With files from CTV Vancouver's Jon Woodward