‘Permanent’ Gas Tax Transfers

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The federal government’s Building Canada program was promoted as providing “stable, predictable, and flexible funding which will allow Canadian municipalities, provinces and territories to plan for the longer term—allowing them to address their ongoing infrastructure needs.”

As usual though, and I say it often, the devil’s in the details. “Over half of the fundingwill be provided as base funding…” (the Gas Tax Fund and the Goods and Services Rebate) “…over seven years.” Specifically, that portion (at least) of the funding was originally scheduled to end in 2010; then extended to 2014. Temporarily “predictable” perhaps, but hardly the “longer term” that was touted.

Somewhat better news, maybe…

The Globe reports that last Thursday there was an opposition motion which called for the transfer to be made permanent, and that the Conservative government “quietly” agreed to it. Holy smokes! That seems to be quite a reversal from Jim Flaherty’s 2007/03/19 rebuke in which he scolded: “The day in Canada of governments with their hands out to other governments (is) passing. It’s time for governments to be self-reliant and to be answerable to their own taxpayers.”

I suspect that there has to be a catch, and I fully realize that “permanent” in poli-speak only means that it lasts for as long as it lasts, but I’ll wait hopefully for some more of the details to come out.

Appended:
I forgot to point out that the reason municipalities so desperately need direct funding from the federal government is because of the lurch that they were put in by the provinces back in the late 1990s. You may remember that when the federal government cut transfer payments to the provinces, they turned around and cut their transfers to local governments. There’s a good post about it HERE.

Links:
GovCanada: Gas Tax Fund
2005/06/16 – TransitToronto: Gas-tax formula a blow to TTC
2005/12/21 – NDP: Jack Layton’s letter of commitment…
2007/03/20 – Globe&Mail: Mayor views budget as big setback
2007/12/07 – TelegraphJournal: MP smells fertile area for Grits
2007/12/08 – Globe & Mail: Cities to reap gas tax revenue permanantly

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