County council opposes AMO motion to increase provincial sales tax by 1%


By Jolene Perron


A senior advisor from the Associations of Municipalities of Ontario (AMO) came forward to county council Jan. 17 to discuss their proposal to raise HST by one percent to help fund critical services in communities across the province.

In what Matt Wilson, AMO senior advisor called “the most ambitious engagements” AMO has undertaken in the last 10 years, he explained project started in spring 2015 with three phases. He stated the first phase is to identify the problem, the challenges and the economic realities. The second phase slowed them to explore options, of which there were 44. The third, and current, phase sees AMO presenting the action plan which Wilson pointed out their board of directors has unanimously endorsed.

It was a very different story at county council.

Wilson went on to explain the solutions AMO narrowed down to needed to be sustainable, long-term plans to one problem.

“The problem is that to deliver existing services and close the infrastructure gap, every year for the next 10 years, municipalities will need an additionally $4.9 billion,” said Wilson. “That’s a substantial sum of money and as I’m sure you can appreciate, it includes a number of assumptions as well. Two of the most critical assumptions, that this $4.9 billion annual need is on top of inflationary increases to property taxes and user fees and it also assumes all existing federal and provincial commitments are fulfilled.”

Wilson said the one per cent municipal sales tax, which would be added to the current 13 per cent HST tax, would help fund critical local services such as roads, bridges and transit while reducing the upward pressure of property tax bills. He gave an example of what increases property taxes would look like as an alternative.

“If we use a property tax to close that gap, it would requite an eight per cent revenue increase per year for ten years,” said Wilson. “Of course, as you well know Ontarians already pay the highest property taxes in the country. We have to ask some pretty realistic questions about whether those increases are achievable, or whether they are desirable. To give you an example, a person who was paying $3,000 a year in property taxes in 2015, would be paying about $6,700 a year by 2025, for a fairly substantial increase as I’m sure you would agree.”

While county council did agree with his point, many councillors voiced their concerns about the overall affect on the taxpayers. Leamington Mayor John Paterson brought up points about Ontario’s high hydro costs and the recent raise of minimum wage which is affecting local small businesses with the costs associated with the pay increase.

“All these increases in costs of living in this province – the last thing I want to do is go back to an Ontarian and say, we’re going to add one per cent to your sales tax to help us manage our infrastructure,” said Paterson. “I’m not going to deny you numbers here. I don’t disagree with them at all, but at this point in time, I think if you went back, you said the survey you did was last June, I think if you went back and asked those same Ontarians what they’re thinking, they may not be as supportive of this idea.”

Wilson rebutted Paterson’s point by explaining even if they don’t like this solution as it has been proposed, he asked them to think about how it may be a way for the municipalities to go back to the province with a solution and if they don’t like the solution as it’s been proposed, perhaps it would allow them to come forward with another option.

With that in mind, Lakeshore Deputy Mayor Al Fazio said his concern is that if they come forward with a one per cent increase, somewhere down the line it would turn to two per cent, then three per cent, and so on.

“The problem is always going to be there,” said Fazio. “The issue regarding roads and bridges etcetera is always going to be an issue in the municipalities. I think the province should give us some of their money, that’s how I feel. Honestly, I’m not going to vote in favour of the motion. There is a problem, and this might be the solution in the future, but to me, it’s not the right time.”

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