Progressive ideas needed – Metro US

Progressive ideas needed

Enjoying the lower GST yet? The federal tax on goods and services went from a rate of 6 per cent to 5 on Jan. 1 and two readers, one a regular user of GO Transit and the other of TTC, asked me whether the price of transit tickets and passes should have dropped at the same time.

I had to check, but can confirm transit fares are exempt from GST or provincial sales tax.

There are a few other tax issues I have been trying to clear up. When the feds announced the GST reduction last fall, they also lowered the rate on the lowest income tax bracket from 15.5 per cent to 15 per cent. It’s a retroactive change for all of 2007, so either you’ll pay less at filing time or get a bigger refund than you expected.

This is welcome, no doubt, but there is one catch: The federal tax credit for transit passes also drops a bit. Many transit agencies have been touting the credit as a way to bring down the cost of monthly and weekly passes, but some have been advertising the credit as 15.5 per cent. It’s been retroactively changed to 15 per cent for 2007, so that’s a few bucks less you’ll be able to claim. Get details via transitpass.ca.

When Prime Minister Stephen Harper’s Conservatives promised to introduce the transit pass tax credit in the last election, it was hoped people would switch from cars to buses and trains. However, there is no strong evidence this happened. Yes, transit use grew across Canada after the credit, but at approximately the same rate as before it was introduced. Many people just switched from tickets to passes, and transit organizations actually made less money per ride.

The campaign pledge won votes last time around, but hasn’t made an appreciable difference. However, there is another idea that has been around for years — but ignored by both Tory and Liberal governments in Ottawa. And it might convince employers to rethink their own transportation policies.

Traditionally, many companies just offer parking spaces for their workers, especially in suburban areas. To shake up this old-school approach, Ottawa could give tax breaks to firms that buy transit passes for their employees. It might not be too catchy on the campaign trail, but it’s 2008 — if we really want to promote a lifestyle shift from cars now is the time for serious efforts.

According to the Canadian Urban Transit Association, the U.S. has had transit tax benefits for more than 20 years, and the U.K. has just introduced them “as an important new tool for addressing traffic congestion and greenhouse gas concerns.”

It’s just one of several progressive ideas for transit, and federal politicians need to show they’re paying attention.

ed drass for metro toronto


Ed Drass has been covering transportation issues in Toronto since 1998. He has a degree in urban studies from York University and regularly rides transit in the GTA and elsewhere.

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