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Debate rages at region over HST increase proposal

Regional chair says property tax increases not sustainable, Oshawa Mayor says hydro rates should be addressed first

By Dave Flaherty/The Oshawa Express

A push by the Association of Municipalities of Ontario (AMO) for a one per cent increase to the HST, with the revenue to go directly into municipal infrastructure coffers, created a line of division at regional council.

At its latest meeting, council received the resolution from AMO calling on the province for the HST increase, estimating it could create $2.5 billion in new yearly revenue.

AMO is asking any tax revenue be distributed to municipalities for the strict purpose of funding upgrades to infrastructure such as roads, bridges and water treatment facilities.

Oshawa Mayor John Henry proposed council receive the resolution for information and take no further action.

Henry said he understands municipalities across Ontario are facing infrastructure deficits, but he would rather see a potential HST increase used to pay down the province’s hydro debt.

“That would free up money for every resident in Ontario,” Henry added. “That’s what the public is really looking for.”

The rising price of electricity in Ontario is keeping the province from being as competitive as it could be, and to Henry, should be the number one priority to address.

“We’ll never be on the same playing field when we are paying 30 per cent more for electricity than our competitors,” he stated.

He also questioned whether the provincial government would take something away from municipalities in exchange for a piece of the HST pie.

“Do we have a level of trust in the government that they aren’t going to cut off any of the other funding we have?” Henry asked his fellow members of council. “If you trust them, ask them why there are tolls on the (Highways) 412 and 418.”

Regional chair Roger Anderson was a vocal supporter of AMO’s resolution, claiming it is not sustainable for the region to meet its infrastructure needs solely on property tax increases.

“If you think you can continue to build your roads and infrastructure on property taxes, vote to receive this, [but] the reality is you can not,” Anderson said. “You’re all going to go around saying,’ I don’t support a budget with tax increases.’ Then stop building roads…we can just pull the plug on Bloor Street, Harmony Road, (and) Westney Road.”

According to Anderson, Durham’s share of the proposed HST increase would be approximately $64.5 million a year, with $10.8 million going to Oshawa.

“That’s $64 million for the Region of Durham…I don’t know how you possibly raise taxes that much and think people will accept it,” he said. “You can start a conversation and let the leaders of the three main parties know the public is aware of the infrastructure deficit, and people aren’t going to accept tax increases.”

The region’s multi-year economic and financial forecast, released earlier this year, predicts the region will need to spend in excess of $1 billion on road expansion, rehabilitation, bridge rehab and replacement and other traffic improvements over the next decade.

Oshawa Councillor Nester Pidwerbecki says those daunting figures will likely increase.

“We are in dire straits. It’s going to have to go up some more. Our infrastructure, we have to upgrade and it’s going to cost a fortune, there’s no question about it,” he said.

Ajax Councillor Colleen Jordan said AMO’s resolution is not “some wild and crazy idea.”

“Quebec and other provinces have higher taxation. About 25 states [in the U.S.] have the ability to use sales tax to fund their local programs for infrastructure,” Jordan said.

“If we don’t start moving in this direction we are going to be in a lot of trouble,” she continued. “I’ve sat here and heard us saying we need more revenue. An idea comes up, and we say, ‘no, we don’t want this’. What do you want? To raise property taxes?”

Henry pointed out the leaders of Ontario’s three main political parties have said they would not support an increase to the HST.

However, Anderson argued that initially the idea of municipalities receiving funds from gas taxes seemed unlikely as well.

“It didn’t happen overnight in 2006 and 2007; it took years,” he said. “The Conservative government was certainly not in favour and even the province was not that gung-ho.”

While it took some time to finally get the upper levels of government on board, it eventually happened, and Anderson believes the same could occur with the AMO proposal.

To him, the alternative would be a disaster.

“It boils down to how much can property owners pay in taxes. We can fill this room with people my age and older who will scream murder and young people who just bought their first house who will scream murder [if tax increases continue],” Anderson said.

Council, by a 19 to 10 margin, voted to support AMO’s resolution.

Henry, along with Oshawa councillors Doug Sanders, John Neal, Bob Chapman, John Aker and Dan Carter were opposed with Pidwerbecki and Councillor Amy McQuaid-England in favour.