City keeps some fees the same, despite tax drop

Ottawans seeking savings related to the New Year’s Day GST cut should try the mall, not city hall.

Taxpayers will not see across-the-board savings equal to the one-per-cent cut in the Goods and Services Tax, because the city will keep fees on some municipal services — such as parking meters, park and display machines and pools and skating arenas, for example — the same despite the tax cut, said Ottawa’s manager of revenue Ken Hughes.

“For the purposes of simplicity, we round to an even amount,” Hughes said yesterday. “It doesn’t matter whether it’s five or six per cent. When you look at things like parking meters, you can’t take something from a loonie to 99 cents.”


Bus fares, set by council last year, will also not change to reflect the lower GST, which the federal government trimmed from six to five per cent, effective Jan. 1.

Hughes said that in the case that revenue from these services is higher than expected, it allows council to approve additional programs or move the surplus to cover other costs.

But critics say the city should make a better effort to pass savings along.

For the most part, the prices of goods and services should reflect the cut in tax, said John Williamson, federal director of the Canadian Taxpayers Federation (CTF).

“The tax cut that the government implemented was never meant to flow to the municipality or to businesses,” he said. “It was meant to flow to consumers. They should benefit from the full tax cut.”

Kevin Gaudet, Ontario director for the CTF, agreed. “The cities should do what other businesses would do, which is tighten their belts. Taxpayers are tired of having their pockets picked at every level of government.”

But Ottawa councillor Alex Cullen said that the city had already taken the GST cut into account when the fee schedule for city services was set, to keep a lid on costs.

“This was already calculated in,” said Cullen. “The city already took the GST cut into account. The rates would have been even higher (without it).”

Rapid cuts

  • The GST cut to five per cent is the second in two years after the federal Conservatives reduced the tax from seven to six per cent in 2006.

Latest From ...