Transport Committee on Oct. 24th, 2011

[The Chair, Conservative, Merv Tweed]

Welcome back to the Standing Committee on Transport, Infrastructure, and Communities and part two of meeting number eight.

Joining us now, on behalf of the Canadian Taxpayers Federation, is Mr. Gregory Thomas, federal and Ontario director.

Thank you for being here. You know the drill, so please present.

[Gregory Thomas, Federal and Ontario Director, Canadian Taxpayers Federation]

Thank you, Mr. Chairman.

As the federal director of the Canadian Taxpayers Federation, I'm here representing 70,000 supporters from across Canada. We are Canada's largest and oldest taxpayer advocacy organization, proudly non-partisan, and funded solely by voluntary contributions from supporters. We've never accepted government funding of any kind—we never will—and we're not a charity.

As we discuss the concept of a national transportation strategy, it's important that we have some context. The government just reported a budget deficit for last year of $33.4 billion. It's interesting to note that revenues surged $18.5 billion from the year previous, a healthy rise of 8.5%, bringing the government to within $5 billion of the record revenues reached in 2007-08. Yet just three years prior, those record revenues were sufficient to throw off a surplus of nearly $10 billion, while in this past year the government ran a deficit of $33.4 billion, owing to surging annual expenses that shot to over $270 billion from $233 billion in the same time frame.

So to the extent that government revenue was sufficient last year to have generated a surplus if the minority Parliament had merely held the line on spending, we now have a spending problem, and a major spending problem at that.

In the context of four years of massive deficits that erased 10 years of progress in reducing Canada's federal debt, we approach the proposition of a national transit strategy with some trepidation. We note the enthusiasm of the Federation of Canadian Municipalities for such a strategy. In their brief, the FCM put forth the notion that they represent 90% of Canada's population and they argued for more money from Canadian taxpayers to fund municipal transit systems.

Look, we have sympathy for Canada's city governments. They have built the lion's share of Canada's roads, and for years they had to witness the federal government collecting a user fee for roads, in the form of a gasoline excise tax, while not spending any of the money on roads at all. So we do support the transfer of the gas tax to cities for road projects. We would rather that all the revenue from the gas tax be directed towards roads and bridge-building and maintenance and we'd rather that the municipalities and provinces collect the revenue, rather than delegating the job to the federal government and the Federation of Canadian Municipalities.

Let's be clear: the Government of Canada has no reason to collect an excise tax on gasoline, except for the obvious and disheartening reality that it can, so it does.

Of course, the Government of Canada has spent $5 billion on transit since 2006, including $1.1 billion in gas tax revenue that it rightfully ought to have invested in roads and bridges, not transit systems. Once the diversion of the gas tax into transit began, it failed to satisfy the demands of the FCM and city governments, which see only the insufficiency of the federal financing.

So let's not kid ourselves: the concept of a national transportation strategy, especially as set forth in the official opposition's proposed legislation, is nothing more than a money grab. The so-called legislation contains no strategy, only the proposal that the government convene a conference and gather a group of money-seekers together to draw up a list of demands and submit them to Parliament.

In case there's any confusion that this is something other than a naked cash grab, the province of Quebec is fully exempt from any strategic element of the strategy at all. The bill only provides that any element of strategy that would have an effect on Quebec's sovereign soil simply be monetized, turned into a federal cheque, and handed over to the National Assembly.

The relevant passage says, “Recognizing the unique nature of the jurisdiction of the Government of Quebec with regard to...transit”, and ends with the statement that Quebec shall “receive an unconditional payment of the full federal funding that would otherwise be paid within its territory under...” the title of the legislation--

[An hon. member]

[Inaudible--Editor]

[Gregory Thomas]

Yes, entitled “National Public Transit Strategy”, so--

[An hon. member]

[Inaudible--Editor]...Quebec?

[Gregory Thomas]

We have no quarrel with Quebec's jurisdiction over transit, but we don't submit that it's unique. We think that provinces have jurisdiction over transit. Perhaps if Parliament stopped collecting a heinous excise tax on gasoline, the provinces could go and tax it, fund away, and do what they like.

We were recently asked to comment on proposed tolls to finance the replacement of the Champlain Bridge in Montreal, in a radio interview, and the interviewer was shocked to hear that we enthusiastically support them. I had to point out that we're the Canadian Taxpayers Federation, not the Montreal bridge motorists federation, and we believe that those who use a service should pay for it.

So we put it to you that the FCM, collectively, have been proven to be bad managers of taxpayer dollars, and they should not be rewarded with more federal money for more municipal empire-building. We put it to you that voter turnouts in municipal elections are woefully low, way short of 90%, and that the municipal politicians are principally beholden to people on city payrolls who extract outsized pay packages, benefits, and pensions in exchange for their support, and also to people who buy land as far as possible from transit, schools, municipal infrastructure, and other amenities, and then proceed to build housing on it.

Here in Ottawa, you just need to look at last weekend's daily papers to see ads for new housing located nowhere near any transit.

City governments cheerfully approve these projects, extract massive development cost charges for parks, street lights, sidewalks, street trees, and then send their lobbyists to you to demand billions for elaborate transit systems to get all these newcomers to their distant jobs. The cities’ approach seems to be to fill pastures with two-car garages, and then demand federal assistance for ever wider roads and ever more elaborate transit systems to prevent their regional economies from collapsing into gridlock.

[An hon. member]

Tell us what you really think.

[Voices]

Oh, oh!

[The Chair, Conservative, Merv Tweed]

Thank you.

I will go to Ms. Morin.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

I would like to thank the witnesses for joining us today.

You talked about the government’s excessive spending and the increase in spending. You have worked for two ministers. Could you tell me who they were?

[Gregory Thomas]

Suzanne Blais-Grenier, former member for Rosemont, and André Bissonnette, member for Saint-Jean in the 1980s.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Public transit benefits across the country are estimated at $10 billion annually. That includes economic spinoffs and the benefits for users, the environment and communities. Their value is estimated as being twice as high as public transit operating costs and government investment.

Are you opposed to government spending going to public transit, even though evidence shows that it is profitable for the economy and it contributes to people’s well-being?

[Gregory Thomas]

Yes.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Okay.

Could you expand on that, please? Given that the system works well, that it is good for people and the economy and that it makes it possible to redistribute assets, which helps those in need, could you tell me why you are against it?

[Gregory Thomas]

At the Canadian Taxpayers Federation, we do not buy into the concept of redistribution of wealth as something that is a public good. We believe that wealth is earned and that taxes are levied to provide public services to the public, so any element of redistribution of wealth is not going to be something that meets with our support. We would even argue that in a place like British Columbia, the HST was voted down because it had this element of redistribution of wealth in it that was excessive.

With regard to the whole question of the federal excise tax on gasoline and the transportation strategy, I think there's a historic opportunity here for the opposition and the government to get together. Both the government and the official opposition support the notion of Quebec's jurisdiction in this area. I think it's not too big a stretch to extend that notion to the jurisdiction of the great provinces of Ontario and Alberta and every other province, and to the idea of the government's just getting out of levying excise tax and giving that space to the provinces.

Also, rather than just proposing that others come together and work on a strategy, I think a strategy that encourages governments to price the service they're providing.... In British Columbia, the Port Mann Bridge is going to be a $3.3-billion improvement. It's the same deal with the Champlain Bridge in Montreal; it's a multi-billion-dollar expenditure.

If you go on the 401 in Toronto, it's plugged 24-7.

These are multi-billion dollar transportation investments that aren't priced at all. They're treated as free goods, so people build big houses with two-car garages at either end of them and plug them up. It's a disaster. It's an economic disaster for everyone.

As for the idea that we can sit here in Ottawa and strategize on how to unplug the city of Toronto better than they can do it themselves on the ground, I don't think that idea holds water.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

In you presentation, you said that cities and provinces should be the ones collecting money for roads. You are basically in favour of taxes for provinces and cities, but not in favour of those coming to the federal level.

[Gregory Thomas]

Well, on areas of their own jurisdiction, certainly.

The fact is that the federal government doesn't have jurisdiction in road building or transit building, and yet it levies taxes on transportation fuels. This has created this resentment in city governments, and with provincial governments, which are saying, look, you're levying taxes on transportation fuels, and historically none of this revenue has made its way back to Montreal, Toronto, Sherbrooke, or wherever, in the form of roads, buses, or what have you.

This elaborate mechanism has been evolved for the government to take tax it shouldn't be levying. Give it back to the people who should be levying the tax so they can use that money to build roads.

We didn't write the Constitution in the 1800s. If anyone thinks that city transit ought to be a federal responsibility, you could propose rewriting the Constitution. But it probably makes sense that city transportation, transit, ought to be a city responsibility, and they ought to have the means available to pay for it.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

In your opinion, what is the best way to address the needs of Canadians who are not happy with the public transit currently available in cities? Since municipalities are telling us that they don’t have money, what is the best way to guarantee public transit?

[Gregory Thomas]

Our recommendation is that the federal government scrap the gas tax and that the provinces and the cities assume that responsibility. As a result, they would make the money back and have taxation power.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

What are you going to do to ensure that rural municipalities have enough funding?

[Gregory Thomas]

I come from Vancouver where all taxes combined amount to 50 cents per litre of gas.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

I am talking about a rural municipality, not Vancouver.

[Gregory Thomas]

You are talking about a rural municipality. What does “rural” mean? Are we talking about Rivière-du-Loup or—

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

A small municipality.

[Gregory Thomas]

Could you give me an example?