Infrastructure big winner in 2015 Ontario Budget

by MM&D Online Staff

Toronto, Ontario—Proclaiming that gridlock is “choking” the provincial economy, Finance Minister Charles Sousa announced a 10-year, $130-billion infrastructure plan in the 2015 Ontario budget unveiled yesterday.

For transportation infrastructure specifically, the budget boosts the funding previously announced in the 2014 budget for roads, bridges and transit available through the Moving Ontario Forward plan from nearly $29 billion to $31.5 billion. This increase is to help accelerate priority projects and enable new projects to come online, the government stated.

Of this $31.5 billion, the near 50-50 revenue split between transit projects in the Greater Toronto Hamilton Area (GTHA) and infrastructructure projects in other parts of the province will be maintained.

Some specific non-transit projects highlighted in the 2015 budget include: expanding additional segments of Hwy. 11/17 between Thunder Bay and Nipigon; constructing a new alignment of Hwy. 7 between Kitchener and Guelph; and making improvements to Hwy 401 and Hwy 417 in Ottawa.

The budget highlights several ways the dedicated funding could be supported. Based on last year’s establishment of the Trillium Fund – where revenue gains from government asset sell-offs would be used to finance key public infrastructure priorities such as public transit, highways, hospitals and schools – the budget mentions:

·         Dedicating 7.5 cents of the existing provincial gas tax (with no increase on current rate);
·         Repurposing revenues from the existing Harmonized Sales Tax (HST) on current provincial taxes on gas and diesel;
·         Dedicating the revenue that will be gained from closing the Road Building Machine (RMB) exemptions;
·         Increasing the aviation fuel tax by 1 cent per litre;
·         Other measures that restrict large corporations from claiming small business deductions.

While no further details were revealed in working towards closing the RBM loophole, in a statement the Ontario Trucking Association said it was encouraged to see the government reconfirm its commitment to eliminating the longstanding exemption of certain heavy trucks (such as mobile cranes, vacuum trucks and concrete pumper trucks, among others) having to be plated and subjected to commercial vehicle registration fees and provincial fuel taxes.

While the budget briefly touched on the government’s recently proposed cap and trade program, there were few details that were new. However, the budget did state the government will continue to work with industry stakeholders over the summer months and that a ‘final strategy’ would emerge sometime in the fall.

The budget did, however, call for a new program to expand the province’s natural gas network, which could, depending on the type of development, expand the use of CNG and LNG trucks.

The Ontario Trucking Association (OTA) expressed concern over a reference in the budget confirming the government will continue with its new strategy relating to non-tax revenue (user fees), which could include things like driver and vehicle fees. While it’s unclear at this point what impact, if any, this will have on the trucking industry, the process of reviewing all current user fees is slated to begin in 2015. The Ontario trucking industry already absorbed a 70-percent increase in commercial licence plate fees over 2013-2014.