It’s an idea that won’t be implemented anytime soon, but most members of Prince Edward County council are supporting in principle the idea of raising the sales tax by 1% to 14% as long as the extra tax revenues go straight to municipalities for spending on roads, bridges, and public transit projects.
The Association of Municipalities of Ontario is beginning a campaign to get support for the idea from the over 400 municipal councils in the province.
It’s estimated the extra 1% of sales tax would raise $2.5 billion a year for infrastructure spending. All communities are in dire need of more money to upgrade hard services.
Some on Prince Edward County council didn’t like the idea of any tax increase, because it would hurt low and middle income people, however most, like Councillor Jamie Forrester, thought it was worth a look.
All municipalities in the province desperately need money to upgrade hard services, but have limited ways to raise revenue outside of property taxes. AMO says it looked at 44 options to get more money for local infrastructure, and believes the extra 1% sales tax plan is the best way.
If the plan were to be put in place, it’s estimated Prince Edward County would receive an extra $6.5 million a year for infrastructure upgrades, essentially doubling what council has been spending on roads, bridges, and public transit annually.
Some on the committee worried that if municipalities received the extra sales tax, the provincial and federal governments would be tempted to cut back their infrastructure programs and no one would be further ahead.
Others believed another 1% on the sales tax would be a serious financial blow to low and middle income families.
Some described the proposal as “thinking outside of the box”. Councillor Dianne O’Brien didn’t agree.
Councillor David Harrison sided with O’Brien, saying there was “only one cow to milk and that’s the taxpayer”.
Councillor Gordon Fox thought extra infrastructure money could be found by rooting out wasteful spending by senior governments.
In the end though, the committee did recommend the idea as a way to get dialogue going. The vote was 9 to 5 in favour.
Prince Edward County Mayor Robert Quaiff.