OTA likes Ontario’s transportation spending, tax cuts

TORONTO — Ontario Trucking Association head David Bradley applauded the McGuinty government’s new Ontario budget, particularly the $1.2 billion in new spending for transit and highway infrastructure.

While most of the cash will go towards urban transit, Bradley was glad to see Finance Minister Dwight Duncan’s first budget maintain the same level of funding for highway construction, including $400 million for municipal road and bridge maintenance and construction, mainly in northern and rural communities.

“The (budget) is a positive development that the infrastructure crisis facing Ontario’s transportation system has finally made its way onto the government’s agenda. For years we’ve been asking for the provincial government to re-invest more the taxes that governments collect from transportation users back into the transportation system and we’re finally seeing some movement towards that kind of re-investment,” Bradley said in a press release.

This year, OTA points out, the Ontario government will collect over $4 billion in direct taxes on transportation users (gas tax $2.3 billion, fuel tax $750 million, and vehicle registration fees $1 billion) compared to a $2 billion total budget for the Ministry of Transportation. The trucking industry alone pays in excess of $1.2 billion, equal to the entire average annual provincial highway construction and maintenance budget.

Bradley did say, however, that he would have liked to see a greater emphasis on highways and local roads, but is nonetheless pleased that the government has not cut funding for highways and has provided at least some relief for municipalities who have bridges and roads that are in need of repair. He added that traffic congestion in, around and through the GTA “is the single largest bottleneck in the provincial supply chain and is strangling the economy.”

“But whether all the new spending on transit will lead to reduced congestion and more efficient goods movement depends entirely on whether it gets more cars off the road. Only time will tell,” Bradley cautioned.

Bradley also welcomed the budget announcement that the government will accelerate the capital tax rate cut. Effective Jan. 1, 2007, the current capital tax rate will be cut by five per cent, a full two years earlier than originally promised and the government has pledged to completely eliminate the tax as early as 2010.

“It’s good news for trucking companies that the government has accelerated the timetable for eliminating the capital tax, which is just a dumb, investment killer,” he said.