Transit fare hike approved

Vancouver Sun

HST sinks TransLink in $57-million hole

By Richard J. Dalton Jr.

METRO VANCOUVER – B.C.’s new harmonized sales tax will blow a $57-million-a-year hole in TransLink’s future financial plans, TransLink and the provincial government confirmed Thursday.

TransLink had counted on boosting a tax on commercial parking spaces, which now brings in $18 million a year, to raise $57 million annually.

But because the parking tax is a sales tax, it is being eliminated and will be rolled into the HST when it is launched next July 1.

TransLink and transportation ministry officials were scrambling to find a way to fix the problem.

If the hole isn’t fixed by the time TransLink’s mayors’ council chooses among several financial options later this fall, the transportation authority may have to default to a base plan that requires it to make drastic service cuts.

The news came just as TransLink commissioner Martin Crilly released a report that contained a stern warning for TransLink to live within its means.

Crilly said TransLink’s preferred financial option, which would require $450 million a year in new revenue, is unrealistic because it hasn’t nailed down where the money would come from.

TransLink spokesman Ken Hardie said that option now has been put on hold. TransLink had sent letters to Metro Vancouver’s mayors saying it’s no longer on the table, he said.

Crilly gave approval in principle to a transit fare increase of three to 3.5 per cent next year, but said three subsequent yearly fare hikes proposed by TransLink can’t be justified.

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He also cleared the way for a three-cent-per-litre increase in TransLink’s portion of the provincial fuel tax.

But the parking tax was a huge part of the agency’s future finances.

“It’s an important piece,” TransLink chairman Dale Parker said, adding that he discovered the problem when the budget was announced Tuesday.

Losing the tax would drain $18 million from TransLink’s budget at the current seven-per-cent parking-tax rate and $57 million at a proposed 21-per-cent rate, Parker said.

“We have to replace it,” Langley Mayor Peter Fassbender said.

Without the parking tax, all the budget proposals crumble, said Surrey Mayor Dianne Watts, who chairs the mayors’ council, which is to vote next month on TransLink’s financial options.

“According to legislation, we cannot support a plan that is not fully funded,” she said. “We may have to, by default, reject them all because there’s that gaping hole right now.”

If the council rejects additional funding, TransLink would be stuck with its last-resort plan and the drastic service cuts it would necessitate.

Crilly’s report, written before the budget was tabled, termed the last-resort option “clearly unpalatable.”

Translink officials, the mayor’s council and provincial officials were all looking for solutions.

Transportation Minister Shirley Bond said she had notified the finance ministry of the funding gap. “We’re in conversations about that and certainly our commitment is to find a solution to allow that revenue source to continue before the HST is implemented,” she said.

But other than help with the parking tax, Bond rejected the idea of bailing out TransLink, saying it must look to become more efficient.

“The taxpayers of British Columbia today already provide at least half a billion dollars of resources to the TransLink organization, and the rest of British Columbia wants to make sure those dollars are being spent wisely,” she said.

Assuming the parking tax problem can be fixed, the mayors’ council now has two financial options to choose from in addition to the “unpalatable” drastic-cuts default option:

– A “funding stabilization” plan that minimize service cuts but would require $130 million a year more in funding.

– A “maintain and upgrade” plan that would strengthen existing service and lay the groundwork for expansion, requiring $275 million a year more funding than the base plan and expanded borrowing powers for TransLink. It also includes a vehicle levy.

Crilly warned that the region’s transportation system lacks adequate funding, faces interference from senior governments and lacks an integrated approach to transportation and regional planning.

Crilly’s report also said TransLink had overstated the impact that higher transit funding will have on reducing greenhouse gases.

He summed up: “TransLink must find ways to bridge the gulf between system planning and system financing to ensure that it does not continue to live beyond its means; planned expansions in services and infrastructure must be accompanied by the revenues to support them.”

rdalton@vancouversun.com

With files from Jonathan Fowlie

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