Metro Vancouver mayors, with three exceptions, are backing a plan to raise the provincial sales tax to 7.5 per cent in the Metro Vancouver regional district, to pay for expanded transit service.
The plan will go to a mail-in referendum in the spring, if the province gives its blessings to the plan, which it will likely do.
There are several points to consider about this plan.
First, there is a need for better transit service, and replacement of the Pattullo Bridge, which is part of the plan. That is undeniable, even if the population doesn’t grow as fast as Metro mayors claim it will.
Second, this is probably the fairest possible tax. A car tax, which was being seriously considered, would have cost $170 per vehicle and would be very unfair to those in areas like Langley, which are poorly-served by transit.
Property taxes could have been raised, but the portion going to TransLink is already quite high. A regional carbon tax would also unfairly penalize car owners.
Third, the proposal is going to a vote — which is a natural follow-through to the success of the HST referendum in overthrowing that tax. Politicians, starting with Premier Christy Clark, who pushed for this referendum, now realize they have to consult with voters about controversial tax increases. This is all to the good.
With all that noted, there remain a number of significant challenges with the planned PST increase.
The first is, what will be the effect on the sellers of large-ticket items, like cars, in areas on the fringe of the region such as Langley? Dealers in Abbotsford won’t be charging the extra .5 per cent. This is clearly a big challenge to some types of businesses, and is patently unfair.
The second challenge is, what guarantee is there that the .5 per cent won’t become one per cent in a few years? The referendum question does not say that the tax increase will be limited to .5 per cent. Given the constant boost to taxes and fees by politicians, this is a fair question.
The third challenge may be the biggest one which those who campaign in favour of the referendum will encounter. TransLink has a history of not managing its resources wisely, and giving the organization extra money could be a recipe for more mismanagement.
Here are some examples. Overtime for Transit Police on Sundays. Very high executive compensation. High car allowance for top executives (who apparently don’t use transit). A stalled attempt to install fare gates. Continued widespread fare evasion. An appointed and unaccountable board. A SkyTrain system that has been prone to several lengthy and poorly-communicated breakdowns this year.
The Canadian Taxpayers Federation has already started a campaign to have the referendum defeated. Many people are saying they can’t afford to pay any more taxes. In this part of the region, the poor transit service means that few people ever use it, and thus they are disinclined to support any more funds for it.
These are all significant obstacles to the referendum passing. The tax increase will get a lot of vocal support, and there will be significant “yes” campaigns. The HST also got plenty of support from the establishment, but that wasn’t enough to save it.
