A call to raise the provincial portion of the Harmonized Sales Tax (HST) by 1% has quickly been shot down by Ontario's finance minister.
The Association of Municipalities of Ontario (AMO) officially put a proposal forward at its annual conference in Ottawa on Monday asking the province to bump its share of the HST from 8% to 9%. The lobby group, which represents almost all of Ontario's 444 municipal governments, wants the hike to help cover the cost of local infrastructure such as roads, bridges, and transit.
But a written statement from Finance Minister Charles Sousa's office issued Tuesday made it clear the Liberal government has no intention of raising the HST.
"Ontario already has a strong track record of supporting municipalities. Transfers through the Ontario Municipal Partnership Fund, provincial uploads, and other initiatives have increased to more than $4-billion, up from $1.1-billion in 2003. We are also demonstrating our commitment to providing long-term sustainable funding by doubling revenues to municipalities through the gas tax, increasing from 2 cents to 4 cents beginning in 2019," said Sousa spokesperson Jessica Martin, in an email. "With more money coming down the pipes each year, municipalities can better plan and invest to meet their local needs."
Martin also stated the province understands the need to upgrade infrastructure, pointing to its plan to spend over $190-billion over 13-years beginning in 2014.
AMO President Lynn Dollin warns without the HST boost the only alternative municipalities will be left with is drastically increasing property taxes over the next decade. She added that due to the infrastructure funding gap from existing programs, municipalities face an annual shortfall of about $4.9-billion for the next ten years.
"We've done our homework, and it's clear that property taxes can't keep up with growing local needs," said Dollin. "Municipalities have been funded the same way for decades. Obviously, times have changed and if we want to build communities for the future, municipal governments need a greater local share of tax dollars."
Premier Kathleen Wynne, NDP Leader Andrea Horwath, and PC Leader Patrick Brown could potentially speak to the AMO proposal Tuesday afternoon when they each address the conference.
The federal portion of the HST sits at 5% and would be unaffected by any change to the provincial portion.